Full text of Federal Reserve Bulletin : January 1999
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Volume 85 • Number 1 • January 1999
Federal Reserve
BULLETIN
Board of Governors of the Federal Reserve System, Washington, D.C.
Table of Contents
1 AGGREGATE DISTURBANCES, MONETARY
POLICY, AND THE MACROECONOMY:
THE FRB/US PERSPECTIVE
The FRB/US macroeconometric model of the
U.S. economy was created at the Federal Reserve
Board for use in policy analysis and forecasting.
This article begins with an examination of the
model's characterization of the monetary transmission mechanism—the chain of relationships
describing how monetary policy actions influence
financial markets and, in turn, output and inflation. The quantitative nature of this mechanism is
illustrated by estimates of the effect of movements in interest rates and other factors on spending in different sectors and by simulations of the
effect of a change in the stance of policy on the
economy as a whole. After the discussion of
the transmission mechanism, the article considers
the influence of monetary policy on the macroeconomic consequences of specific events by
showing how the predicted effects of selected
disturbances change under alternative policy
responses. These examples illustrate an important
policy tradeoff in the FRB/US model involving
the variability (but not the level) of output and
inflation: Past some point, lower variability in
inflation can be obtained only at the expense of
greater fluctuations in output and interest rates.
20 INDUSTRIAL PRODUCTION AND CAPACITY
UTILIZATION: 1998 ANNUAL REVISION
In late 1998, the Federal Reserve published the
results of an annual revision of its measures of
industrial production, capacity, and capacity utilization, which cover the nation's manufacturing,
mining, and electric and gas utilities industries.
The revision involved both the incorporation of
newly available and more comprehensive source
data and, for some series, the introduction of
modified methods for compiling the series. The
revised figures show stronger growth of both
production and capacity since 1996; however, the
overall capacity utilization rate was little changed
from the previous data.
34 INDUSTRIAL PRODUCTION AND CAPACITY
UTILIZATION FOR NOVEMBER 1998
Industrial production declined 0.3 percent in
November, to 131.8 percent of its 1992 average,
after an upwardly revised increase of 0.2 percent
in October. Capacity utilization fell 0.6 percentage point, to 80.6 percent, a level 1 Vi percentage
points below its 1967-97 average.
37 ANNOUNCEMENTS
Reduction in the discount rate.
Reduction in fees for payment services of the
Federal Reserve Banks.
Provision for enhanced settlement services to
depository institutions.
Decrease in the net transaction accounts to which
a 3 percent reserve requirement will apply in
1999.
Joint statement on the allowance for loan losses
of depository institutions.
Enforcement actions.
40 MINUTES OF THE FEDERAL OPEN MARKET
COMMITTEE MEETING HELD ON
SEPTEMBER 29, 1998
At its meeting held on September 29, 1998, the
Committee adopted a directive that called for
conditions in reserve markets that would be consistent with a slight decrease in the federal funds
rate to an average of about 5 lA percent and that
contained a bias toward a possible further easing
of reserve conditions and a lower funds rate.
49 LEGAL DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders; and pending
cases.
AI FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
A68 BOARD OF GOVERNORS AND STAFF
A?Q
November 26, 1998.
A3 GUIDE TO TABULAR PRESENTATION
A4 Domestic Financial Statistics
A42 Domestic Nonfinancial Statistics
A50 International Statistics
A63 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
A66 INDEX TO STATISTICAL TABLES
M2
FED£RAL
^
^
^
.
QpEN
ADVISQRY
^
RESERV£
COMMITTEE AND
MARKET
COUNCILS
BQARD
P(JBUCATI0NS
A74 MAPS OF THE FEDERAL RESERVE SYSTEM
A76 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
PUBLICATIONS COMMITTEE
Lynn S. Fox, Chairman • S. David Frost 3 Karen H. Johnson • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Dolores S. Smith • Richard Spillenkothen
The Federal Resen>e Bulletin is issued monihly under the direction of (lie staff publications committee. This committee is responsible for opinions expressed
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Aggregate Disturbances, Monetary Policy, and
the Macroeconomy: The FRB/US Perspective
David Reifschneider, Robert Tetlow, and John Williams, of the Board's Division of Research and Statistics, prepared this article.
The U.S. economy is continually buffeted by disturbances originating both within and outside our
borders. To assess the influence of such events on
employment, inflation, and other measures of macroeconomic performance, economists often use models
of the economy—systems of mathematical equations
describing the interactions among various measures
of activity in the markets for labor, goods, and financial instruments. Although no model can replicate in
full detail the complex behavior of the real world,
one can construct models that are consistent with
both economic theory and historical data. Such models shed light on the way the economy works and
how it responds to disturbances and policy actions
that are similar to those encountered historically.
The FRB/US model of the U.S. economy is maintained at the Federal Reserve Board for use in policy
analysis and forecasting. With FRB/US, the Board's
staff can gauge the likely consequences of specific
events through simulation analysis—computational
"what-if" exercises in which the model is used to
predict the outcomes from alternative assumptions
regarding fiscal and monetary policy, international
conditions, and so forth. In a similar manner, the staff
can use model simulations to assess possible implications for economic performance of the full range of
disturbances likely to be experienced over extended
periods of time.
This article examines the properties of the FRB/US
model and the ways in which they shape the model's
predictions. To a large extent, the discussion centers
on the monetary transmission mechanism—the chain
of relationships embedded in the model that describe
how monetary policy actions influence financial markets and, in turn, aggregate output and inflation. The
quantitative nature of this mechanism is illustrated by
estimates of the effect of movements in interest rates
and other factors on spending in different sectors and
by simulations of the effect of a change in the stance
of policy on the economy as a whole.
After the discussion of the transmission mechanism, the article considers the ways in which mone
tary policy influences the macroeconomic consequences of specific events in the FRB/US model by
showing how the predicted effects of selected disturbances change under alternative policy responses.
Because these disturbances—a decline in the value of
the stock market, a period of unexpectedly rapid
wage growth, and an adverse shock to the productivity of American firms and workers—differ in their
implications for output and inflation, they illustrate
some of the choices faced by policymakers in the
context of the model. In the final section of the
article, these choices are summarized in terms of
policy frontiers that show how, past some point,
reductions in the variability of inflation are obtained
only through increases in the variability of output.
PROPERTIES OF THE FRB/US MODEL
FRB/US is what is often called a New Keynesian
model because of the assumptions it incorporates.
In the model, households and firms are forwardlooking—that is, they base their decisions on the
income and sales, financial conditions, and prices that
they expect for the future. However, rather than being
instantaneous, the response to changes in these fundamental factors is gradual because capital installation
costs, contracts, and other considerations create significant frictions that slow the process. For this reason, the failure of markets to clear quickly after
disturbances to the economy can result in periods
of over- or under-utilization of labor and capital
resources (see box "An Overview of the FRB/US
Model").
According to the viewpoint embedded in the
model, monetary policy can mitigate these swings in
aggregate resource utilization by altering financial
market conditions and thereby exerting an indirect
influence on output and employment in the short term
and on inflation over the longer term. In FRB/US,
policymakers alter financial conditions by changing
the short-term interest rate under the control of the
Federal Reserve—the federal funds rate. Current and
anticipated changes in this rate influence prices and
rates of return on various financial assets, including
bonds and corporate equities, and on foreign exchange.
2
Federal Reserve Bulletin • January 1999
Changes in these financial conditions in turn influence spending by households and firms and, by altering resource utilization in labor and product markets,
affect the rate of inflation. (For alternative views on
how monetary policy may influence the economy, see
box "Other Monetary Transmission Channels.")
An Overview of the FRB/US Model
Macroeconomic models sometimes differ in their predictions about the effect of a particular event on the economy,
owing to differences in theoretical design, empirical specification, and degree of aggregation. For this reason, reviewing the structure of the FRB/US model is useful for understanding the model's behavior.1
The equations of FRB/US are specified in accordance
with standard economic theory. In particular, households,
businesses, and investors are assumed to be forward-looking
in their decisionmaking as they seek to optimize their
welfare. Individuals choose a path for current and future
consumption that maximizes their lifetime utility, subject to
a budget constraint; this assumption implies that consumer
spending today is related to the present value of expected
future earnings and the current value of assets. Similarly,
firms maximize expected profits in hiring workers, investing in capital goods, and setting prices; this assumption
implies, among other things, that the desired stock of business equipment is a function of expected sales and the cost
of capital. In financial markets, investors equate expected
rates of return on different assets, subject to premiums that
compensate borrowers and lenders for differences in risk
and liquidity.
In their decisionmaking, households and firms are
assumed to face significant frictions that slow the speed at
which they adjust prices and quantities to changes in fundamental economic factors. Although not explicitly incorporated into the structure of FRB/US. the sources of these
frictions are varied; they include the cost of adjusting a
firm's work force and physical capital, labor contracts and
other agreements, and an apparent reluctance of households
to change spending habits quickly. The existence of such
frictions means that households and firms have an incentive
to be forward-looking in their behavior because costs of
adjusting spending and prices can be reduced by correctly
anticipating their preferred values in the future. As a result,
many decisions in the nonfinancial sectors depend not only
on conditions today and in the recent past but also on the
way conditions are expected to change in the near future.
1. For a more extended discussion of rile FRB/US model and its uses, sec
Flint Brayton and Peter Tinsley, "A Guide to FRB/US: A Macroeconomic
Model of the United States." Finance and Economic Discussion Series,
1996-42 (Board of Governors of the Federal Reserve System, October 1996):
Flint Brayton, Eileen Mauskopf, David Reifschneider, Peter Tinsley, and
John Williams, "The Role of Expectations in the FRB/US Macroeconomic Model," Federal Reserve Bulletin, vol. 83 (April 1997),
pp. 227-45: and Flint Brayton. Andrew Levin. Ralph Tryon, and John B.
Williams, "The Evolution of Macro Models at the Federal Reserve Board,"
Carnegie-Rochester Conference Series on Public Policy, vol. 47 (1997),
pp. 43-81.
Expectations also play a key role in determining prices
in the financial market sector of the model. However, the
motivation for this dependence on expectations is somewhat different because financial decisions are assumed to
be unaffected by frictions, given the negligible cost of such
transactions. Rather, expectations figure prominently in this
sector because the return on many financial investments
is a stream of payments stretching well into the future. In
FRB/US, expectations are modeled explicitly, but in a
flexible manner that allows Board staff to make alternative
assumptions about the amount of information available to
households, firms, and investors in forming their expectations about the future course of the economy.
Because of the presence of frictions that delay the adjustment of nonfinancial variables, FRB/US belongs to a class
of models often described as "New Keynesian."2 In such
models, prices and quantities do not adjust quickly enough
to ensure full resource utilization at afl times. These models
predict that the labor market, in particular, will be out of
equilibrium periodically. For example, during economic
downturns an unusually large percentage of the labor force
may be willing to work at current wage rates but be unable
to find a job. Alternatively, during periods of above-average
activity, the unemployment rate may temporarily fall to a
low level, and employees may be required to work a longer
workweek than desired. However, these Keynesian features
of FRB/US diminish over time, and in the long run, when
adjustment is complete, all markets clear.
An aspect of FRB/US that is closely related to slow
market adjustment is the behavior of inflation. In the model,
firms seek to pay workers the value of their marginal
product and to price their output as a markup over trend unit
labor and energy costs. However, labor contracts and other
factors create frictions that slow the speed at which wages
and prices adjust to shifts in demand and supply. (Commodity prices are an exception to this behavior because they
adjust quickly on world spot markets). Such "sticky-price"
behavior is incorporated into the equations of FRB/US that
govern the response of inflation to changes in economic
conditions. An important implication of this view of the
inflation process is that policy-directed changes in shortterm nominal interest rates have a temporary influence on
the real rate of interest. Through this influence over real
interest rates, monetary policy can affect real prices and
yields on a variety of financial assets and thereby indirectly influence economic activity in various sectors of the
economy.
2. For further infontoution, see N. Gregory Mankiw and David Romer,
eds.. New Keynesian Economics (MIT Press, 1991).
Aggregate Disturbances. Monetary Policy, and the Macroeconomy: The FRB/US Perspective
The Influence of Policy Actions on Financial
Markets
The set of relationships linking policy actions to
movements in aggregate output and inflation is commonly known as the monetary transmission mechanism. In FRB/US, the first step in this chain is the
connection between two markets—that for overnight
interbank loans and related short-term instruments
(strongly influenced by Federal Reserve operations)
and that for long-term government and corporate
bonds. Specifically, these markets are linked by the
expectations theory of the term structure, which states
that investors seek to equalize—up to a premium to
compensate for differences in risk—the yield from
holding a bond to maturity with the yield expected
from a sequence of short-term investments in the
money market. Mathematically, the theory implies
that the yield on a bond is given by the following
formula:
Here /?,„, is the yield to maturity on an m-period
bond; r, +j is the value of the overnight interbank loan
rate (the federal funds rate) expected j periods in the
future; and the weights, (fij, sum to unity. As the
formula shows, a bond's yield is, in part, a weighted
average of the funds rate expected well into the
future. The remaining term, <p,, denotes the premium
paid to investors to compensate for uncertainty in the
future course of short-term interest rates and for the
chance of default.
Given this arbitrage relationship—which is assumed to hold at all times because financial markets,
with their low transaction costs, are relatively
unaffected by the frictions that slow adjustment in
other sectors—policy can influence long-term yields
in at least two ways. First, it can alter the current
value of the funds rate. By itself, however, such an
action has only a minor direct influence on long-term
yields because the weight on the current period's
setting of the funds rate is relatively small. Second,
policy can affect investors' expectations for the future
course of the funds rate—an influence that is potentially quite powerful. In the FRB/US model, the
Other Monetary Transmission Channels
The discussion in the text focuses on the aspects of the
monetary transmission channel explicitly incorporated
in the structure of the FRB/US model. In the real
world, other channels may also help transmit monetary
policy actions through the economy. Here in brief are
two such mechanisms that have been discussed in the
economics literature: the real balance effect and the credit
channel.
The Real Balance Effect. The monetary base—the sum
of currency and bank reserves—makes up part of the public's financial wealth. Movements in the federal funds rate
are accomplished through changes in the monetary base; for
example, an increase in the federal funds rate necessitates a
decrease in the monetary base. Unlike debt between private
parties, for which a change in value affects only the distribution of real wealth and not its overall level, changes in the
monetary base do affect the level of private wealth and
therefore should, in theory, alter consumption spending.
However, relative to movements in other forms of wealth,
movements of the monetary base are very small in size, and
thus, in reality, the real balance effect is likely to be quantitatively unimportant.
The Credit Channel. A number of economists have
argued that financial markets do not function as flawlessly
as depicted in the standard framework embedded in
the FRB/US model.' In particular, households and firms
3
face significantly higher costs if funds are raised from bank
loans and other outside sources than if internal cash sources
are used. Moreover, banks may restrict the amount lent to
limit borrowers' exposure to default risk. According to this
view, when monetary policy is tight, not only do high real
interest rates deter spending, but as income and profits fall,
many households and firms see their savings and cash
reserves diminish. Given the high cost and limited availability of outside financing, households and firms curtail spending even more than the change in interest rates implies.
Although it is difficult to incorporate fully the effects of
such credit market imperfections into a macroeconomic
model like FRB/US, in two spending categories allowance
is made for such effects. For a portion of households—
estimated to account for about 10 percent of aggregate
consumption—consumer outlays move one-for-one with
current income. Similarly, a portion of business investment
in equipment depends on current profits, capturing the reliance of many firms on internal funds. More generally,
household spending is estimated to be more procyclical
than standard theory would imply, perhaps because of the
effects of the credit channel.
1. For a recent review of this literature, see Ben S. Bernanke. "Credit in
the Macroeconomy," Federal Reserve Bank of New York Quarterly Review
(Spring 1993). pp. 50-70. For an empirical evaluation of different views of
the monetary transmission channels, see Christina D. Romer and David H.
Romer, "New Evidence on the Monetary Transmission Mechanism," Brookings Papers on Economic Activity, vol. 1 (1990), pp. 149-213.
4
Federal Reserve Bulletin • January 1999
public expects policymakers to respond to changes in
economic conditions in a systematic manner, raising
the funds rate when output is above potential and
inflation is high and lowering rates when output is
below potential and inflation is low. In forming their
expectations, households, firms, and investors use
this expected policy response to guide their forecasts
not only of the future course of interest rates but also
of output, inflation, and other macroeconomic variables.1 (For additional information on monetary pol-
icy operations, see box "How Does the Federal
Reserve Set the Funds Rate?")
Similar asset-pricing formulas, based on the same
principle of equalizing risk-adjusted expected rates
of return across investments, link the value of corporate equities to the yield on bonds and expectations
of future corporate earnings. In addition, arbitrage
across international markets implies that variations in
the return on investments in the United States cause
changes in the foreign exchange value of the dollar.
]. Further information on the treatment of expectations in the
FRB/US model can be found in Flint Brayton and others, "The Role
of Expectations in the FRBrtJS Macroeconomic Model," Federal
Reserve Bulletin, vol. 83 (April 1997), pp. 227^15.
The Influence of Financial Market Conditions
on Spending
How Does the Federal Reserve
Set the Funds Rate?
Throughout this article, monetary policy actions are characterized as setting the nominal federal funds rate—the
interest rate that banks pay to each other for overnight
loans of reserves held in the Federal Reserve System. In
fact, the Federal Reserve does not directly control the
federal funds rate; instead, the funds rate is a market rate
determined by the supply and demand for reserves. The
Federal Reserve uses open market transactions—buying
and selling Treasury securities—to expand or contract
the supply of reserves. By choosing the right supply of
reserves to the banking system, the Federal Reserve can
effectively keep the funds rate near its desired level.1
An alternative representation of monetary policy procedures is one in which the Federal Reserve, instead of
choosing a level for the funds rate, strives to keep the
money supply near a target level. If the reserves-tomoney multiplier were stable, the money supply target
would imply a particular level for the supply of reserves.
If the demand for both money and reserves were also
stable, the money supply target would be associated
with a particular level of the federal funds rate. Therefore, targeting the money supply and targeting the federal funds rate need not be fundamentally different
approaches. In practice, however, substantial disturbances
to money demand occurred as a result of financial deregulation during the early 1980s and financial innovation in
the early 1990s. Current discussions of monetary policy
and Federal Reserve practice therefore focus on the direct
setting of the federal funds rate.2
1. For a detailed account of open market operations, see Ann-Marie
Meulendyke, US. Monetary Policy and Financial Markets (Federal
Reserve Bank of New York, 1989), and "Open Market Operations during
1997." Federal Reserve Bulletin, vol. 84 (July I99S). pp. 517-32.
2. See Joshua N. Feinman and Richard D. Porter. "The Continuing
Weakness in M2," Federal Reserve Board Finance and Economics Discussion Series 1992-209 (September 1992).
Changes in financial conditions, whether or not
driven by shifts in the stance of monetary policy, are
an important factor in the spending decisions of
households and firms. For example, swings in interest
rates can greatly affect the cost of financing purchases of goods on credit. In the case of the stock
market, equity price movements have historically
been a large component of changes in household
wealth, which alter the desired level of consumer
spending. Finally, changes in the foreign exchange
value of the dollar alter the price of domestically
produced goods relative to the price of products
produced abroad and thereby influence the volume
and direction of foreign trade.
These financial effects manifest themselves in
FRBAJS in several ways. For example, the stock of
capital equipment that firms hold is sensitive to
movements in the relative price of that stock, which
includes the cost of raising funds in both the bond
and the equity markets. These financing costs are
related to expected real yields on both types of
assets—that is, the nominal yield that must be paid to
an investor for holding a bond or a corporate equity
less the average rate of inflation expected to prevail
over the holding period. Similarly, movements in real
mortgage and bank loan rates influence the desired
level of the housing stock and consumer holdings of
motor vehicles and other durable goods.
We use the model to derive the quantitative importance of these financial effects for different categories
of stocks and spending by computing the response of
individual sectors to changes in interest rates, wealth,
and the exchange rate in isolation from the rest of
the economy (table 1). In particular, no allowance is
made here for feedback effects—that is, for a simulated change in sectoral spending to alter, in turn,
the original change in financial conditions. This type
of calculation, typically dubbed partial-equilibrium
analysis, provides a direct measure of the quantita-
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
1.
Partial-equilibrium response of capital stocks and
private spending to changes in financial conditions,
with other factors constant
Percent
Gttejutytf riaefc
anil speeding
Response in level at end of year
t
2
3
IS
I perceniage point decrease in interest rales
Capital slocks
Consumer durable goods .
Housing
Producers' durable
equipment
Private invtsnhem spending
Consumer durable goods
Housing
.3
.1
.7
.3
,5
1.3
t.0
4.0
1.7
4,8
1.7
6,8
1.3
5,7
1.3
IJ
3.1
3.8
4.0
Producers' durable
equipment1
2fi percent incrca.su in sKx-tt market wealth
Private spending
Consumer durable goods
Housing
Consumer .spending on
nondurable gnods and
services
.9
2.4
1.3
35
1,1
2.9
.6
.6
.4
6 percent depreciation of the dollar
Exports
Imports
1.7
-1.1
4.8
-3.5
5.5
-3.8
5.7
-3.7
1. Includes effect of a i percentage point fall in the rate of return on equity.
tive importance of these parts of the transmission
mechanism.
In the FRB/US model, a decrease in all interest
rates—with inflation, income, and other factors he]d
constant—boosts the desired stocks of consumer
durable goods, business equipment, and residential
structures by lowering the relative cost of investment
goods (top portion of table 1). Because of frictions
that make rapid installation of new capital costly,
households and firms do not instantaneously adjust
capital stocks to the new long-run desired levels.
Instead, adjustment is gradual, especially in the case
of producers' durable equipment and housing, for
which only a fraction of the long-run rise in the
capital stock is in place at the end of three years.2
The gradual adjustment of stocks does not imply
that associated investment spending—that is, expenditures on new equipment and structures intended to
cover depreciation of the existing stocks as well as
any desired net increments to stocks—is slow to
respond to a sustained change in interest rates. In
fact, the opposite is true: The percentage increase in
2. In FRB/US, movements in interest rates have no direct effect on
two other categories of investment—nonresidential structures and
inventories. Although such investment should, in theory, depend on
interest rates, the empirical evidence for such interest sensitivity is
weak.
5
investment outlays for all three categories is substantial in the first year, with spending rising further over
the next year or two and even climbing above its
long-run percentage change in the case of consumer
durable goods and housing. Such a hump-shaped
pattern in the response of investment flows (as
opposed to the corresponding stocks) is called the
accelerator effect. It arises because gross investment
spending is typically small in relation to the size of
the capital stock, implying that a given percentage
change in stocks, if it is to be achieved rapidly,
requires a much larger percentage movement in
investment outlays. This phenomenon is particularly
important for housing, where the ratio of investment
outlays to the capital stock is so low that it would
take an increase of approximately 25 percent in
spending to raise the capital stock 1 percent within a
year.
As noted previously, financial conditions should
have a major influence on private spending through
wealth effects because the desired level of consumer
spending depends, in part, on the current value of net
household assets. An important component of the
latter is corporate equity, whether held directly or
owned indirectly in the form of mutual fund shares
and pension fund reserves. Such stock market wealth
(which currently accounts for roughly one-third of
household net worth) is highly variable over time and
has a tendency to rise whenever real long-term interest rates fall, because of arbitrage between the bond
and stock markets. According to the model's pricing
formula for the stock market, a 1 percentage point
decrease in the real yield on bonds should be accompanied by a 20 percent increase in the value of
corporate equity, all else being equal.3 Such a boost
to wealth stimulates the various components of
household spending by an appreciable amount, particularly in the short run for investment expenditures
(middle portion of table I).4
3. In equilibrium, the dividend-price ratio for equities is approximately equal to r + 9 - g, where ;• is the expected yield on bonds, 8 is
a premium paid to investors to compensate them for the greater
riskiness of equity, and g is the expected growth rate of dividends.
Because the historical mean of r + 9 - g is about 5, a I percentage
point increase in the yield on bonds reduces equity prices on average
by one-fifth, or 20 percent, all else being equal. Although in theory the
sensitivity of stock prices to a change in interest rates should shift as
/•, 9, and g move over time, this nonlinear effect is ignored in the
FRB/US model.
4. Wealth effects such as these are often described in terms of how
much an additional dollar of wealth increases consumer spending. In
the FRB/US model, an extra dollar of stock market wealth increases
spending on average about y/i cents in the long run. However,
because the elasticity of spending with respect to wealth is constant in
the model, at the present high valuation of the stock market the
estimated wealth effect is closer to 2 cents.
6
Federal Reserve Bulletin U January 1999
The final major influence of financial markets on
spending occurs through the market for foreign
exchange. As with stock prices, the exchange value
of the dollar with respect to foreign currencies fluctuates widely over time. However, arbitrage across
international money and bond markets causes movements in the exchange rate to be correlated with
changes in U.S. interest rates. A version of this relationship, called the uncovered interest parity condition, implies that a 1 percentage point fall in real
domestic long-term interest rates should produce an
immediate 6 percent depreciation of the dollar, all
else being equal.5 In FRB/US, such a depreciation of
the dollar boosts the demand for U.S. exports almost
6 percent by lowering the price of American goods
expressed in a weighted average of foreign currencies
(bottom portion of table 1). In the same manner,
depreciation of the dollar increases the domestic price
of foreign-produced goods, decreasing the volume of
imports almost 4 percent in the long run. In both
cases, the adjustment of trade volumes is not instantaneous but is spread over two or three years.
The Influence of Changes in Aggregate Income
and Sales on Spending
Changes in sectoral spending, whether caused by
financial factors or other forces, alter the level of
aggregate sales, output, and income. Changes in these
economywide factors, in turn, further influence the
spending of households and firms beyond the financial effects just described. Such general-equilibrium
effects are incorporated into simulations of the full
FRB/US model. However, as in the analysis of the
direct effects on spending of changes in financial
conditions, examining this feedback portion of
the monetary transmission mechanism in a partialequilibrium framework is instructive.
Table 2 summarizes the response of different categories of private spending to a 1 percent increase in
the level of aggregate income, output, and sales, with
5. Ignoring risk considerations, ihe uncovered interest parity condition implies that, if the expected yield on a dollar-denominated bond
is higher than the yield on a bond denominated in a foreign currency,
investors will hold the foreign bond only if the dollar is expected to
depreciate by enough to equate the two yields when both are measured
in a common currency. For this reason, when domestic interest rates
rise relative to foreign rates, the dollar immediately appreciates to
ensure the requisite amount of future depreciation. Under the assumption that the duration of the average bond is about six years, a
1 percentage point decrease in the spread between domestic and
foreign interest rates should therefore yield a 6 percent depreciation of
the dollar.
2.
Partial-equilibrium response of capital stocks and
private spending to a 1 percent increase in the level
of aggregate income, sales, output, and wealth,
with other factors constant
Percent
Category of stock
and spending
Capital stocks
Consumer durable goods
Housing
Producers' durable equipment ..
Inventories
Response in level at end of year
3
15
1.0
1.0
1.0
1.0
.1
A
I.I
.9
.4
.8
1.0
Private investment spending
Consumer durable goods
Housing
Producers' durable equipment
Nonresidential structures
Inventories'
1.5
3.9
1.3
I.I
.8
2.0
5.7
2.0
1.4
.3
1.7
4.7
1.8
1.3
-.1
1.0
1.0
1.0
1.0
.0
Other private spending
Consumer nondurable goods
and services
Imports
.4
1.9
.7
1.5
1.3
1.0
1.0
2
II
I. Change in four-quarter growth rale of inventory stocks.
prices, interest rates, and other factors held constant.
Because wealth equals the present value of expected
future dividends, interest, and other forms of capital
income, the net worth of households has also been
increased 1 percent. In these simulations, the income
shift is permanent and is assumed to be immediately
recognized as such by firms and households.
The table reveals an important feature of the behavior of households and firms—the speed at which the
public adjusts its spending to a change in income and
sales. For example, in the model the level of consumer spending depends on both income and wealth.
In response to a rise in income and wealth of 1 percent, outlays on consumer nondurable goods and
services would be expected to rise proportionally
in the absence of any frictions slowing adjustment.
However, because such impediments to rapid adjustment are estimated to be significant, this category of
consumer spending rises to its new long-run level
only after three or four years.6
Households also behave in a gradual manner when
adjusting their holdings of durable goods and housing, as do firms when investing in productive capital.
But unlike spending on nondurable goods and services, gradual adjustment in these areas manifests
6. Households and firms are much less sensitive to transitory
changes in income and sales; for example, the first-year responses
shown in table 2 would be roughly halved if the income shift were
only temporary. In part, this response results from the life-cycle view
of consumer choice built into the model, according to which a temporary blip in household income yields only a small change in the value
of lifetime resources. But households and firms are also less willing to
respond to changes in income and interest rates viewed as temporary
because of habit persistence and adjustment costs.
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
itself in the response of capital stocks to the permanent rise in aggregate income and sales: As in the
previous example of a change in financial conditions,
investment spending responds quickly. Because private investment spending is a major component of
aggregate demand, composing almost one-quarter
of nominal gross domestic product (GDP), these
accelerator effects have important implications for
the dynamic response of the overall economy to
disturbances.7
1
Partial equilibrium effect on inflation of a reduction
of 1 percentage point in the unemployment rate
Percentage point change
Sustained reduction
Two-year reduction
The Influence of Changes in Output
on Inflation
The final step in the FRB/US transmission mechanism concerns the behavior of inflation. Because of
labor contracts and other frictions, wages and prices
are slow to adjust to changes in economic conditions.
Such "sticky-price" behavior, which is readily apparent in the historical data, is incorporated into the
model by making the current rate of aggregate price
inflation depend on five factors: (1) the degree to
which the markup of prices over unit labor and
energy costs is out of line with its historical mean;
(2) the recent past rate of price inflation; (3) the rate
of growth of unit labor and energy costs expected to
prevail in the future; (4) the current and expected
degree of slack in labor and product markets; and
(5) movements in the relative prices of food, energy,
and imports.8
In the model, inflation is predicted to decline as
long as labor and capital are underutilized and to rise
whenever resource utilization is above average. Diagram 1 illustrates this behavior. The FRB/US model
7. Business inventory decisions tend to augment these accelerator
effects because the desired stock of inventories is proportional to the
level of aggregate sales. This relation implies that a permanent jump
in spending leads to a temporary surge in stockpiling lhat quickly
fades. Another area in which spending responds in a hump-shaped
pattern is imports, which rise almost 2 percent in the first year after a
sustained jump in GDP but then fall back to only 1 percent. In contrast
to investment spending, the response of imports to shifts in domestic
activity acts as a stabilizing force for the U.S. economy by diverting a
portion of any increase in domestic demand to foreign firms. This
stabilizing property of import demand is even greater in many other
models of foreign trade because they do not impose the equilibrium
condition of stable long-run import shares of GDP but allow the
long-run income elasticity of imports to be 2 or higher.
8. Aggregate wages are determined in a similar manner, in that
wage inflation depends primarily on past wage inflation, expected
future growth in consumer prices and labor productivity, and aggregate resource utilization. Wage inflation is also influenced by changes
in the minimum wage and payroll taxes. Taking the wage and price
equations together, the FRB/US specification of the inflation process
is in certain respects similar to the traditional "Phillips curve" model;
however, unlike a Phillips curve, it is derived from optimizing behavior and explicitly accounts for the effects of expectations.
n i l
II
I I I I
I I I M
I II
I I
8
predicts that, all else being equal, if the unemployment rate is held 1 percentage point below its equilibrium level on a sustained basis, inflation should climb
steadily about 0.4 percentage point a year, provided
that the public's expectations for long-run inflation
rise gradually in response to the actual pickup in
inflation. Alternatively, if the decline in unemployment is temporary, lasting only two years, then the
long-term change in the rate of inflation is limited,
settling in at about 0.8 percentage point.
These partial-equilibrium simulation results have
two important implications for monetary policy in the
context of FRB/US. The first concerns the absence of
a long-run tradeoff between the level of unemployment and that of inflation. Because inflation stabilizes only if unemployment returns to its equilibrium level—a property known as the natural rate
hypothesis—long-run economic stability requires real
interest rates and other financial conditions to be
consistent with a balance between aggregate spending and the productive potential of the economy. For
this balance to be achieved, in the long run the
nominal value of the federal funds rate must be set to
reflect both the prevailing rate of inflation and the
underlying determinants of spending and production.
The second implication for policy concerns the
cost of altering the rate of inflation. If the prevailing
rate of inflation has risen because of past episodes of
over-utilization of resources or other disturbances
directly boosting inflation, then a return to the original inflation rate requires a period of tight monetary
policy—that is, for a time, the level of the real funds
rate must be elevated above its long-run equilibrium
level, causing the unemployment rate to be temporarily above its equilibrium level. If inflation has
fallen, then the opposite holds: Restoration of the
previous growth rate of prices allows a period of low
real interest rates and above-average employment.
8
Federal Reserve Bulletin LJ January 1999
Full-Model Effects of an Easing
in Monetary Policy
So far the analysis of the FRB/US transmission
mechanism has dealt with each of its components
in isolation from one another. Now we can put
the pieces together and show how the transmission
mechanism functions in its entirety by examining the
way a drop in the federal funds rate, acting through
sector-specific responses to induced changes in financial conditions and income, works to influence aggregate output, unemployment, and inflation.
Table 3 summarizes the simulated response
(expressed relative to baseline) of the full FRB/US
model to a policy action that lowers the federal funds
rate by I percentage point on a sustained basis. In this
simulation, the public initially interprets the drop in
the federal funds rate as a temporary action that will
be reversed relatively quickly. Thus, their expectations for the future are little changed at first. As time
passes, however, the public interprets the easier
stance as a signal that the long-run objectives of
monetary policy have changed and that policymakers
seek to raise the level of inflation permanently. For
this reason, beliefs about the future are revised more
and more as the reduction in the funds rate is
sustained.
The evolving nature of expectations explains why
the 1 percentage point decrease in the funds rate
initially leads to only a small drop in long-term
interest rates (upper portion of table 3). As investors
come to believe that the policy easing represents a
long-term shift in policy objectives, they gradually
revise down their estimate of the average level of
short-term interest rates likely to prevail over the next
ten years. As a result, bond yields are V2 percentage
point below baseline by the end of two years.9 Arbitrage considerations cause this fall in bond yields to
affect other asset markets and to lead both to higher
stock prices and to a depreciation of the dollar.10
The improvement in financial conditions stimulates activity in various sectors and leads to an
9. The decline in bond yields is also limited by (he public's
expectation that nominal short-term interest rates, after falling for an
extended time, will eventually recover and then increase by the
amount of the revision to the expected long-run rate of inflation.
10. In this simulation and throughout most of the article, it is
assumed that the public forms its expectations about the future course
ol the economy using a small-scale forecasting system that includes
output, inflation, the federal funds rale, an estimate of the economy's
long-run equilibrium real short-term interest rate, and an estimate of
the long-run trend level of inflation sought by policymakers. This
particular characterization of expectations is discussed in Brayton and
others, "The Role of Expectations in the FRB/US Macroeconomic
Model.'
3.
Monetary transmission mechanism in the FRB/US
model: Full-model simulated effect of a 1 percentage
point fall in the federal funds rate
Percent
Response at end of year
Item
1
2
Change from baseline
Financial markets
Yield on 10-year Treasury bonds
Slock market prices
Exchange rale value of the dollar
Aggregate activity
GDP (chain-weighted 1992 dollars)
Unemployment rate
Consumer price inflation rate
-.3
8.8
-2.2
-JS
12.7
-4.9
.6
-.2
.2
1.7
-.7
.6
Portion of total response
Decomposition of GDP response into
expenditure allegories'
Consumer spending, durable goods (8.3) .
Consumer spending, other (59.4)
Business fixed investment (10.6)
Residential investment (4.0)
Inventory investment (0.8)
Exports (11.9)
Imports (-13.1)
Government (17.9)
24.0
28.0
13.0
26.2
16.4
7.1
-17.5
2.4
18.6
26.2
18.5
24.0
10.7
13.0
-14.8
3.4
Decomposition of GDP response
into transmission channels
Cost of borrowing
Slock market
Exchange rate value of the dollar
Anticipated nonlinancial responses
26.9
16.0
6.9
50.2
36.4
20.7
17.3
25.7
Decomiwsition of inflation response into
transmission channels
Resource utilization
Exchange rate value of the dollar
Anticipated nonlinancial responses
10.6
24.8
64.6
33,1
22.4
44.5
I. 1997 nominal shares of GDP in parentheses.
increase in the level of real GDP. This increase is
initially modest, but as adjustment proceeds and
accelerator effects kick in, the response of aggregate
spending quickens, and by the end of two years, real
GDP has risen about P/4 percent above its baseline
level. As suggested by the earlier discussion of financial influences on spending, investment spending
accounts for a disproportionate share of the increase
in GDP (table 3, lower portion). For example, at the
end of two years the change in residential investment
accounts for about one-quarter of the increase in
output even though it constitutes only 4 percent of
aggregate spending, and the portions of the GDP
response attributable to outlays on consumer durable
goods and business fixed investment are roughly
twice their expenditure shares. Inventory investment
also plays a disproportionate role in the rise of aggregate demand.
Another way to decompose the GDP response is
to break it down into its primary transmission
channels—that is, the separate effects on spending
of changes in the cost of borrowing, stock market
Aggregate Disturbances, Monetary Policy, and the Macweconomy: The FRB/US Perspective
wealth, and the exchange rate discussed earlier, as
well as a fourth channel, anticipated nonfinancial
responses. In the model simulation, changes in the
funds rate exert a direct influence on expectations of
future movements in output and inflation. In essence,
this influence can be thought of as an anticipation of
the effects of the other three channels on aggregate
activity that have yet to materialize. For this reason,
the importance of this anticipatory channel fades as
the direct effects of the other channels emerge in full
and expectations of future conditions are realized in
actual developments.
But the anticipations channel is powerful in the
short run, and it accounts for about half of the total
response of aggregate output in the first year (lower
portion of table 3). By contrast, only a quarter of the
first-year GDP response is directly attributable to
current and past declines in the cost of borrowing;
wealth effects and dollar depreciation account for
even smaller shares. By the second year, the importance of anticipated changes in aggregate income and
other variables that have not yet materialized is considerably diminished. Commensurately, that of the
three standard channels is raised—particularly the
exchange rate channel, where adjustment of trade
flows to dollar depreciation is especially drawn out.
As with the GDP response, the movement in aggregate price inflation can also be decomposed into its
primary determinants, including a channel that measures the anticipated effect of the policy easing on
expected changes in the future growth rate of trend
unit production costs that have yet to emerge. Such
anticipation effects—related in part to the public's
evolving view of the long-run rate of inflation sought
by policymakers—are extremely important in the
short run and account for almost half of the two-year
change in actual inflation. However, their effect by
the end of the third year—not shown in table 3—is
zero. The contribution of current and past changes in
resource utilization is also considerable, as is that of
exchange rate depreciation. The latter arises because
a large portion of the induced decline in the foreign
exchange value of the dollar is passed through into
the dollar-denominated price of imports, which in
turn directly boosts consumer prices.
SOME MACROECONOMIC CONSEQUENCES
OF AGGREGATE DISTURBANCES
The preceding discussion showed how policy actions
are transmitted throughout the economy, affecting
real variables, such as consumption and output, and
nominal variables, such as inflation. This section
9
looks at the monetary mechanism in a slightly different way by examining monetary policy responses to
disturbances originating from elsewhere in the economy. These experiments show that the way in which
monetary policy reacts to shocks, together with the
nature of the shock itself, influences the way in which
the economy evolves over time.
Simple macroeconometric models have only a few
possible types of disturbances, often just generic
shifts in aggregate demand and supply. But in a larger
model like FRB/US, as well as in the real world, the
kinds of disturbances are numerous (see box "On
Defining and Measuring Shocks"). In this section,
the focus is on the implications for policy of two
general classes of disturbances: shocks whose primary initial influence is on spending ("demand"
disturbances) and shocks whose initial effect is
mainly on prices or production ("supply" disturbances). All shocks differ, and their classification is
not always straightforward. There are, however, some
broad similarities of disturbances within a class and
important differences in the policy implications of
each type of shock.
A Shift in the Equity Premium
As just noted, demand shocks include any disturbance directly affecting people's willingness to
spend. In FRB/US, shifts in foreign demand, personal income taxes, and asset prices are examples of
demand disturbances. In regard to the last example,
movements in stock market wealth that are not
explained by changes in interest rates and other fundamentals are frequent occurrences. These may occur
because people suddenly reassess the riskiness of
the stock market and demand a higher or a lower
rate of return for holding equities relative to bonds.
This reassessment is called a change in the equity
premium.
For illustrative purposes, we use the FRB/US
model to simulate a permanent rise in the equity
premium that is sufficient to bring about an initial
20 percent decline in stock market wealth. Many
policy responses to this disturbance could be considered; results for three of them, expressed as changes
from baseline, are summarized in diagrams 2 and 3.
Policy cannot completely offset the consequences
of the rise in the equity premium for stock prices; so
regardless of the policy response, the initial fall in
real stock-market wealth is essentially the same (diagram 2, upper-left panel). For consumers, this development represents a significant decline in the wealth
that can be allocated to fund current and future expen-
10
Federal Reserve Bulletin • January 1999
ditures. For firms, the higher premium implies an
increase in the cost of financing capital outlays
using equity. The FRB/US model predicts that, in
the absence of adjustment costs, consumers would
respond to this change in financial conditions by
reducing the level of consumption approximately
0.6 percent and firms would cut equipment investment a bit more than 0.8 percent per year. (That is,
the frictionless responses to the rise in the equity
premium would be identical to the fifteen-year
partial-equilibrium changes shown in table 1.) However, neither category of expenditures falls by this
amount at first because of the adjustment costs and
other frictions discussed earlier (diagram 3, top
panels).
Falling demand and the associated rise in unemployment put downward pressure on inflation. Monetary policy can reinforce this effect on output and
inflation if it fails to respond to the change in the
macroeconomic environment. Because the rise in the
equity premium is permanent, it leads to a sustained
loss in wealth and a permanent increase in the saving
rate. As a result, permanently lower real interest rates
are necessary after the shock to restore equilibrium.
Thus, if the nominal federal funds rate were kept
constant, the initial value of the real federal funds
On Defining and Measuring Shocks
In the context of a model, a disturbance is any factor
affecting spending and other variables that is not itself
determined by the equations of the model—that is, any
factor exogenous to the system. These exogenous factors
fall into two categories. The first includes all explanatory
variables determined outside macroeconomic models, such
as population growth. The second category includes the
errors—the difference between the model's predictions and
actual historical outcomes—made by the model's equations. This definition of shocks makes it clear that the
decomposition of movements in economic data into the
portion explained by a model's structure and the portion
attributable to autonomous influences depends on the model
used in the analysis.
For example, in the FRB/US model, movements in the
relative price of oil are treated as autonomous and not
affected by changes in energy use and production. However,
a model of greater complexity might include equations for
the world demand and supply of petroleum and thus would
attribute at least some changes in the price of oil to factors
internal to the model, rather than classifying them as disturbances. Similarly, FRB/US and other models with a fully
articulated supply side distinguish between exogenous
changes in prices and autonomous disturbances to productivity. However, in smaller models that lack an aggregate
production function, such as the IS-LM-Phillips-curve system of many textbooks, the wage-price block is often
simply called a short-run supply curve, and price disturbances are therefore frequently referred to as supply
shocks.1
The measurement of shocks is also influenced by empirical methodology, as illustrated by research in the early
1980s that suggested that permanent shocks to supply are
important in explaining movements in real GDP. The relative importance and the persistence of supply and demand
shocks remain subjects of considerable research and
I. See Laurence Ball and N. Gregory Mankiw, "Relative-Price Changes
as Aggregate Supply Shocks." Quarterly Journal of Economics, vol. 110
(February 1995). pp. 161-93.
debate.2 Such uncertainty over the duration of disturbances
complicates monetary policy because of the significant lag
between changes in the federal funds rate and the response
of aggregate output, unemployment, and inflation. Thus,
policymakers must often act before they have complete
information; for example, in the case of an unexplained
movement in equity prices, they must act without knowing
how long the bull or bear market will last.
Finally, the definition and measurement of shocks is
influenced by the theoretical approach used to construct the
economic model. New Keynesian models such as FRB/US
allow for direct disturbances to many sectors of the economy without inquiring too closely into the exact nature of
these disturbances.3 By contrast, another class of models—
known as dynamic stochastic general equilibrium, or DSGE,
models—are based on the view that the economy is subject
to only a small number of fundamental disturbances to
consumer tastes and production technology.4 Such models
place more importance than do New Keynesian models
on the role of productivity shocks in explaining economic
fluctuations. These models also interpret historical
responses of output and employment to disturbances as
people's optimal adjustments, rather than as a failure of
markets to clear. Accordingly, DSGE models assign a much
smaller role to monetary policy in mitigating the effects of
macroeconomic disturbances than do New Keynesian models like FRB/US.
2. See Charles R. Nelson and Charles I. Plosser, "Trends and Random
Walks in Macroeconomic Time Series: Some Evidence and Implications."
Journatof Monetary Economics, vol. 10 (September 1982), pp. 139-62, and
Pierre Perron, "The Great Crash, the Oil Price Shock, and the Unit Root
Hypothesis," Ecanometrica. vol. 57 (November 1989). pp. 1361-401, for
examples of research into the permanence of supply shocks.
3. One consequence of this approach is that a real-world event may
manifest itself as a set of simultaneous disturbances to different portions of
the model. For example, the recent Asian financial crisis appears as an
autonomous decline in foreign output, a reduction in relative oil prices, an
unexpected appreciation of the dollar, and a fall in the premium incorporated
into U.S. bond yields.
4. For an introduction to DSGE models, see Edward Prescott, "Theory
ahead of Business Cycle Measurement," Federal Reserve Bank of Minneapolis Quarterly Review, vol. 10 (Fall 1986). pp. 9-21.
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
rate would be too high (diagram 2, lower-right panel).
The high real rate would put additional downward
pressure on aggregate spending and thereby raise
unemployment and push down inflation (diagram 2,
middle-left and middle-right panels respectively). As
a result, the real funds rate would rise further. If
allowed to persist, this policy would result in a continuing downward spiral of falling output and inflation, driven by ever-rising real interest rates.
An alternative policy is to fix the real interest rate
at its initial level. The lower-left panel of diagram 2
shows a substantial decline in the nominal funds rate
associated with this policy (curve for fixed real funds
rate). As already noted, however, a recovery in aggregate demand requires that the real interest rate fall.
2.
1]
Thus, fixing the real rate is also destabilizing in the
long run. Therefore, in response to a demand shock,
and in the absence of some additional countervailing
disturbance, the real rate must be moved in the same
direction as the movement in demand resulting from
the equity shock.
One policy response that fits this description is
shown by the curve for stabilizing policy in the
lower-left panel of diagram 2. The reduction in the
funds rate shown is small but long lasting and so is
sufficient for bringing inflation and unemployment
back to their previous levels. The mechanism through
which this policy works is that described previously
in the full-model simulation of the effects of an
easing in policy: According to the FRB/US model, a
A permanent increase in the equity premium (deviation from baseline)
Percentage point change
Percentage point change
Real slock market wealth
Real GDP
—
5.0
— 10.0
15.0
-I
1
I
Fixed nominal funds rate
I
I
1
I
1 L.
Unemployment rate
Consumer inflation
(four-quarter average)
—
0.4
—
0.2
—
r— 0.4
I
I
i
I
j
i
L
Nominal federal funds rate
J
U
j
L
I
i
Real federal funds; rate
j
L
—
0.2
—
0.4
I
I
I
I
I
I
1
I
J
[_
i
i
I
12
3.
Federal Reserve Bulletin • January 1999
A permanent increase in the equity premium and the components of spending (deviation from baseline)
Percentage point change
Percentage point change
Camsamer goods and services
Producers' durable goads
i
reduction in the federal funds rate today lowers real
interest rates today and generates expectations of
lower rates and of higher output in the future. These
expectations, in turn, elicit higher domestic spending
by raising the target level of consumption and investment spending. These effects are supplemented by an
expectations-driven decrease in corporate bond rates,
which helps the stock market recover some of its
initial losses." Finally, the reduction in domestic
interest rates puts downward pressure on the
exchange value of the U.S. dollar, improving international competitiveness and strengthening the trade
balance (diagram 3, bottom panels).
The stabilizing policy promptly returns both inflation and resource utilization close to their original
levels. Only a brief, small acceleration in inflation
I I. The value of stock-market wealth recovers somewhat in the
quarter immediately following the shift in the equity premium because
of expectations on the part of bond-market participants that the initial
loss of wealth will reduce the equilibrium real interest rate. Equity
prices rise in response to this expectation because of asset arbitrage.
Beyond the first quarter or two, expected real corporate bond rates fall
because of expectations of lower short-term nominal interest rates in
the future and sluggish adjustment of price inflation. This fall permits
the modest recovery in stock market wealth to persist. However, when
the nominal federal funds rate is held fixed, once expectations of
declines in the federal funds rate go unrealized, stock market wealth
begins to fall once again.
i
I
i
i
i
and a slight increase in unemployment are borne by
the economy. The increase in inflation is attributable
to exchange-rate pass-through, for the fall in the
dollar also leads to higher prices of imported consumer goods, which are then passed through into a
higher rate of consumer price inflation. For the most
part, this ability to offset simultaneously the output
and the inflation consequences of demand disturbances is a feature of the FRB/US model, and of all
models of its class: Stabilizing both output and inflation are complementary objectives in the presence of
a shift in aggregate demand.
As diagram 2 shows, there is a monetary policy
setting associated with a path for the real interest rate
that stabilizes inflation and unemployment. However,
under this policy, consumer expenditures are significantly lower throughout the period shown in
the upper-left panel of diagram 3 and for the period
beyond. Thus, monetary policy cannot fully replace
the loss of wealth and consumption caused by the
rise in the equity premium. This result illustrates
the general principle that in the long run policy can
only restore normal levels of resource utilization
and determine the prevailing rate of inflation; it
cannot undo all the effects of permanent shifts in
fundamentals.
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
An Acceleration
in Wage
Compensation
In contrast to demand shocks, some macroeconomic
disturbances affect prices directly and only afterward
have an influence on real quantities. Shocks in this
category include autonomous movements in the
prices of food and energy. Such shocks, together with
direct disruptions to the supply of labor or other
aspects of production, present policymakers with
short-term tradeoffs not encountered in the case of
demand shocks.
One typical example of a price shock is an unanticipated change in wage compensation. This change
may occur for a number of reasons: In the context of
a macroeconomic model, the precise origin of shocks
is not always clear. For present purposes it suffices to
4.
13
consider an autonomous temporary acceleration in
wage inflation without any accompanying shocks to
aggregate demand, labor supply, or the like. For this
experiment, the shock raises the four-quarter wage
inflation rate by 1 percentage point after a year.
Having established that there are circumstances
under which pegging either nominal or real interest
rates leads to macroeconomic instability, we restrict
our attention to policies that stabilize either unemployment or inflation. Simulation results are shown
in diagram 4.
As expected, the wage-growth disturbance acts
directly and immediately on wages and prices and
then on measures of real activity. And as before,
monetary policy cannot realistically offset the initial
effects of the shock: Wage inflation rises by essen-
Transitory increase in wage compensation (deviation from baseline)
Percentage point change
Percentage point change
Nominal wage growth
(four-quarter average)
Consumer inflation
(four-quarter average)
Inflation stabilization
1
I
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t
i
I
i
i
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i
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1
i
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i
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i
i
i
Real GDP
l
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1
i
i
i
I
t
i
i
I
\ , i
Unemployment rate
— 0.6
— 0.4
— 0.5
— 1.0
I
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!
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:
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1
Real federal funds rate
Nominal federal funds rate
I
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— 1.0
—
—••
— 0.5
—
— 0.5
— 0.5
—
— 0.5
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F
I
1.0
14
Federal Reserve Bulletin • January 1999
tially the same amount over the first year of the
scenario, regardless of the policy responses considered (diagram 4, upper-left panel). All else being
equal, the acceleration in wages squeezes the profit
margins of firms, inducing a wage-price spiral as
firms push up prices in an attempt to re-establish their
profit margins. A policy of keeping the inflation rate
close to its original level must therefore raise the
nominal (and real) federal funds rate early and by
a substantial amount (the curves for inflation stabilization, bottom panels). This policy tightening
results in an extended period of higher unemployment (middle-right panel). Over time, expectations of
future price and wage inflation are brought into line
with policy objectives, and real variables return to
equilibrium levels.
The depiction of the economy when policy attempts to stabilize unemployment contrasts sharply
with the inflation-stabilization case. Because unemployment is slow to respond to falling profit margins,
under this strategy the federal funds rate initially
remains unchanged (bottom-left panel). The shock
therefore propagates into higher and longer-lasting
inflation than is the case when policy reacts promptly
to head off an emerging wage-price spiral (topright panel). Under this policy, only when growing
demand pressure begins to show up in employment do nominal interest rates rise, and then only
enough to maintain unemployment near its baseline
level (middle-right panel). By this time, the experience of higher inflation has become entrenched in
expectations.
Beyond the end of the period shown, price and
wage inflation do not return to their original levels:
Without an active effort by the monetary authority
to contain the actual and expected growth of prices
at the original low rates, inflation tends to drift with
whatever relative-price disturbances hit the economy.
This result is a direct consequence of the natural rate
hypothesis embedded in the FRB/US and most other
models. For all such models, full employment is
consistent with any constant inflation rate, and for the
economy to arrive at a particular inflation rate, the
monetary authority must take appropriate action—
that is, it must establish a nominal anchor.12
12. An extensive literature compares the virtues of possible nominal anchors, which include the price level, the nominal exchange rate,
commodity prices, nominal income, and the inflation rate. For a
general discussion of this issue, see Bennett T. McCallum "Issues in
the Design of Monetary Policy Rules" in John B. Taylor and Michael
Woodford. eds., Handbook of Macroeconomics (North-Holland, forthcoming). A readable guide to inflation targeting is Ben S. Bernanke
and others, Inflation Targeting: Lessons from the International Experience (Princeton University Press, 1999).
A Shift in the Level of Productivity
Besides being subject to shifts in relative prices, the
economy is affected by disturbances to the availability or efficiency of inputs to the production process.
Changes in labor supply, crop failures, and technological innovations are common examples of such
shocks to supply.
A supply disturbance that economists often study
is a shift in total factor productivity—that is, an
unanticipated change in the volume of output that can
be produced with a given level of productive inputs.
Some implications of a temporary slowdown in productivity growth are illustrated in diagram 5. In the
simulation, the slowdown gradually reduces the level
of potential output 1 percent over two years, after
which productivity growth returns to normal but
the level of potential output remains permanently
lower (upper-right panel). One reason for such
a decline in productivity might be that research
and development expenditures temporarily yield an
abnormally low flow of technical innovations.
Two policy responses to such an event are considered. In one, policy acts to bring inflation promptly
back to its original level, and in the other, policy
stabilizes inflation more gradually. In either case,
policymakers and the public are assumed to understand that the reduction in the level of productivity is
permanent.
The effect of this shock on real GDP can be split
into two parts. First, the level of potential output falls
by 1 percent, so that if resource utilization does not
change, the level of real GDP must fall proportionally. Second, the other dynamic aspects of adjusting
spending behavior cause the initial decline in outlays
to be greater than that of potential output, with the
result that unemployment rises.
On the price side, the fall in productivity reduces
the equilibrium real wage by 1 percent. Reestablishment of labor market equilibrium requires
that the real wage fall to this new equilibrium level;
monetary policy influences whether the reduction in
the real wage occurs through a period of low wage
growth, of higher price inflation, or a combination of
both.
For monetary policy to keep price inflation close to
its original level (curve for rapid stabilization of
inflation, middle-right panel), the nominal federal
funds rate needs to rise immediately and by a substantial amount (lower-left panel). Raising the funds rate
in this way counteracts the expectation that some of
the adjustment in real wages will take place through
higher prices.
With this policy response, the upward pressure
on prices is short-lived. The decline in productivity
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
5.
15
Temporary reduction in productivity growth (deviation from baseline)
Percentage point change
Penwilagc point change
Real GDP
Potential output
Gradual stabilization
of inflation
Rapid stabilization
of inflation
Wage inflation
(four-quarter average)
Consumer inflation
(four-quarter average)
—
1
L
I
I
I
I
t
1
1
i
1 _ i
1 .1
I
I
i
Nominal federal funds rate
I
1 1 U-J
l i l t
i_J
L_J
I
I. ,1. .1 ..I.
Real federal funds tale
— 1.0
reduces the desired capital stock, bringing down
investment. Similarly, the falling real wage reduces
labor income, bringing down consumption. The
accelerator mechanisms discussed in the previous
section tend to make producers' durable equipment
and consumption expenditures overshoot their new,
lower long-run levels. Accordingly, significant excess
supply emerges by the second year.
The initial tightening in policy thus gives way
shortly thereafter to substantial easing to support
aggregate demand and contain emerging expectations
of disinflation. In the end, the policy succeeds in
achieving tight control of inflation but at the cost of
sizable swings in output around potential.
This policy response is just one of many that are
consistent with keeping the inflation rate from driftover long periods of time. In the diagram, the
Digitizeding
for FRASER
I
0.05
— 1.0
— 0.5
— 0.5
— 1.0
l
I I I I I I
i
II
curves for gradual stabilization show another, more
gradual response to the shift in potential output. The
early tightening of policy in this case is designed to
be one-half the size of the tightening just discussed,
as measured by the nominal funds rate. This policy
results in more of the real wage adjustment taking
place through prices, rather than through nominal
wages. It also results in less short-run fluctuation in
aggregate spending (upper-left panel). Finally, this
less-aggressive policy results in less variability of the
nominal federal funds rate throughout the period.
These alternative policies show that, in the context
of the FRB/US model, policy that seeks to stabilize
inflation must establish a nominal anchor in the long
run, but doing so still leaves considerable latitude for
different short-run responses to disturbances. In the
case of supply shocks (broadly defined to include
16
Federal Reserve Bulletin l_ January 1999
price disturbances), policies that work aggressively
against movements in inflation do so at the expense
of greater variability in output and interest rates. In
contrast, policies that are less strict about short-run
control of inflation result in lower variability of output and interest rates by accepting larger fluctuations
of inflation. Thus, although there is no long-run
tradeoff between the level of employment and that
of inflation, supply shocks in the FRB/US model do
present policymakers with tradeoffs in variability
among output, inflation, and interest rates.
Lconomic Disturbances and General Policy
Responses
The disturbances discussed above are merely three
among the many whose economic effects can be
simulated using the FRB/US model. The macroeconomic consequences of a selection of these shocks,
including the three just presented, are summarized in
table 4. Some of these disturbances—a fall in stock
market wealth, a rise in foreign output, and a change
in fiscal policy—can be classified as demand shocks.
Others—higher wage inflation, a fall in productivity,
an increase in oil prices, and a hike in the minimum
wage—are examples of supply disturbances. Still
others—a depreciation of the dollar and a decline in
the relative price of capital goods—combine features
of both types of shocks in that they directly affect
both spending and production (or prices).
To simplify the comparison of results across the
different disturbances, the effects of each disturbance
are first simulated holding the real federal funds rate
constant (table 4, left-hand portion). Comparing
results for the various disturbances reveals a range of
macroeconomic outcomes, indicating that each shock
has its unique influence on the economy. The results
also provide guidance on the direction of the change
in the federal funds rate that would be needed to
stabilize employment or inflation or both in the
model, as well as a rough sense of which shocks
would require greater or smaller shifts in the stance
of policy.
In theory, individualized policy responses could be
crafted to accompany each specific disturbance, with
the goal of delivering particular macroeconomic outcomes, subject to the limitation that policy cannot
eliminate all short-run fluctuations in both aggregate
employment and inflation in the case of supply
shocks. In practice, however, the economy often
experiences several disturbances at the same time;
in addition, policymakers and the public alike may
find it difficult to identify the precise nature of shocks
as they occur. For this reason, it is useful to consider
generalized policy responses that have the property
of gradually stabilizing output and inflation in the
face of a wide range of economic disturbances.
A simple example of such a policy is the Taylor
rule.13 According to the rule, the nominal federal
funds rate is raised by 150 basis points for each
percentage point increase in the rate of inflation. In
addition, the rule also increases the federal funds rate
by 50 basis points for each percentage point that real
GDP exceeds its potential level (a measure usually
referred to as the output gap). In the context of the
FRB/US model, the rule's procedure for setting the
federal funds rate stabilizes the economy for a wide
range of macroeconomic disturbances. As shown in
the right-hand portion of table 4, the Taylor rule does
not ensure that complete stabilization of output and
inflation will be achieved in a period as short as three
years. Relative to a policy of holding the real funds
rate constant, however, the rule does successfully
prevent longer-term macroeconomic instability: For
all the disturbances, both unemployment and inflation
are within 0.1 percentage point of their baseline
values after ten years.14
MONETARY POLICY AND AVERAGE
MA CR0EC0N0M1C PERFORMA NCE
The simulations of various disturbances discussed
above are examples of the ways in which monetary
policy actions affect movements in prices and unemployment after disturbances to aggregate demand
and supply. As was noted, disturbances to aggregate
demand typically do not present policymakers with a
tradeoff between the objective of price stability and
that of employment stability: Adjusting the stance of
monetary policy to bring the level of economic activity closer to its potential simultaneously acts to damp
any upward or downward pressure on inflation. By
contrast, production and price disturbances do present
policymakers with a tradeoff between the variability
of output and that of inflation, though not between
the levels: In FRB/US, there is no long-run tradeoff
13. The Taylor rule was introduced "lo preserve the concept o f . . .
a polity nile in an environment where it is practically impossible to
follow mechanically the algebraic formulas economists write down to
describe their preferred policy rules." John B. Taylor, "Discretion
versus Policy Rules in Practice" Carnegie-Rochester
Conference
Series on Public Policy, vol. 39 (1993). p. 197.
14. For many of the disturbances, GDP and the federal funds rate
do not return to baseline. Such long-run shifts occur when the shock
permanently alters the level of potential GDP or the steady-stale rate
of interest or both.
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
4.
17
Simulated inacroeconomic effects of selected disturbances under alternative monetary policies
Percent change from baseline except as noted
Macroeconomic measure
Constant real funds rate
Taylor rule
Response at end of year
Response at end of year
10
10
Stock market: Reduction in stock market wealth of 20 percent ex ante, caused by permanent increase in the equity premium
GDP1
Unemployment rate
Consumer price inflation - .
Nominal federal funds rate
-.8
.3
_2
-2
-1.0
.4
-.4
-.4
-2.1
-1.4
-1.4
-.2
.1
.0
-.3
-.3
.1
.0
-.3
.1
.0
-.1
.0
.0
-.4
Wages: Four quarters of unanticipated increases in nominal wage growth cumulating to I percentage point
1
GDP
Unemployment rale
Consumer price inflation3 .
Nominal federal funds rale
-.2
.1
.7
.7
-.3
.2
.6
.6
-I
.0
.3
,3
.0
.0
.2
.2
-.3
.2
.6
.8
-.5
.3
.5
.6
-.1
.0
.1
.1
Potential GDP: Eight-quarter reduction in total factor productivity growth cumulating to a permanent 1 percent fall in the level
1
GDP
Unemployment rate
Consumer price inflation2 .
Nominal federal funds rate
-1.2
.1
.3
.3
-1.4
.3
.1
.0
-.1
-.1
-.5
.0
.1
.1
-1.3
.2
.3
-1.3
.3
.1
-.1
-.9
.0
.0
.0
Exchange rale: Permanent ex ante 10 percent reduction in the real exchange value of the dollar
GDP1
Unemployment rale
Consumer price inflation - .
Nominal federal funds rate
1.6
-.4
.5
.5
2.5
-1.0
.4
.4
3.8
-1.9
3.0
3.0
.4
-.1
.4
.7
1.0
-.2
.4
1.2
1.2
-.5
-.1
.8
-.5
-.1
Oil prices: Permanent increase in relative oil prices cumulating to $10 per barrel over four quarters
GDP1
Unemployment rate
Consumer price inflation2 .
Nominal federal funds rale
-.2
.1
.2
.2
-.2
-.3
-.3
.4
.4
.5
.5
.1
.1
.2
-I.I
.0
-.1
.1
.2
-.2
.1
.4
-.2
.0
.0
.4
—4
.2
.3
.2
Foreign output: Permanent 5 percent increase in the trend level of foreign GDP
GDP'
Unemployment rate
Consumer price inflation3 .
Nominal federal funds rate
.9
-.5
.4
.4
1.6
1.3
1.3
.6
-.2
.0
.4
.4
-.2
.1
.4
Income taxes: Permanent increase in federal personal income taxes equal to 1 percent of GDP ex ante
1
GDP
Unemployment rate
Consumer price inflation2 .,
Nominal federal funds rate .
-.4
.1
.0
.0
-1.0
.4
-.3
-.3
-1.5
.7
-1.2
-1.2
-.3
.1
.0
-.2
-.5
.2
.0
-.4
-.5
.2
.0
-.4
-.1
.1
.0
-.7
Government expenditures: Permanent increase in federal government purchases of goods and services equal to I percent of GDP
1
GDP
Unemployment rate
Consumer price inflation2 ..
Nominal federal funds rale .
1.4
-.5
1.4
-.7
.5
.5
1.1
-.7
.7
.6
1.1
-.6
1.4
1.4
I.I
-.3
.0
.7
.5
-.3
.1
.7
.0
-.2
.5
Minimum wage: Permanent $1 per hour increase in the minimum wage, indexed to inflation
GDP1
Unemployment rate
Consumer price inflation - ..
Nominal federal funds rale .
.0
.0
.3
.3
-.3
.2
.7
.7
-.2
.2
.5
.5
-.1
.0
,3
.2
-.0
.0
.3
,4
—4
.2
.7
.8
-.4
.3
.4
.4
Capital goods prices: Permanent 5 percent fall in the relative price of business equipment
GDP1
Unemployment rate
Consumer price inflation3 .
Nominal federal funds rate
.2
.0
.0
.0
.6
-.2
.0 '
.0
1. Gross domestic product measured in chain-weighted 199^ dollars.
1.0
-.3
2.2
-.6
1.0
1.0
.2
.0
.0
.5
-.1
.0
.2
.7
„2
.0
.3
.7
.0
2. Four-quarter growth rate of chain-weighted price index for personal
consumption expenditures.
18
Federal Reserve Bulletin D January 1999
between unemployment and inflation.15 Thus, as seen
in the experiment of a negative shock to productivity,
a policy that forcefully acts to keep inflation in
check achieves this objective at the cost of more
pronounced fluctuations in economic activity and
unemployment. Alternatively, a more muted initial
policy response limits the magnitude of the fall in
employment but does so at the cost of larger swings
in inflation.
In the context of the full range of demand and
supply disturbances hitting the economy, any systematic policy response to changes in macroeconomic
conditions embodies its own particular average
tradeoff between variability of output and that of
inflation. For example, because the Taylor rule discussed earlier responds to movements in inflation and
the output gap in a fixed fashion, it generates a predictable stabilization path for different economic
measures following any given set of macroeconomic
disturbances. Taking account of all the possible
shocks that might be encountered over time, and
adjusting for their likelihood, one can compute the
average variability of output, inflation, and interest
rates likely to be experienced under the Taylor rule.
Similar calculations can be made for other systematic
policy responses—for example, policies that allow
for larger or smaller responses to movements in inflation and the output gap or that include responses to
past or projected levels of interest, inflation, and
other variables.
To analyze the stability implications of the Taylor
rule and other systematic policy responses, policy is
assumed to follow a generalized policy rule of the
form
r, = a + br, _ , +
CK, +
dv,,
where r, denotes the federal funds rate in quarter /,
n is the four-quarter inflation rate, y is the output
gap, and a, b, c, and d are the coefficients of the
policy rule. The coefficients of such a generalized
policy rule determine how quickly and aggressively policy responds both to deviations of inflation
from its target rate and to the output gap.16 The
choice of coefficient values thus affects the volatility
of inflation and output in the economy. For example,
15. In ihe model, there is a limited long-run effect of inflation on
the level of real GDP because [he tax system is not neutral in relation
to the average rate of inflation. Thus, a change in the average rate of
inflation affects the after-tax cost of capital, investment, and potential
GDP.
16. For the Taylor rule, b = 0, c = 1.5, d = 0.5, and the intercept a
depends on ihe economy's equilibrium real interest rate and the
long-run rate of inflation sought by policymakers.
policies that respond aggressively to inflation—that
is, ones for which the value of c is large—will be
associated with a lower average volatility of inflation.
The coefficient b on the lagged funds rate measures to
what extent the current setting of the funds rate
depends on past observations of inflation and output.
The FRB/US model can be used to evaluate the
relationship between policy and macroeconomic fluctuations. With a specific set of coefficient values for
the generalized policy rule, one can compute the
standard deviations of inflation and the output gap
associated with that specific policy rule, based on
stochastic simulations in which the FRB/US model is
repeatedly subjected to random supply and demand
shocks based on the experience of the past thirty
years.17 The shocks include random disturbances to
the labor, goods, financial, and foreign markets. This
process is then repeated for many different sets of
policy coefficients.
Diagram 6 summarizes the results of this experiment. The shaded area shows the inflation and output
volatilities that result from choices of coefficients in
the generalized policy rule, subject to a constraint
that the variability of the federal funds rate does not
exceed a specified level.18 This limit on funds rate
variability serves the purpose of excluding from the
analysis "unreasonable" policy rules that are highly
effective in offsetting aggregate disturbances (in particular those to demand) but, in so doing, generate
wild swings in interest rates. For purposes of these
simulations, we assume that the public is fully aware
of the policy in place and forms expectations consistent with that policy and the structure of the model.19
In addition, the long-run inflation goal of policymakers is assumed to be constant.
In general, points in the lower left portion of the
shaded region represent better outcomes, in terms of
a lower variability of both inflation and output, than
17. For a complete description of the methodology used in this
experiment see Andrew T. Levin, Volker Wieland, and John C.
Williams, "Robustness of Simple Monetary Policy Rules under Model
Uncertainty," in Monetary Policy Rules, John B. Taylor, ed. (University of Chicago Press, forthcoming).
18. In the FRB/US model, the connection between the level of the
output gap and the unemployment rate is close. Thus, in terms of the
diagram, greater volatility of the output gap implies greater volatility
of the unemployment rate around its equilibrium level.
19. Such expectations are called model consistent, and they differ
somewhat from those in the previous sections of the article, in which
the public was assumed to have an approximate, but not exact,
understanding of monetary policy and the workings of the economy in
general. In the present context, model-consistent expectations have
the advantage of preventing expectational errors caused by the public's misunderstanding of policy procedures—errors that would be
unlikely to occur in the long run if policymakers were to adopt
standard procedures.
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
6.
FRB/US policy frontier
SlwKjani deviation of oulpul gap
1.3
1.4
1.5
1.6
1.7
1.8
2.0
Standard deviation of inflation rate
do points in the upper right. The curve on the boundary of the shaded region, labeled "policy frontier,"
shows the minimum output variability attainable for a
given amount of inflation variability. Thus, the frontier represents the best attainable set of outcomes for
the types of policy considered here.
Many policies, however, are associated with outcomes well away from the frontier. Modifications to
such inefficient policies can lead to outcomes in
which the fluctuations of inflation and output are both
smaller on average. For example, a policy associated
with the outcome labeled point C in the diagram can
be changed so that the resulting outcome is given by
point B, which represents a lower variability of both
inflation and output.
One can draw a number of conclusions from these
results. First, among policies on the frontier, there is,
as expected, a tradeoff between inflation variability
and output variability. As in the examples of shocks
to wages and productivity, a policy that decreases
the variability of inflation does so at the cost of an
increase in the variability of output. As noted, the
variability tradeoff stems fundamentally from the
existence of supply shocks. Shocks of this type
present policymakers with the choice of keeping a
tight rein on inflation and accepting large movements
in resource utilization or allowing the inflation rate to
fluctuate significantly in the short run while tempering the movements in unemployment and output.
19
Demand shocks, however, present no such conflict: A
policy that offsets demand shocks effectively stabilizes both inflation and output.20
Not surprisingly, policies that respond relatively
aggressively to inflation and only moderately to output generate outcomes of low inflation variability and
high output variability. For example, point B on the
policy frontier results from a policy that is about
50 percent more responsive to inflation and about
50 percent less responsive to the output gap than the
policy associated with point A on the frontier.
A couple of caveats are worth mentioning. First,
these results are specific to the FRB/US model; other
models may provide different conclusions regarding the existence and characteristics of the tradeoff
between inflation variability and output variability.
Second, an assumption of the experiment is that the
policymaker faces no uncertainty regarding the
coefficients or structure of the model and the accuracy of the data, factors that in reality greatly complicate policymakers' decisionmaking. Uncertainties
regarding the state of the economy, the "true" model
of the economy, and the incidence of supply versus
demand shocks may suggest modifications to the
types of policy rules considered here.21
In summary, this analysis using the FRB/US model
shows that, for well-chosen policies, there is a
tradeoff between reducing the magnitude of fluctuations in inflation and reducing those in employment
and output. Within the set of efficient policies—that
is, those associated with the policy frontier—the
choice of appropriate monetary policy depends on the
weights that policymakers place on stabilizing inflation relative to stabilizing employment.
C
20. Demand shocks cause a different kind of tradeoff, that between
stabilizing inflation and output and minimizing the volatility of movements in interest rates. According to the FRB/US model, to fully offset
the effect of all demand disturbances, it would be necessary to regularly raise or lower the federal funds rate by multiple percentage
points within a year. Because such violent movements in interest rates
may have harmful repercussions on the efficient operation of financial
markets, monetary policy in practice is limited to damping the effects
of demand disturbances—it cannot eliminate them.
21. Fora further discussion of these issues, see John B. Taylor, ed.,
Monetary Policy Rules (forthcoming).
20
Industrial Production and Capacity Utilization:
1998 Annual Revision
Charles Gilbert and Richard Raddock, of the
Board's Division of Research and Statistics, prepared
this article. Robert Ritterbeck provided research
assistance.
REVISIONS TO PRODUCTION, CAPACITY,
AND UTILIZATION
In late 1998, the Federal Reserve published revised
indexes of industrial production (IP) and the related
measures of capacity and utilization for the period
January 1992 through October 1998. For the third
quarter of 1998, the revision placed the production
index at 131.6 percent of output in 1992, compared
with 128.2 percent reported previously, and the
capacity index at 161.5 percent of output in 1992,
compared with 158.1 percent reported previously.1
As a result, the rate of industrial capacity
utilization—the ratio of production to capacity—for
that quarter was revised up 0.3 percentage point, to
81.5 percent. (Summary data for total industry and
manufacturing are shown in appendix tables A.I and
A.2.)
The revised increases in the total IP index are about
the same as those shown previously for 1993 and
1994 but are faster for 1995-98 (table A.3). The
revised annual rate of growth has averaged 4.5 percent since 1994, 0.8 percentage point higher than
previously shown; the upward revision for 1996 forward was close to 1 percentage point per year. The
index shows the same pattern of output growth since
1992: No quarter shows a decrease in output, but
gains were slower between the second quarter of
1995 and the first quarter of 1996, and again beginning with the first quarter of 1998. The slowing in the
latter period reflects the effects of the economic turmoil in Asia.
The updated measures reflect both the incorporation of newly available, more comprehensive source
data typical of annual revisions and, for some series,
the introduction of modifications in the methods for
compiling the series. The new source data, which are
principally derived from the 1996 Annual Survey of
Manufactures and the 1997 Survey of Plant Capacity,
affect data for 1995 and thereafter. The modified
methods affect data for 1992 onward.
Growth in the output and capacity of hightechnology industries is now estimated to have been
more rapid than previously shown. Outside of the
high-technology industries, revisions to the output
indexes for individual industries were largely offsetting and had little net effect on the overall IP index
through 1997 (chart 1).
NOTE. Other contributors to the revision and this article include the
following: Ana Aizcorbe, William Cleveland, Carol Corrado, Maura
Doyle, Norman Morin, and Dixon Tranum.
I. The revisions to the industrial production data tor August
through October 1998 and the new data for November from the
Board's G.17 statistical release on "Industrial Production and Capacity Utilization." issued on December 16, 1998, have been incorporated in all the statistics and tables presented in this article.
Production
By Market Groups
Among major market groups, the expansion of output
was pervasive and substantial in 1996 and 1997, with
strength concentrated in business equipment, durable
consumer goods, and related materials; only the production of defense and space equipment declined in
these years. The production of nondurable consumer
products advanced relatively slowly; solid growth in
the consumer chemical products industry was offset
by declines in apparel production for 1995 through
the present.
In 1998, growth was slower in the production
of consumer goods, business equipment other than
information processing equipment, and both durable
and nondurable materials. The output of information processing and related equipment continued to
increase strongly, and the output of construction supplies accelerated after having risen slowly in 1997.
The output of energy products and materials also
picked up, on balance, a move reflecting the unusual
weather patterns since last fall. The output of defense
and space equipment edged up after having declined
substantially for most of this decade.
21
1. Industrial production, capacity, and utilization
Index. 1992 output = 100. ratio scale
Percent of capacity
. Revised
.Earlier
Capacity
— 80
I I I M I I II I I I I II I I I I I I I [ M I I I I ] I I I 1
1967 1971
1975
1979
1983
1987
1991
1995
1999
1
1987
1991
I
1995
1999
NOTE. The production indexes and utilization rates are seasonally adjusted.
All the revised measures extend ihrough November 1998; ihe earlier measures
extend through October 1998.
By Industry Groups
The revised figures continue to show that during the
past two years growth among the broad industry
groups was concentrated in durable manufacturing,
which advanced 11.1 percent in 1997 before easing
to a 4.2 percent annual rate in the first three quarters
of 1998. The relatively rapid expansion in this sector
has been supported over the years by sustained rapid
increases in the output of computers, semiconductors
and related electronic components, and communications equipment. According to the revised index, the
annual rate of growth of production in these hightechnology industries averaged nearly 40 percent for
1994 through 1997, substantially higher than previously shown (table A.4). The growth of output of
other manufacturing industries, which was revised
little on balance for the 1994-97 period, advanced
3.0 percent over the four quarters of 1996 and
4.3 percent over 1997 before edging down in 1998. In
1998, the economic troubles in Asia have, either
through more imports or fewer exports, reduced the
domestic production of iron and steel, semiconductors, some chemicals, and other internationally traded
goods. However, the revised series for civilian aircraft shows stronger growth in the first half of 1998
than shown previously.
liminary results of the 1997 Survey of Plant Capacity
conducted by the Bureau of the Census, which
yielded utilization rates for manufacturing industries
for the fourth quarter of 1997.
As was the case with the IP index, the rate of
growth of manufacturing capacity was revised
upward for 1995 forward (table A.5). The revised
figures show that the annual rate of growth jumped to
6.0 percent in 1995 and 6.4 percent in 1996. It has
slowed a bit in the past two years; 1998 growth
is estimated to have been 5.6 percent. The rapid
growth and upward revisions were again concentrated in durable manufacturing, especially in the
high-technology industries. The capacity increase in
these industries peaked at 46.3 percent in 1996 and
then decelerated to 34.8 percent by 1998. In contrast,
capacity growth in the rest of manufacturing was
approximately 3 percent in 1995 and 1996 and then
declined to an estimated 2.6 percent by 1998.
Capacity expansion in mining and utilities was
considerably slower. In particular, the North American Electric Reliability Council reduced its estimate
of generating capacity for the winter of 1997 and
projected increases in capacity short of probable
increases in demand. Moreover, the drop in world
demand for crude oil and its low price have led to a
sharp drop in work in domestic oil fields.
Capacity
Capacity Utilization
The revised measures of capacity and utilization
reflect the new IP indexes, updated estimates of
manufacturing capital input, new information on
physical capacity and utilization for selected industries provided mainly by trade associations, and pre-
For 1997 and 1998, the upward revisions to manufacturing capacity were relatively smaller than the revisions to output; consequently, the rate of manufacturing capacity utilization was revised up 0.3 percentage
point for the fourth quarter of 1997 and 0.6 percent-
22
Federal Reserve Bulletin ! ' January 1999
age point for the third quarter of 1998 (table A.6).
The largest upward revision of utilization was for
the transportation equipment industry. Utilization
in manufacturing in the third quarter of 1998 was
80.2 percent, a level that is 0.9 percentage point less
than the 1967-97 average, as the rates in both
primary- and advanced-processing industries fell
more than 2 percentage points over the first three
quarters of 1998. In contrast to the general easing in
manufacturing utilization rates, the rate rose further
for petroleum products, to 96.5 percent. The low
price of crude oil pushed refining activity toward
capacity limits.
The capacity utilization rate for mining for the
third quarter of J998 was revised down 2.5 percentage points, leaving it more than a percentage point
below its long-term average. Although the rate for
gas utilities also was revised down, to a belowaverage level, the rate for electric utilities was
revised upward to 97.7 percent, its highest level since
1970. Strong summer demand for air conditioning
due to high temperatures forced some utilities to limit
their supply of electricity to industrial companies.
series, up from 264 at the time of the previous annual
revision. Individual series were changed for electronic components, coal, aircraft, and lawn and garden equipment.
The electronic components industry, SIC 367, was
previously covered by two indexes, one for TV tubes
and the second for semiconductors and other components. Now, four new indexes cover electronic components other than TV tubes: (1) semiconductors
and related devices, SIC 3674; (2) printed circuit
boards, SIC 3672; (3) other electronic components,
SIC 3675-8 and part of 3679; and (4) printed circuit
assemblies and loaded boards, part of SIC 3679.
Development of the estimates of production of semiconductors and related devices is discussed below;
the other three series are derived from monthly
Bureau of Labor Statistics data on worker hours and
productivity trends determined by annual data. The
four series appear within the industry structure of the
IP index in the subgroup electronic components,
SIC 367; and within the market structure in equipment parts, a subgroup within durable goods materials, as shown in the following table:
TECHNICAL ASPECTS
OF THE ANNUAL REVISION
Semiconductors and Related Electronic Components
within the Market Structure
The revision incorporates the updating of the comprehensive annual data and of the monthly source data
used in the estimation of production, capacity, and
utilization. More up-to-date results were obtained
from the 1996 Annual Survey of Manufactures, the
1997 Survey of Plant Capacity, other annual industry
reports, recent information on prices, and revised
monthly source data on physical products and on
labor and electricity inputs.2 Productivity relationships were revised on the basis of the differences
between the new annual and monthly data and
applied to the individual monthly source data to
determine the final individual production indexes.
Along with the individual production series and seasonal factors, the annual value-added weights used in
aggregating the indexes to market and industry
groups were also updated.
Changes to Individual Production Series
The industry and market structures of the index of
industrial production now comprise 267 individual
2. Information about the sources of monthly data used to calculate
the indexes can be found in "Table I: Industry structure of industrial production: Classification, value-added weights, and description of series" on the Board's World Wide Web site (hup://
www.federalreserve.gov/releases/gl7/About.htm).
Series
Materials
Durable goods materials
Equipment parts
Computer and other board assemblies and parts
Printed circuit assemblies and loaded boards
(SIC 3679pl)
Semiconductors, printed circuit boards, and other
electronic components
Printed circuit boards (SIC 3672)
Semiconductors and related devices (SIC 3674) ...
Other electronic components (SIC 3675-8,9pt)
1997
value added
share
40.2
24.0
9.2
.9
.5
3.7
.3
2.8
.6
The new production measure for semiconductors
and related devices (SIC 3674) attempts to capture
advances in the capability of these devices as well as
changes in volumes produced by aggregating detailed
information on physical quantities and average unit
values for about 300 distinct devices.3 A chained
Fisher quantity index of semiconductor output is
derived by dividing an estimate of nominal domestic
production by a chained Fisher price index.
Nominal domestic production is estimated using
monthly data from the World Semiconductor Trade
3. The data for the individual devices are aggregated using Fisher
aggregation methods. See Carol Corrado, Charles Gilbert, and Richard Raddock, "Industrial Production and Capacity Utilization: Historical Revision and Recent Developments," Federal Reserve Bulletin,
vol. 83 (February 1997), pp. 67-92, for a general description of the
methodology.
Industrial Production and Capacity Utilization: 1998 Annual Revision
Statistics monthly (WSTS) issued by the Semiconductor Industries Association and estimates of the
U.S. share of world shipments based on data from the
Census Bureau's annual Current Industrial Reports
for semiconductors.
Data on physical quantities and average unit values
for the different semiconductor devices are obtained
from several sources and used to construct price
indexes for about a dozen categories of chips. Data
on metal oxide semiconductor (MOS) microprocessors (MPUs) come from MicroDesign Resources;
data on MOS memories and selected MOS logic
chips other than MPUs come from Dataquest; and
data on other devices come from the WSTS.
The price indexes computed from these data for
MOS memories and MOS MPUs are quantitatively
very similar to those published by the Bureau of
Economic Analysis for the period 1992 through 1996,
and to the new producer price indexes (PPI) published by the Bureau of Labor Statistics since January
1997.4 In contrast, the price indexes that are used
in the industrial production system for non-MOS
devices and MOS logic chips other than MPUs show
steeper price declines than the corresponding PPI
measures.
Some minor products of SIC 3674 are not included
in the semiconductor indicator described above. The
nominal gross output data from the Annual Survey of
Manufactures (ASM) for the industry include all of
the products made by the industry, so the price deflator constructed above is augmented by producer price
indexes for the secondary products of the industry
when computing the deflator for the nominal gross
output data for the industry. The final industrial production estimate for semiconductors and related
devices includes a correction to align the monthly
output index to the deflated gross output data for the
industry.
Changes to individual series other than those in the
electronic components subgroup include revised IP
series for coal, completed commercial aircraft, and
lawn and garden equipment. The coal series had been
based directly on tonnage production. However, the
quality of U.S. coal varies by region.5 For example, a
4. See Bruce T. Grimm, "Price Indexes for Selected Semiconductors, 1974-96," Survey of Current Business (U.S. Department of
Commerce, Bureau of Economic Analysis, February 1998); and Mike
Holdway, "Changes in the PPI for Semiconductors Indexes," Producer Price Indexes: PPI Detail Report (U.S. Department of Labor,
Bureau of Labor Statistics, January 1997).
5. See A. Denny Ellerman, Thomas M. Stoker, and Ernst R.
Berndt, "Sources of Productivity Growth in the American Coal Industry, 1972-95" (paper prepared for a meeting of the Conference on
Research on Income and Wealth, New Directions in Productivity
Analysis, Washington, D.C., March 1998).
23
ton of coal from Appalachia provides more heat,
expressed in British thermal units (Btu), than a ton of
lignite coal from North Dakota, Texas, or Louisiana.
The growth in coal production over the past decade
or so has been concentrated in subbituminous coal,
which is extracted by surface mining at low cost in
Wyoming and western Montana and is relatively low
in Btu content. Therefore, the revised index of coal
production weights the tonnage produced in a region
by the Btu content typical of a ton of coal mined in
that region.
Completed aircraft, SIC 3721, includes both commercial and military aircraft. The benchmark annual
levels for this industry are gross output levels for the
industry, derived from data from the ASM and from
price deflators from the Bureau of Economic Analysis. These benchmark levels are split into military
and civilian components on the basis of more detailed
ASM product shipments.
The goal of the revision for this industry was to
make the IP indexes reflect actual aircraft operations.
Previously the indexes were based on monthly
production-worker hours and rested on productivity
assumptions that were developed from historical
trends. One of the difficulties with this approach was
that the information on production-worker hours does
Data Changes and Availability
Data on production, capacity, and utilization are published monthly in the Board's G.I7 statistical release
"Industrial Production and Capacity Utilization." As
described in the accompanying article, the data for 1992
and after have been revised. This revision marks die
introduction of one new market group: semiconductors,
printed circuit boards, and other electronic components.
Files containing all the historical data can be found 00
the Board's web site (http://www.federalreserve,gov)
under "Statistics: Releases and historical data." For paid
access to these files through the Department of Commerce's Economic Bulletin Board or web site, please call
STAT-USA at 1-800-STAT-USA (1-202-482-1986).
Diskettes containing either historical data (through
1985) or more recent date (1986 to those most recently
published in the G. 17 statistical release) are available
from Publications Services, Board of Governors of
the Federal Reserve System, Washington, DC 20551
(202-452-3245).
A document with printed tables of the revised estimates of series shown in the G.17 release is available
upon request to the Industrial Output Section, Mail
Stop 82, Division of Research and Statistics, Board of
Governors of the Federal Reserve System, Washington,
DC 20551.
24
Federal Reserve Bulletin LH January 1999
not distinguish hours used in the production of commercial aircraft from hours used in the production
of military aircraft. Under the new procedure, the
production measure for commercial aircraft approximately equals a forward-looking ten-month moving
average of actual or future planned completions
(deliveries plus the change in stock) of commercial
aircraft by Boeing Corporation. The final IP index
is also constructed so that its monthly changes are
positively correlated with the monthly changes in
production-worker hours.
The estimates of military aircraft productivity were
also improved, using annual information on planned
production of military aircraft, including fighters,
bombers, cargo planes, and AWACS planes, which
were combined into an annual aggregate military
aircraft production indicator using prices available on
Department of Defense web sites. This indicator,
combined with the estimate of commercial aircraft
production, provides a good estimate of the overall
production of complete aircraft through the current
year.
Finally, a physical product series for lawn and
garden equipment, SIC 3524, was developed using
data for production of lawn and garden tractors,
mowers, rotary tillers, and snow throwers from
Stark's Component Ledger. The data represent output
for the three-month period from the third month of a
given calendar quarter through the second month of
the following quarter. Through 1992, the monthly
indicator for this series remains production-worker
hours.
Weights
The IP index is an annually weighted Fisher index.6
In the revision, the annual value-added weights for
the aggregation of the IP indexes and the capacity
utilization rates, which are derived from annual estimates of industry value added, were updated and
extrapolated (table A.7). Data from the Annual Survey of Manufactures, together with revenue and
expense data reported by the Department of Energy
and the American Gas Association, provided information on industry value added for manufacturing
and utilities through 1996; the latest value-added data
for mining came from the Census of Mineral Industries for 1992. The weights are expressed as unit
value added. Generally, the unit-value-added measures track broad changes in corresponding producer
6. The aggregation procedures are described in Corrado, Gilbert,
and Raddock, "Industrial Production and Capacity Utilization: Historical Revision and Recent Developments."
prices. The weights required for aggregating IP in the
most recent period are (1) estimated from available
data on producer prices through the most recent year
and (2) extrapolated for the following year, given the
persistence of many relative price trends.
Revised Monthly Data
The monthly physical product data that are used to
measure the monthly movements of many IP indexes
have been updated to capture data that became available after the closing of the regular four-month
reporting window. For many individual IP indexes,
monthly data on production-worker hours or sales of
electric power to industry groups, in kilowatt-hours,
along with estimates of trends in output per worker
hour or kilowatt-hour, are used to indicate the
monthly change in output. This revision incorporates
the Bureau of Labor Statistics benchmark of the
employment data for March 1997. It also incorporates revised data on the sales of electricity to industries for 1992 onward. The monthly kilowatt-hour
sales figures were benchmarked to data on the annual
use of electric power reported in the Annual Survey
of Manufactures through 1996. The incorporation of
the new data resulted in an average upward revision
in industrial use of electric power of 0.3 percentage
point per year over the period 1994 through 1996
(table A.8). Seasonal factors for the electric power
scries were reestimated using data through May
I998.7
This revision also introduced an improvement in
the techniques for adjusting monthly electric power
data for systematic influences of the weather. Data on
electric power use by establishments in fifty threedigit SIC industries are used as monthly indicators
for production in forty-two component IP series.
Unusually warm or cool temperatures appear at times
to have caused the use of electricity to rise or
fall independently of its use in production. Staff
research indicated that the usual seasonal adjustment
techniques did not adequately capture the influence
of the weather on electric power usage by thirteen
industries, which are used to infer production for
almost 16 percent of the IP index. The revised IP
index estimates for these thirteen industries incorporate electric power use series with the effects of
unseasonable weather removed; the procedure uses
data on national heating and cooling degree days to
model weather effects.
7. Seasonal factors for worker hours were based on data through
October 1998: factors for the monthly physical product series were
based on data through June or later in the summer.
Industrial Production and Capacity Utilization: 1998 Annual Revision
Measurement
25
of Capacity
Procedure for Estimating Capacity
The revisions to capacity and utilization incorporate
the revised production indexes, the preliminary
results of the 1997 Survey of Plant Capacity, updated
measures of 1997 and 1998 capacity in physical units
for selected industries, and revised estimates of industry capital input. The 1997 Survey of Plant Capacity,
which was conducted by the Bureau of the Census
and partially funded by the Federal Reserve, returned
to being conducted annually; from 1989 to 1996,
results from the survey were received every two
years.
The Survey of Plant Capacity is the Federal
Reserve's source of utilization rates for most manufacturing industries. The preliminary results of the
1997 survey, along with revisions to the 1996 survey,
suggested that trends in manufacturing utilization
rates were roughly in line with those previously estimated by the Federal Reserve for those years. However, dividing the industrial production indexes for
high-technology industries, which were generally
revised substantially upward, by the Census utilization rates yielded a noticeable upward revision of
capacity in those industries.
An estimate of capital input for an industry is
typically the third major component, along with an IP
index and a survey utilization rate, in the Federal
Reserve's procedure for estimating capacity by industry (see box "Procedure for Estimating Capacity").
Revised BEA estimates of business investment and
deflators by asset type through mid-1998 were incorporated with this revision. The effect of these new
data on the overall manufacturing capital input measure was very small.
The Federal Reserve's procedure for constructing individual capacity indexes involves several steps. First preliminary, implied end-of-the-year indexes of capacity are
calculated by dividing a production index by a utilization
rate obtained from a survey for that end-of-year period.
These ratios, like the indexes of industrial production, are
expressed as percentages of 1992 production; they give
the general level and trend of the capacity estimates.'
Once the preliminary implied capacity indexes are
calculated, measures of physical capacity or of capital
input are used to estimate and extrapolate the annual
movements of the capacity indexes. For most manufacturing industries, physical measures of capacity are lacking; in these cases, the annual growth in the capacity
estimates is related to the growth in an industry's capital
input. The capital input measures are developed principally from investment data reported in the Annual Survey
of Manufactures.
1. Each implied capacity index number is an estimate of a sustainable
maximum level of output expressed as a percentage of actual output in
1992. Thus, if in the fourth quarter of 1992 the production index is 100
and a related utilization rate from a survey is 80 percent, then the implied
capacity index is I00/.8, or 125.
The capacity indexes capture the concept of sustainable practical
capacity, which is defined as the greatest level of output that a plant can
maintain within the framework of a realistic work schedule after taking
account of normal downtime and assuming sufficient availability of inputs
to operate the machinery and equipment in place. The questions asked
in both the broad Census Bureau survey and the narrower surveys of
selected industries are generally consistent with this definition of capacity.
The concept itself generally conforms to that of a full-input point on a
production function, with the qualification that capacity represents a
realistically sustainable maximum, rather than some higher unsustainable
short-term maximum. See Carol Corrado and Joe Mattey, "Capacity
Utilization," Journal of Economic Perspectives^ vol. II (Winter 1997),
pp. 151-67.
In the absence of utilization rale information for an industry, which is
the case for a few series in mining, trends through peaks in production are
used to estimate capacity output for that industry.
26
Federal Reserve Bulletin • January 1999
APPENDIX A: SUMMARY TABLES BASED ON THE G.17 RELEASE, DECEMBER 16, 1998
A. 1.
Revised data for industrial production, capacity, and utilization for total industry, 1987-98
Seasonally adjusted data except as noted
Quarter
Jan.
Year
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dee.
Annual
avg.1
1
2
3
4
.6
.5
.5
4.2
3.2
-.6
-.6
2.0
-8.3
1.3
4.3
6.1
6.3
2.8
5.6
3.9
-AA
1.0
6.2
2.7
1.2
5.2
3.5
5.5
7.2
.9
7.1
3.6
-.1
-5.8
1.1
4.6
6.4
7.6
3.0
3.5
6.6
4.6
4.5
1.8
-.2
-2.0
3.1
Industrial production (percentage change)
1987
1988
1989
1990
1991
1992
1993 ..
1994 .
1995
1996 .
1997
1998
-.6
.1
.6
-.8
-.5
-.5
.5
-.8
.2
,5
.2
. .
.5
-.2
,5
.0
1.2
.3
.6
5
.5
-.1
1.3
.7
-.1
.4
.0
.9
.4
.6
3.
.4
.1
-.6
.9
.1
-.2
.5
-&
.7
,2
-.6
.3
.4
.8
.0
1.2
-.1
.7
.2
—2
.4
.4
.7
.4
.4
-.1
1.2
.6
,5
.2
-.5
.7
.3
.9
.3
.4
.2
.5
.4
.7
.5
-.9
.1
.5
.4
.2
.1
-.3
-.4
.5
1.1
.5
.6
1.4
.6
.7
-1.0
.0
.8
2
.3
-.3
.2
.7
-.1
-.1
-.4
-.2
.1
1.0
.4
1.0
.2
.3
.1
.5
-.4
1.4
.3
-.5
-.6
— 1
.6
.4
.7
.0
,1
.6
.2
.3
.3
6.6
1.6
6.7
3.1
.5
.6
1.5
6.1
1.5
7.1
1.3
9.6
6.0
2.8
95.3
98.8
98.6
97.7
98.1
101.7
104.8
111.6
115.7
121,9
129.9
131.8
95.9
99.3
99.0
97.2
97.5
101.8
105.7
112.9
115.8
122.3
130.3
91.0
96.1
99.6
99.1
95.9
98.3
102.6
106.5
113.5
116.5
123.7
130.4
92.5
96.9
99.7
99.2
96.2
99.8
103.0
108.3
113.8
119.2
125.6
131.3
93.8
97.8
98.6
99.5
97.7
100.4
103.3
109.7
114.8
120.8
127.8
131.6
95.4
98.7
98.6
98.0
98.0
101.5
104.9
111.7
115.7
121.8
129.8
93.2
97.4
99.1
98.9
97.0
100.0
103.5
109.1
114.4
119.5
126.8
115.1
116.5
118.8
121.0
123.0
125.5
128.3
133.0
140.1
148.1
155.7
163.5
1152
116.7
119.0
121.2
123.2
125.7
128.6
133.4
140.8
148.8
156.3
114.1
115.5
J17.0
119.3
121.6
123.6
126.2
129.3
134.5
142.1
150.1
157.6
114.4
115.8
117.6
119.9
122.1
124.2
1265
130.5
136.4
144.1
152.0
159.6
114.7
116.2
118.2
120.4
122.6
124.9
127.6
131.7
138.2
146.1
153.8
161.5
115.1
116.5
118.8
121.0
123.0
125.5
128.3
133.0
140.1
148.1
155.7
114.6
116.0
117.9
120.2
122.3
124.5
127.2
131.1
137.3
145.1
152.9
82.8
84.8
83.0
80.8
79.8
81.0
81.7
83.9
82.6
82.3
83.4
80.6
83.2
85.1
83.2
80.2
79,2
81.0
82.2
84.6
82.3
82.2
83.4
79.8
83.3
85.1
83.0
78.9
79.5
81.3
82.4
84.3
82.0
82.5
82.7
80.8
83.7
84.8
82.8
78.8
80.3
81.2
83.0
83.5
82.7
82.6
82.3
81.7
84.2
83.4
82.6
79.7
80.4
81.0
83.3
83.1
82.7
83.1
81.5
82.9
84.7
83.0
81.0
79.6
80.9
81.8
84.0
82.6
82.2
83.4
81.3
84.0
84.1
82.3
79.3
80.3
81.3
83.2
83.4
82.4
82.9
.8
.4
-1.3
-.1
.5
.5
.8
.2
.6
.5
_3
.1
.8
1.1
.0
.3
3.8
3.5
5.4
4.9
4.5
6.0
Industrial production (index)
I9g7
1988 ..
1989
,
1990
1991 .
»
1992
1993
1994 . . . .
1995
1996...
.
1997
1998
90.2
959
99.8
98.6
96.7
97.7
102.3
105.9
113.4
115.5
123.0
130.3
91.2
96.2
99.0
99.1
95.9
98.2
102.7
106.4
113.4
117.0
123.9
130.2
91.6
96.3
10O.O
99.6
95.0
98.9
102,9
107.2
113.6
116.8
124.4
130.7
92,0
96.8
100,2
99.0
95.4
99.6
103,3
107.6
113.4
118.2
125-1
131.3
92.4
96.9
99.6
99.4
96.1
99.9
102.7
108.4
113.8
119.2
125.5
131.9
93.2
97.0
99.4
99.3
97.2
99.7
103.0
108.9
114.3
120.0
126.1
130.6
93.8
98.1
98.8
99.5
97.4
100.2
102.8
109.8
115.1
120.9
127.8
132.4
93.7
97.6
98.4
99.3
97.3
100.5
103.2
109.3
113.9
120.3
127.0
130.5
93.7
97.8
98.6
99.6
98.4
100.6
103.9
110.0
115.4
121.1
128.5
131.9
95.0
98.0
98.2
99.1
98.3
101.2
104.3
110.8
115.5
121.2
129.3
132.2
Capacity (index)
1987 . . . .
1988
,1989 . . .
1990
1991
1992
1993
1994
1995 . . . .
1996
1997
1998
114.0
115.3
116.8
119.2
121.4
123.4
125.9
128.9
133.9
141.4
149.4
157.0
114.1
115.5
117.0
119.3
121.6
123.6
126.2
129.3
134.5
142.1
150.1
157.6
114.2
115.6
117.2
119,5
121.7
123.8
126.4
129.7
135,1
142.8
150.7
15&3
114.3
115.7
117.4
119.7
121.9
124.0
126.6
130.1
135.7
143.4
151.3
158.9
114.4
115.8
117.6
119,9
122.1
124.2
126.9
130.5
136.4
144.1
152,0
159.6
114.5
115.9
117.8
120.1
122.2
124.5
127.1
1305
137.0
144.8
152.6
160.3
114.6
116.0
118.0
120.2
122.4
124.7
127.4
131.3
137.6
145.5
153.2
160.9
114.7
116.2
118.2
120.4
122.6
124.9
127.6
131.7
138.2
146.1
153.8
161.5
114.9
116.3
118.4
120.6
122.7
125.1
127.8
132.1
138.8
146.8
154.4
162.2
115.0
116.4
118.6
120.8
122.9
125.3
128.1
132,6
139.5
147.4
155.0
162.8
Utilization (level, percent)
1987 . .
1988
1989
1990
1991
1992
1993 .
1994
1995 . ..
1996 .
1997
1998
79.1
83.2
85.4
82.7
79.6
79.2
81.2
82.1
84.7
SJ.7
82.3
83.0
80.0
83.4
84.6
83.0
78,9
79.5
81.4
82,3
84.3
82.4
82.6
82.6
80.2
83.3
85.3
83.3
78.1
79.9
81.4
82.6
84.1
81.8
82.5
82,6
80.5
83.7
85.3
82.7
78.2
80.3
8J.5
82.7
83.5
82.4
82.7
82.6
80.7
83.7
84.7
82.9
78.7
80.4
SI.O
83.1
83.4
82.7
82.6
82.6
81.4
83.6
84.4
82.7
79.6
80.1
81.0
83.2
83.4
82.9
82.6
81.5
81.8
84.1
83.4
82.6
79.5
80.6
81.0
83.2
82.7
82.7
82.9
81.1
NOTE. Monthly percentage change figures show change from the previous
month; quarterly figures show the change from (he previous quarter at a
compound annual rate of growth. Production and capacity indexes are expressed
as percentages of output in 1992.
81.8
84.5
83.6
82.6
79.5
80.2
80.6
83.4
83.3
82.8
83.1
82.0
81.6
84.1
83.3
82.6
80.2
80.4
81.3
83.3
83.1
82.5
83.2
81.3
82.6
84.2
82.8
82.0
80.0
80.8
81.4
83.5
82.8
82.2
83.4
81.2
In this and subsequent tables, data for September 1998 onward are subject to
revision in future monthly G.17 statistical releases.
1. Annual averages of industrial production are calculated from indexes that
are not seasonally adjusted.
Industrial Production and Capacity Utilization: 1998 Annual Revision
A.2.
27
Revised data for industrial production, capacity, and utilization for manufacturing industries, 1987-9
Seasonally adjusted data except as noted
Quarter
Year
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Annual
avg.1
1
2
3
4
.6
.6
.1
-.6
-.5
-.1
9
I.I
.1
.4
.3
5.0
2.3
4.3
2.9
-9.7
2,7
4.9
6.3
6.7
2.1
72
2.4
7.0
4.1
-.7
-.1
1,2
6.8
2 1
8.8
1.1
10.6
6.6
2.5
5.5
3.7
-4.5
.8
7.8
3.4
.5
5.8
2.9
7.0
7.7
.4
7.6
5.2
-1.4
-6.3
1.7
4.0
69
9.2
3.8
3.9
7.5
-2.4
4.0
37
6.0
5.4
4,7
6.8
95 6
99.4
98 3
96.6
97.1
101 7
106.0
114.3
1173
124.7
133.7
90.6
95.6
99 8
98.8
95.0
98.1
102.8
106.8
115 0
117.8
126.2
133.8
92 1
96.6
99 6
98.8
95.2
99.7
103.3
109.1
115.3
120.8
128.3
134.7
93.4
97.5
98 5
99.0
97.0
100.6
103.5
110.7
116 1
122.9
130.7
134.8
95 1
98.7
98 1
97.4
97.5
101.6
105.2
113.1
117.2
124.1
133.1
92.8
97.1
99 0
98.5
96.2
1O0.O
103.7
109.9
115.9
121.4
129.7
114.9
116.6
1195
122.0
124.2
126.9
130.1
135.2
143.4
152.5
161 3
170.3
115.0
116.8
119.7
122.2
124,3
127,1
130.3
135.7
144.2
153.3
1621
113.4
115.3
117.3
120.1
122.6
124.8
127.6
131.1
137.0
145.7
154 8
163.5
113.9
115.7
118.0
120.7
123.1
125.5
128.4
132.5
139.1
148.0
1570
165.8
114.4
116.1
118.7
121.3
123.7
126.2
129,3
133.8
141.2
150.3
159 1
168.1
114.9
116.6
119.5
122.0
i24.2
126.9
130.1
135.2
143.4
152.5
1613
114,1
115.9
118.4
121.0
123.4
125.8
128.8
133.2
140.2
149.1
158 1
82.8
84.8
82.2
79.7
78.6
80.2
80.8
83.6
81.7
81.4
82.6
79.8
83.1
85.1
82,1
79.0
78.1
80.0
81.4
84.2
81.3
81.3
82.5
79.9
83.0
85.1
82.3
77.5
78.6
80.5
81.5
83.9
80.9
81.6
81.8
80.9
83.5
84.4
81.9
77.3
79.5
80.4
82.4
82.9
SI.6
81.7
81.2
81.6
83.9
82.9
81.6
78.5
79.7
80.0
82.7
82.2
81.8
82.1
80.2
82.8
84.7
82.1
79.9
78.5
80.1
80.9
83.6
81.7
81.3
82.5
81.3
83.8
83.6
81.4
77.9
79.5
80.5
82.5
82.7
81.4
82.0
Industrial production (percentage change)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
........
.. .
...
. . .
-.8
-.2
.9
-.2
-.9
.3
.9
.1
.6
-.3
.5
1.6
.4
-1.2
.9
-.7
.7
2
.6
-.2
1.3
.9
-.1
.2
-.1
.8
.3
-1.1
.8
.2
.9
-.3
.5
.3
.5
1.0
.1
-.8
.3
.6
6
.7
-.1
1.4
.6
.6
.3
-.1
-.7
.4
.7
.4
-.4
.8
.i
1.0
3
.3
1.0
.0
.0
-I
1.4
.0
0
.2
.5
.8
.7
-1.2
.7
.7
-1.1
.0
.2
.7
.2
.5
-.5
.5
7
-.1
-.2
.3
3
.3
.2
-.2
-5
.6
.9
.5
8
1.6
.1
2
-.3
-.1
I.I
.3
1 2
.3
.7
2
4
-.4
1.3
.2
-.6
-.6
-.1
.5
4
.8
.1
.0
6
.6
.•>
.9
.4
-1.3
-.2
.6
5
.9
.1
,7
.8
.0
5.3
4.7
1.9
Industrial production (index)
1987
1988
1989
1990
1991
1992
1993
1994 . .
1995 , .
1996
1997
1998
89.6
95.4
100.3
98.1
95.8
97.4
102.6
106.1
115.0
116.9
125.3
133.8
91.0
95.8
99.1
99.0
95.1
98.1
102.8
106.7
114.8
118.4
126.4
133,7
91.2
95.7
99.9
99.3
94.1
98.9
103.0
107.6
115.1
118.1
127.0
134.1
91 6
96.7
100.0
98.6
94.4
99.5
103.6
108.4
1150
119.7
127.7
134.9
91 9
96.6
99 4
99.0
95.0
99.9
103.2
109.3
115.1
120.9
128.1
135.4
92 8
96.6
994
98.9
96.3
99.9
103.2
109.5
1157
121.8
129.0
133.7
93 4
93.3
97.3
97.5
98 3
98 7
98.8
99.1
96.6
96,8
100 6 100 4
103.4 102.9
110.1 110.7
115 1 1162
122.4 123.0
129.8 130.8
133.6 135.7
93 4
97.7
98 4
99.0
97.8
100.7
104,1
III.l
117.0
123.3
131.4
135.2
94 6
97.9
97 8
98.4
97.8
101.2
104.5
112.0
117 1
123.3
132.2
136.0
95 1
98.9
9 8 •?
97.2
97.6
101 8
105.1
U3.0
117 2
124.2
133.3
135.9
Capacity (index)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
.
113.2
115.2
1170
119.9
122.4
124.5
127.4
130.7
136.3
. . 144.9
154.1
162.8
113.4
115.3
117 3
120.1
122.6
124.8
127.6
131.1
137.0
145.7
154.8
163.5
113.6
115.4
117 5
120.3
122.8
125.0
127.9
131.6
137.7
146.4
155.5
164.3
113.8
115.6
117 8
120.5
123.0
125.2
128.2
132.0
138.4
147.2
156.2
165.1
113.9
115.7
1180
120.7
123.1
125.5
128.4
132.5
139.1
148.0
157 0
165.8
114.1
115.8
1183
120.9
123.3
125.7
128.7
132.9
139.8
148.8
157 8
166.6
114.2
116.0
1185
121.1
123.5
125.9
129.0
133.4
140.5
149.5
1584
167.3
114.4
116.1
1187
121.3
123.7
126.2
129.3
133.8
141.2
150.3
159 1
168.1
114.6
116.3
119.0
121.5
123.8
126.4
129.5
134.3
141.9
151.0
159 9
168.8
114.7
116.5
1192
121,7
124.0
126.6
129.8
134.8
142.6
151.8
160 6
169.5
Utilization (level, pereeni)
1987 ,
1988
1989 .
1990 ,
1991
1992 ..
1993
1994 . . .
1995
1996 . . . .,
1997
1998
79.1
82.9
85.7
81.8
78.2
78.2
80.5
81.2
84.4
80.7
81.3
82.2
80.2
83.1
84.5
82.5
77.5
78.6
80.6
81.4
83.8
81 3
81.7
81.8
80.3
82.9
85.0
82,6
76.6
79.1
80.5
81.8
83.6
80.6
81.7
81.6
NOTE. See general note to table A. I.
80 6
83.7
85.0
81.8
76.8
79.4
80.8
82.2
83.1
81 3
81.7
81.7
80.7
83.5
84.2
82.0
77.1
79.6
80.4
82.5
82.8
81.7
81.6
81.6
81.4
83.4
84.1
81.8
78.1
79.5
80.1
82.4
82.7
81 9
81.7
80.2
81.8
83.8
83.0
81.6
78.2
79.9
80.1
82.6
81.9
81 9
81.9
79.8
81.5
84.0
83.1
81.7
78.2
79.6
79.6
82.8
82.3
81.8
82.2
80.7
81.5
84.0
82.7
81.5
79.0
79.7
80.4
82.7
82.4
81 6
82.2
80.1
82.5
84.1
82.1
80.9
78.9
79.9
80.5
83.1
82.1
81.2
82.3
80.2
1. Annual averages of industrial production are calculated from indexes that
are not seasonally adjusted.
28
Federal Reserve Bulletin • January 1999
A3.
Rates of growth in industrial production, by major market group, 1994-98
Difference between growth rates:
revised less earlier
(percentage points)
Revised growth rate
(percent)
Market group
1994
1995
1996
1997
1998
1994
6.5
3.5
5.3
6.6
1.8
.0
Products, total
Final products
Consumer goods
Durable
Automotive products
Autos and trucks
Autos
Trucks
Auto parts and allied goods
Other durable goods
Appliances and electronics
Appliances and air conditioning ..
Home electronics
Carpeting and furniture
Miscellaneous
Nondurable
Nonenergy
,
Foods and tobacco
Clothing
Chemical products
Paper products
Energy products
Fuels
Utilities
4.7
4.8
4.3
6.5
5.4
5.2
5.8
3.0
5.6
7.4
14.4
2.7
28.1
5.8
3.5
3.7
4.9
6.6
4J
5.3
-.5
-4.2
-2.2
-5.1
2.1
2-6
1.3
.3
-2.4
-4.7
-7.3
1.3
1.8
2.5
9.0
-2.0
20.1
-3.0
1.1
1.6
.9
-.3
-3.5
5.1
2.1
6.3
1.4
8.6
4.2
4.4
2.2
2.3
2.0
2.5
-3.8
8.1
1.0
2.6
8.9
-.2
18.3
3.0
-1.7
2.2
2.1
1.4
-.2
4.9
1.9
2.3
3.5
1.8
5.0
5.6
2.7
6.5
9.3
113
3.4
15.7
4.7
4.3
11.8
-.5
24.2
2.4
.9
1.7
1.7
1.3
-2.0
2.9
3.8
1.6
1.8
1.5
2.4
2.3
-.5
.9
-6.5
-14.0
-7.0
-17.0
6.9
7.0
17.5
9.5
25.3
3.1
3.0
-.9
-1.9
-1.0
-3.7
-1.9
-3.9
6.5
1.7
.1
.2
-.1
-.3
-.6
-1.0
-.8
-1.4
Equipment, total
Business equipment
Information processing and related —
Computer and office
Industrial
Transit . . . ,
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
5.8
9.4
13.4
29.5
10.0
1.5
8.4
5.9
-6.7
-6.7
8.6
4.6
7.0
14.9
44.7
8.5
-9.4
-6.0
1.9
-7.2
2.4
8.7
8.0
9.8
16.5
41.9
1.2
14.3
-3.0
5.5
-1.0
7.6
-.7
10.4
13.1
16.2
43.7
5.2
22.8
12.3
10.4
-3.9
9.4
-.7
6.5
9.0
15.4
58.1
3.0
9.7
-8.3
.9
.5
-19.8
6.7
.7
.8
-.1
-.3
4.3
7.2
2.5
.5
-.3
1.1
3.8
5.9
2.4
3.2
2.4
3.8
9J
13.5
10.3
21.4
5.7
11.0
3.6
26.3
6.9
10.2
1.2
22.7
53.2
8.9
6.9
5.9
8.9
5.1
5.7
5.6
2.0
3.3
-.3
65.4
13
1.6
-2.5
-7.2
-2.8
-.8
-3.0
.6
.3
1.1
Special aggregates
Total excluding:
Computers and office equipment.
6.1
Business equipment excluding:
Computers and office equipment.
7.7
Tbtal index
Intermediate products . . .
Construction supplies
Business supplies
Materials
Durable
Consumer parts
Equipment parts
Semiconductors, printed circuit boards,
and other electrical components . . .
Other
Basic metals
Nondurable
,
Textile
Paper
Chemical
Other
Energy
Primary
Convened fuel
1996
1997
1998
.3
.5
-.1
.5
.6
1.2
-.3
-.2
-.3
.4
4.1
.4
5.2
-.1
-1.9
-.3
1.3
1.6
.4
1.5
-.8
-1.0
-.3
-.2
-.3
3.6
.4
-1.4
1.0
2,3
5,2
.1
-,1
-A
.9
-.5
1.2
2.2
-1.5
4.1
1.1
.3
.3
-.4
-.3
-.4
.3
.4
-.2
-.4
-.3
-.1
-.3
.1
^1.1
4.7
-1.6
.0
-.4
-.4
-.7
1.9
-.2
-1.6
.0
.1
-.2
A
.9
.0
2
—3
-2J2
1.0
-2.1
3.0
-2.4
-4.2
.1
.2
-.4
3.9
.2
-.5
-.4
.2
-.8
4.1
5.7
-.2
.9
.3
1.0
1.5
1.6
1.9
1.7
.8
3.3
1.6
.1
1.5
.4
2.0
1.2
1.5
4.7
4.5
1.2
-4.9
-2.9
.7
.5
.6
.2
1.6
2.3
4.0
9.2
-.5
5.2
3.8
.9
-1.3
.2
.5
,1
3.3
-.2
-2,0
-5.0
2.6
4.8
1.3
-.1
.0
-.2
.0
.2
-.2
.0
.1
.0
-.4
.2
-.8
.4
-1.3
1.3
9.0
13.3
7.3
26.4
.9
2.0
-4.8
10.0
-.3
-.4
.2
-1.3
.3
.6
1.3
2.2
3.5
f.t
7.8
1.7
2.1
.4
4.8
.7
.0
1.7
49.4
3.9
3.9
3.6
2.7
4.3
5.1
.5
.8
-.7
3.6
53.3
5.0
4.3
4.5
3.2
4.7
5.0
3.8
.3
.2
.5
20.7
-2.1
-4.7
-2.6
-5.2
-1.4
-4.0
.4
1.9
1.9
1.9
n.a.
-.1
_2
-.2
-.2
-.1
-.4
-.2
-.1
.0
-.1
n.a.
.2
.2
-.1
.1
1.1
-.6
-.2
-.2
-.2
-.1
n.a.
.8
1.3
-.1
1.8
1.4
-1.0
—1
.3
.3
.6
n.a.
.4
-A
2.9
4.6
5.9
.7
.2
3.8
6.8
10.5
4.6
1.5
NOTE. Growth rates are calculated as the percentage change in the seasonally
adjusted index from (he fourth quarter of the previous year to the fourth quarter
1995
.0
-.1
.9
-.6
2.9
.3
-.8
-.1
-.1
-.2
-.2
.1
-.1
-.1
.1
-.1
-.5
.5
-.3
-.6
-1.2
1.0
-.4
.0
-.4
3.4
4.3
6.2
10.4
.1
73
1.5
1.7
.0
-.8
-.2
-1.8
n.a.
.0
-.7
-.5
5
"~.3
-1.5
1.1
-.9
-1.4
.0
.9
.6
.5
I.I
1.5
3.0
1.0
-.7
of the year specified. For 1998, the growth rates are calculated from the fourth
quarter of 1997 to the third quarter of 1998 and annualized.
Industrial Production and Capacity Utilization: 1998 Annual Revision
A.4.
29
Rates ut'prowtli in industrial production, hy industry group, 1904 9S
Series
Difference between growth rates:
revised less earlier
(percentage points)
Revised growth rate
(percent)
SIC
code1
1994
1995
1996
1997
1998
1994
1995
1996
J997
1998
Total index
6.5
3.5
5.3
6.6
1.8
.0
.3
1.1
Manufacturing.
7.5
3.6
5.9
7.3
1.8
.0
.3
1.2
6.5
8.0
-.3
5.5
4.1
6.7
3.9
8.8
-.9
3.0
-.1
.0
.1
.4
.6
1.5
.4
1.2
-.3
1.7
9.9
5.3
5.6
5.2
6.9
.8
-.8
2.7
8.6
1.8
4.7
6.3
11.1
3.1
3.3
2.6
4.2
3.7
1.4
2.5
.0
.2
.3
-.3
.8
-.4
-1.2
1.2
2.1
-1.0
-26
2.5
1.6
1.0
-.3
-2.0
1.8
-I.I
3.8
2.5
-.2
-.3
.7
4.9
5.0
7.3
4.9
4.5
13.4
43.6
24.2
-6.4
-9.6
-2.6
-2.5
-.3
14.8
55.9
9.2
-.2
-.1
.0
-.3
-.1
.0
.4
-1.8
.2
.6
.0
-.3
.0
1.6
3.7
.2
.9
.9
2.1
6.4
9.6
-.7
-.7
.0
-.6
.7
2.1
7.2
5.7
-1.1
-l.l
.0
\.2
14.1
41.6
25.9
4.6
3.6
-1.7
5.9
4.1
9.8
42.9
22.2
I.I
1.3
.0
333-«.9
34
35
357
36
8.7
7.7
6.2
10.1
8.9
15.3
30.8
25.4
3672-9
48.8
58.0
44.6
48.6
18.0
-6.1
-1.3
19.1
8.8
37
371
371 pi
2.1
8.9
4.2
-4.2
-.6
-5.1
4.9
-1.4
1.9
13.1
12.8
10.9
-12.9
1.1
-1.0
1.0
1.0
-.6
-.6
,0
.9
.9
.9
1.3
2.1
.0
-1.1
372-6,9
38
39
-6.7
1.9
3.8
-9.7
4.2
2.5
15.3
3.0
2.7
13.4
3.6
1.4
9.9
1.3
-1.6
.4
1.3
-.2
1.1
2.3
-.7
-1.7
-1.2
-2.5
.8
.3
-3.4
5.1
,7
20
21
22
23
26
4.8
2.3
43.6
5.9
6.4
4.5
-.3
.5
-4A
-4.6
-3.6
-2.5
2.6
1.1
-.1
1.9
-.9
3.0
26
1.9
—R
-.1
-.1
.0
.0
-.2
-.2
-.2
-I.I
.8
.6
.9
.4
.1
-.6
-2.4
1.8
2.5
.7
.0
.0
-2.7
-.5
-.1
1.1
-.1
.2
-3.8
.8
-2.0
4.2
-1.3
-.4
-5.3
-1.6
-4.0
-.9
27
28
29
30
31
1.1
4.6
-.8
9.6
-8.4
1.6
.7
.2
-5.6
1.9
4.9
3.7
4.0
1.3
3.6
3.1
2.0
4.3
-8.7
-2.2
-2.5
3.0
2.3
-8.3
-.1
-.1
.1
.0
.5
-.2
-.5
.2
.2
5.4
3
-.5
.4
.7
5.3
-.3
.2
-.2
.4
-1.5
2.7
-1.2
-3.0
-.1
2.0
10
12
13
14
.8
-3.2
8.9
-1.2
6.7
-.9
4.6
-1.4
-1.4
-1.1
2.0
4.6
4.3
1.0
4.8
2.1
4.4
2.2
-2.7
-6.1
5.9
-5.1
2.3
-.1
-.2
_2
!l
-.2
-.1
.1
-1.3
.1
.0
.4
1.2
1.8
.1
-.5
.0
1.7
-2.5
-.1
2.8
-2.5
.0
3.2
-3.5
-7.7
49l.493pt
492,493pl
-.4
1.7
-8.0
6.3
5.2
10.8
1.1
1.0
1.8
-1.3
6.4
7.1
2.9
-.1
.0
-.3
-.1
-.1
.0
-.3
.0
-1.3
-.5
-.3
-2.1
1.9
1.0
4.9
36.6
42.0
36.7
38.5
25.1
-2.6
1.4
13.8
7.9
4.8
3.0
4.3
-.5
6.4
6.9
2.5
-.1
.3
1.3
1.0
1.1
Primary processing ..
Advanced processing
Durable manufacturing
Lumber and products
Furniture and fixtures
Stone, clay, and glass products
Primary metals
Iron and steel
Raw steel
Nonferrous metals
Fabricated metal products
Industrial machinery and equipment .
Computer and office equipment ...
Electrical machinery
Semiconductors and related
electronic components
Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and miscellaneous
transportation equipment ..
Instruments
Miscellaneous manufactures
Nondurable manufacturing .
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction ...
Stone and earth minerals ,
24
25
32
33
331,2
331pt
sis
7!s
-1.3
-9.2
1.0
4.0
5.6
1.6
3.4
Utilities ...
Electric .
Gas
....
Special aggregates
Computers, communications equipment,
and semiconductors2
Manufacturing excluding computers,
communications equipment, and
semiconductors-
5.4
Manufacturing excluding motor vehicles
and parts
7.4
3.9
NOTE. Growth rales are calculated as the percentage change in ihe seasonally
adjusted index from Ihe fourth quarter of the previous year to the founh quarter
of the year specified. For 1998. the growth rates are calculated from the fourth
quarter of 1997 lo the third quarter of 1998 and annualized.
Primary-processing manufacturing includes textile mill products; paper and
products; industrial chemicals, synthetic materials, and fertilizers; petroleum
products; rubber and plastics products; lumber and products; primary metals;
fabricated metals; and stone, clay, and glass products. Advanced-processing
manufacturing includes foods, tobacco products, apparel products, printing and
1.9
2.6
publishing, chemical products and other agricultural chemicals, leather and
products, furniture and fixtures, industrial and commercial machinery and
computer equipment, electrical machinery, transportation equipment, instruments, and miscellaneous manufactures.
1. Standard Industrial Classification; see Executive Office of Ihe President,
Office of Management and Budget, Standard Industrial Classification Manual,
1987 (U.S. Government Priming Office. 1987).
2. Semiconductors include related electronic components,
pt Part of classification.
30
A.5.
Federal Reserve Bulletin • January 1999
Kak-s n! g r o w t h
m C:\\Kicily.
b\
imliivtiy
I'J'U '),S
Difference between growlh rates:
Revised growlh rate
Industry g r o u p
SIC
code1
revised less earlier
(percent)
1994
1996
1995
(percentage points)
1997
1998-
1994
1995
1996
1997
I998 2
.6
Total index
3.6
5.4
5.7
5.1
5.0
—
- 1
.5
1.2
.4
Manufacturing .
4.0
6.0
6.4
5.8
5.6
— I
.5
1.2
.5
2.4
4.8
3.3
7.4
3.8
7.4
3.9
6.4
3.0
.1
.4
.5
1.5
.6
->
' ' 24
25
32
5,8
3.1
2,0
-.1
9,5
3.0
2.5
5.7
9.7
3.9
5.9
4.9
8.6
4.2
5.1
2.9
7,9
2.9
1.9
.6
-.1
2
-.5
-.9
33
331,2
331 pi
333-6,9
34
35
357
36
3.0
2.8
.9
3.2
3.0
9.2
21.7
16.3
2.7
1.9
3.1
3.4
3.9
5.8
2.8
6,5
3.4
5,1
6.8
1.4
4.3
.6
2
.0
.3
11.5
34.7
28.8
3.6
5.0
2.8
2.0
5.5
13.0
46.1
30.3
12.1
43,2
23.6
14.6
59.4
18,4
.0
1.3
,4
.9
-.2
-2.0
.0
,0
1,3
.7
3672-9
31.6
58.7
56.6
46,7
33,4
-9.6
37
371
37lpt
2.7
5.5
3.7
4.3
8.4
4.5
2.5
3.9
-.5
2.0
3.2
.8
2.1
2.5
2.7
-1.5
-1.5
372-^,9
38
39
-.6
1.6
1.5
—4
,5
2
1.3
1.4
2.4
.5
1.5
1,9
1,9
-.4
20
22
23
26
1.9
1.7
3.4
1.3
1,7
2.3
2.0
22
.7
2,9
2,0
1.2
4.6
1.8
2.4
2.6
2.8
2.0
2.3
2.4
-.1
-.5
-.3
-1.2
27
28
29
30
31
.6
2.5
1.9
4.7
-1.5
.7
2.8
-.2
4.4
3.4
.3
.8
4.9
3.5
.1
2.7
1.3
5.1
.9
10
12
13
14
-1.5
.3.3
-.4
,7
.6
.4
1.6
1.7
.3
2.4
-1.0
1.2
1.0
.4
1.7
"> i
Primary processing ..
Advanced processing
Durable manufacturing
Lumber and products
Furniture and fixtures
Stone, clay, and glass products
Primary metals
Iron and steel
Raw steel
Nonferrous melals
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment ..
Electrical machinery
Semiconductors and related
electronic components
Transportation equipment
Motor vehicles and pans
Autos and light trucks
Aerospace and miscellaneous
transportation equipment
Instruments
Miscellaneous manufactures
Nondurable manufacturing
Foods
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction ..
Stone and earth minerals
Utilities ...
Electric .
Gas . . . .
49l'.3pl
49? 3pt
Special aggregate.*
Computers, communications equipment,
and semiconductors'
Manufacturing excluding computers,
communications equipment, and
semiconductors3
NOTE. See general note to table A.4.
1. Standard Industrial Classification; see table A.4, note I.
2. Through the fourth quarter of 1998.
.3.5
5.2
2.6
1.7
2.1
2 2
.1
1.9
6.6
,9
—7
3'o
.6
.3
1.4
-.6
-2.7
2.9
.0
.7
.0
-.8
,8
1.7
6.2
11.0
-.4
.1
.0
-.8
1.5
.4
2.2
4.4
-1.5
-.1
1.2
-3.1
-.3
4.1
17.8
,6
2.7
24.8
9.9
-1.7
.5
.3
,1
-.8
-1.7
-1.4
-1.4
-1,5
-1.6
-1.8
,2
-I.I
1.3
-.6
-1.3
-1.6
-.5
-1.4
-1.3
-.9
-1.6
_2
"1
-n
-5
,1
.1
.1
.4
.5
-2
-L2
2.7
1.8
.6
.8
.9
-.1
.0
.9
.0
.0
.0
-.6
5.9
-.6
-.1
.5
.5
5.9
-.7
-.6
-.4
.9
-.6
2.2
2
-L9
1.5
4.5
.1
2
7
.9
.8
2.2
-.1
-.7
-1.4
3.4
3..5
-1.4
.9
2,2
.3
3.1
1.5
2.9
.9
.8
1.7
1.7
„ 2
3.5
1.0
4.4
.4
4.0
-.1
.0
-.8
.0
.0
.3
-.1
1.9
.7
.6
1.5
-.1
.5
1.9
1.9
2.1
23.2
41.0
46.3
37.4
34.8
-4,2
2.5
3.2
2.7
2.6
2.4
.6
.2
2
-.8
— 1
—2
-3.3
2.2
-.5
.1
1.6
I.I
-.8
-.5
2.5
I.I
4.8
-.4
3.5
.0
.3
.7
.0
.0
.7
_ 1
.9
_
,9
.0
-.1
-.3
-4
•7
.0
.0
.1
.8
.4
~ 1
.5
7
-I.I
-1.5
.0
.4
.3
.0
3.2
16.2
7.0
3. Semiconductors include related electronic components,
pi Part of classification.
.0
_
7
—4
-.1
-.1
Industrial Production and Capacity Utilization: 1998 Annual Revision
A.6.
31
Capacity utilization rates, by industry group, 1967-9
Item
SIC
code1
Total index
Difference between rates:
revised less earlier
(percentage points)
Revised rate
(percent of capacity, seasonally adjusted)
1967-97
avg.
1988-89
high
1990-91
low
199&Q4
1997-Q4
I998:Q3
I99&Q4
82.1
85.4
78.1
82.2
83.4
81.5
_ I
.3
I997-Q4
I998:Q3
.2
81.1
85.7
76.6
81.3
82.5
80.2
-.1
82.3
80.5
88.9
84.2
77.7
76.1
85.4
79.6
853
81.4
82.8
793
-.5
.2
-.7
1.0
-.9
1.4
24
25
32
79.4
82,5
81.4
78,2
84.6
93.6
86.6
83.5
73.1
75.5
72.5
69.7
80.2
82.1
79.2
80.9
82.1
81.3
77.9
80.7
79.9
81.7
77.6
81.7
-a
.5
.1
-2.1
-1.4
1.4
-1.4
.4
1.7
33
331,2
331m
333-6,9
34
35
357
36
81.1
81.1
80.9
8U
78.0
81.3
81.2
81.1
92.7
95.2
92.7
993
82.0
85.4
86.9
84.0
73.7
71.8
71.5
74.2
7J.9
723
66.9
75.0
90.7
90.9
88.8
90.5
80.3
84.4
83.3
813
92.0
91.8
90.0
92.3
78.8
85.4
83.5
81.7
85,4
.810
84.Q
89.S
76.1
$5.6
82.5
76.6
-.3
.0
.1
-.9
-.1
-.7
-.6
.7
-.1
1.0
-1.0
.6
3672-9
80.0
81.1
75.6
82.7
83.8
76.0
37
371
371pt
75.9
76.8
85.8
89.1
92.3
68.5
55.9
533
72.2
74.4
79.6
80.0
813
87.6
78.0
74.2
773
3
2.3
3-0
2.0
4,2
5.5
4.0
4.7
4.1
372-6.9
38
39
75.0
81.7
75.6
873
81.4
79.0
79.2
77.2
71,7
69.3
79.1
80.1
78.4
80.8
79.7
83.3
S0.2
77.6
-IX
-.4
.9
-.7
3
-.7
3.0
1.2
-.1
20
22
23
26
83.4
83.0
85.7
81.1
89.2
87.3
85.4
90.4
85.1
93.5
80.7
82.7
77,7
753
85.0
82,8
81.6
85.5
79.1
87.8
833
82.1
84.7
76,2
89.3
81.0
80.2
83.0
74.2
86.8
.2
.7
3.0
Z2
-.7
.4
1.6
.4
.8
-.1
13
.9
.8
27
28
29
30
31
85J
79.S
86.6
84.5
80.8
91.7
86.2
8&5
89.6
83.3
79.6
79.3
82.1
79.5
94.5
77.4
76.1
81.9
76.8
96.5
84,0
63JB
10
12
13
14
87.5
79.1
86.6
88.6
84.8
88.0
89.4
91.5
88.2
89.0
87.0
79.9
83.4
88.7
79.4
70,9
88.1
90.8
84.2
88.9
86.3
85.1
79.8
95.2
85.5
66.9
88.6
912
84.5
89,6
85.5
491.3pt
492.3pt
87.3
89.2
82.4
92.6
95.0
8S.0
83.4
87.1
67.1
89.4
90.8
83.7
Special aggregates
Computers, communications equipment,
and semiconductors'
80.3
81.9
72.4
Manufacturing excluding computers,
communications equipment, and
semiconductors*
81.2
86.1
76.8
Manufacturing.
Primary processing ..,
Advanced processing
Durable manufacturing
Lumber and products
Furniture and fixtures
Stone, clay, and glass products
Primary metals
Iron and steel
Raw steel
Nonferrous metals
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment
Electrical machinery
Semiconductors and related
electronic components
Transportation equipment
Motor vehicles and parts
Autos and light trucks- . . . .
Aerospace and miscellaneous
transportation equipment
Instruments
Miscellaneous manufactures . . . .
Nondurable manufacturing .
Foods
Textile mill products . . . .
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum produett
Rubber and plastics products .
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction . . ,
Stone and earth minerals .
Utilities . . .
Elcciric .
Gas . . . ,
NOTE. The "high" column refers to periods in which utilization generally
peaked; the "low" column refers 10 recession years in which utilization generally bottomed out. The monthly highs and lows are specific to each series, and
all did not occur in the same month.
ss.i
1.
2.
3.
pt
-.6
-1.8
-.5
-.1
.7
.1
-10
-3
-.4
.8
-.7
-.8
.9
3.7
.2
-13
-1.2
.1
-1.7
-.4
1.0
.4
3
-2.1
-1.0
1.5
-.4
-.5
-3.0
-1.9
863
87.3
87.1
86.0
84.5
-2
A
-2.0
.2
-S
-.9
—1
-42
-.6
1.5
-2.5
.2
-23
-2.9
-3.4
90.8
93.2
81.1
94.6
97.7
81.9
-.6
81.4
82.0
77.4
81.3
82.6
80.7
mi
-1.6
-.1
1.0
-33
-.1
Standard Industrial Classification: see table A.4, note I.
Series begins in 1977.
Semiconductors include related electronic components,
Pan of classification.
1.4
2.0
-.2
32
Federal Reserve Bulletin J January 1999
A.7.
Annual proportions in industrial production, by industry group, 1990-97
Iiem
SIC
code1
1990
1991
1992
1993
1994
1995
i 1996
1997
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
84.4
84.5
85.4
85.9
86.7
86.8
86.8
87.8
26.8
57.6
26.1
58.4
26.6
58.9
27.0
58.9
28.2
58.5
28.0
58.8
27.6
59.2
27.8
60.0
44.2
1.8
1.3
2.1
44.9
45.6
46.3
25
32
44.8
1.8
1.4
2.2
46.8
2.1
1.4
2.2
47.6
2.1
1.4
2.3
48.5
2.1
1.4
33
331,2
33Ipt
333-6.9
34
35
3.3
1.9
.1
1.4
5.1
8.3
3.1
1.7
.1
1.4
4.9
7.9
3.1
1.8
.1
1.4
5.0
3.6
2.0
.1
1.6
357
36
1.8
6.7
6.8
7.8
1.6
7.1
3.5
1.9
.1
1.6
5.4
9.2
1.8
8.6
3672-9
2.2
2.3
37
371
371 pi
9.7
4.7
2.7
9.6
4.6
2.6
372-6,9
38
39
5.0
5.1
1.3
5.0
5.4
1.3
39.6
9.0
1.5
1.7
2.1
3.7
40.3
9.4
1.6
1.7
1.6
1.8
2.2
3.7
2.2
3.5
6.7
6.8
9.9
1.5
Total index
Manufacturing
Primary processing
Advanced processing
Durable manufacturing
Lumber and producls
Furniture and fixtures
Stone, clay, and glass products
Primary metals
Iron and steel
Raw steel
Nonferrous metals
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment
Electrical machinery
Semiconductors and related
electronic components
Transportation equipment
Motor vehicles and pans
Autos and light trucksAerospace and miscellaneous
transportation equipment
Instruments
Miscellaneous manufactures
Nondurable manufacturing
Foods
Tobacco products
Textile mill producls
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and producls
Mining
:
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas
Special ugxrexates
Computers, communications equipment.
and semiconductors Manufacturing excluding computers,
communications equipment, and
semiconductors 2
' ' 24
' ' 20
21
22
23
26
27
28
29
30
31
9.8
1.6
3.2
.3
3.3
.3
2.2
1.4
2.1
2.2
1.4
2.2
3.3
1.9
.1
1.4
5.1
8.1
1.6
7.4
3.5
2.0
.1
1.6
5.2
8.4
1.6
7.8
3.5
1.9
.1
1.6
5.3
8.9
1.7
8.3
2.5
2.6
2.9
3.4
3.6
3.7
9.4
4.7
2.5
9.5
5.1
2.6
9.3
5.5
2.8
8.9
5.4
2.7
8.8
5.2
2.7
9.2
5.3
2.6
4.7
5.4
1.3
4.4
5.3
1.3
3.8
4.9
1.3
3,5
4.8
1,3
3.6
4.9
1.4
4.8
1.4
40.6
9.6
40.3
9.6
1.1
40.1
9.2
1.3
1.7
2.0
3.9
39.3
9.0
1.3
1.6
1.9
3.5
39.3
8.9
2.1
3.4
40.4
9.3
1.2
1.8
2.1
3.8
6.8
10.0
1.4
3.5
.3
6.8
9.9
6.6
10.0
1.5
3.6
.3
1.6
3.8
.2
6.6
9.9
1.5
3.7
.2
6.6
9.7
1.6
3.7
.2
6,7
9.8
1.6
3.8
6.8
6.4
6.0
.5
.4
.5
.9
4.0
.6
6.5
.4
.9
4.6
.6
5.9
.4
1.0
6.1
.5
.9
4.1
.6
2.1
1.8
2.4
5.5
9.4
1.9
8.8
3.9
1.3
1,6
1.8
3,5
.2
10
12
13
14
.5
7.5
.5
1.2
5.6
.6
I.I
5.3
.6
4.7
.9
4.4
.6
.6
7.7
6.3
1.5
8.0
6.5
1.5
7.8
6.2
1.6
7.7
ft.l
1.6
7.4
5.S
1.5
7.1
5.6
1.5
6.7
5.4
1.3
6.3
491.3pl
492.3pl
5.4
5.3
5.7
5.8
6.2
6.9
7.3
7.6
79.0
79.2
79.8
80.1
80.4
80.0
79.5
80.1
7.9
N u i t . The IP proportion data arc estimates of ihe industries' relative contribution to overall IP growth in the following year. For example, a 1 percent
increase in durable goods manufacturing in 1998 would account for a 0.485 percent increase in total [P.
1.6
2.1
1.4
1. Standard Industrial Classification; see table A.4. note I.
2. Semiconductors include related electronic components,
pi Pan of classification.
.9
4.1
.6
5.2
I.I
Industrial Production and Capacity Utilization: 1998 Annual Revision
A.8.
33
Rates of growth in electric power use, 1994-98
Item
Difference between growth rates:
revised less earlier
(percentage points)
Revised growth rate
(percent)
SIC
code1
1994
1995
1996
1997
Total
4.9
-.8
1.5
Manufacturing.
5.1
-.9
1.4
3.1
-.1
1.4
.8
4.0
3.1
-1.0
5.4
-1,4
.6
-1.2
-2.0
.1
.0
.4
.6
.0
.3
Durable manufacturing
Lumber and products
Furniture and fixtures
Stone, clay, and glass products .
Primary metals
Fabricated metal products
Industrial machinery and equipment .
Electrical machinery
Transportalion equipment
Instruments
Miscellaneous manufactures
Nondurable manufacturing .
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products.
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction ...
Stone and earth minerals .
Su/Jplemeniary groups
Total, excluding nuclear nondelense
Utilities sales to industry
Industrial generation
1994
1.0
-2.6
I.I
-2.9
1995
1996
1997
1998
.2
.3
.5
-.1
.0
.2
.3
.5
.0
.0
.4
-.6
-.3
.4
1.4
.4
.7
-.8
A
2.3
.2
_^
-1.4
_2
__ •)
-.7
_2
1.1
-2.0
.8
.9
.6
.4
24
25
32
33
34
3.4
2.9
7.6
2.1
3.0
5.5
.5
1.5
-3.6
1.5
1
_2
43
4.2
3.4
-3.8
3.7
35
36
37
38
39
4.0
2.4
4.1
1.7
II.1
.4
1.5
-2.0
.4
-4.7
1.4
2.5
_^
-2^8
6.9
3.0
2.3
5.2
.6
.3
2.6
2.0
-7.5
1.3
-3.8
.5
2
-.5
.8
_2
.5
-1.0
-.8
.9
-I.I
-.2
-1.1
-.7
.6
-1.4
-.1
-.8
-.4
-.3
-.7
1.2
5.1
I.I
-.6
.7
6.5
4.5
-5.5
6.0
6.8
2.7
-2.0
2.5
6.3
-3.4
-6.4
-.6
2.6
1.7
2^9
-1.8
.4
-.5
22
~,5
2.1
-2.0
2.2
-4.4
20'
21
22
23
26
.3
1.0
-.3
.6
.5
-1
2
.9
-1.2
-.2
.4
-.1
.3
.7
-2.2
.3
.8
.0
.3
.5
-2.3
-1.0
.5
1.3
-.9
-.7
3.2
-.9
.3
,1
27
28
29
30
3!
4.2
9.7
2.7
9.0
-3.5
.7
-6.5
7.3
—5
-9^2
.8
5.7
-3.3
3.4
-1.4
3.0
-4.2
2.5
.6
-1.7
-2.3
-9.7
-2.0
3.7
.0
.2
1.1
-.3
.8
.3
1
1.2
-.2
-4.5
_ J
-s.o
.5
.3
.0
.3
-.6
-.1
2.0
-.4
-.6
.8
-2.2
1.2
-.!
1.4
2.2
5.6
7.4
-».8
7.5
1.0
8.5
-1.3
-4-9
5.7
2.8
2.5
.0
4.4
3.7
-.4
.4
-.6
1.0
-4.2
1.8
.0
8.1
-4.5
10.5
.0
-.2
-I
.0
.2
.0
-.2
.0
.0
.5
.5
— 1
.0
1.4
2
-1.2
-I
,3
-.8
-5.8
.6
-1.6
1.0
-1.0
7.3
3.7
5.3
1.3
.6
-1.2
4.8
.9
1.9
-5.7
2.2
1.0
.8
-1.5
-2.6
2.4
.2
.3
-.3
.3
.4
_ |
.4
.3
-.1
-.1
.1
.4
.2
.4
.4
10
12
13
14
NOTE. Growih rates are calculated as ihe percentage change in the seasonally
adjusted index from the fourth quarter oi the previous year to the fourth quarter
of the year specified. For 1998. the growth rates are calculated from the fourth
quarter of 1997 to Ihc third quarter of 1998 and annualized.
1998
—?
— ?
-5.0
2.6
-8.5
-4.0
I
1. Standard Industrial Classification; sec table A.4, note 1.
34
Industrial Production and Capacity Utilization
for November 1998
Released for publication December 16
Industrial production declined 0.3 percent in November after an upwardly revised increase of 0.2 percent
in October. The decline in the index resulted from
a fall of 3.4 percent in the output of utilities and of
1.2 percent in the output of mines. Manufacturing
output was unchanged after having risen 0.6 percent
in October. At 131.8 percent of its 1992 average,
industrial production in November was 1.5 percent higher than it was in November 1997. Capacity
utilization fell 0.6 percentage point, to 80.6 percent,
a level \l/i percentage points below its 1967-97
average.
Industrial production and capacity utilization
Percent of capacity
Ratio scale, 1992= 100
Industrial production
Capacity utilization
130
-
Manufacturing
~J3?
J ^
-
y
A/*\
120
Total industry
_
Total industry
-
85
-
80
110
*
Manufacturing
- 100
\
1
1
1990
i
i
i
1992
i
V
i
1994
1996
1998
1988
1990
1
1992
1
1
1994
1
1
1996
1
1998
Industrial production, market groups
Ratio scale. 1992 = 100
__
f\
Consumer goods
Durable
—
.
Ratio scale, 1992 = 100
135
_
Intermediate products
— 125
^J\f
i
r
Nondurable
~/*~
1
1
1
1
1
Business supplies
—
Business
-
-
^
- 95
-
1
Ratio scale. 1992 = 100
Equipment
115
105
Yyf^vF
- 95
/
1
Construction supplies /S'\ss'*
-
— 105
—
135
125
115
^
-
Ratio scale, 1992 = 100
175
160
145
130
115
-
100
-
85
— 175
Materials
Durable gc ods
-
160
145
—
130
115
100
/*
Nondurable goods and energy
_
Defense and space
^
1
85
i
1
1990
1992
1994
1996
1998
1990
1992
All scries are seasonally adjusted. Latest series. November. Capacity is an index ot potential industrial production.
1
1994
1
1
1996
1
1
1
1998
35
Industrial production and capacity utilization, November 1998
Industrial production, index, 1992= 100
Percentage change
Category
1998
1998'
Aug.'
Sept.'
Oct.'
Nov. P
Total
132.4
131.9
132.2
131.8
Previous estimate
132.5
132.0
132.0
Major market groups
Products, total2
Consumer goods . . . .
Business equipment .
Construction supplies
Materials
124.9
116.1
166.6
128.0
144.4
124.2
114.8
167.2
126.7
144.4
124.8
115.3
168.7
128.1
144.1
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
135.7
159.8
1113
103.7
120.2
135.2
159.5
110.6
102.7
120.5
136.0
160.7
111.0
101.9
116.1
Aug. r
Sept.'
Nov.
-.3
1.5
1.8
-.5
1.4
-.4
.2
1.6
-.4
.0
124.4
115.4
167.7
129.0
143.7
1.3
1.9
1.9
-.3
1.7
-.6
-1.1
.4
-1.0
.0
.5
.4
.9
1.1
-.2
-3
.1
-.6
135.9
160.4
1.6
3.5
-.9
1.6
.6
.8
.4
-.8
-3.7
.0
-.2
100.7
I 12.5!
-.4
-.2
-.6
-1.0
.2
.7 •
-.3
-1.2
-3.4
1997
Total
82.1
Low,
1982
71.1
High,
1988-89
85.4
81.1
80.5
82.3
87.5
87.3
69.0
70.4
66.2
80.3
75.9
85.7
84.2
88.0
92.6
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
MARKET GROUPS
The output of consumer goods edged up 0.1 percent
after an upwardly revised increase of 0.4 percent in
October. Among consumer durables, production of
automotive products decreased, but remained near
the high level in October; the decline was offset,
however, by a 0.7 percent increase in the production
of other consumer durables, mainly computers and
appliances. The output of nondurable consumer
goods other than energy products, which rose 0.3 percent, was led by a second month of strong gains
in the production of foods and consumer chemicals.
The output of consumer energy products fell 1.2 percent, a drop that reflected the lowering of residential
demand for electricity and gas that came from the
abnormally warm weather during the month.
The production of business equipment fell 0.6 percent, reversing the upward-revised increase in October. The drop reflected widespread declines in the
production of most types of business equipment.
2.0
4.7
-1.3
-4.1
-1.2
1998
Capacity,
percentage
change,
Nov. 1997
to
Nov. 1998
Nov.
Aug. 1
Sept.'
Oct.1
Nov. i'
83.4
82.0
81.3
81.2
80.6
5.0
82.0
81.4
81.1
80.7
79.9
83.1
86.3
95.1
79.5
82.0
85.4
95.2
80.2
79.6
82.1
84.7
91.6
79.8
79.3
81.7
83.5
88.5
5.6
6.6
3.0
Previous estimate
Manufacturing
Advanced processing ..
Primary processing
Mining
Utilities
7.9
4.4
.9
MEMO
Capacity utilization, percent
Average,
1967-97
Nov. 1997
to
Nov. 1998
Oct.'
82.6
81.6
85.4
87.9
90.3
.9
.7
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
A notable exception was the production of computers, where continued strength pushed up the reading
on the output of information processing equipment.
Declines in the production of civilian aircraft and
business vehicles lowered the overall output of transit
equipment, and further weakness in the production of
farm machinery reduced output in the "other equipment" category.
The output of construction supplies increased
0.7 percent after having risen 1.1 percent in October.
Gains continued to be widespread among most of the
underlying components of this index. In contrast, the
production of business supplies fell 1.0 percent, a
drop that reflected, in part, the reduced commercial
use of energy.
The production of materials fell 0.3 percent after
having dropped 0.2 percent in October. The production of durable goods materials edged up 0.2 percent,
as continued strength in the production of semiconductors, printed circuit boards, and other electronic
components was only partly offset by a sharp drop in
36
Federal Reserve Bulletin • January 1999
the production of basic metals; the production of iron
and steel fell 5.0 percent. The output of nondurable
goods materials slipped again, with weakness in the
production of chemicals, textiles, and paper. Because
of the drop in electricity generation, the output of
energy materials fell 1.8 percent.
INDUSTRY GROUPS
Manufacturing output was unchanged as gains in the
production of nondurable goods were offset by a
falloff in the production of durables. Among durables, declines in the production of primary metals,
industrial machinery other than computers, and transportation equipment contributed to the November
weakness. In contrast, the production of nondurable
goods edged up 0.2 percent and was led by increases
of '/2 percent or more in the production of foods,
petroleum products, and rubber and plastic products.
The reading on mining production continued to fall,
being pulled down by the continued contraction in oil
and gas extraction and declines in natural gas output
and coal mining activity.
The factory operating rate dropped 0.4 percentage
point, to 79.8 percent—more than 23A percentage
points below the level it had reached in November 1997. Utilization rates for both primary- and
advanced-processing industries have fallen this year
to levels below their historical averages. Similarly,
utilization at mines fell to 83.5 percent—more than
4 percentage points below its year-ago level and well
below its historical averages.
REVISION OF INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION
On November 24, the Federal Reserve published
revisions to its measures of industrial production
(IP), capacity, capacity utilization, and industrial use
of electric power. The revisions began with 1992 and
incorporated updated source data for more recent
years.
This regular updating of source data for IP included
annual data from the Bureau of the Census's 7996
Annual Survey of Manufactures and from selected
editions of its 7997 Current Industrial Reports.
Annual data from the Department of the Interior on
metallic and nonmetallic minerals (except fuels) for
1996 and 1997 were also introduced. The updating
also included revisions to the monthly indicators for
each industry (physical product data, productionworker hours, or electric power usage) and revised
seasonal factors. In addition, the revision introduced
improved measures of production for semiconductors, coal, lawn and garden equipment, and aircraft.
Capacity and capacity utilization were revised
to incorporate preliminary data from the Census
Bureau's 7997 Survey of Plant Capacity. The statistics on the industrial use of electric power incorporated more complete reports received from utilities
for the past few years as well as data from the 7996
Annual Survey of Manufactures.
The revised data are available on the Board's
web site, http://www.federalreserve.gov/releases/gl7,
and on diskettes from Publications Services (telephone 202-452-3245). Further information on these
revisions is available from the Board's Industrial
Output Section (telephone 202-452-3197).
A document with printed tables of the revised
estimates of series shown in the G.17 release is
available upon request to the Industrial Output Section, Mail Stop 82, Division of Research and Statistics, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
•
37
Announcements
REDUCTION IN THE DISCOUNT RATE
The Federal Reserve on November 17, 1998,
announced the following set of policy actions:
• The Board of Governors approved a reduction in
the discount rate by 25 basis points from 43/4 percent
to 4'/2 percent.
• The federal funds rate is expected to fall 25 basis
points from around 5 percent to around 43A percent.
Although conditions in financial markets have
settled down materially since mid-October, unusual
strains remain. With the 75 basis point decline in the
federal funds rate since September, financial conditions can reasonably be expected to be consistent
with fostering sustained economic expansion while
keeping inflationary pressures subdued.
In taking the discount rate action, the Board
approved requests submitted by the boards of directors of the Federal Reserve Banks of New York,
Philadelphia, and Dallas. Subsequently, the Board
approved similar actions by the board of directors of
the Federal Reserve Bank of San Francisco, also
effective November 17; by the boards of directors of
the Federal Reserve Banks of Boston, Richmond,
Atlanta, and Kansas City, effective November 18; by
the board of directors of the Federal Reserve Bank
of St. Louis, effective November 19; and by the
boards of directors of the Federal Reserve Banks of
Cleveland, Chicago, and Minneapolis, also effective
November 19. The discount rate is the interest rate
that is charged depository institutions when they borrow from their District Federal Reserve Banks.
REDUCTIONS IN FEES FOR PAYMENT SERVICES
OF THE FEDERAL RESERVE BANKS
The Federal Reserve Board on November 4, 1999,
announced continued price reductions in fees for
electronic payment services provided to depository
institutions by the Federal Reserve Banks. Most of
the new fees become effective January 4, 1999.
Prices across all electronic payment services will
decline 17.5 percent in 1999, reflecting lower prices
for Fedwire and automated clearinghouse (ACH)
transactions. In large part, the savings reflect the
efficiencies gained from the successful completion
of a five-year project to consolidate the Federal
Reserve's computer facilities.
For 1999, the Reserve Banks will reduce the basic
fee for a Fedwire funds transfer and a Fedwire securities transfer by almost 30 percent and 25 percent
respectively. The Reserve Banks will eliminate some
ACH fees and reduce other fees for their ACH customers, including the fee for items received, which
will decline more than 12 percent.
Fees for paper check products, which include
forward-processed, fine-sort, and returned checks,
will increase about 2.6 percent on a volume-weighted
basis (a 3.7 percent increase from January 1998 fee
levels). This increase is driven primarily by increases
in fine-sort and returned-check fees.
Fees for forward-processed items will remain
stable. Fees for payor bank services, which include
electronic check products, will increase about 0.6 percent (a 1.2 percent increase from January 1998 fee
levels).
Besides these fee changes, the Reserve Banks will
implement a volume-based fee structure for the Fedwire funds transfer service and a new fee structure for
the Fedwire securities transfer service. These structure changes become effective February 1, 1999.
During the first quarter of 1999, the Reserve Banks
will also implement an enhanced multilateral settlement service that will allow participants in settlement
arrangements to submit settlement files to the Federal
Reserve electronically, improving operational efficiency over current methods. The fees and fee structure for the new and existing multilateral settlement
services have been revised by lowering the per-entry
fee, introducing a settlement file fee, and increasing
the off-line surcharge.
Working with other industry participants, the
Reserve Banks also plan to expand their efforts to
educate depository institutions and end users about
the benefits of the ACH. This campaign, coupled
with ACH fee decreases for 1999, is expected to spur
commercial ACH growth and help broaden the use of
electronic payment systems.
The Monetary Control Act of 1980 requires that
the Federal Reserve recover the costs of providing
38
Federal Reserve Bulletin • January 1999
certain payment services over the long term. During
the 1988-97 period, the Reserve Banks recovered
99.6 percent of the costs of priced services.
The Reserve Banks project that they will recover
101.0 percent of their priced services costs for 1999,
including imputed expenses and targeted return on
equity, generating a net income of $64.2 million. The
Reserve Banks estimate that they will recover
102.2 percent of their costs in 1998.
On November 4, 1998, the Board also approved
the 1999 private-sector adjustment factor (PSAF) for
Reserve Bank priced services of $115.8 million, an
increase of $7.3 million, or 6.7 percent, from the
1998 targeted PSAF of $108.5 million. The PSAF is
an allowance for taxes and other imputed expenses
that would have been paid and return on capital that
would have been earned had the Federal Reserve's
priced services been provided by a private business
firm.
PROVISION FOR ENHANCED SETTLEMENT
SERVICES TO DEPOSITORY INSTITUTIONS
The Federal Reserve Board on November 3, 1998,
announced plans for providing an enhanced settlement service to depository institutions. The enhanced
service combines and improves selected features
from the Reserve Banks' existing net settlement
services.
Under the enhanced service beginning March 29,
1999, the Federal Reserve Banks will offer a fully
automated settlement service that provides participants in clearing arrangements with finality of settlement intraday on the settlement date.
The service will provide the settling participants
with an on-line mechanism to submit an electronic
file of settlement information to the Federal Reserve.
Besides increasing operational efficiency, the enhanced service is intended to facilitate a reduction
in the duration of settlement risk for private-sector
clearing arrangements.
DECREASE IN THE NET TRANSACTION
ACCOUNTS TO WHICH A 3 PERCENT RESERVE
REQUIREMENT WILL APPLY IN 1999
The Federal Reserve Board on November 24, 1998,
announced a decrease from $47.8 million to
$46.5 million in the net transaction accounts to which
a 3 percent reserve requirement will apply in 1999.
This adjustment is known as the low reserve tranche
adjustment.
The Board also changed from $4.7 million to
$4.9 million the amount of reservable liabilities of
each depository institution that is subject to a reserve
requirement of 0 percent.
Additionally, the Board increased the deposit cutoff levels that are used in conjunction with the
exemption level to determine the frequency and detail
of deposit reporting required for each institution from
$78.9 million to $81.9 million for nonexempt depository institutions and from $50.7 million to $52.6 million for exempt depository institutions.
For depository institutions that report weekly, the
low reserve tranche adjustment and the reservable
liabilities exemption adjustment will apply to the
reserve computation period that begins Tuesday,
December 1, 1998, and the corresponding reserve
maintenance period that begins Thursday, December 31, 1998.
For institutions that report quarterly, the low
reserve tranche adjustment and the reservable liabilities exemption adjustment, will apply to the reserve
computation period that begins Tuesday, December 15, 1998, and the corresponding reserve maintenance period that begins Thursday, January 14, 1999.
JOINT STATEMENT ON THE ALLOWANCE FOR
LOAN LOSSES OF DEPOSITORY INSTITUTIONS
The Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Federal
Reserve Board, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision on
November 24, 1998, jointly issued the following
statement on the allowance for loan losses of depository institutions.
The Securities and Exchange Commission, Federal
Deposit Insurance Corporation, Federal Reserve Board,
Office of the Comptroller of the Currency and Office of
Thrift Supervision (the Agencies) recognize the importance of meaningful financial statements and disclosure for
both the benefit of investors and a safe and sound financial
system. The Agencies also recognize the importance of
depository institutions having prudent, conservative, but
not excessive loan loss allowances that fall within an
acceptable range of estimated losses. Accordingly, the
Agencies are issuing this Statement to better ensure the
consistent application of loan loss accounting policy and to
improve the transparency of financial statements.
In 1986, the Securities and Exchange Commission
issued FRR 28 concerning Procedural Discipline in Determining the Allowance and Provision for Loan Losses to be
Reported. In 1993, the four Federal banking agencies
jointly issued the lnteragency Policy Statement on the
Allowance for Loan and Lease Losses (lnteragency Statement). These documents provide guidance to depository
Announcements
institutions on the establishment and maintenance of an
allowance consistent with generally accepted accounting principles (GAAP). As these materials make clear, the
allowance for loan losses should reflect estimated credit
losses for specifically identified loans, as well as estimated
probable credit losses inherent in the remainder of the loan
portfolio at the balance sheet date. When determining the
appropriate level for the allowance, management should
always ensure that the overall allowance appropriately
reflects a margin for the imprecision inherent in most
estimates of expected credit losses. Management's judgment should be exercised in a disciplined manner that is
based on and reflective of adequate detailed analyses of the
loan portfolio.
Although management's process for determining allowance adequacy is judgmental and results in a range of
estimated losses, it must not be used to manipulate earnings or mislead investors, funds providers, regulators or
other affected parties. Management's process must be
based on a comprehensive, adequately documented, and
consistently applied analysis of the institution's loan portfolio. The depository institution must ensure that its
allowance is supportable in light of the accompanying
disclosures made to investors, including those made in
management's discussion and analysis and financial footnotes, with respect to the underlying economics and trends
in the portfolio and any other factors that significantly
affect the collectibility of loans.
The Agencies have discussed their respective concerns
about accounting for allowances for loan losses and agree
that the approach to the allowance should be consistent
with the guidance noted above. Accordingly, each of the
Agencies will continue to fulfill its respective responsibilities for ensuring that the allowance for loan losses is
appropriately determined and that earnings are not improperly managed, consistent with safety and soundness objec-
39
tives and investor protection objectives. The banking agencies understand that the SEC's general concerns about
earnings management issues extend to all SEC registrants,
not merely banking organizations, and that questions have
arisen with respect to loan loss allowances in this context only with regard to a small number of banking
organizations.
The Agencies today have agreed to work together with
the public accounting profession and banking industry in
developing further guidance consistent with GAAP, the
Interagency Statement and FRR 28. This additional guidance will help to ensure the transparency of the reported
amounts, improve auditability, and serve as a benchmark
for the exercise of prudent judgment. The Chief Accountants of each of the Agencies will meet quarterly to coordinate this and other projects of mutual interest.
ENFORCEMENT ACTIONS
The Federal Reserve Board on November 17, 1998,
announced the issuance of a cease and desist order
against the Frontier Bank of Laramie County, Cheyenne, Wyoming.
The order, which includes provisions addressing
year 2000 readiness, was issued jointly with the
Wyoming Department of Audit, Division of Banking.
Also on November 17, 1998, the Federal Reserve
Board announced the issuance of a cease and desist
order against William Shilstone, a former institutionaffiliated party of the New York branch of Societe
Generate, New York, New York.
•
40
Minutes of the
Federal Open Market Committee Meeting
Held on September 29, 1998
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors of
the Federal Reserve System in Washington, D.C., on
Tuesday, September 29, 1998, at 9:00 a.m.
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Ferguson
Mr. Gramlich
Mr. Hoenig
Mr. Jordan
Mr. Kelley
Mr. Meyer
Ms. Minehan
Mr. Poole
Ms. Rivlin
Mr. Reinhart, Deputy Associate Director, Division
of Monetary Affairs, Board of Governors
Mr. Struckmeyer, Assistant Director, Division of
Research and Statistics, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Messrs. Spillenkothen and Parkinson,2 Director,
Division of Supervision and Regulation, and
Associate Director, Division of Research and
Statistics respectively, Board of Governors
Messrs. Boehne, McTeeir, Moskow, and Stern,
Alternate Members of the Federal Open Market
Committee
Messrs. Broaddus, Guynn, and Parry, Presidents of
the Federal Reserve Banks of Richmond,
Atlanta, and San Francisco respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Ms. Fox, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Baxter, Deputy General Counsel
Mr. Truman, Economist
Mr. Connolly, First Vice President, Federal Reserve
Bank of Boston
Messrs. Eisenbeis, Goodfriend, Hunter, Kos, Lang,
and Rolnick, Senior Vice Presidents, Federal
Reserve Banks of Atlanta, Richmond, Chicago,
New York, Philadelphia, and Minneapolis
respectively
Messrs. Judd and Rosengren, Vice Presidents, Federal
Reserve Banks of San Francisco and Boston
respectively
Ms. Yucel, Research Officer, Federal Reserve Bank of
Dallas
Messrs. Cecchetti, Dewald, Hakkio, Lindsey,
Simpson, Sniderman, and Stockton, Associate
Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors'
Mr. Ettin, Deputy Director. Division of Research and
Statistics, Board of Governors
Messrs. Madigan and Slifman, Associate Directors,
Divisions of Monetary Affairs and Research and
Statistics respectively, Board of Governors
I. Attended portion of the meeting relating
disclosure policies.
Messrs. Alexander, Hooper, and Ms. Johnson,
Associate Directors, Division of International
Finance, Board of Governors
the Committee's
By unanimous vote, the minutes of the meeting
of the Federal Open Market Committee held on
August 18, 1998, were approved.
The Manager of the System Open Market Account
reported on recent developments in foreign exchange
markets. There were no open market operations in
foreign currencies for the System's account in the
period since the previous meeting, and thus no vote
was required of the Committee.
The Manager also reported on developments in
domestic financial markets and on System open mar2. Attended portion of meeting relating to developments stemming
from the financial difficulties of a large hedge fund.
41
ket transactions in government securities and federal
agency obligations during the period August 18,
1998, through September 28, 1998. By unanimous
vote, the Committee ratified these transactions.
The Committee then turned to a discussion of the
economic and financial outlook, and the implementation of monetary policy over the intermeeting period
ahead. A summary of the economic and financial
information available at the time of the meeting and
of the Committee's discussion is provided below,
followed by the domestic policy directive that was
approved by the Committee and issued to the Federal
Reserve Bank of New York.
The information reviewed at this meeting suggested that economic activity was expanding at a
moderate rate. Growth of private domestic final
demand had slowed from its pace in the first half of
the year, though it was still relatively robust, and
reduced spending on U.S. exports and rising import
competition were exerting appreciable restraint on
overall activity, as was a slowing in inventory investment. Reflecting the moderation in growth from the
first half of the year, total payroll employment was
trending up at a somewhat slower pace. Despite the
pressures on labor resources associated with stilltight labor markets, trends in wages and prices
remained stable.
Growth in nonfarm payroll employment slowed
somewhat over the July-August period. The deceleration reflected further job losses in the manufacturing
sector, notably in the apparel and electronic components industries on which the crisis in Asia was
having a sizable adverse effect. Outside of manufacturing, employment increases remained strong in
the service-producing industries, and even though
anecdotal reports continued to indicate shortages
of skilled workers, further sizable job gains were
recorded in construction. The civilian unemployment
rate stayed at 4.5 percent in August.
Industrial output rebounded in August as production at General Motors resumed following the settlement of the labor strike. Outside the motor vehicle
sector, however, output had changed little on balance
over recent months in association with the erosion in
net exports stemming from the turmoil in Asia and its
repercussions on a number of other U.S. trading partners; production of consumer goods edged down on
balance in July and August, and the growth of output
of business equipment slowed. The rise in industrial
production in August boosted the rate of utilization of
manufacturing capacity, but the factory operating rate
remained somewhat below the level of late last year.
Total retail sales were held down in July and
August by a sharp contraction in spending for motor
vehicles, but non-auto sales continued to rise at
a brisk pace. The gains were widespread, with
increases in spending on furniture and appliances,
apparel, and miscellaneous nondurables especially
strong. Purchases of services also were up appreciably further in July and August after a rapid secondquarter rise. Sales and construction of residential
buildings remained quite strong on balance, reflecting
very favorable homebuying conditions. Housing
starts slipped in August but were still above the high
level of the first half of the year. Sales of existing
homes dropped back in August from the record high
registered in July, while sales of new homes were
slightly higher in July (latest data) than in the first
half of the year.
Available indicators pointed to more moderate
growth in business fixed investment after the surge in
capital spending during the first half of the year.
Shipments of nondefense capital goods declined
in July and August, retracing much of June's large
increase, while sales of medium and heavy trucks
continued to increase at a rapid pace. Nonresidential
construction weakened in July, extending a pattern of
sluggish building activity; construction of industrial
structures remained in a downtrend, and office building activity changed little on balance over June and
July.
Business inventory accumulation eased further in
July after having slowed sharply in the second quarter, and inventory-sales ratios remained moderate.
Stockbuilding in manufacturing was at a somewhat
lower rate in July than in the second quarter, and the
stock-shipments ratio for the sector stayed a little
above the low level that had prevailed over the past
year. At the wholesale level, a further decline in
inventories reflected additional reductions in motor
vehicles; the inventory-shipments ratio remained in
the upper part of its narrow range for the past year. In
the retail sector, a sharp drop in stocks at automotive
dealerships more than offset a rise in stocks of other
goods. The aggregate inventory-sales ratio for the
retail sector was at a relatively low level.
The nominal deficit on U.S. trade in goods and
services narrowed slightly in July from its secondquarter average, with the value of imports falling
more than the value of exports. Much of the decline
in imports and exports involved trade in automotive
products with Canada and Mexico. Economic activity
in the major foreign industrial countries other than
Japan decelerated on average in the second quarter,
with a deterioration in net exports partially offsetting
continued strength in domestic final demand. In
Japan, activity contracted for a third consecutive
quarter; net exports made a large positive contri-
42
Federal Reserve Bulletin • January 1999
bution as imports dropped sharply, but domestic
demand, most notably business fixed investment, fell
steeply.
Both the overall and the core CPI again rose moderately in August; a further increase in food prices
was offset by a sizable decrease in energy prices. For
the twelve months ended in August, core consumer
prices rose slightly more than they had in the yearearlier period. At the producer level, prices of finished goods dropped appreciably in August, largely
reflecting declines in the prices of finished foods and,
notably, energy goods. Producer prices of finished
goods other than food and energy moved slightly
higher in the twelve months ended in August after
having edged down in the year-earlier period. Producer prices at earlier stages of production were
under strong downward pressure; prices of intermediate materials fell during the year ended in August by
slightly more than they had risen in the year-earlier
period, and prices of crude materials plunged further
in the twelve months ended in August. Average
hourly earnings of production or nonsupervisory
workers continued to increase at a relatively moderate pace in the July-August period, and for the twelve
months ended in August they rose slightly more than
in the year-earlier period.
At its meeting on August 18, 1998, the Committee
adopted a directive that called for maintaining conditions in reserve markets that would be consistent with
the federal funds rate continuing to average around
5'/: percent. However, in light of mounting financial
strains abroad, their potential implications for the
U.S. economy, and less accommodative conditions in
domestic financial markets, the Committee concluded
that the risks to the outlook were no longer tilted
toward rising inflation but had become more balanced. Accordingly, the Committee adopted a directive that did not include a presumption about the
likely direction of any adjustment to policy during
the intermeeting period. The reserve conditions associated with this directive were expected to be consistent with moderate growth of M2 and M3 over coming months.
Open market operations were directed throughout
the intermeeting period toward maintaining the
existing degree of pressure on reserve positions, and
the federal funds rate remained close to its intended
level of 5'/2 percent. In an atmosphere of greatly
increased volatility in financial asset values worldwide and a reduced appetite for risk among many
investors, interest rates on U.S. Treasury securities,
and to a much smaller extent on investment-grade
corporate debt, fell appreciably during the intermeeting period; in contrast, yields on the bonds of lower
rated firms increased sharply, and a number of large
banks tightened terms and standards for making business loans to sizable firms. Credit conditions also
tightened in Europe, Asia, and Latin America. Share
prices in U.S. and foreign equity markets remained
volatile during the intermeeting period, and major
U.S. equity price indexes declined considerably further on balance.
In foreign exchange markets, the trade-weighted
value of the dollar depreciated substantially over the
intermeeting period in relation to other major currencies. A spreading perception that the United States
was more vulnerable than either Europe or Japan to
an economic downturn in Latin America, increasing
expectations of monetary easing in the United States,
and shifts into yen associated with the end of the
fiscal half-year in Japan and the unwinding of some
investment positions financed in yen were factors that
weighed on the dollar. By contrast, the dollar appreciated slightly in terms of an index of currencies that
includes the developing countries of Latin America
and Asia that are important trading partners of the
United States.
Growth of M2 and M3 picked up considerably in
August and apparently strengthened further in September. The acceleration was the result of unusually
large inflows to money market funds that in part
reflected households' preference for relatively safe,
liquid placements for funds shifted out of equities
and lower-rated corporate debt. For the year through
September, both aggregates recorded growth rates
well above the Committee's ranges for the year.
Expansion of total domestic nonfinancial debt had
moderated somewhat in recent months after having
picked up earlier in the year.
The staff forecast prepared for this meeting incorporated a considerably weaker assessment of underlying aggregate demand, owing to downward revisions to growth abroad and to the less accommodative
conditions that were evolving in U.S. financial
markets. The staff projected that the expansion of
economic activity would slow for a time to a pace
appreciably below the estimated growth of the economy's potential and then would pick up to a rate more
in line with that potential. Damped expansion of
foreign economic activity and the lagged effects of
the earlier rise in the foreign exchange value of the
dollar were expected to place considerable restraint
on the demand for U.S. exports for a period ahead
and to lead to further substitution of imports for
domestic products. Domestic production also would
be held back for a while by the efforts of firms to
bring inventories into better balance with the anticipated moderation in the trajectory of final sales. In
Minutes of the Federal Open Market Committee
addition, private final demand would be restrained by
tighter lending terms and conditions as well as the
drop that had occurred in equity prices. Pressures on
labor resources were likely to ease somewhat as the
expansion of economic activity slowed, but inflation
was projected to pick up gradually in association with
a partial reversal of the decline in energy prices this
year.
In the Committee's discussion of current and prospective economic conditions, members focused on
developments that pointed to the potential for a significant weakening in the growth of spending. They
recognized that there were at present few statistical
indications that the economy was on a significantly
slower growth track. Indeed,' the available data
suggested that consumer expenditures and business
investment retained considerable strength. At the
same time, however, investors' perceptions of risks
and their aversion to taking on more risk had
increased markedly in financial markets around the
world. That change in sentiment was exacerbating
financial and economic problems in a number of
important trading partners of the United States. In
addition, it was generating lower equity prices and
tightening credit availability in U.S. financial markets. As a consequence, the downside risks to the
domestic expansion appeared to have risen substantially in recent weeks. Though labor markets were
expected to remain relatively tight for some time,
the members saw little prospect that inflation would
gather significant momentum in coming quarters.
Declining commodity and other import prices would
be restraining prices and inflation expectations for
a while. Overall consumer prices might rise a little
more rapidly next year as the effects of a number
of favorable factors, such as falling energy prices,
diminished or reversed, but underlying inflation was
expected to stay quite subdued as inflation expectations remained damped and pressures in labor markets became less pronounced.
The intensification and further spread of turmoil in
international financial markets, notably since the outbreak of a financial crisis in Russia in mid-August,
had spilled over into U.S. financial markets. Strong
demands for safety and liquidity had driven down
yields on U.S. Treasury securities, but spreads of
private rates over Treasury rates had gapped higher.
Increases in risk spreads were especially large for
lower-grade borrowers and on bonds below investment grade, whose rates had increased considerably
since mid-August. In addition, many banks had tightened their credit standards and terms. Prices in U.S.
equity markets, which had weakened appreciably
before the crisis in Russia, had declined substantially
43
further. These market developments strongly suggested, and anecdotal reports tended to confirm, the
emergence of widespread perceptions of greater risks
in a broad range of financial investment activities and
of considerably greater reluctance to put capital at
risk. The members did not believe that the tightness
in credit markets and strong demand for safety and
liquidity were likely to lead to a "credit crunch,"
though some members expressed the view that such
an outcome could not be ruled out. At a time when
business balance sheets already indicated a significant softening of cash flows owing to weaker profits,
many business firms were experiencing increased
difficulty and costs in their efforts to raise funds in
debt or equity markets or to borrow from lending
institutions; if these conditions were to persist, the
sustainability of the current strength in business
capital expenditures would come into question. The
decline in stock market prices also appeared likely
to damp the growth of consumer spending over
time, with added implications for business capital
expenditures.
Despite the emergence of decidedly less hospitable
financial conditions, there were few indications in the
data available to the Committee of any weakening as
yet in consumer and business spending. Consumer
expenditures, though temporarily held back by shortages of new motor vehicles stemming from the work
stoppage at General Motors, had remained on a solid
uptrend, with overall growth in recent months apparently slipping only a little from a remarkably rapid
pace in the first half of the year. Strong growth in jobs
and incomes along with substantial further increases
in stock market prices through mid-July had fostered
a high level of consumer confidence and spending.
Members commented that the more recent weakness
in the stock market and the related decline in household net worth had removed an important support for
the growth of consumer spending, but they noted that
recent surveys indicated only a slight deterioration in
consumer sentiment and that the stimulus from earlier stock market gains probably would dissipate only
gradually. Looking further ahead, consumer spending
could be expected to expand at a pace that was more
in line with the growth of household incomes than it
had been in recent years.
Growth in business investment spending, while
apparently moderating from an extraordinary pace
during the first half of the year, likewise seemed to
have been little affected to date by the tightening in
credit conditions and the increased aversion to risktaking. Data on shipments of capital equipment
continued to display a clear uptrend, and members
reported very strong construction activity in many
44
Federal Reserve Bulletin • January 1999
parts of the country. Declining relative prices and
rapid technological advances were likely to generate
appreciable further growth in spending for computer
and office equipment over the projection horizon.
Moreover, new orders for capital equipment did not
suggest any general weakening, though such orders
had declined dramatically in the steel industry under
the weight of intense foreign competition. Even so,
the members anticipated that the pronounced increase
in investor and lender perceptions of risk would
result in considerable moderation in the growth of
overall business investment, especially in light of
concurrent expectations of reduced gains in sales and
profits and evidence of some diminution in both
internal and external sources of financing. Reports
from nearly every Federal Reserve District suggested
that executives had become considerably more concerned about business prospects. In a number of
cases they already had seen a substantial downturn
in their exports or a surge in competing imports at
prices they found difficult to match. In other cases
they were anticipating such developments or were
reacting to the general sense of unease and uncertainty evident in financial markets. Forthcoming data
on capital spending, including new orders and contracts, were likely to point to a weaker uptrend in
business fixed investment. How much weaker was a
major uncertainty in the economic outlook and a key
to determining the extent to which financial market
turmoil was likely to affect the real economy.
Very favorable underlying factors, including a
strong job market and declining mortgage rates, had
helped to sustain homebuilding activity at an elevated
level. The large further advance in stock market
prices earlier in the year also appeared to have been a
positive factor in the strong performance of the housing market. While anecdotal reports suggested that
softening was confined to only a few areas, the
delayed effects of the drop in stock market prices and
forecasts of slower employment and income growth
suggested some moderation in housing activity at
some point. Even so, the continued affordability of
new homes for many households was likely to sustain
housing demand at a relatively high albeit diminished
level, and homebuilding activity would be bolstered
for a time as backlogs created by shortages of skilled
construction workers in many areas were worked off.
Net exports, while subject to a great deal of uncertainty, were seen as likely to continue to restrain
demand and production to a substantial extent over
coming quarters. Members cited examples from
across the country of business firms, notably in the
manufacturing sector but also in energy, agriculture,
forest products, and some other industries, that
already were being adversely affected by weaker
export markets and increased competition from
lower-priced imports. Moreover, the intensification
of turmoil in international financial markets since the
Russian devaluation and debt moratorium had led
to tighter financial conditions in key U.S. trading
partners—especially in the Americas—a development that was likely to weaken growth in those
markets and demand for U.S. products. Of potentially
greater importance for the domestic economic outlook, however, was the spread of international financial unsettlement to U.S. financial markets and the
attendant deterioration in business and investor confidence. It was clear that the contagious effects of
international economic and financial turmoil had
markedly increased the downside threat to the domestic expansion.
In their comments about the outlook for inflation,
members referred to the persistence of very tight
labor markets across the nation and to indications of
escalating increases in labor compensation in a number of areas. At the same time, price inflation generally had remained subdued, with little evidence of
acceleration. As had been true for an extended period,
competitive pressures were widely reported to be
preventing employers from passing through rising
labor costs to consumer prices. Looking ahead, members cited a variety of factors bearing on the prospects for inflation that on the whole suggested that
the risks of an inflationary uptrend had receded.
Favorable factors in the outlook for prices included
the lingering effects of the dollar's earlier appreciation, ample industrial capacity, generally declining
commodity and other import prices, and an apparently more rapid trend of productivity gains. Over
time, some slowing in economic growth and less
intense pressures on labor resources would hold down
increases in labor costs. Developments that might
tend to offset these positive factors, at least in part,
included a possible turnaround in energy prices after
sizable declines over the past year and an upturn
in the costs of worker benefits, notably for medical
expenses. A few members also observed that the
rapid growth of key monetary aggregates, including
M2, over a period of several quarters was a worrisome element in the outlook for inflation, though the
most recent surge in M2 probably was induced in
large measure by a flight to quality and liquidity.
In their discussion of policy for the intermeeting
period ahead, all the members endorsed a proposal
calling for a slight easing in reserve markets to produce a decline of [A percentage point in the federal
funds rate to an average of about 5lA percent. In their
view, such an action was desirable to cushion the
Minutes of the Federal Open Market Committee
likely adverse consequences on future domestic economic activity of the global financial turmoil that had
weakened foreign economies and of the tighter conditions in financial markets in the United States that
had resulted in part from that turmoil. At a time of
abnormally high volatility and very substantial uncertainty, it was impossible to predict how financial
conditions in the United States would evolve. In
the view of many members, equity prices and risk
spreads in U.S. financial markets previously had
embodied an overly optimistic assessment of business prospects, and they saw some correction in these
markets as a positive development. Moreover, they
expected markets to become much more settled once
the initial adjustments to new risk assessments had
been made. On balance, however, credit conditions
were likely to remain tighter and equity prices lower
than earlier, and in the context of continued damped
inflation, monetary policy had the room to adjust to
these new circumstances. In any event, an easing
policy action at this point could provide added insurance against the risk of a further worsening in financial conditions and a related curtailment in the availability of credit to many borrowers.
The members agreed that the decrease in the federal funds rate should be limited to 25 basis points.
Several emphasized in this regard that although the
risk of rising inflation might have receded, it was still
present, especially in light of the persistence to date
of very tight labor markets and relatively robust
economic growth. In these circumstances, while an
easing move was warranted to provide some insurance against undesirably tight domestic financial conditions, many members saw the need for a cautious
policy action. A more sizable policy move at this
point might convey an exaggerated impression of the
Committee's current thinking regarding the extent of
downside risks in the economy.
The members were divided over whether to retain
the current symmetrical directive or to adopt an
asymmetrical directive that would be tilted toward
ease. A small majority favored moving to asymmetry
on the grounds that it seemed more consistent with
the increased downside risks to the economy that
they believed would exist even after the contemplated policy action and that it would underscore the
Committee's readiness to respond promptly to conditions that might threaten the sustainability of the
expansion. Other members expressed a preference for
a symmetric directive but indicated that they could
accept a directive that was tilted toward ease. In their
opinion, the uncertainties relating to the direction of
the next policy move were sufficiently great on both
sides to justify a neutral directive. Some commented
45
that unanticipated developments were likely in any
event to provide the principal basis for future policy
actions. They suggested that the Committee would
undoubtedly confer by telephone should such developments materialize during the intermeeting period,
and the symmetry or asymmetry of the directive
would have little bearing on whatever policy decision
might be reached.
At the conclusion of the Committee's discussion,
all the members supported a directive that called for
conditions in reserve markets that would be consistent with a slight decrease in the federal funds rate to
an average of about 514 percent. All the members
also indicated that they could accept a change in the
directive to include a bias toward easing. Accordingly, in the context of the Committee's long-run
objectives for price stability and sustainable economic growth, and giving careful consideration to
economic, financial, and monetary developments, the
Committee decided that a slightly higher federal
funds rate might be acceptable or a somewhat lower
federal funds rate would be acceptable during the
intermeeting period. The reserve conditions contemplated at this meeting were expected to be consistent
with some moderation in the growth of M2 and M3
over the months ahead.
Federal Reserve Bank of New York was authorized
and directed, until instructed otherwise by the Committee, to execute transactions in the System Account
in accordance with the following domestic policy
directive:
The information reviewed at this meeting suggests that
the economy has been growing at a moderate rate, paced
by brisk, albeit slowing, increases in spending by businesses and households, while expansion in overall economic activity has continued to be restrained by developments abroad. Nonfarm payroll employment grew
somewhat more slowly over July and August, mostly
reflecting job losses in the manufacturing sector; the civilian unemployment rate was unchanged at 4.5 percent in
August. Industrial production has changed little on balance
over recent months. Total retail sales over July and August
were held down by a sharp contraction in spending for
motor vehicles. Residential sales and construction have
remained quite strong in recent months. Available indicators point to continued growth in business capital spending,
but at a more moderate pace than in the first half of the
year. Business inventory accumulation slowed further in
July. The nominal deficit on U.S. trade in goods and
services narrowed slightly in July from its second-quarter
average. Trends in wages and prices have remained stable
in recent months.
Most interest rates have fallen appreciably since the
meeting on August 18, though yields on the bonds of
lower-rated firms have increased and a number of large
banks have tightened terms and standards for making business loans. Broadly similar developments have occurred in
46
Federal Reserve Bulletin • January 1999
major foreign markets. Share prices in U.S. and global
equity markets have remained volatile and major indexes
have declined considerably further on balance over the
intermeeting period. In foreign exchange markets, the
trade-weighted value of the dollar declined substantially
over the intermeeting period in relation to other major
currencies: it was up slightly in terms of an index of the
currencies of the developing countries of Latin America
and Asia that are important trading partners of the United
States.
Growth of M2 and M3 strengthened considerably in
August and appeared to have picked up further in September, partly reflecting shifts of funds by households out of
investments in equities and lower-rated corporate debt. For
the year through September, both aggregates rose at rates
well above the Committee's ranges for the year. Expansion
of total domestic nonfinancial debt has moderated somewhat in recent months after a pickup earlier in the year.
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability and
promote sustainable growth in output. In furtherance of
these objectives, the Committee reaffirmed at its meeting
on June 30-July 1 the ranges it had established in February
for growth of M2 and M3 of 1 to 5 percent and 2 to
6 percent respectively, measured from the fourth quarter of
1997 to the fourth quarter of 1998. The range for growth of
total domestic nonfinancial debt was maintained at 3 to
7 percent for the year. For 1999, the Committee agreed on
a tentative basis to set the same ranges for growth of the
monetary aggregates and debt, measured from the fourth
quarter of 1998 to the fourth quarter of 1999. The behavior
of the monetary aggregates will continue to be evaluated in
the light of progress toward price level stability, movements in their velocities, and developments in the economy
and financial markets.
In the implementation of policy for the immediate future,
the Committee seeks conditions in reserve markets consistent with decreasing the federal funds rate to an average of
around 5'A percent. In the context of the Committee's
long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, a slightly
higher federal funds rate might or a somewhat lower federal funds rate would be acceptable in the intermeeting
period. The contemplated reserve conditions are expected
to be consistent with some moderation in the growth in M2
and M3 over coming months.
Votes for this action: Messrs. Greenspan, McDonough,
Ferguson, Gramlich, Hoenig, Jordan, Kelley, Meyer,
Ms. Minehan, Mr. Poole, and Ms. Rivlin. Votes against
this action: None.
RELEASE OF INFORMATION ABOUT FOMC
MEETINGS
At this meeting, the Committee reviewed its current
practices relating to its policy announcements, meeting minutes, and directive wording. This discussion
was part of an ongoing appraisal of the Committee's
disclosure policies. The Committee took no action at
this meeting but agreed that further review of some of
these issues would be appropriate.
FINANCIAL PROBLEMS OF A LARGE HEDGE
FUND
The Committee discussed the limited role of the
Federal Reserve Bank of New York in facilitating a
private-sector resolution of the severe financial problems encountered in the portfolio managed by LongTerm Capital Management L.P. The size and nature
of the positions of this fund were such that their
sudden liquidation in already unsettled financial markets could well have induced further financial dislocations around the world that could have impaired the
economies of many nations, including that of the
United States. Against this background, the Federal
Reserve Bank of New York had brought together key
interested parties with the aim of increasing the probability of an orderly private-sector solution to the
hedge fund's difficulties.
It was agreed that the next meeting of the Committee would be held on Tuesday, November 17, 1998.
The meeting on September 29 adjourned at
2:40 p.m.
CONFERENCE CALL
In a telephone conference held on October 15, 1998,
the Committee members discussed recent economic
and financial developments and their implications for
monetary policy. Risk aversion in financial markets
had increased further since the Committee's meeting
in September, raising volatility and risk spreads even
more, eroding market liquidity, and constraining borrowing and lending in a number of sectors of the
financial markets. Although indications of any softening in the pace of the economic expansion across the
country remained sparse, the widespread signs of
deteriorating business confidence and evidence of
less accommodative domestic financial conditions
suggested that the downside risks to the expansion
had continued to mount.
Against this background, a consensus emerged in
favor of a 'A percentage point reduction in the federal
funds rate that would accompany a reduction in the
discount rate that the Board of Governors was
expected to approve at a meeting following this telephone conference. Some members were concerned
that a policy move so soon after the late September
action might be misread as indicative of a degree of
concern about prospective developments in financial
Minutes of the Federal Open Market Committee
markets or the economic outlook that did not represent the Committee's thinking. However, the members generally concluded that the risk of adverse
market reactions was worth taking and that the easing
actions under consideration were more likely to help
settle volatile financial markets and cushion the
effects of more restrictive financial conditions on the
ongoing expansion. At the conclusion of this discus-
47
sion, the Chairman indicated that he would instruct
the Federal Reserve Bank of New York to lower the
intended federal funds rate by 25 basis points, consistent with the Committee's directive issued at the
meeting on September 29, 1998.
Donald L. Kohn
Secretary
49
Legal Developments
FINAL RULE—AMENDMENT TO REGULATION A
The Board of Governors is amending 12 C.F.R. Part 201,
its Regulation A (Extensions of Credit by Federal Reserve
Banks; Change in Discount Rate), to reflect its approval of
a decrease in the basic discount rate at each Federal Reserve Bank. The Board acted on requests submitted by the
Boards of Directors of the twelve Federal Reserve Banks.
The amendments to 12 C.F.R. Part 201 were effective on
November 17, 1998. The rate changes for adjustment credit
were effective on the dates specified in 12 C.F.R. 201.51.
Part 201—Extensions of Credit by Federal Reserve
Banks (Regulation A)
1. The authority citation for Part 201 continues to read as
follows:
Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d,
348 et seq., 357, 374, 374a and 461.
2. Section 201.51 is revised to read as follows:
Section 201.51 Adjustment credit for depository
institutions.
The rates for adjustment credit provided to depository
institutions under section 201.3(a) are:
Federal Reserve Bank
Rate
Effective
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
November
November
November
November
November
November
November
November
November
November
November
November
18. 1998
17. 1998
17, 1998
19, 1998
18, 1998
18, 1998
19, 1998
19. 1998
19, 1998
18, 1998
17, 1998
17, 1998
reserve requirement of zero percent. This action is required
by section 19(b)(ll)(B) of the Federal Reserve Act, and
the adjustment is known as the reserveable liabilities exemption adjustment. The Board is also increasing the deposit cutoff levels that are used in conjunction with the
reserveable liabilities exemption to determine the frequency of deposit reporting from $78.9 million to
$81.9 million for nonexempt depository institutions and
from $50.7 million to $52.6 million for exempt institutions.
(Nonexempt institutions are those with total reserveable
liabilities exceeding the amount exempted from reserve
requirements ($4.9 million) while exempt institutions are
those with total reserveable liabilities not exceeding the
amount exempted from reserve requirements.) Thus, beginning in September 1999, nonexempt institutions with total
deposits of $81.9 million or more will be required to report
weekly while nonexempt institutions with total deposits
less than $81.9 million may report quarterly, in both cases
on form FR 2900. Similarly, exempt institutions with total
deposits of $52.6 million or more will be required to report
quarterly on form FR 2910q while exempt institutions with
total deposits less than $52.6 million may report annually
on form FR 2910a.
Effective December 1. 1998, 12 C.F.R. Part 204 is
amended as follows:
Part 204—Reserve Requirements of Depository
Institutions (Regulation D)
1. The authority citation for Part 204 continues to read as
follows:
Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611,
and 3 105.
2. Section 204.9 is revised to read as follows:
Section 204.9 Reserve
requirement
ratios.
FINAL RULE—AMENDMENT TO REGULATION D
The Board of Governors is amending 12 C.F.R. Part 204,
its Regulation D (Reserve Requirements of Depository
Institutions), to decrease the amount of transaction accounts subject to a reserve requirement ratio of three
percent, as required by section 19(b)(2)(C) of the Federal
Reserve Act, from $47.8 million to $46.5 million of net
transaction accounts. This adjustment is known as the low
reserve tranche adjustment. The Board is increasing from
$4.7 million to $4.9 million the amount of reserveable
liabilities of each depository institution that is subject to a
(a) Reserve percentages. The following reserve ratios are
prescribed for all depository institutions. Edge and Agreement corporations, and United States branches and agencies of foreign banks:
(b) Exemption from reserve requirements. Each depository
institution, Edge or agreement corporation, and U.S. branch
or agency of a foreign bank is subject to a zero percent
reserve requirement on an amount of its transaction accounts subject to the low reserve tranche in paragraph (a)
of this section not in excess of $4.9 million determined in
accordance with section 204.3(a)(3).
50
Federal Reserve Bulletin • January 1999
Category
Reserve requirements'
Net transaction accounts:
$0 to $46.5 million
over $46.5 million
3 percent of amount
Nonpersonal time deposits
Eurocurrency liabilities
0 percent
0 percent
$1,395,000 plus 10 percent of
amount over $46.5 million
1. Before deducting the adjustment to be made by the paragraph (b) of this
section.
FINAL RULE—AMENDMENT TO REGULATION Y
The Board of Governors is amending 12 C.F.R. Part 225,
Subpart G of its Regulation Y (Appraisal Standards for
Federally Related Transactions), which exempts from the
Board's appraisal requirements transactions involving the
underwriting or dealing of mortgage-backed securities.
This amendment permits bank holding company subsidiaries engaged in underwriting and dealing in securities (socalled section 20 subsidiaries) to underwrite and deal in
mortgage-backed securities without demonstrating that the
loans underlying the securities are supported by appraisals
that meet the Board's appraisal requirements.
Effective December 28, 1998, 12 C.F.R. Part 225 is
amended as follows:
sections 1 l(i) and (k) of the Federal Reserve Act (12 U.S.C.
248(i) and (k)). Specifically, the Board is revising and
expanding the delegation of authority to the Director of
Division of Consumer and Community Affairs to include:
issuing interpretations under the Fair Credit Reporting Act,
adjusting the dollar amount to determine coverage under
the Home Ownership and Equity Protection Act, adjusting
the depository institution exemption threshold under the
Home Mortgage Disclosure Act, making certain determinations under the Community Reinvestment Act regulations,
and holding public hearings on financial service issues in
keeping with congressional mandates.
Effective December 28, 1998, 12 C.F.R. Part 265 is
amended as follows:
Part 265—Rules Regarding Delegation of Authority
1. The authority citation for Part 265 continues to read as
follows:
Authority: 12 U.S.C. 248(i) and (k).
2. Section 265.9 is amended by revising paragraphs (a)
introductory text, (a)(l), (c)(l), (c)(4), and (c)(5), and
adding new paragraphs (a)(8) and (d) through (g). The
revisions and additions read as follows:
Part 225—Bank Holding Companies and Change in
Bank Control (Regulation Y)
1. The authority citation for Part 225 continues to read as
follows:
Authority: 12 U.S.C. 1817(j)(13), 1818, 1828o, 1831i,
1831p-L 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310,
3331-3351,3907, and 3909.
2. In Subpart G, section 225.63 is amended by removing
the word " o r " at the end of paragraph (a)(ll), by
redesignating paragraph (a)(12) as paragraph (a)(13),
and by adding a new paragraph (a)(12) to read as
follows:
Section
225.63
Appraisals
certified or
(*\\ ^* ^
(12)
required; transactions requiring a State
licensed
appraiser.
^
The transaction involves underwriting or dealing in mortgage-backed securities; or
FINAL RULE—AMENDMENT TO RULES REGARDING
DELEGATION OF AUTHORITY
The Board of Governors is amending 12 C.F.R. Part 265,
its Rules Regarding Delegation of Authority, pursuant to
* * * * *
Section 265.9 Functions delegated to the Director
of Division of Consumer and Community Affairs.
(a) Issuing examination manuals, forms, and other materials. To issue examination or inspection manuals; report,
agreement, and examination forms; examination procedures, guidelines, instructions, and other similar materials pursuant to: section 11 (a) of the Federal Reserve
Act (12 U.S.C. 248(a)); sections 108(b). 621(c), 704(b),
814(c), and 917(b) of the Consumer Credit Protection
Act (15 U.S.C. 1607(b), 1681s(b), 1691c(b), 16921(c)
and I693o(b)); section 3O5(c) of the Home Mortgage
Disclosure Act (12 U.S.C. 2804(c)); section 18(f)(3) of
the Federal Trade Commission Act (15 U.S.C.
57a(f|(3)); section 8O8(c) of the Civil Rights Act of
1968 (42 U.S.C. 3608(c)); section 270(b) of the Truth in
Savings Act (12 U.S.C. 4309); and section 5 of the
Bank Holding Company Act of 1956 (12 U.S.C.
1844(c)). The foregoing manuals, forms, and other materials are for use within the Federal Reserve System in
the administration of enforcement responsibilities in
connection with:
(1) Sections 1-200 and 501-921 of the Consumer
Credit Protection Act (15 U.S.C. 1601-1693r), in
regard to the Truth in Lending Act, the Consumer
Leasing Act, the Equal Credit Opportunity Act, the
Electronic Fund Transfer Act, the Fair Credit Re-
Legal Developments
porting Act and the Fair Debt Collection Practices
Act;
* * * * *
(8) Sections 261-274 of the Truth in Savings Act
(12 U.S.C. 4301-4313).
ORDERS ISSUED UNDER BANK HOLDING
ACT
51
COMPANY
Orders Issued Under Section 3 of the Bank Holding
Company Act
CAB Holding, LLC
Wilmington, Delaware
(c) Determining inconsistencies between state and federal
laws. * * *
(1) Sections 111, 171 (a) and I86(a) of the Truth in
Lending Act (15 U.S.C. 1610(a), 1666j(a),
1667e(a)) and section 226.28 of Regulation Z
(12 C.F.R. Part 226) and section 213.7 of Regulation M (12C.F.R. Part 213);
(4) Section 3O6(a) of the Home Mortgage Disclosure
Act (12 U.S.C. 2805(a)) and section 203.3 of Regulation C (12 C.F.R. Part 203); and
(5) Section 273 of the Truth in Savings Act (12 U.S.C.
4312) and section 230.1 of Regulation DD
(12 C.F.R. Part 230).
(d) Interpreting the Fair Credit Reporting Act. To issue
interpretations pursuant to section 621(e) of the Fair
Credit Reporting Act (15 U.S.C. 1681s(e));
(e) Annual adjustments. To adjust as required by law:
(1) The amount specified in section 103(aa)(l)(B)(ii)
of the Truth in Lending Act and section
226.32(a)(l)(ii) of Regulation Z (12 C.F.R. Part
226), relating to mortgages bearing fees above a
certain amount in accord with section IO3(aa)(3) of
that act (15 U.S.C. 1602(aa)); and
(2) The amount specified in section 309(b)( 1) of the
Home Mortgage Disclosure Act (12 U.S.C.
2808(b)(l)) and section 203.3(a)(l)(ii) of Regulation C (12 C.F.R. Part 203) relating to the asset
threshold above which a depository institution must
collect and report data.
(f) Community Reinvestment Act determinations. To make
determinations, pursuant to section 804 of the Community Reinvestment Act (12 U.S.C. 2903), approving or
disapproving:
(1) Strategic plans and any amendments thereto pursuant to section 228.27(g) and (h) of Regulation BB
(12 C.F.R. Part 228); and
(2) Requests for designation as a wholesale or limited
purpose bank or the revocation of such designation,
pursuant to section 228.25(b) of Regulation BB
(12 C.F.R. Part 228).
(g) Public hearings. To conduct hearings or other proceedings required by law, concerning consumer law or
other matters within the responsibilities of the Division
of Consumer and Community Affairs, in consultation
with other interested divisions of the Board where
appropriate.
Order Approving Formation of a Bank Holding
Company
CAB Holding, LLC ("CAB") has requested the Board's
approval under section 3(a)(l) of the Bank Holding Company Act ("BHC Act") (12 U.S.C. § 1842(a)(l)) to become a bank holding company by acquiring all the voting
shares of The Chinese American Bank, New York, New
York ("Bank").
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 12,813 (1998)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
CAB is a newly formed nonoperating corporation that
would become a bank holding company by the acquisition
of Bank. Bank is the 122d largest commercial banking
organization in New York, with deposits of $188 million,
representing less than 1 percent of total deposits in commercial banking organizations in the state.1 Based on all
the facts of record, the Board has concluded that consummation of the proposal would not have a significantly
adverse effect on competition or on the concentration of
banking resources in any relevant banking market and that
competitive consideraiions are consistent with approval.
Based on all the facts of record, including confidential
supervisory information and other information concerning
Bank and the sole shareholder of CAB, the Board concludes that considerations relating to the financial and
managerial resources and future prospects of CAB and
Bank, the convenience and needs of the communities to be
served, and other supervisory factors that the Board is
required to consider under section 3 of the BHC Act are
consistent with approval of the proposal. In addition, the
Board has received commitments that ensure the Board's
access to information on the operations and activities of
CAB and its affiliates, in order to permit the Board to
determine and enforce compliance with the BHC Act and
other federal banking laws.
Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved. The Board's approval is expressly
conditioned on compliance with all the commitments made
by CAB, Bank, and CAB's sole shareholder in connection
with the application. For purposes of this action, the com-
1. Deposit and market data are as of June 30, 1997. CFBanc
Holdings, Inc.
52
Federal Reserve Bulletin • January 1999
mitments and conditions relied on by the Board in reaching
this decision are deemed to be conditions imposed in
writing by the Board in connection with its findings and
decision and, as such, may be enforced in proceedings
under applicable law.
The proposal shall not be consummated before the fifteenth calendar day after the effective date of this order, or
later than three months after the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of New York, acting
pursuant to delegated authority.
By order of the Board of Governors, effective November 30, 1998.
Voting for this action: Chairman Greenspan. Vice Chair Rivlin, and
Governors Kelley, Meyer. Ferguson, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
CFBanc Holdings, Inc.
Washington, D.C.
CFBanc Corporation
Washington, D.C.
Order Approving Formation of Bank Holding Companies
and Acquisition of a Bank
CFBanc Holdings, Inc. ("Holdings") and CFBanc Corporation ("Corporation") have requested the Board's approval under section 3(a)(l) of the Bank Holding Company
Act ("BHC Act") (12U.S.C. § 1842(a)(l)) to become
bank holding companies by acquiring control of more than
25 percent of the voting shares of City First Bank of D.C,
Washington, D.C. ("Bank"), a de novo national bank that
will operate with a community development focus.1 Corporation would acquire all of the voting shares of Bank, and
Holdings, a nonstock, nonprofit corporation organized under
the laws of the District of Columbia, would acquire approximately 48 percent of the voting shares of Corporation.2
1. Bank would engage primarily in lending and other activities
designed to promote the welfare of low- and moderate-income neighborhoods and individuals in the District of Columbia.
2. Georgetown University and the National Community Investment
Fund ("NCIF"), a community development fund sponsored by Shorebank Corporation, Chicago, Illinois ("Shorebank"). propose to make
investments in Corporation. Georgetown University. NCIF. and Shorebank have made a number of commitments, including commitments
that the Board has relied on in previous cases, to limit the ability of
these companies to exercise a controlling influence over Corporation
or Bank. Based on these commitments, the fact that Holdings (which
is a company independent of the other investors in Corporation) will
control nearly 50 percent of the voting shares of Corporation, the
purpose and nature of the activities of Bank, and all the other facts of
record, the Board concludes that the facts do not warrant a conclusion
at this time that Georgetown, NCIF. or Shorebank would control
Corporation or Bank for purposes of the BHC Act. The Board expressly retains its authority to initiate a control proceeding if the facts
presented at a later date indicate that any such entity in fact controls
Corporation or Bank for purposes of the BHC Act.
Notice of the applications, affording interested persons
an opportunity to submit comments, has been published
(63 Federal Register 29,996 (1998)). 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 of the BHC Act.
Holdings and Corporation are nonoperating corporations
formed for the purpose of acquiring control of Bank, a
de novo institution.3 The Board previously has noted that
the establishment of a de novo bank enhances competition
in the relevant banking market and is a positive consideration in an application under section 3 of the BHC Act.4
Accordingly, the Board concludes that consummation of
the proposal would not have a significantly adverse effect
on competition or on the concentration of banking resources in any relevant banking market and that competitive considerations are consistent with approval. In light of
all the facts of record, the Board also concludes that the
financial and managerial resources and future prospects of
Holdings, Corporation, and Bank, and the other supervisory factors that the Board is required to consider under
section 3 of the BHC Act are consistent with approval of
the proposal.
Bank intends to operate with a community development
focus and to seek to increase the availability of credit,
capital, and financial services in low- and moderate-income
neighborhoods and to low- and moderate-income individuals in the District of Columbia. Bank intends to serve the
identified credit and banking needs of low-and moderateincome areas in the District of Columbia by offering a
range of commercial, real estate, and consumer loans, as
well as checking, savings, and other traditional deposit
products. In light of Bank's objectives and all other facts of
3. The Federal National Mortgage Association ("Fannie Mae")
proposes to acquire up to 4.9 percent of the voting shares and up to
9.9 percent of the total equity of Corporation. Section 18(s) of the
Federal Deposit Insurance Act ("FDI Act") prohibits depository
institutions from being an affiliate of, sponsored by, or accepting
financial support directly or indirectly from Fannie Mae or any other
Government-sponsored enterprise. 12U.S.C. § 1828(s)(l). Section
18(s)(3), however, permits a Government-sponsored enterprise to
provide financial assistance to a depository institution as permitted by
the statutes governing the enterprise. See id. at § I828(s)(3). In this
case. Fannie Mae has not sponsored and would not be an affiliate of
Bank. Fannie Mae also asserts that its purchase of Corporation stock is
permissible under section 18(s)(3) of the FDI Act because the proposed investment is authorized under, and consistent with, the purposes of the Fannie Mae Charter Act. See I2U.S.C. §§ 1716,
I723a(a); 62 Federal Register 68.060 (1997). Fannie Mae's purchase
of a noncontrolling interest in Corporation would increase the resources of Bank available for residential mortgage financing and. thus,
appears consistent with the purposes of the Charter Act. See id. at
§ 1716. The Board notes, moreover, that Bank intends to focus its
lending efforts on low- and moderate-income areas, and that Federal
law encourages Fannie Mae to assist primary lenders to make housing
credit available in areas with concentrations of low-income and minority families. See id. at § 4565(a). In light of all the facts of record, and
after consulting with the Federal Deposit Insurance Corporation, the
Board concludes that Fannie Mae's proposed investment in Corporation is permitted under section 13(s)(3) of the FDI Act.
4. See Wilson Bank Holding Company. 82 Federal Reserve Bulletin
568(1996).
Legal Developments
record, the Board concludes that convenience and needs
are consistent with approval of the proposal.
Based on the foregoing and all the facts of record, the
Board has determined that the applications should be, and
hereby are, approved. The Board's approval is expressly
conditioned on compliance by all relevant parties with the
commitments made in connection with the applications.
For purposes of this action, the commitments and conditions relied on by the Board in reaching this decision are
deemed to be conditions imposed in writing by the Board
in connection with its findings and decision, and as such,
may be enforced in proceedings under applicable law.
The transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months following the effective
date of this order, unless such periods are extended for
good cause by the Board or by the Federal Reserve Bank of
Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective November 9, 1998.
Voting for this action: Vice Chair Rivlin and Governors Kelley,
Meyer, Ferguson, and Gramlich. Absent and not voting: Chairman
Greenspan.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
City Holding Company
Charleston, West Virginia
Order Approving the Acquisition of a Bank Holding
Company
City Holding Company ("Applicant"), a bank holding
company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842)
to acquire Horizon Bancorp, Inc., Beckley, West Virginia
("Horizon Bancorp"), and its wholly owned subsidiary
banks, Bank of Raleigh, Beckley; First National Bank in
Marlinton, Marlinton; Greenbrier Valley National Bank,
Lewisburg; National Bank of Summers, Hinton; and The
Twentieth Street Bank, Huntington, all in West Virginia.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 54,712 (1998)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Applicant is the sixth largest depository institution in
West Virginia, controlling approximately $916.9 million in
deposits, representing approximately 4.8 percent of total
deposits in depository institutions in the state ("state deposits"). 1 Horizon Bancorp is the seventh largest depository institution in West Virginia, controlling approximately
]. State and market data are as of June 30. 1997, and are updated for
merger activity as of October 23, 1998.
53
$831.8 million in deposits, representing 4.4 percent of state
deposits. On consummation of the proposal, and accounting for the proposed divestitures, Applicant would be the
fourth largest depository institution in West Virginia, controlling approximately $1.65 billion in deposits in the state,
representing approximately 8.7 percent of state deposits.
Competitive Considerations
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly or would be in furtherance of
any attempt to monopolize the business of banking. The
BHC Act also prohibits the Board from approving a proposed combination that would substantially lessen competition or tend to create a monopoly in any relevant banking
market, unless the Board finds that the anticompetitive
effects of the proposal are clearly outweighed in the public
interest by the probable effect of the proposal in meeting
the convenience and needs of the community to be served.2
Applicant and Horizon Bancorp compete directly in four
banking markets in West Virginia: Beckley, Charleston,
Greenbrier and Huntington.3 The Board has carefully reviewed the competitive effects of the proposal in these
banking markets in light of all the facts of record, including
the number of competitors that would remain in the markets, the characteristics of the markets, and the projected
increase in the concentration of total deposits in depository
institutions in the markets ("market deposits") 4 as measured by the Herfindahl-Hirshman Index ("HHI") under
the Department of Justice Merger Guidelines ("DOJ
Guidelines"). 5 Consummation of the proposal without divestitures would be consistent with the DOJ Guidelines
and prior Board decisions in the Huntington and Charleston, banking markets.6
To mitigate the potential anticompetitive effects of the
proposal in the Greenbrier banking market, Applicant has
2. 12 U.S.C. § I842(c).
3. The banking markets are described in Appendix A.
4. Market share data are based on calculations that include the
deposits of thrift institutions at 50 percent. The Board previously has
indicated that thrift institutions have become, or have the potential to
become, significant competitors of commercial banks. See. e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989);
National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g.. First
Hawaiian Inc.. 11 Federal Reserve Bulletin 52 (1991).
5. Under DOJ Guidelines. 49 Federal Register 26,823 (1984), a
market in which the post-merger HHI is more than 1800 is considered
highly concentrated. The Department of Justice has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by more than 200 points. The Justice Department
has stated that the higher than normal HHI thresholds for screening
bank mergers for anticompetitive effects implicitly recognize the
competitive effects of limited-purpose lenders and other nondepository financial institutions.
6. Market data for these banking markets after consummation of the
proposal are described in Appendix B.
54
Federal Reserve Bulletin • January 1999
committed to divest one branch that controls approximately $37.8 million in deposits in the market.7 With the
proposed divestitures, the concentration levels in the
Greenbrier banking market as measured by the HHI would
be consistent with the DOJ Guidelines after consummation
of the proposal. The HHI would increase by approximately
88 points to not more than 2529, and five competitors
would remain in the Greenbrier banking market.
Applicant is the fifth largest commercial banking organization in the Beckley banking market, controlling deposits
of $109.8 million, representing 8.8 percent of market deposits. Horizon Bancorp is the largest in the market, controlling $361.1 million of deposits, representing 29 percent
of total market deposits.
Applicant has committed to divest one branch that controls approximately $57 million in deposits and that represents approximately 4.6 percent of the market deposits. On
consummation of the proposal and divestiture, Applicant
would be the largest depository institution in the market,
controlling $413.9 million in deposits, representing approximately 33.3 percent of market deposits. The post-merger
HHI would increase by not more than 208 points to not
more than 2132.
Consummation of the transaction with the proposed divestiture would exceed the DOJ Guidelines, in the Beckley
banking market. As the Board has indicated in previous
cases, in a market in which the competitive effects of a
proposal exceed the DOJ Guidelines, the Board will consider whether other factors tend to mitigate the competitive
effects of the proposal. The number and strength of factors
necessary to mitigate competitive effects depend on the
level of market concentration and size of the increase in
market concentration.8
The Beckley banking market has characteristics that
make it attractive for entry when compared to similar
counties in West Virginia.'' For example, from 1994 to
1997, the increase in population in the Beckley banking
market was three times larger than the increase in population in comparable counties. In addition, the average number of residents per branch and amount of deposits per
branch in the banking market exceeded those statistics for
7. With respect to each divestiture. Applicant has committed to
execute a sales agreement for the proposed divestiture with a new
market entrant prior to consummation of the proposal, and to complete the divestiture within 180 days of consummation. Applicant also
has committed that, in the event it is unsuccessful in completing the
divestiture within 180 days of consummation, it will transfer the
unsold branch to an independent trustee that is acceptable to the Board
and will instruct the trustee to sell the branch promptly to one or more
alternative purchasers acceptable to the Board. See BankAmerica
Corporation, 78 Federal Reseire Bulletin 338 (1992); United New
Mexico Financial Corporation. 11 Federal Reserve Bulletin 484
(1991). In the Beckley banking market. Applicant has committed that
the purchaser of the divested branch of a one-branch bank would be
given the option of retaining the name of that bank.
8. See, e.g.. First Union Corporation, 84 Federal Reserve Bulletin
489 (1998): NationsBank Corporation. 84 Federal Reserve Bulletin
129(1998).
9. Beckley is not a Metropolitan Statistical Area ("MSA"). Accordingly, the market characteristics of the Beckley banking market were
compared with other non-MSA counties in West Virginia.
comparable counties in West Virginia. The entry of a
commercial bank de novo in 1995 also appears to confirm
the attractiveness of the Beckley banking market.
The proposed divestiture of approximately 4.6 percent of
market deposits to an out-of-market commercial banking
organization would create another market entrant, and the
number of depository institutions competing in the market
would remain unchanged at nine competitors. These competitors include three large national and regional banking
organizations that each have significant market shares.
The Department of Justice has conducted a detailed
review of the proposal and has advised the Board that, in
light of the proposed divestitures, consummation of the
proposal would not likely have a significantly adverse
effect on competition in any relevant banking market. The
Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation and the West Virginia Commissioner of Banking also have been afforded an opportunity to comment and have not objected to consummation of
the proposal.
After carefully reviewing all the facts of record and for
the reasons discussed in this order and appendices, the
Board concludes that consummation of the proposal would
not likely result in any significantly adverse effects on
competition or on the concentration of banking markets in
the Beckley, Charleston, Greenbrier and Huntington banking markets where Applicant and Horizon Bancorp compete or in any other relevant banking market. Accordingly,
based on all of the facts of record and subject to completion of the proposed divestitures, the Board has determined
that the competitive factor is consistent with approval of
the proposal.
Other Factors Under the BHC Act
The BHC Act also requires the Board, in acting on an
application, to consider the financial and managerial resources and future prospects of the companies and banks
involved in a proposal, the convenience and needs of the
community to be served, and certain other supervisory
factors.10
The Board has carefully considered the financial and
managerial resources and future prospects of Applicant and
Horizon Bancorp, and their respective subsidiary banks,
and other supervisory factors in light of all the facts of
record. As part of this consideration, the Board has reviewed relevant reports of examination and other supervisory information prepared by the Reserve Banks and other
10. A commenter has asserted that First National Bank in Marlinton
("Bank") is the subject of several lawsuits as a result of its business
relationships with local public agencies. There have been no adjudications of wrongdoing by Bank in these proceedings, and each matter is
before a forum that can provide adequate remedies if the allegations of
wrongdoing can be sustained. Commenter also alleges, without providing any supporting information, that Bank is under investigation
for the misuse of federal and state grants. In reviewing this case, the
Board has contacted and considered the views of federal banking
agencies and the Department of Justice.
Legal Developments
federal agencies. The Board notes that the bank holding
companies and their subsidiary banks currently are well
capitalized and are expected to remain so after consummation of the proposal.
The Board also has considered other aspects of the
financial condition and resources of the two organizations,
the structure of the proposed transaction, and the managerial resources of each of the entities and the combined
organization. Based on these and other facts of record, the
Board concludes that considerations relating to the financial and managerial resources and future prospects of Applicant, Horizon Bancorp, and their respective subsidiaries
are consistent with approval of the proposal, as are the
other supervisory factors that the Board must consider
under section 3 of the BHC Act.
The Board has carefully considered the effect of the
proposed acquisition on the convenience and needs of the
community to be served in light of all the facts of record.
All of Applicant's and Horizon's subsidiary banks have
received "outstanding" or "satisfactory" ratings from their
appropriate federal supervisors at the most recent examinations of their performance under the Community Reinvestment Act ("CRA") (12 U.S.C. § 2901 etseq.). Based on all
the facts of record, including the CRA performance records
of the subsidiary banks of Applicant and Horizon Bancorp,
the Board concludes that convenience and needs considerations are consistent with approval of the proposal.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved. Approval of the application is specifically conditioned on compliance by Applicant with all the commitments made in connection with the
proposal and with the conditions stated or referred to in
this order, including Applicant's divestiture commitments.
For purposes of this transaction, the commitments and
conditions referred to in this order shall be deemed to be
conditions imposed in writing by the Board in connection
with its findings and decision and, as such, may be enforced in proceedings under applicable law.
The acquisition shall not be consummated before the
fifteenth calendar day after the effective date of this order,
and the proposal shall not be consummated later than three
months after the effective date of this order, unless such
period is extended for good cause by the Board or by the
Federal Reserve Bank of Richmond, acting pursuant to
delegated authority.
By order of the Board of Governors, effective November 30, 1998.
55
Appendix A
The Beckley, West Virginia, banking market is defined as
the Beckley Ranally Metro Area ("RMA") and includes
the town of Whitesville in Boone County, the remainder of
Raleigh County, Summers County, and the portion of
Fayette County that excludes the towns of Montgomery
and Smithers.
The Charleston, West Virginia, banking market is defined as the Charleston, West Virginia, RMA and includes
the remainders of Kanawha and Putman Counties, and the
towns of Montgomery and Smithers in Fayette County.
The Greenbrier, West Virginia, banking market is defined as Greenbrier County, West Virginia.
The Huntington banking market is defined as Huntington, West Virginia-Kentucky-Ohio RMA and the remainder of Boyd County, Kentucky; Lawrence County, Ohio;
and Cabell and Wayne Counties, West Virginia.
Appendix B
In the Charleston, West Virginia, banking market applicant
would control 13.8 percent of market deposits and would
remain the second largest depository institution in the
market after consummation of the proposal. The HHI
would increase by 34 points to 1841.
In the Huntington, West Virginia, banking market applicant would control 9.3 percent of the market deposits and
would become the second largest depository institution in
the market after consummation of the proposal. The HHI
would increase by 25 points to 636.
Peoples Heritage Financial Group, Inc.
Portland, Maine
Order Approving Acquisition of a Bank Holding
Company
Peoples Heritage Financial Group, Inc., Portland, Maine
("Peoples"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), and its
wholly owned subsidiary, Peoples Heritage Merger Corp.,
Portland, Maine ("Peoples Merger"), have requested the
Board's approval under section 3 of the BHC Act
(12 U.S.C. § 1842) to merge with SIS Bancorp, Inc.,
Springfield, Massachusetts ("SIS"), and to acquire the
subsidiary banks of SIS, Springfield Institution for Savings, Springfield, Massachusetts ("SIS Bank"), and Glastonbury Bank & Trust Company, Glastonbury, Connecticut
("Glastonbury Bank"). 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 54,140 (1998)). The time for filing
comments has expired, and the Board has considered the
Voting for this action: Chairman Greenspan. Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
1. Peoples also has requested Board approval to hold and exercise
options to acquire up to 19.9 percent of the voting shares of SIS, if
certain events occur. The options would not be exercised if the merger
is consummated.
56
Federal Reserve Bulletin • January 1999
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Peoples, with total consolidated assets of approximately
$9.8 billion, operates depository institutions in Maine, New
Hampshire, and Massachusetts.2 Peoples is the tenth largest depository institution in Massachusetts, controlling deposits of approximately $1 billion in the state, representing
less than 1 percent of total deposits in insured depository
institutions in the state ("state deposits'"). SIS, with total
consolidated assets of approximately $1.8 billion, operates
depository institutions in Massachusetts and Connecticut.
SIS is the ninth largest depository institution in Massachusetts, controlling deposits of approximately $1.1 billion in
that state, representing less than 1 percent of state deposits.
On consummation of the proposal, Peoples would be the
eighth largest depository organization in Massachusetts,
controlling deposits of $2.1 billion, representing 1.8 percent of state deposits.
Interstate Analysis
Section 3(d) of the BHC Act allows the Board to approve
an application by a bank holding company to acquire
control of a bank located in a state other than the home
state of the bank holding company if certain conditions are
met.3 For purposes of the BHC Act, the home state of
Peoples is Maine, and SIS controls banks in Massachusetts
and Connecticut.4 All the conditions for an interstate acquisition enumerated in section 3(d) are met in this case.5 In
view of all the facts of record, the Board is permitted to
approve the proposal under section 3(d) of the BHC Act.
Competitive, Financial and Managerial
Considerations
Peoples and SIS do not compete in any banking market.
Based on all the facts of record, the Board concludes that
consummation of the proposal would not result in a monopoly or have a significantly adverse effect on competition in any relevant banking market.
2. Asset and deposit data are as of June 30, 1998. unless otherwise
noted.
3. See 12U.S.C. § 1842(d).
4. A bank holding company's home state is that state in which the
operation 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.
12U.S.C. § 1841(o)(4)(C).
5. See 12U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A)
and (B). Peoples is adequately capitalized and adequately managed, as
defined in the BHC Act, and the subsidiary banks of SIS have been in
existence and operated for the minimum periods of time necessary to
satisfy age requirements established by applicable state law.
See Mass. Gen. Laws Ann. ch. I67A, § 2 (West 1998) (three years);
Conn. Gen. Stat. Ann. § 36a-412 (West 1998) (five years). Peoples
also would not exceed applicable state law deposit limitations as
calculated under state law. On consummation of the proposal. Peoples
would control less than 10 percent of the total amount of deposits in
insured depository institutions in the United States. All other requirements of section 3(d) of the BHC Act also would be met on consummation of the proposal.
The BHC Act also requires the Board, in acting on an
application, to consider the financial and managerial resources and future prospects of the companies and banks
involved, and other supervisory factors. The Board has
reviewed these factors in light of the record, including
supervisory reports of examination assessing the financial
and managerial resources of the organizations and financial
information provided by Peoples. Based on all the facts of
record, the Board concludes that the financial and managerial resources and future prospects of Peoples, SIS, and
their respective subsidiary banks are consistent with approval, as are other supervisory factors the Board must
consider under section 3 of the BHC Act.
Convenience and Needs Considerations
In acting on a proposal under section 3 of the BHC Act, the
Board is required to consider the effect of the proposal on
the convenience and needs of the community to be served.
The Board has carefully reviewed the effect of the proposal
on the convenience and needs of the communities to be
served in light of all the facts of record, including comments submitted on the proposal.6
The Board has long held that consideration of the convenience and needs factor includes a review of the records of
the relevant depository institutions under the Community
Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). As
provided in the CRA, the Board has evaluated this factor in
light of examinations by the primary federal supervisors of
the CRA performance records of the relevant institutions.
An institution's most recent CRA performance evaluation
is a particularly important consideration in the applications
process because it represents a detailed on-site evaluation
of the institution's overall record of performance under the
CRA by its primary federal supervisor.7 All the insured
depository institutions controlled by Peoples received "outstanding" or "satisfactory" CRA performance ratings in
their most recent CRA examination by their primary federal supervisor: Family Bank, FSB, Haverhill, Massachusetts ("Family FSB"), received an "outstanding" rating
from the Office of Thrift Supervision ("OTS"), as of
July 28, 1997; Peoples Heritage Savings Bank, Portland,
Maine, received an "outstanding" rating from the Federal
Deposit Insurance Corporation ("FDIC"), as of April 8,
1996; and Bank of New Hampshire received a "satisfactory" rating from the FDIC, as of January 17, 1995.
6. The Board received a comment letter signed by several community groups ("commenters") which expressed concern that the acquisition of SIS by Peoples would adversely affect the positive impact
SIS has had on the Springfield, Massachusetts, community. Commenters favorably noted some current programs of Peoples, but expressed
concern about the record of Peoples in meeting the residential lending
needs of low- and moderate-income and minority borrowers.
7. The Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act provides that a CRA
examination is an important and often controlling factor in the consideration of an institution's CRA record and that reports of these
examinations will be given great weight in the applications process.
54 Federal Register 13,742 and 13,745 (1989).
Legal Developments
In reviewing this case, the Board has paid particular
attention to the record of performance of Family FSB in
helping to meet the convenience and needs of the community because Peoples proposes to merge SIS Bank into
Family FSB. 8 In its most recent CRA examination of
Family FSB, examiners noted that Family FSB offered a
full range of residential, commercial, and consumer loans.
Examiners commented favorably on the institution's nofee checking accounts, telephone banking services, and an
electronic banking card program for social security and
public assistance income distribution. Examiners also noted
that Family FSB's services were readily accessible and
tailored to the convenience of all segments of its assessment area. Examiners stated that all of the institution's
branches offered automated teller machines ("ATMs") and
16 of the institution's 21 full-service retail offices offered
extended hours at drive-through facilities. Peoples also
indicates that it maintains full-service branches operated by
students at local high schools to provide business training
opportunities for the students.
Examiners stated that, according to data reported for
1995 pursuant to the Home Mortgage Disclosure Act
(12 U.S.C. § 2801 et seq.) ("HMDA"), Family FSB originated a substantially higher percentage of residential loans
to low- and moderate-income ("LMI") borrowers than the
aggregate average percentage for all HMDA lenders in the
area. Based on 1995 HMDA data, Family FSB made more
than 400 residential loans, totaling more than $25 million,
to LMI borrowers. Examiners particularly noted that the
institution met many low-income lending needs through
special credit programs with flexible debt-to-income ratios,
down payment assistance, government guarantees, and
mortgage insurance. Examiners stated that Family FSB
significantly enhanced efforts to promote home ownership
for low-income borrowers through the institution's Community Outreach Program and its participation in first-time
home buyer and down payment assistance programs offered by community groups, government agencies, and
secondary market sources.9 Examiners also stated that
Family FSB's residential loan originations were substantially concentrated in its assessment area from January 1,
1995, to July 31, 1997. Examiners noted that Family FSB
participated in affordable housing programs sponsored by
8. Immediately after consummation of the merger of SIS into
Peoples Merger, Peoples anticipates that SIS Bank would merge with
and into Family FSB. The merger of SIS Bank into Family FSB is
subject to the prior approval of the OTS under the Bank Merger Act.
9. Peoples states that, as part of its Community Outreach Program,
Family FSB offers mortgages with special terms for LMI borrowers,
including an adjustable rate mortgage with discounted pricing based
on the borrower's income level compared with the median income of
the area, with the most favorable pricing reserved for borrowers
earning less than 50 percent of the area's median income level:
permitting up to 2 percent of the required 5 percent down payment to
come from a gift, grant, or Family FSB unsecured loan with no
interest for applicants earning less than 60 percent of the area's
median income; and flexible requirements for debt-to-income ratios.
Peoples also states that more than $6 million in mortgage loans have
been made through its Community Outreach Program since the program began in late 1994.
57
government agencies such as the Massachusetts Housing
Finance Authority ("MHFA"), the Federal Housing Administration ("FHA"), and the Department of Veterans
Affairs ("VA"). Peoples states that the majority of the
mortgage loans originated in 1997 by Family FSB were to
borrowers earning less than the median income of the
assessment area and 36 percent of mortgage loans were to
borrowers earning less than 80 percent of the median
income.
Examiners noted that Family FSB made almost 500
loans, totaling more than $84 million, to small businesses
in its assessment area from January 1, 1996, to July 31,
1997. Examiners noted that these loans represented more
than 60 percent of Family FSB's commercial loans and
more than 90 percent of the institution's small business
loans. Moreover, examiners stated that Family FSB made
80 small business loans, totaling more than $12 million, in
LMI census tracts. Peoples states that, in cooperation with
the North Quabbin Community Advisory Board, Family
FSB made loans totaling more than $250,000 pursuant to a
$1 million commitment to a small business loan pool since
the pool was established in June 1998. Peoples also states
that Family FSB has been designated a "Preferred Lender"
by the Small Business Administration.
Examiners stated that, from January 1, 1996, to July 31,
1997, Family FSB made 28 loans, totaling more than
$5 million, to organizations in its assessment area that
supported affordable housing, economic and community
development, and neighborhood stabilization. Examiners
also noted that, of these loans, almost 40 percent by number and more than 30 percent by dollar amount were made
in LMI census tracts. Examiners favorably commented on
the more than $2 million in investments in community
development organizations made by Family FSB during
the examination period, including investments in lowincome housing limited partnerships, small business loan
funds, and programs for housing rehabilitation. Peoples
states that, in 1996 and 1997, Family FSB made grants and
donations of more than $200,000 to organizations such as
The United Way, Merrimack Valley Housing Partnership,
Worcester County Food Bank, Worcester East Side CDC,
and the North County Land Trust. Examiners also noted
that the institution's management and officers contributed
financial expertise to a significant number of community
organizations and programs, including affordable housing
development and rehabilitation corporations, credit and
home ownership counseling agencies, job training and
placement services for low-income individuals, and financial intermediaries that lend to small businesses in LMI
areas.
SIS Bank received an "outstanding" rating from the
FDIC at its most recent CRA examination, as of September 22, 1997.10 Glastonbury Bank received a "satisfacto-
10. For purposes of CRA, the assessment area of SIS Bank consists
of the Springfield, Massachusetts. Metropolitan Statistical Area
("MSA") and some contiguous towns in the same census tracts as
towns located in the Springfield MSA.
58
Federal Reserve Bulletin • January 1999
ry" rating from the FDIC at its most recent CRA examination, as of August 26, 1996. Examiners noted that, based
on 1995 HMDA data, SIS Bank was the market leader in
its assessment area with 8.7 percent by number and
11 percent by dollar amount of the HMDA loans reported
in the assessment area. Examiners also noted that, based on
1996 HDMA data, SIS Bank made almost 50 HMDA
loans, totaling more than $2.7 million, in LMI census tracts
and 250 HMDA loans, totaling more than $14 million, to
LMI borrowers. Examiners stated that, during 1996, SIS
Bank made more than 80 home equity loans, totaling more
than $2 million, in LMI census tracts and more than
470 home equity loans, totaling more than $12 million, to
LMI borrowers. Examiners commented favorably on the
innovative and flexible lending programs offered by SIS
Bank, many of which were focused on first-time home
buyers in LMI areas. Examiners noted that, in 1996, SIS
Bank made approximately $1.5 million in mortgage loans
under its Soft Seconds Program which provides LMI borrowers with two mortgages; the second mortgage is subsidized with public funds and provides for significantly
reduced payments during the first nine years of the loan.
Examiners also stated that, during 1996, SIS Bank made
38 mortgage loans, totaling more than $2.7 million, under a
program sponsored by the MHFA to assist first-time home
buyers that includes a 30-year fixed rate mortgage at below
market interest rates with low down payment requirements
and flexible underwriting guidelines. Examiners also noted
that, in 1996, SIS Bank made 21 mortgage loans, totaling
more than $2 million, in a VA mortgage program that
provides 100 percent financing to eligible veterans.
Examiners stated that, in 1996, SIS Bank made more
than 260 commercial loans, totaling more than $ 10 million,
in amounts equal to or less than $100,000, representing
more than 60 percent by number of the commercial loans
made by SIS Bank during the period. Examiners also noted
that 65 percent of commercial loans made by SIS Bank
with original balances of $1 million or less during the
period were originated to businesses with gross annual
revenues of $1 million or less.
Examiners stated that the number and distribution of SIS
Bank's branches provided reasonable access to the bank's
services by everyone living in the bank's assessment area.
Examiners noted that most of the bank's branches offered
extended operating hours. Examiners stated that SIS Bank
employed numerous bilingual individuals who could provide translation services. Examiners also noted that SIS
Bank offered several free deposit products, such as basic
checking, statement savings, and unlimited usage of proprietary and nonproprietary ATMs.
Peoples states that, after consummation of the proposed
merger, the combined organization would continue to offer
many of the consumer products and services offered by
SIS, including a checking account with no minimum balance, no monthly service charges, and no transaction limits; home equity loan and credit lines; relationship checking packages, which provide enhanced deposit rates and
reduced fee structures; certificates of deposit with flexible
interest rate terms; and telephone banking services. Peo
ples also states that no branch closings or consolidations
are anticipated in connection with the proposed merger.
The Board has carefully considered the lending records
of Family FSB and SIS Bank in light of comments on the
1996 and 1997 data reported by the institutions pursuant to
the HMDA. The data for 1996 and 1997 generally show
that Family FSB and SIS Bank have assisted in meeting the
credit needs of the communities they served with respect to
HMDA-related loans, including the credit needs of minority and LMI borrowers and borrowers in LMI census tracts.
The Board has carefully considered the data in light of
other information, including examination reports that provide an on-site evaluation of the compliance by Family
FSB and SIS Bank with the fair lending laws and the
overall lending and community development activities of
the banks. The examinations revealed no evidence of prohibited or illegal credit practices at Family FSB and SIS
Bank, and the institutions were in compliance with the
substantive provisions of antidiscrimination laws and regulations, including the Equal Credit Opportunity Act, the
Fair Housing Act, and the HMDA. Peoples states that
Family FSB conducts annual CRA and fair lending training
for all employees.
The Board has carefully considered all the facts of
record, including the comments received, responses to
those comments, and the CRA performance record of
Family FSB and SIS Bank, including relevant reports of
examination and other supervisory information. Based on a
review of the entire record and for the reasons discussed
above, the Board concludes that convenience and needs
considerations, including the CRA records of performance
of the institutions involved, are consistent with approval of
the proposal.
Conclusion
Based on all the facts of record, and for the reasons
discussed above, the Board has determined that the application should be, and hereby is, approved. The Board's
decision is specifically conditioned on compliance with all
the commitments made in the application. The commitments relied on in reaching this decision shall be deemed
to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be
enforced in proceedings under applicable law.
The acquisition of SIS may not be consummated before
the fifteenth calendar day after the effective date of this
order, and the proposal may not be consummated later than
three months after the effective date of this order, unless
such period is extended for good cause by the Board or by
the Federal Reserve Bank of Boston, acting pursuant to
delegated authority.
By order of the Board of Governors, effective November 4, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Ferguson, and Gramlich. Absent and not voting:
Governor Meyer.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Legal Developments
Popular, Inc.
Hato Rey, Puerto Rico
Banco Popular de Puerto Rico
Hato Rey, Puerto Rico
Popular Transition Bank
Hato Rey, Puerto Rico
Banco Popular, New York
New York, New York
Order Approving the Acquisition of Banks, Merger of
Banks, Establishment of Branches and an Agency, and
Membership in the Federal Reserve System
Popular, Inc., Hato Rey, Puerto Rico ("Popular"), a bank
holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), and its subsidiaries propose
to reorganize their holdings in a manner that requires the
Board's approval under section 3 of the BHC Act
(12 U.S.C. § 1842) and section I8(c) of the Federal Deposit
Insurance Act (12 U.S.C. § 1828(c)) ("Bank Merger Act").
As part of this proposal. Popular would reorganize its
banking operations under two de novo banks, one organized under the laws of Puerto Rico and the other organized under the laws of New York, that propose to become
members of the Federal Reserve System pursuant to sections 9 and 19(h) of the Federal Reserve Act ("FRA")
(12 U.S.C. §§ 321 and 466). The Puerto Rican de novo
bank. Popular Transition Bank, Hato Rey, Puerto Rico
("New Banco Popular"), also proposes to operate a branch
and agency in the United States pursuant to section 7(d) of
the International Banking Act ("IBA") (12 U.S.C.
§ 3IO5(d)),' and to establish three agreement corporations
pursuant to section 25 of the FRA.2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 52,273 (1998)).3 As required by the
Bank Merger Act, reports on the competitive effects of the
merger were requested from the U.S. Attorney General, the
Office of the Comptroller of the Currency ("OCC"), and
the Federal Deposit Insurance Corporation. The time for
riling comments has expired, and the Board has considered
the applications and notices and all comments received in
light of the factors set forth in the Bank Merger Act, the
BHC Act, the FRA, and the IBA.
Popular, the top-tier parent holding company of Banco
Popular de Puerto Rico. Hato Rey, Puerto Rico ("Banco
Popular"), has total consolidated assets of approximately
1. For purposes of the application under the IBA, New Banco
Popular is considered a "foreign bank" as defined in section l(b)(7)
of the IBA. See 12 U.S.C. §3101(7).
2. The applications filed with the Board in connection with the
proposed reorganization are listed in the Appendix.
3. Notices of the various applications submitted in connection with
the proposal were also published in newspapers of general circulation
in the relevant communities.
59
$20 billion and total consolidated deposits of approximately $12 billion.4 Banco Popular, with total consolidated
assets of approximately $16 billion, is the largest commercial banking organization in Puerto Rico, controlling total
consolidated deposits of approximately $8 billion, representing approximately 35 percent of total deposits in Puerto
Rico.5 Banco Popular has approximately 200 branches in
Puerto Rico, as well as branches in the U.S. Virgin Islands
and the British Virgin Islands. Banco Popular's U.S. banking operations include branches in New York State and an
agency in Chicago, Illinois (the "Chicago Agency"). In
addition to Banco Popular, Popular controls nine insured
depository institutions in California, Florida, Illinois,
New Jersey, and Texas.
As part of the reorganization, Popular proposes to merge
certain of its current U.S. banking operations into a single
state-chartered bank, Banco Popular, New York ("Banco
Popular-New York"). Popular also proposes to transfer
Banco Popular's current operations in Puerto Rico, the U.S.
Virgin Islands and the British Virgin Islands, and a proposed state-licensed branch in New York, New York (the
"New NY Branch"), and the Chicago Agency (collectively, the "Purchased Operations"), to New Banco Popular.
Both Banco Popular-New York and New Banco Popular
have requested approval to become members of the Federal Reserve System.6
Interstate Analysis
Under the proposal, Banco Popular-New York would operate branches in its home state of New York and in California, Florida, Illinois, and New Jersey at locations where the
bank's predecessors currently operate branches.7 Under
section 9 of the FRA and section 44 of the Federal Deposit
Insurance Act ("FDI Act"), a state member bank may
acquire and operate branches outside the bank's home state
provided certain conditions are met.8 None of the home
4. Asset and deposit data are as of June 30, 1998. unless otherwise
noted. In September 1998, Popular received approval under the BHC
Act to acquire First State Bank of Southern California, Sante Fe
Springs, California, and Bronson-Gore Bancorp, and thereby acquire
its subsidiary banks, Bronson-Gore Bank, Prospect Heights, Illinois;
Irving Bank, Chicago, Illinois; and Water Tower Bank, Chicago,
Illinois. Popular consummated these acquisitions on October 31. 1998.
5. Banco Popular deposit data and ranking are as of June 30, 1997.
6. New Banco Popular proposes to continue to operate branches in
Puerto Rico at locations where Banco Popular currently operates
branches.
7. The following insured depository institutions would be merged
into Banco Popular-New York: Banco Popular, N.A. (California). City
of Commerce, California; First State Bank of Southern California.
Santa Fe Springs, California; Banco Popular, N.A. (Florida). Sanford.
Florida; Banco Popular, Illinois, Irving Bank, and Water Tower Bank,
all of Chicago, Illinois; and Bronson-Gore Bank, Prospect Heights,
Illinois. In addition, Popular proposes to merge Banco Popular, F.S.B.,
Newark, New Jersey ("BP-FSB"), into Banco Popular-New York
through a series of steps that require approval under section 5(d)(3) of
the FDI Act (12 U.S.C. § 1815(d)(3)). All the factors under section 5(d)(3) of the FDI Act are met in this proposal.
8. See 12 U.S.C. §§ 321 and 1831u. Section 9 of the FRA governs
the locations where a bank that is or becomes a state member bank
60
Federal Reserve Bulletin • January 1999
states of the depository institutions involved in the proposed depository institution mergers have enacted laws
that prohibit the proposed mergers. 9 In addition, the Board
has determined that each bank involved in the proposal
would be adequately capitalized and adequately managed
on consummation of the transaction, and that all other
applicable conditions of section 9 of the FRA and section
44 of the FDI Act are met by this proposal.10 Popular has
notified the relevant state authorities in New York, California, Florida, Illinois, and New Jersey of its proposal to
consolidate banking operations and provided a copy of its
Bank Merger Act application to all the relevant state agencies. Representatives from all the states involved in the
proposal have indicated that this transaction would comply
with their state laws on interstate bank mergers. In light of
the foregoing, it appears that the proposal complies with
the interstate banking requirements of section 9 of the FRA
and section 44 of the FDI Act.''
Under section 5(a)(7) of the IBA, a foreign bank, with
the approval of the Board, may establish an agency outside
its home state, provided the establishment and operation of
the agency is expressly permitted by the state in which the
agency is to be established.12 For purposes of the IBA,
New Banco Popular's home state would be New York, and
New Banco Popular proposes to operate the Chicago
Agency as an agency of the bank. After a review of section 5 of the IBA and the relevant state law of Illinois, the
Board has determined that New Banco Popular may operate the Chicago Agency at this location, subject to the
condition that New Banco Popular also receive the approval of the OCC.
Other Factors
In reviewing this proposal under the FRA, the Bank Merger
Act and section 3 of the BHC Act, the Board has considered the financial and managerial resources and future
prospects of the companies and banks involved, the convenience and needs of the communities to be served, and
certain supervisory factors. The Board has reviewed these
factors in light of the facts of record, including supervisory
reports of examination assessing the financial and managerial resources of the organizations and financial information provided by Popular. The Board notes that the resulting
institutions
would
be
well-capitalized
on
consummation of the proposal. Based on all the facts of
record, the Board concludes that the financial and managerial resources and future prospects of the holding compa-
may establish and operate branches. That section incorporates the
restrictions contained in section 44 of the FDI Act. Section 44 also
governs branches that may be acquired by any state member bank in
an interstate merger transaction.
9. See Cal. Fin. Code § 3824 (West 1998); Fla. Stat. Ann.
§ 658.2953 (West 1998); 205 111. Comp. Stat. Ann. 5/21.1 (West
1998); and N.J. Stat. Ann. § 17:9A-133.1 (West 1998).
\0.See 12U.S.C. § 1831u(b).
11. All the conditions for an interstate acquisition enumerated in
section 3(d) of the BHC Act also would be met in this case.
12. See 12U.S.C. § 31O3(a)(7)
nies and their subsidiaries are consistent with approval, as
are the other supervisory factors the Board must consider
under the FRA, the Bank Merger Act and section 3 of the
BHC Act.
In considering the convenience and needs factor, the
Board reviewed the records of the relevant depository
institutions under the Community Reinvestment Act
("CRA"). 13 As provided in the CRA, the Board has evaluated this factor in light of examinations by the primary
federal supervisors of the relevant institutions. All the
insured depository institutions controlled by Popular received "outstanding" or "satisfactory" CRA performance
ratings in their most recent CRA examinations by their
primary federal supervisors. Based on a review of the
entire record, the Board concludes that convenience and
needs considerations, including the CRA performance
records of the institutions involved, are consistent with
approval of the proposal.
The Board also considered the competitive effects of the
proposal as required by the Bank Merger Act and section 3
of the BHC Act. Based on all the facts of record, including
the fact that this transaction is a corporate reorganization,
the Board concludes that consummation of the proposal
would not have a significantly adverse effect on competition or on the concentration of banking resources in any
relevant banking market. Accordingly, the Board concludes that competitive considerations are consistent with
approval.
In addition, the Board has considered the factors it is
required to evaluate under the IBA for New Banco Popular
to operate the Chicago Agency and the New NY Branch.
New Banco Popular would engage directly in the business
of banking outside the United States through its banking
operations in Puerto Rico and elsewhere. Popular has provided the Board with the information necessary to assess
the application through submissions that address the relevant issues. In addition, New Banco Popular would be
subject to comprehensive consolidated supervision by the
appropriate federal and Puerto Rican bank supervisory
agencies. The Board also has determined that the other
standards required by the IBA are met in this case and that
all factors under section 25 of the FRA are consistent with
approval.
Conclusion
Based on the foregoing, including the commitments made
to the Board by Popular and its subsidiaries in connection
with these applications and notices, and in light of all the
facts of record, the Board has determined that these applications and notices should be, and hereby are, approved.
The Board's approval is specifically conditioned on compliance by the applicants with all commitments made in
connection with these applications and notices and the
conditions discussed in this order.
13. 12U.S.C. § 2901 etseq.
Legal Developments
The acquisition and merger of Popular's subsidiary
banks shall not be consummated before the fifteenth calendar day following the effective date of this order or later
than three months following the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of New York, acting
pursuant to delegated authority.
By order of the Board of Governors, effective November 16, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Appendix
Applications and Notices Submitted to the Board in
connection with the Reorganization of Popular, Inc.
(1) Membership of New Banco Popular in the Federal
Reserve System under section 19(h) of the Federal
Reserve Act (12 U.S.C. § 466).
(2) Membership of Banco Popular-New York in the Federal Reserve System under section 9 of the Federal
Reserve Act (12 U.S.C. § 321).
(3) Acquisition by Popular and its intermediate holding
companies of control of Banco Popular-New York
under section 3(a)(3) of the Bank Holding Company
Act (12 U.S.C. § 1842(a)(3)).
(4) Acquisition by Popular and its intermediate holding
companies of control of New Banco Popular under
section 3(a)(3) of the Bank Holding Company Act
(12 U.S.C. § 1842(a)(3)).
(5) Retention of ownership by Popular and its intermediate holding companies, under section 3(a)(3) of the
Bank Holding Company Act, of Banco Popular,
F.S.B., after its conversion from a federal savings
association to a national banking association
(12 U.S.C. § 1842(a)(3)).
(6) Acquisition by Banco Popular North America, Inc. of
control of Banco Popular, N.A. (Texas) under section
3(a)(3) of the Bank Holding Company Act
(12 U.S.C. § 1842(a)(3)).
(7) Acquisition by New Banco Popular of the Purchased
Operations from Banco Popular under the Bank
Merger Act (12 U.S.C. § 1828(c)).
(8) Merger of Banco Popular (with only New York operations) with and into Banco Popular-New York under
the Bank Merger Act (12 U.S.C. § 1828(c)).
(9) Merger of Banco Popular, F.S.B. (after its conversion
to a national banking association) with and into
Banco Popular-New York under the Bank Merger
Act (12 U.S.C. § 1828(c)).
(10) Merger of Banco Popular, Illinois, with and into
Banco Popular-New York under the Bank Merger
Act (12 U.S.C. § 1828(c)).
(11) Merger of Banco Popular, N.A. (California) with and
into Banco Popular-New York under the Bank
Merger Act (12 U.S.C. § 1828(c)).
61
(12) Merger of Banco Popular, N.A. (Florida) with and
into Banco Popular-New York under the Bank
Merger Act (12 U.S.C. § 1828(c)).
(13) Merger of First State Bank of Southern California
with and into Banco Popular-New York under the
Bank Merger Act (12 U.S.C. § 1828(c)).
(14) Merger of Bronson-Gore Bank with and into Banco
Popular-New York under the Bank Merger Act
(12 U.S.C. § 1828(c)).
(15) Merger of Irving Bank with and into Banco PopularNew York under the Bank Merger Act (12 U.S.C.
§ 1828(c)).
(16) Establishment of branches at the locations of the
predecessor institutions of New Banco Popular and
Banco Popular-New York under section 9 of the
Federal Reserve Act (12 U.S.C. § 321).
(17) Merger of Water Tower Bank with and into Banco
Popular-New York under the Bank Merger Act
(12 U.S.C. § 1828(c)).
(18) Establishment by New Banco Popular of an agency
in Chicago, Illinois, under section 7(d) of the International Banking Act (12 U.S.C. § 3105(d)).
(19) Establishment by New Banco Popular of a branch in
New York, New York, under section 7(d) of the
International Banking Act (12 U.S.C. § 3105(d)).
(20) Redemption of capital stock and reduction of capital
of Banco Popular under sections 9(6) and 9(11) of
the Federal Reserve Act (12 U.S.C. §§ 324 and 329),
resulting from a distribution to Popular consisting of
all the outstanding shares of common stock of New
Banco Popular.
(21) Reduction of capital of Banco Popular-New York,
under sections 9(6) and 9(11) of the Federal Reserve
Act (12 U.S.C. §§ 324 and 329), resulting from a
dividend to Popular North America, Inc., consisting
of all the outstanding shares of common stock of
Equity One, Inc.
(22) Acquisition by New Banco Popular of all the outstanding shares of Popular Leasing & Rental, Inc.,
Popular Mortgage, Inc., and Popular Finance, Inc. as
agreement corporations under section 211.4(f) of
Regulation K (12 C.F.R. 211.4(f».
(23) Establishment by Banco Popular-New York of an
international banking facility under 12 C.F.R.
204.8(a)(l).
(24) Establishment by New Banco Popular of its first two
branches in foreign countries, under section 25 of the
Federal Reserve Act (12 U.S.C. § 601) and section
211.3(a)(l) of Regulation K (12 C.F.R. 211.3(a)(l)).
Susquehanna Bancshares, Inc.
Lititz, Pennsylvania
Order Approving Acquisition of a Bank Holding
Company
Susquehanna Bancshares, Inc. ("Susquehanna"), a bank
holding company within the meaning of the Bank Holding
Company Act ("BHC Act") (12 U.S.C. § 1842(a)(3)), has
62
Federal Reserve Bulletin • January 1999
requested the Board's approval under section 3 of the BHC
Act to acquire Cardinal Bancorp, Inc. ("Cardinal"), and
thereby acquire Cardinal's subsidiary bank, First American
National Bank of Pennsylvania ("FA Bank"), both of
Everett, Pennsylvania.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 38,335 (1998)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Susquehanna operates subsidiary banks in Pennsylvania,
Maryland, and New Jersey. Susquehanna is the tenth largest depository institution in Pennsylvania, controlling
approximately $1.5 billion in deposits, representing approximately 1.1 percent of total deposits in depository
institutions in the state ("state deposits"). 1 Cardinal is the
112th largest depository institution in Pennsylvania, controlling approximately $111.9 million in deposits, representing less than 1 percent of state deposits. On consummation of the proposal, Susquehanna would become the ninth
largest depository institution in the state, controlling deposits of $1.6 billion, representing approximately 1.2 percent
of state deposits.
Competitive, Financial and Managerial
Considerations
Susquehanna and Cardinal do not compete in any banking
market. Based on all the facts of record, the Board concludes that consummation of the proposal would not have a
significant adverse effect on competition or on the concentration of banking resources in any relevant banking market.
The Board also has considered the financial and managerial resources and future prospects of Susquehanna, Cardinal, and their respective subsidiaries in light of all the facts
of record, including supervisory reports of examination
assessing the financial and managerial resources of the
organizations and financial information provided by Susquehanna. The Board notes that Susquehanna and its subsidiaries are well capitalized and are expected to remain so
after consummation of the proposal. The Board also has
considered other aspects of the financial condition and
resources of the two organizations and the structure of the
proposed transaction. Based on all the facts of record, the
Board concludes that considerations related to the financial
and managerial resources and the future prospects of Susquehanna, Cardinal, and their respective subsidiary banks,
are consistent with approval, as are the other supervisory
factors the Board is required to consider under section 3 of
the BHC Act.
Convenience and Needs Considerations
The Board also has carefully considered the effect of the
proposal on the convenience and needs of the communities
1. All banking data are as of June 30, 1998.
to be served in light of all the facts of record. As part of
that review, the Board has considered a comment from a
community group, New Jersey Citizen Action ("NJCA"),
concerning the performance of Susquehanna's subsidiary,
Equity National Bank, Atco, New Jersey ("Equity Bank"),
under the Community Reinvestment Act ("CRA"). 2 NJCA
alleges that Susquehanna has not demonstrated its commitment to the credit needs of southern New Jersey and has
failed to develop products to meet the community credit
needs.3 NJCA further alleges that, based on data filed
under the Home Mortgage Disclosure Act ("HMDA"), 4
Equity Bank has an inadequate record of lending to lowand moderate-income ("LMI") census tracts and to African Americans.
The Board has long held that consideration of the convenience and needs factor includes a review of the records of
the relevant depository institutions under the CRA. As
provided in the CRA, the Board has evaluated the convenience and needs factor in light of examinations of the
CRA performance records of the relevant institutions by
their primary federal supervisors. An institution's most
recent CRA performance evaluation is a particularly important consideration in the application process, because it
represents a detailed, on-site evaluation of the institution's
overall record of performance under the CRA by its primary federal supervisor.
Susquehanna's largest insured depository institution subsidiary, which accounts for approximately 26.8 percent of
the company's consolidated assets, received an "outstanding" rating from its primary federal supervisor, the Office
of Thrift Supervision, at its most recent examination for
performance under CRA, as of July 20, 1998. Equity Bank,
which was acquired by Susquehanna on February 28, 1997,
and represents approximately 6 percent of the total assets
of Susquehanna, received a "satisfactory" rating at its
most recent evaluation for CRA performance in 1996. Two
of Susquehanna's other banks received "outstanding" ratings from their primary federal supervisor at their most
recent evaluations for CRA performance, and all of Susquehanna's other subsidiary banks received "satisfactory"
ratings at their most recent evaluations for CRA performance. FA Bank, which is the bank Susquehanna proposes
to acquire, received a "satisfactory" rating from the Office
of the Comptroller of the Currency at its last performance
examination.
The records of examination of the subsidiary banks of
Susquehanna and Cardinal indicate that the examiners
found no evidence of prohibited discrimination or other
2. 12U.S.C. §2901 etseq.
3. NJCA also argues that Susquehanna has failed to meet with
community groups to discuss the needs of the communities that
Equity Bank serves. The Board previously has noted that, although
communication by depository institutions with community groups
provides a valuable method of assessing and determining how best to
meet the credit needs of a community, neither the CRA nor the CRA
regulations of the federal supervisory agencies require depository
institutions to enter into agreements with any organization. See Fifth
Third Bancorp, 80 Federal Reserve Bulletin 838 (1994).
4. 12U.S.C. §2801 etseq.
Legal Developments
illegal credit practices and found no violations of fair
lending laws in any of Susquehanna's subsidiary banks.
Susquehanna's lead commercial subsidiary bank, Farmers
First Bank, Lititz, Pennsylvania ("FFB"), has increased its
residential mortgage loans to LMI borrowers in recent
years. Many of these loans were originated in conjunction
with the Lancaster Housing Opportunity Program, which
offers a home buyer program with flexible underwriting
standards. FFB also offers Veterans Administration and
Federal Housing Administration loans. In addition, FFB
has originated more indirect automobile loans to LMI
borrowers than to any other income group. FFB also participates in the Habitat for Humanity program and other
housing projects through the Housing Development Corporation in Lancaster County.
Susquehanna's other subsidiary banks have implemented
several programs to address the credit needs of LMI communities, such as a Community Homebuyers Program,
which provides reduced fee loans to borrowers. Some of
the banks also have a special small loan program and lines
of credit for home renters. The banks also are participating
lenders in affordable housing programs throughout
Pennsylvania.
The Board previously reviewed the outreach programs
of Susquehanna's subsidiary banks in connection with its
acquisition of Equity Bank and found that Susquehanna
had policies and programs in place to ascertain the credit
needs of its community.5 The Board's 1997 Order noted
that Susquehanna proposed to implement a three-year lending program at Equity Bank to expand the type of loans
available in its community.
Equity Bank is primarily a small business lender,6 and
the three-year CRA plan was designed to increase Equity
Bank's affordable home mortgage lending, home improvement lending, community development lending, and to
increase its small business lending to its community. Since
its acquisition by Susquehanna, Equity Bank has increased
lending in all these categories, resulting in increases in the
percentage of Equity Bank's loan originations to LMI
areas and individuals, and an overall increase in the percentage of lending within Equity Bank's assessment area.
In 1997 and 1998, Equity Bank extended more than
$687,000 in loans to first-time LMI home purchases and
$263,000 in home improvement loans to qualified LMI
borrowers. The bank also has commitments for $550,000
in revolving credit for the construction of affordable housing and for $178,000 for a commercial mortgage for a
family services agency. Overall, data provided by Equity
Bank shows that Equity Bank's lending to LMI census
tracts improved from 1996 to 1997, and continued to
increase in 1998. Data on small business loans indicate that
5. See Susquehanna Bancshares, Inc., 83 Federal Reserve Bulletin
317 (1997) ("1997 Order").
6. According to Equity Bank's last examination, as of December 31,
1995, approximately 42 percent of the bank's loan portfolio consisted
of small business loans in amounts of less than $1 million. Small
business loans constituted 45.7 percent of the dollar volume of Equity
Bank's loans through August 31. 1998.
63
the percentage of Equity Bank's loans made in LMI census
tracts increased from 1996 to 1997, and increased again
through August 1998. Equity Bank also recently established an advisory board to help identify the credit needs of
the community.
The Board has considered carefully the entire record in
its review of the convenience and needs factor under the
BHC Act. Based on all the facts of record, including
NJCA's submission, Susquehanna's response, and the relevant reports of examination, the Board concludes that
considerations relating to convenience and needs, including the CRA performance records of the relevant institutions, are consistent with approval. The Board expects that
Susquehanna will continue to implement its three-year plan
at Equity Bank and to take the steps necessary to incorporate programs at Equity Bank that will help meet the credit
needs of its community. The Board's action in this case is
conditioned on the full implementation of these programs
by Susquehanna and Equity Bank. In addition, to permit
the Board to assess the effectiveness of Equity Bank's
eiforts, the Board's action on this proposal is conditioned
on the requirement that Susquehanna report to the Federal
Reserve System, on a semi-annual basis during the twoyear period after consummation, its progress toward improving Equity Bank's lending in LMI areas and to LMI
individuals.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved.7 The Board's approval
is specifically conditioned on compliance by Susquehanna
with the conditions described in this order and with all the
commitments made in connection with the application. For
the purpose of this action, the commitments and conditions
relied on by the Board in reaching its decision are deemed
to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be
enforced in proceedings under applicable law.
7. NJCA also requested that the Board hold a public meeting or
hearing on the proposal. Section 3(b) of the BHC Act does not require
the Board to hold a public hearing on an application unless the
appropriate supervisory authority for the bank to be acquired makes a
timely written recommendation of denial. The Board has not received
such a recommendation from the appropriate supervisory authorities.
Under its rules, the Board also may, in its discretion, hold a public
meeting or hearing on an application to acquire a bank if a meeting or
hearing is necessary or appropriate to clarify factual issues related to
the application and to provide an opportunity for testimony, if appropriate. 12C.F.R. 225.16(e). The Board has carefully considered
NJCA's request in light of all the facts of record. In the Board's view.
NJCA has had ample opportunity to submit its views, and did submitted written comments that have been carefully considered by the
Board in acting on the proposal. NJCA's request fails to demonstrate
why its written comments do not adequately present its evidence and
fails to identify disputed issues of fact that are material to the Board's
decision that would be clarified by a public meeting or hearing. For
these reasons, and based on all the facts of record, the Board has
determined that a public meeting or hearing is not required or warranted in this case. Accordingly, the request is denied.
64
Federal Reserve Bulletin • January 1999
The acquisition of Cardinal shall not be consummated
before the fifteenth calendar day after the effective date of
this order, or later than three months after the effective date
of this order, unless such period is extended for good cause
by the Board or the Federal Reserve Bank of Philadelphia,
acting pursuant to delegated authority.
By order of the Board of Governors, effective November 23, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Ferguson, and Gramlich. Absent and not voting:
Governor Meyer.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Valley View Bancshares, Inc.
Overland Park, Kansas
Order Approving Application to Acquire a Bank Holding
Company
Valley View Bancshares, Inc. ("Valley View"), a bank
holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), has requested the Board's
approval under section 3 of the BHC Act (12 U.S.C.
§ 1842) to acquire Paola-Citizens Bancshares, Inc.
("Paola"), and thereby acquire control of its subsidiary
bank, Citizens State Bank ("Citizens Bank"), both of
Paola, Kansas.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 53,672 (1998)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Valley View, with total consolidated assets of approximately $1.7 billion, operates four subsidiary banks in Kansas and one subsidiary bank in Missouri.1 Valley View is
the sixth largest commercial banking organization in
Kansas, controlling approximately $1.4 billion in deposits,
representing approximately 3.5 percent of total deposits in
commercial banking organizations in the state ("state deposits"). Paola is the 167th largest commercial banking
organization in Kansas, controlling approximately $37 million in deposits, representing less than 1 percent of state
deposits. On consummation of the proposal, Valley View
would remain the sixth largest commercial banking organization in Kansas, controlling deposits of approximately
$1.4 billion, representing approximately 3.6 percent of
state deposits.
In reviewing the proposal under the BHC Act, the Board
has considered the financial and managerial resources and
future prospects of the companies and banks involved, the
convenience and needs of the communities to be served,
and certain supervisory factors. The Board has reviewed
these factors in light of the facts of record, including
1. State asset and deposit data are as of June 30, 1998.
supervisory reports of examination assessing the financial
and managerial resources of the organizations, discussions
with other federal financial supervisory agencies, and confidential information provided by Valley View. The Board
notes that Valley View management has adequate procedures in place to address the limited risks associated with
the current activities of the holding company and its subsidiary banks. The Board further notes that the proposal
represents a relatively small acquisition by Valley View,
that Valley View would not incur or assume any debt in
connection with the proposal, and that Valley View would
remain well capitalized on consummation of the proposal.
Based on the specific facts of record in this case, the Board
concludes that the financial and managerial resources of
Valley View, Paola, and their respective subsidiary banks
and other supervisory factors are consistent with approval
of the proposal.
In considering the convenience and needs factor, the
Board has reviewed the records of the relevant depository
institutions under the Community Reinvestment Act
("CRA").2 As provided in the CRA, the Board has evaluated this factor in light of examinations of the CRA performance records of the relevant institutions by the Federal
Deposit Insurance Corporation ("FDIC"), the institutions'
appropriate federal banking supervisor. All the insured
depository institutions controlled by Valley View received
"satisfactory" CRA performance ratings at their most recent CRA examinations by the FDIC. Citizens Bank received an "outstanding" CRA performance rating at its
most recent CRA examination by the FDIC. Based on all
the facts of record, the Board concludes that convenience
and needs considerations, including the CRA performance
records of the relevant institutions, are consistent with
approval of the proposal.
As required under the BHC Act, the Board also has
considered the competitive effects of the proposal. Valley
View and Paola do not compete with each other in any
relevant banking market. Based on all the facts of record,
the Board concludes that the proposal would not have a
significantly adverse effect on competition or on the concentration of banking resources in any relevant banking
market. Accordingly, the Board concludes that competitive
considerations are consistent with approval.
Conclusion
Based on all the facts of record, the Board has determined
that this application should be, and hereby is, approved.3
The Board's approval is specifically conditioned on com2. 12 U.S.C. §2901 etseq.
3. A former shareholder of Paola has requested that the Board, as
part of its review of the proposal, monitor a private undertaking by
Paola's management to compensate former shareholders from the
proceeds of the proposal. The limited jurisdiction of the Board to
review applications under the specific statutory factors in the BHC
Act does not authorize the Board to consider matters relating to
general corporate governance, such as shareholder relations and the
adequacy of shareholder compensation. See Western Bancshares, Inc.
v. Board of Governors, 480 F.2d 749 (10th Cir. 1973).
Legal Developments
pliance by Valley View with all the commitments made in
connection with this proposal. The commitments and conditions relied on by the Board in reaching its decision are
deemed to be conditions imposed in writing by the Board
in connection with its findings and decisions and, as such,
may be enforced in proceedings under applicable law.
The proposed acquisition shall not be consummated
before the fifteenth calendar day after the effective date of
this order, or later than three months after the effective date
of this order, unless such period is extended 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 30, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Orders Issued Under Section 4 of the Bank Holding
Company Act
Bank One Corporation
Chicago, Illinois
Order Approving Investment in a Company that
Performs Trust Company Activities
Bank One Corporation ("Bank One"), a bank holding
company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.24 of the Board's Regulation Y (12C.F.R. 225.24) to acquire 50 percent of the
voting interests in EquiServe Limited Partnership ("EquiServe"), a Delaware limited partnership,1 and thereby perform functions or activities that may be performed by a
trust company.2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 23,044 (1998)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 4 of the BHC Act.
Bank One, with total consolidated assets of approximately $231.7 billion, is the fifth largest commercial banking organization in the United States. Bank One controls
subsidiary banks that operate in 14 states, and engages in a
1. Bank One would acquire an interest in EquiServe in exchange for
contributing to the joint venture substantially all the assets of the
shareholder services business conducted by its wholly owned subsidiary, First Chicago Trust Company of New York ("FCTC").
2. The remaining voting interests in EquiServe are held by
Boston EquiServe Limited Partnership, Canton, Massachusetts ("Boston EquiServe"), a joint venture between BankBoston, N.A. and
Boston Financial Data Services, Inc. ("BFDS"). BFDS is owned by
State Street Corporation and DST Systems, Inc. ("DST").
65
broad range of nonbanking activities. After consummation
of this proposal, EquiServe would offer shareholder services nationwide. These shareholder services would include maintenance of records of shareholders in publicly
traded companies and related services, such as acting as
dividend disbursement and reinvestment agent, registrar,
transfer agent, redemption agent, rights agent, exchange
agent, tender agent, and reorganization agent; proxy mailing and tabulation; and annual and interim report distribution.
The Board previously has determined by regulation that
the performance of functions or activities, such as shareholder servicing, that may be performed by a trust company is closely related to banking and permissible for bank
holding companies under section 4(c)(8) of the BHC Act.3
Bank One has committed to conduct these activities subject to the limitations set forth in Regulation Y. In order to
approve the proposal, the Board also must find that the
performance of the proposed activities by Bank One "can
reasonably be expected to produce benefits to the public . . .
that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices." 4
As a part of its evaluation of these factors, the Board
considers the financial condition and managerial resources
of the notificant and its subsidiaries and the effect the
transaction would have on such resources.5 On the basis of
all the facts of record, including relevant reports of examination and consultation with other relevant federal and
state supervisory agencies, the Board has concluded that
financial and managerial considerations are consistent with
approval of the notice.
The Board also has carefully considered the competitive
effects of the proposed joint venture. Both FCTC and
Boston EquiServe currently engage in the activities to be
conducted by the joint venture, EquiServe. On consummation of this proposal, EquiServe would become the largest
shareholder servicing operation in the United States, serving approximately 1400 companies.
The Board notes that the market for shareholder services
is a national market, which is currently moderately concentrated.6 FCTC is the second largest shareholder servicing
operation in the United States, managing approximately
12.1 million shareholder accounts, representing approximately 17.2 percent of total accounts in the United States.
Boston EquiServe is the third largest shareholder servicing
operation in the United States, managing approximately
11.5 million shareholder accounts, representing approximately 16.3 percent of total accounts in the United States.
On consummation of this proposal, EquiServe would be3. See 12 C.F.R. 225.28(b)(5).
4. See 12 U.S.C. § 1843(c)(8).
5. See 12 C.F.R. 225.26.
6. Approximately 115 firms in the United States provide shareholder services commercially to companies issuing equity. These
commercial shareholder services providers compete throughout the
United States, and the Board previously has determined that the
geographic market for this industry is national in scope. See Chemical
Banking Corporation, 82 Federal Reserve Bulletin 239, 270 (1996).
66
Federal Reserve Bulletin • January 1999
come the largest shareholder servicing operation in the
United States, managing approximately 23.6 million accounts, representing approximately 33.5 percent of total
accounts in the United States.
The structure of the market for shareholder services
mitigates the adverse effects of this proposal. Many companies choose to be self-providers of shareholder services.7
Thus, the market indexes tend to overstate the relative
market share controlled by specialized providers, such as
Boston EquiServe and FCTC. Moreover, the decision by
several large companies that currently are self-providers to
outsource the function could significantly change the market share of a successful bidder for that business.8 In
addition, there are numerous potential entrants into this
market. Currently, more than 200 firms specialize in providing shareholder services to groups of affiliated investment companies. Although only a few firms provide shareholder services to industrial or financial companies and to
investment company groups, many of the activities and
organizational features of the types of firms that provide
shareholder services to investment company groups are
similar to those activities of firms providing these services
to industrial or financial companies. The investment company shareholder servicers appear to be fully capable of
entering the commercial services industry with little difficulty. Many investment company shareholder servicers
possess the technology, workforce, and experience that
would enable them to manage the volume of transactions
currently processed by commercial providers. Based on
these and other facts of record, the Board concludes that
consummation of the proposed transaction would not have
a significantly adverse effect on competition in any relevant market.
The Board concludes that the proposed transaction
would increase the ability of EquiServe to serve the needs
of its customers and would allow the joint venture to
provide existing and new customers with a broader range
of products and services at lower costs. The Board also
expects that combining the expertise and technology of
FCTC and Boston EquiServe would enable EquiServe to
become a more effective competitor in the market.
Based on the foregoing and all the other facts of record,
including the commitments and representations made by
Bank One, the Board has determined that the performance
of the proposed activity by the joint venture can reasonably
be expected to produce benefits to the public that would
outweigh any possible adverse effects under the proper
incident to banking standard of section 4(c)(8) of the BHC
Act.
On the basis of all the facts of record, the Board has
determined that the notice should be, and hereby is, ap-
7. The Board's analysis omits self-providers from the competitive
analysis.
8. As of December 31, 1997, an estimated 425 firms were providing
their own shareholder servicing. These firms included some of the
largest companies in the United States. The ability and willingness of
many firms to provide their own shareholder servicing has contributed
to strong price competition in the industry.
proved. This determination is subject to all the conditions
set forth in the Board's Regulation Y, including those in
sections 225.7 and 225.25(c) (12C.F.R. 225.7 and
225.25(c)) and to the Board's authority to require modification or termination of the activities of a bank holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with, or to prevent evasion
of, the provisions and purposes of the BHC Act and the
Board's regulations and orders issued thereunder. The
Board's approval of the proposal is specifically conditioned on compliance with all the commitments made in
connection with this notice. The commitments, representations and conditions relied on in reaching this decision
shall be deemed to be conditions imposed in writing by the
Board in connection with its findings and decision and, as
such, may be enforced in proceedings under applicable
law.
This transaction shall not be consummated later than
three months after the effective date of this order unless
such period is extended for good cause by the Board or by
the Federal Reserve Bank of Chicago, acting pursuant to
delegated authority.
By order of the Board of Governors, effective November 16, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
PNC Bank Corp.
Pittsburgh, Pennsylvania
Order Approving Notice to Engage in Underwriting and
Dealing in All Types of Debt and Equity Securities on a
Limited Basis
PNC Bank Corp. ("PNC"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has requested the Board's approval under
section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8»
and section 225.24 of the Board's Regulation Y (12 C.F.R.
225.24) to expand the activities of its section 20 subsidiary,
PNC Capital Markets, Inc., Pittsburgh, Pennsylvania
("Company"), to include underwriting and dealing in, to a
limited extent, all types of debt and equity securities except
ownership interests in open-end investment companies.
PNC seeks approval for Company to conduct the proposed
underwriting and dealing activities worldwide.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 50,914 (1998)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
PNC, with total consolidated assets of approximately
$75.9 billion, is the 14th largest banking organization in
Legal Developments
the United States.1 PNC's subsidiary depository institutions operate in nine states, and PNC engages through
other subsidiaries in a broad range of permissible nonbanking activities. Company currently engages in limited underwriting and dealing in certain types of bank-ineligible
securities2 as permitted under section 20 of the GlassSteagall Act (12U.S.C. § 377).3 Company is, and will
continue to be, registered as a broker-dealer with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and is
a member of the National Association of Securities Dealers, Inc. ("NASD"). Company, therefore, is subject to the
record-keeping and reporting obligations, fiduciary standards, and other requirements of the Securities Exchange
Act of 1934, the SEC, and the NASD.
Underwriting and Dealing in Bank-Ineligible Securities
The Board has determined that, subject to the framework
of prudential limitations established in previous decisions
to address the potential for conflicts of interests, unsound
banking practices, or other adverse effects, underwriting
and dealing in bank-ineligible securities is so closely related to banking as to be a proper incident thereto within
the meaning of section 4(c)(8) of the BHC Act.4 The Board
also has determined that underwriting and dealing in bankineligible securities is consistent with section 20 of the
Glass-Steagall Act (12 U.S.C. § 377), provided that the
company engaged in the activity derives no more than
25 percent of its gross revenues from underwriting and
dealing in bank-ineligible securities.5
1. Asset and ranking data are as of June 30, 1998.
2. As used in this order, "bank-ineligible securities'" refers to all
types of debt and equity securities that a bank may not underwrite or
deal in directly under section 16 of the Glass-Steagall Act (12 U.S.C.
§ 24(7)).
3. Company has authority to underwrite and deal in, to a limited
extent, certain municipal revenue bonds, 1-4 family mortgage-related
securities, commercial paper, and consumer-receivable-related securities. See PNC Financial Corp., 73 Federal Reserve Bulletin 742
(1987), and PNC Financial Corp., 75 Federal Reserve Bulletin 396
(1989). Company also is authorized to engage in a variety of other
nonbanking activities.
4. See J.P. Morgan & Co. Inc., et at, 75 Federal Resen'e Bulletin
192 (1989), aff'd sub nom. Securities Industry Ass'n v. Board of
Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir.
1990); Citicorp, 73 Federal Reserve Bulletin 473 (1987), aff'd sub
nom. Securities Industry Ass 'n v. Board of Governors of the Federal
Reserve System, 839 F.2d 47 (2d Cir.), cert, denied, 486 U.S. 1059
(1988), as modified by Review of Restrictions on Director, Officer and
Employee Interlocks, Cross-Marketing Activities, and the Purchase
and Sale of Financial Assets Between a Section 20 Subsidiary and an
Affiliated Bank or Thrift, 61 Federal Register 57,679 (1996); Amendments to Restrictions in the Board's Section 20 Orders, 62 Federal
Register 45,295 (1997); and Clarification to the Board's Section 20
Orders, 63 Federal Register 14,803 (1998) (collectively, "Section 20
Orders").
5. See Section 20 Orders. Compliance with the revenue limitation
shall be calculated in accordance with the method stated in the Section
20 Orders, as modified by the Order Approving Modifications to the
Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989);
10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries
of Bank Holding Companies Engaged in Underwriting and Dealing in
67
PNC has committed that Company will conduct its underwriting and dealing activities using the methods and
procedures and subject to the prudential limitations established by the Board in the Section 20 Orders. PNC also has
committed that Company will conduct its bank-ineligible
securities underwriting and dealing activities subject to the
Board's revenue restriction. As a condition of this order,
PNC is required to conduct its bank-ineligible securities
activities subject to the revenue restriction and Operating
Standards established for section 20 subsidiaries.6
Other Considerations
In order to approve this notice, the Board also must determine that performance of the proposed activities is a proper
incident to banking, that is, the proposed activities "can
reasonably be expected to produce benefits to the public,
such as greater convenience, increased competition, or
gains in efficiency, that outweigh possible adverse effects,
such as undue concentration of resources, decreased or
unfair competition, conflicts of interests, or unsound banking practices." 7 The Board expects that consummation of
the proposal would provide added convenience to PNC's
customers, lead to improved methods of meeting customers' financing needs, increase the level of competition
among existing providers of these services, and improve
the operating efficiency of Company.
As part of its review of the statutory factors, the Board
considers the financial and managerial resources of the
notificant and its subsidiaries and the effect the transaction
would have on such resources.8 In considering the financial
resources of the notificant, the Board has reviewed the
capitalization of PNC and Company in accordance with the
standards set forth in the Section 20 Orders and finds the
capitalization of each to be consistent with approval. This
determination is based on all the facts of record, including
PNC's projections of the volume of Company's underwriting and dealing activities in bank-ineligible securities.
The Board also has reviewed the managerial resources
of each of the entities involved in this proposal in light of
examination reports and other supervisory information.
PNC requested that the Board perform a debt-only infrastructure review of Company and stated that it later would
request that the Board perform an equity infrastructure
review of Company. In connection with the proposal, the
Federal Reserve Bank of Cleveland ("Reserve Bank") has
reviewed the policies and procedures of Company for
Securities, 61 Federal Register 48,953 (1996); and Revenue Limit on
Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies
Engaged in Underwriting and Dealing in Securities, 61 Federal
Register 68,750 (1996) (collectively, "Modification Orders").
6. 12C.F.R. 225.200. Company may provide services that are
necessary incidents to the proposed underwriting and dealing activities. Unless Company receives specific approval under section 4(c)(8)
of the BHC Act to conduct the activities independently, any revenues
from the incidental activities must be treated as ineligible revenues
subject to the Board's revenue limitation.
7. 12 U.S.C. § 1843(c)(8).
8. See 12 C.F.R. 225.26.
68 Federal Reserve Bulletin • January 1999
underwriting and dealing in all types of debt securities,
including Company's operational and managerial infrastructure, computer, audit, and accounting systems and
internal risk management procedures and controls. The
Board has determined on the basis of the infrastructure
review that Company has established policies and procedures to ensure compliance with this order and the Section 20 Orders for underwriting and dealing in debt securities. As discussed below, a satisfactory infrastructure review of Company related to underwriting and dealing in all
types of equity securities must be completed before Company may engage in these activities. On the basis of the
Reserve Bank's review of Company's debt underwriting
and dealing policies and procedures and all other facts of
record, including the commitments provided in this case
and the proposed managerial and risk management systems
of Company, and subject to the completion of a satisfactory
infrastructure review of Company related to underwriting
and dealing in all types of equity securities, the Board has
concluded that financial and managerial considerations are
consistent with approval of the notice.
Based on all the facts of record, the Board has determined that performance of the proposed activities by PNC,
under the framework established in this and prior decisions, can reasonably be expected to produce public benefits that outweigh any adverse effects of the proposal.
Accordingly, the Board has determined that the performance of the proposed activities by PNC is a proper
incident to banking for purposes of section 4(c)(8) of the
BHC Act.
underwriting and dealing activities, subject to the other
conditions of this order, the Section 20 Orders, and the
Modification Orders.
The Board's determination also is subject to all the terms
and conditions set forth in Regulation Y, including those in
sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and
225.25(c)), and to the Board's authority to require modification or termination of the activities of a bank holding
company or any of its subsidiaries as the Board finds
necessary to ensure compliance with, or to prevent evasion
of, the provisions and purposes of the BHC Act and the
Board's regulations and orders issued thereunder. The
Board's decision is specifically conditioned on compliance
with all the commitments made in connection with this
notice, including the commitments discussed in this order
and the conditions set forth in this order and the Board
regulations and orders noted above. The commitments and
conditions are deemed to be conditions imposed in writing
by the Board in connection with its findings and decision
and, as such, may be enforced in proceedings under applicable law.
This proposal shall not be consummated later than three
months after the effective date of this order, unless such
period is extended for good cause by the Board or the
Reserve Bank, acting pursuant to delegated authority.
By order of the Board of Governors, effective November 16, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Conclusion
On the basis of all the facts of record, the Board has
determined that the notice should be, and hereby is, approved, subject to all the terms and conditions described in
this order. The Board's approval of the proposal extends
only to activities conducted within the limitations of this
order, including the Board's reservation of authority to
establish additional limitations to ensure that Company's
activities are consistent with safety and soundness, avoidance of conflicts of interests, and other relevant considerations under the BHC Act. Underwriting and dealing in
any manner other than as approved in this order is not
within the scope of the Board's approval and is not authorized for Company.
Company may commence underwriting and dealing in
all types of debt securities immediately. The Board's approval of the proposed underwriting and dealing in all
types of equity securities, however, is conditioned on a
future determination by the Board that Company has established policies and procedures for equity underwriting and
dealing to ensure compliance with the requirements of this
order, the Section 20 Orders, and the Modification Orders,
including Company's operational and managerial infrastructure, computer, audit, and accounting systems and
internal risk management procedures and controls. After
notification by the Board that this condition has been
satisfied, Company may commence the proposed equity
ORDERS ISSUED UNDER INTERNATIONAL BANKING
ACT
Credit Suisse
Zurich, Switzerland
Order Approving Establishment of Representative Offices
Credit Suisse, Zurich, Switzerland, a foreign bank within
the meaning of the International Banking Act ("IBA") has
applied under section 10(a) of the IBA (12U.S.C.
§ 3107(a)) to establish representative offices in Miami,
Florida; New York, New York; and Houston, Texas. The
Foreign Bank Supervision Enhancement Act of 1991
("FBSEA"), which amended the IBA, provides that a
foreign bank must obtain the approval of the Board to
establish a representative office in the United States.
Notice of the application, affording interested persons
an opportunity to submit comments, was published on
March 14, 1997, in a newspaper of general circulation in
Houston {Houston Chronicle), Miami {Miami Herald), and
New York {New York Times). The time for filing comments
has expired, and all comments have been considered.
Legal Developments
Credit Suisse, with total consolidated assets of approximately $89 billion,1 is part of the second largest banking
group in Switzerland, and it engages in a wide range of
banking activities worldwide directly and through subsidiaries. Credit Suisse Group, Zurich, Switzerland, a holding
company that engages through subsidiaries in financial and
nonfinancial activities worldwide, owns 99.9 percent of the
shares of Credit Suisse. No single shareholder owns
10 percent or more of the shares of Credit Suisse Group.
In the United States, Credit Suisse Group operates,
through Credit Suisse First Boston ("CSFB"), Zurich,
Switzerland, branches in New York, New York, and Los
Angeles, California; and representative offices in San Francisco, California; Chicago, Illinois; and Houston, Texas.2
Credit Suisse and CSFB also engage in activities in the
United States through several nonbanking subsidiaries.
Credit Suisse proposes to establish the offices primarily
to act as liaison with private banking clients, solicit private
banking business, and provide information and advice on
economic conditions and investment opportunities in Switzerland. The Houston office would report directly to the
Miami office; the Miami and New York offices would
report directly to Credit Suisse's head office in Switzerland. No funds would be received or disbursed at or
through the representative offices.
In acting on an application to establish a representative
office, the IBA and Regulation K provide that the Board
shall take into account whether the foreign bank engages
directly in the business of banking outside of the United
States, and has furnished to the Board the information it
needs to assess the application adequately. The Board also
shall take into account whether the foreign bank and any
foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home
country supervisor (12U.S.C. § 3107(a)(2); 12C.F.R.
211.24(d)(2)).3 The Board also may take into account
1. Asset data are as of June 30, 1998.
2. CSFB also operates an agency and representative office in Miami.
Those offices would be closed on the establishment of the Miami
office of Credit Suisse.
3. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its
subsidiaries and offices through regular examination reports, audit reports, or otherwise;
(iii) Obtain information on the dealings with and relationship
between the bank and its affiliates, both foreign and
domestic;
(iv) Receive from the bank financial reports that are consolidated on a worldwide basis, or comparable information
that permits analysis of the bank's financial condition on
a worldwide consolidated basis;
(v) Evaluate prudential standards, such as capital adequacy
and risk asset exposure, on a worldwide basis. These are
indicia of comprehensive, consolidated supervision.
No single factor is essential, and other elements may inform the
Board's determination.
69
additional standards as set forth in the IBA and Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)).
As noted above, Credit Suisse engages directly in the
business of banking outside of the United States. Credit
Suisse also has provided the Board with the information
necessary to assess the application through submissions
that address the relevant issues. With respect to supervision
by home country authorities, the Board previously has
determined, in connection with applications involving other
banks in Switzerland, that those banks were subject to
home country supervision on a consolidated basis.4 Credit
Suisse is supervised by the SFBC on substantially the same
terms and conditions as those other banks. Based on all the
facts of record, the Board has determined that Credit Suisse
is subject to comprehensive supervision and regulation on
a consolidated basis by its home country supervisor.
The Board also has taken into account the additional
standards set forth in section 7 of the IBA and Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)).
In this regard, the SFBC has no objection to the establishment of the proposed representative offices.
With respect to the financial and managerial resources of
Credit Suisse, taking into consideration Credit Suisse's
record of operations in its home country, its overall financial resources, and its standing with its home country
supervisors, the Board has also determined that financial
and managerial factors are consistent with approval of the
proposed representative offices. Credit Suisse appears to
have the experience and capacity to support the proposed
representative offices and has established controls and procedures for the proposed representative offices to ensure
compliance with U.S. law.
With respect to access to information about Credit Suisse's operations, the Board has reviewed the restrictions
on disclosure in relevant jurisdictions in which Credit
Suisse operates and has communicated with relevant government authorities regarding access to information. Credit
Suisse and Credit Suisse Group have committed to make
available to the Board such information on the operations
of Credit Suisse and any of its affiliates that the Board
deems necessary to determine and enforce compliance with
the IBA, the Bank Holding Company Act of 1956, as
amended, and other applicable federal law. To the extent
that the provision of such information may be prohibited
by law, Credit Suisse and Credit Suisse Group have committed to cooperate with the Board to obtain any necessary
consents or waivers that might be required from third
parties for disclosure of such information. In addition,
subject to certain conditions, the SFBC may share information on Bank's operations with other supervisors, including
4. See Coutts & Co.. AG, 79 Federal Reserve Bulletin 636 (1993);
Union Bank of Switzerland, 82 Federal Reserve Bulletin 370 (1996);
Swiss Bank Corporation, 82 Federal Reserve Bulletin 690 (1996), and
83 Federal Reserve Bulletin 214 (1997); UBS AG/Union Bank of
Switzerland, 84 Federal Reserve Bulletin 684 (1998). Credit Suisse
Group, although not a bank, is also subject to consolidated supervision
by the Swiss Federal Banking Commission ("SFBC").
70
Federal Reserve Bulletin • January 1999
the Board. In light of these commitments and other facts of
record, and subject to the condition described below, the
Board concludes that Credit Suisse has provided adequate
assurances of access to any necessary information the
Board may request.
On the basis of all the facts of record, and subject to the
commitments made by Credit Suisse and Credit Suisse
Group, as well as the terms and conditions set forth in this
order, the Board has determined that Credit Suisse's application to establish the representative offices should be, and
hereby is, approved. Should any restrictions on access to
information on the operations or activities of Credit Suisse
and its affiliates subsequently interfere with the Board's
ability to obtain information to determine and enforce
compliance by Credit Suisse or its affiliates with applicable
federal statutes, the Board may require termination of any
of Credit Suisse's or its affiliates' direct or indirect activities in the United States. Approval of this application also
is specifically conditioned on compliance by Credit Suisse
and Credit Suisse Group with the commitments made in
connection with this application, and with the conditions in
this order.5 The commitments and conditions referred to
above are conditions imposed in writing by the Board in
connection with its decision and may be enforced in proceedings under 12 U.S.C. § 1818 against Credit Suisse and
its affiliates.
By order of the Board of Governors, effective November 23, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Ferguson, and Gramlich. Absent and not voting:
Governor Meyer.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
5. The Board's authority to approve the establishment of the proposed representative offices parallels the continuing authority of the
States of Florida, New York, and Texas to license offices of a foreign
bank. The Board's approval of this application does not supplant the
authority of those states to license the proposed offices of Credit Suisse in
accordance with any terms or conditions that they may impose.
INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
(JULY 1, 1998-SEPTEMBER 30, 1998)
Applicant
Merged or Acquired Bank or Activity
Date of Approval
Bulletin
Volume
and Page
Bane One Corporation,
Columbus, Ohio
BankBoston Corporation,
Boston, Massachusetts
The Bank of East Asia, Ltd.,
Hong Kong Special Administrative
Region, People's Republic of China
Commerce Bancorp, Inc.,
Cherry Hill, New Jersey
Cooperatieve Centrale RaiffeisenBoerenleenbank B.A., Rabobank
Nederland
Utrecht, The Netherlands
First American Corporation,
Nashville, Tennessee
First Mariner Bancorp,
Baltimore, Maryland
First Chicago NBD Corporation,
Chicago, Illinois
BancAmerica Robertson Stephens,
San Francisco, California
To establish a representative office in
Flushing, New York
September 14, 1998
84,961
August 24, 1998
84,849
August 3, 1998
84,886
Commerce Capital Markets, Inc.,
Philadelphia, Pennsylvania
Weiss, Peck & Greer, L.L.C.,
New York, New York
July 13, 1998
84,798
August 3, 1998
84,852
The Middle Tennessee Bank,
Columbia, Tennessee
Glen Burnie Bancorp,
Glen Burnie, Maryland
The Bank of Glen Burnie,
Glen Burnie, Maryland
Nueces National Bank,
Corpus Christi, Texas
BankAmerica Corporation,
San Francisco, California
Bank of America National Trust and
Savings Association,
San Francisco, California
Bank of America, FSB,
Portland, Oregon
August 17, 1998
84,845
September 28, 1998
84,956
September 8, 1998
84,959
August 17, 1998
84,858
First National Bank Group, Inc.,
Edinburg, Texas
NationsBank Corporation,
Charlotte, North Carolina
NationsBank (DE) Corporation,
Charlotte, North Carolina
Legal Developments
71
Index of Orders Issued—Continued
Applicant
Merged or Acquired Bank or Activity
Date of Approval
Bulletin
Volume
and Page
Norwest Corporation,
Minneapolis, Minnesota
Star Bancshares, Inc.,
Austin, Texas
Star Bancshares of Nevada, Inc.,
Carson City, Nevada
First State Bank,
Austin, Texas
New Security First Network Bank,
Miami, Florida
Citicorp,
New York, New York
Superior Federal Bank, F.S.B.,
Fort Smith, Arkansas
August 12, 1998
84,847
August 3, 1998
84,855
September 23, 1998
84,985
August 3, 1998
84,884
Royal Bank of Canada,
Montreal, Quebec, Canada
Travelers Group, Inc.,
New York, New York
WestStar Bank,
Bartlesville, Oklahoma
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Section 3
Applicant(s)
Bank(s)
Effective Date
Centura Banks, Inc.,
Rocky Mount, North Carolina
Scotland Bancorp, Inc.,
Laurinburg, North Carolina
Scotland Savings Bank, SSB,
Laurinburg, North Carolina
Franklin Bancshares. Inc.,
Franklin, Texas
The First National Bank of Franklin,
Franklin, Texas
November 5, 1998
Applicant(s)
Bank(s)
Effective Date
State Street Corporation,
Boston, Massachusetts
Bridge Information Systems, Inc.,
St. Louis, Missouri
United Bancorporation,
Billings, Montana
ADP Financial Information Services, Inc.,
Jersey City, New Jersey
Wilco International Limited,
London, England
Information Network Services, Inc.,
Billings, Montana
November 6, 1998
Wells Fargo & Company,
San Francisco, California
November 5, 1998
Section 4
November 16, 1998
72
Federal Reserve Bulletin • January 1999
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Section 3
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
AmBank Holdings, Inc.,
Davenport, Iowa
Amundson Family Limited
Partnership,
Sioux Falls, South Dakota
Beulah Bancorporation, Inc.,
Sioux Falls, South Dakota
Applachian Bancshares, Inc.,
Ellijay, Georgia
Area Bancshares Corporation,
Owensboro, Kentucky
American Bank and Trust Company,
Davenport, Iowa
Robinson Bank Holding Company,
Robinson, North Dakota
Security State Bank of Robinson,
Robinson, North Dakota
Chicago
October 29, 1998
Minneapolis
November 4, 1998
First National Bank of Union County,
Blairsville, Georgia
Peoples Bancorp of Winchester, Inc.,
Winchester, Kentucky
Peoples Commercial Bank,
Winchester, Kentucky
TRH Bank Group, Inc.,
Norman, Oklahoma
Mitchell County Bank,
Simpson, Kansas
First Missouri Bancshares, Inc.,
Brookfield, Missouri
First Missouri National Bank,
Brookfield, Missouri
Bank of Okolona,
Okolona, Mississippi
Evergreen Bancorp, Inc.,
Glens Falls, New York
Evergreen Bank, N.A.,
Glens Falls, New York
Downey Bancorp,
Downey, California
Downey National Bank,
Downey, California
The Bank of Orange County,
Fountain Valley, California
Atlanta
November 4, 1998
St. Louis
October 29, 1998
St. Louis
October 29, 1998
Kansas City
November 9, 1998
St. Louis
November 17, 1998
Boston
October 22, 1998
San Francisco
October 22, 1998
Thomson Holdings, Inc.,
Centerville, South Dakota
Minneapolis
November 6, 1998
Quinter Insurance Service, Inc.,
Quinter, Kansas
Peoples Savings Bank,
Indianola, Iowa
Van Alstyne Financial Corporation,
Van Alstyne, Texas
Kansas City
October 22, 1998
Chicago
November 3, 1998
Dallas
November 4, 1998
Minneapolis
November 17, 1998
Arvest Bank Group. Inc.,
Bentonville, Arkansas
Astra Financial Corporation,
Prairie Village, Kansas
Bancorp of Okolona, Inc.,
Okolona, Mississippi
Banknorth Group, Inc.,
Burlington, Vermont
Belvedere Capital Partners, Inc.,
San Francisco, California
California Community Financial
Institutions Fund Limited
Partnership,
San Francisco, California
California Financial Bancorp,
Newport Beach, California
Bluestem Bank Holding Company,
L.L.C.,
Sioux Falls, South Dakota
Bugbee Family Limited Partnership,
Leawood, Kansas
Central South Bancorporation, Inc.
Indianola, Iowa
Chaparral Bancshares, Inc.,
Richardson, Texas
Chaparral Bancshares of Delaware,
Inc.,
Dover, Delaware
Citizens Bancorporation of New
Ulm, Inc.,
New
Ulm, Minnesota
State Bank of La Salle,
La Salle, Minnesota
Legal Developments
73
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Columbia Bancorp,
The Dalles, Oregon
Valley Community Bancorp,
McMinnville, Oregon
Valley Community Bank,
McMinnville, Oregon
Community Bancshares, Inc.,
Neosho, Missouri
San Francisco
November 12, 1998
Kansas City
November 12, 1998
Fort Des Moines Community Bank,
Des Moines, Iowa
Community Shores Bank,
Roosevelt Park, Michigan
Chicago
October 29, 1998
Chicago
November 5, 1998
Community Spirit Bank - Mississippi,
Belmont, Mississippi
East-West Bank,
San Marino, California
Sebastian Bankshares, Inc.,
Barling, Arkansas
River Valley Bank and Trust,
Lavaca, Arkansas
Southwest National Corporation,
Greensburg, Pennsylvania
Atlanta
November 12, 1998
San Francisco
November 12, 1998
St. Louis
November 4, 1998
Cleveland
November 2, 1998
Sutton Agency, Inc.,
Sutton, Nebraska
Kansas City
November 4, 1998
Froid Bankshares, Inc..
Froid, Montana
First State Bank of Froid,
Froid, Montana
First Community Bank of Palm Beach
County,
Pahokee, Florida
First National Bancshares, Inc.,
Goodland, Kansas
Minneapolis
November 16, 1998
Atlanta
November 12, 1998
Kansas City
November 17, 1998
Whatcom State Bancorp,
Bellingham, Washington
Whatcom State Bank,
Ferndale, Washington
Greene County Savings Bank,
Catskill, New York
San Francisco
October 22, 1998
New York
October 29, 1998
Chicago
November 2, 1998
Community Bancshares, Inc.,
Employee Stock Ownership Plan
and Trust,
Neosho, Missouri
Community Bancshares Corp.,
Indianola, Iowa
Community Shores Bank
Corporation,
Roosevelt Park, Michigan
Community Spirit Bancshares, Inc.,
Belmont, Mississippi
East West Bancorp,
San Marino, California
First Bank Corp,
Fort Smith, Arkansas
First Commonwealth Financial
Corporation.
Indiana, Pennsylvania
First York Ban Corp,
York, Nebraska
Albion National Management
Company, Inc.,
Albion, Nebraska
First Community Bancorp, Inc.,
Glasgow, Montana
First Community Bancorp, Inc.,
Pahokee, Florida
First National Bancshares, Inc.
ESOP and 401(k) Trusts,
Goodland, Kansas
First Washington Bancshares, Inc.,
Walla Walla, Washington
Greene County Bancorp, MHC,
Catskill, New York
Greene County Bancorp, Inc.,
Catskill, New York
High Point Financial Services, Inc..
Forreston, Illinois
Kent Bancshares, Inc.,
Kent, Illinois
Kent Bank,
Kent, Illinois
74
Federal Reserve Bulletin • January 1999
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Machias Bancorp, MHC,
Machias, Maine
Machias Bancorp, Inc.,
Machias, Maine
Mid-Atlantic Community
BankGroup, Inc.,
Gloucester, Virginia
Machias Savings Bank,
Machias, Maine
Boston
November 2, 1998
United Community Bankshares, Inc..
Franklin, Virginia
The Bank of Sussex and Surry,
Wakefield, Virginia
The Bank of Franklin,
Franklin, Virginia
Mt. Sterling Bancshares, Inc.,
Mt. Sterling, Illinois
Farmers State Bank & Trust Company,
Mt. Sterling, Illinois
Florida Citizens Bank,
Ocala, Florida
The Oneida Savings Bank,
Oneida, New York
Richmond
October 29, 1998
St. Louis
November 5, 1998
Atlanta
October 29, 1998
New York
October 29, 1998
Kasson State Bank,
Kasson, Minnesota
The Pleasants County Bank,
St. Marys, West Virginia
Meigs County Bancshares, Inc.,
Decatur, Tennessee
Meigs County Bank,
Decatur, Tennessee
Saint James Bancorporation, Inc.,
Lutcher, Louisiana
Saint James Bank and Trust Company,
Lutcher, Louisiana
Bullsboro Bancshares, Inc.,
Newnan, Georgia
The Bank of Newnan,
Newnan. Georgia
VB&T Bancshares Corp.,
Valdosta, Georgia
Valdosta Bank and Trust,
Valdosta, Georgia
Ridgewood Savings Bank of New
Jersey,
Ridgewood, New Jersey
Minneapolis
November 18, 1998
Richmond
November 5, 1998
Atlanta
November 3, 1998
New York
November 16, 1998
Pacific Capital Bancorp,
Salinas, California
First National Bank of Central
California,
Salinas, California
South Valley National Bank,
Morgan Hill, California
San Francisco
November 3, 1998
Mt. Sterling Bancorp, Inc.,
Mt. Sterling, Illinois
OGS Investments, Inc.,
Tallahassee, Florida
Oneida Financial, MHC,
Oneida, New York
Oneida Financial Corp.,
Oneida, New York
Palmer Bancshares, Inc.,
Kasson, Minnesota
Pleasants County Bankshares, Inc.,
St. Marys, West Virginia
Regions Financial Corporation,
Birmingham, Alabama
Ridgewood Financial MHC,
Ridgewood, New Jersey
Ridgewood Financial, Inc.,
Ridgewood, New Jersey
Santa Barbara Bancorp,
Santa Barbara, California
Legal Developments
75
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Security Bank Holding Company
Employee Stock Ownership Plan,
Coos Bay, Oregon
Security Bank Holding Company,
Coos Bay, Oregon
Southern Bancorp, Inc.,
Marietta, Georgia
St. Charles Financial Corporation,
Oak Brook, Illinois
Oregon State Bank,
Corvallis, Oregon
San Francisco
November 12, 1998
Southern National Bank,
Marietta, Georgia
Commerce Bancorp, Inc.,
Berkeley, Illinois
National Bank of Commerce,
Berkeley, Illinois
Georgia Bank and Trust Company,
Calhoun, Georgia
Atlanta
November 3, 1998
Chicago
November 2, 1998
Atlanta
October 29, 1998
Quinter Insurance Service, Inc.,
Quinter, Kansas
Kansas City
November 5, 1998
Oklahoma State Bank,
Guthrie, Oklahoma
Vista Bancorp, Inc.,
Phillipsburg, New Jersey
Community Spirit Bancshares, Inc.,
Belmont, Mississippi
Community Spirit Bank - Mississippi,
Belmont, Mississippi
Kansas City
November 2, 1998
New York
October 29, 1998
Atlanta
November 12, 1998
Western Reserve Bank,
Medina, Ohio
Cleveland
October 23, 1998
Applicant! s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
The Bank of New York Company,
Inc.,
New York, New York
Bank of New York Capital Markets,
Inc.,
New York, New York
First Frederick Financial
Corporation,
Frederick. Maryland
Patricof & Co. Capital Corp.,
New York, New York
New York
October 20, 1998
To place cash dispensing machines in
locations owned or leased by
unaffiliated third parties and thereby
engage in data processing activities
Scott & Stringfellow Financial, Inc.,
Richmond, Virginia
Scott & Stringfellow, Inc.,
Richmond, Virginia
InterBank Systems, Inc.,
Natchez, Mississippi
Richmond
October 23, 1998
Richmond
November 16, 1998
Atlanta
October 22, 1998
American Growth Finance, Inc.,
Dallas, Texas
Atlanta
November 16, 1998
Synovus Financial Corp.,
Columbus, Georgia
TB&C Bancshares, Inc.,
Columbus, Georgia
Terry and Kathy Barrett Family
Limited Partnership,
Frisco, Colorado
Town & Country Bancshares, Inc.,
Guthrie, Oklahoma
Valley National Bancorp,
Wayne. New Jersey
The Weatherford Foundation of Red
Bay, AL, Inc.,
Red Bay, Alabama
Independent Bancshares, Inc.,
Red Bay, Alabama
Western Reserve Bancorp, Inc.,
Medina, Ohio
Section 4
BB&T Corporation,
Winston-Salem, North Carolina
Britton & Koontz Capital
Corporation,
Natchez, Mississippi
Community Financial Group, Inc.,
Nashville, Tennessee
76
Federal Reserve Bulletin • January 1999
Section 4—Continued
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Community National Bank
Corporation.
Venice, Florida
Community Advisory Services, Inc.,
Venice, Florida
Community Financial Centers, Inc.,
Venice, Florida
Community Investment Centers Inc.,
Venice, Florida
Caywood-Scholl Capital Management,
San Diego, California
Atlanta
October 28, 1998
New York
October 19, 1998
Kansas City
November 10, 1998
Boston
November 2, 1998
Lenox Savings Bank,
Lenox, Massachusetts
Trust Company of the Berkshires, N.A.,
Pittsfield, Massachusetts
Boston
October 26, 1998
National Australia Capital Markets,
LLC,
New York, New York
Keystone Financial Leasing
Corporation,
Exton, Pennsylvania
Tampa Townhomes, L.L.C.,
Tampa, Kansas
GSB Financial Corporation,
Goshen, New York
Goshen Savings Bank,
Goshen, New York
Chicago
November 6, 1998
Philadelphia
November 5, 1998
Kansas City
October 22, 1998
New York
November 12, 1998
Dresdner Bank AG,
Frankfurt, Germany
Dresdner RCM Gobal Investors
LLC,
San Francisco, California
Gold Bane Corporation, Inc.,
Leawood, Kansas
Machias Bancorp, MHC,
Machias, Maine
Machias Bancorp, Inc.,
Machias, Maine
MSB Leasing, Inc.,
Machias, Maine
Mutual Bancorp of the Berkshires,
Inc.,
Pittsfield, Massachusetts
United Financial Group, Inc.
Pittsfield, Massachusetts
National Australia Bank Ltd.,
Melbourne, Australia
Patriot Bank Corp.,
Pottstown, Pennsylvania
Tampa State Bankshares, Inc.,
Tampa, Kansas
Warwick Community Bancorp, Inc..
Warwick, New York
The Trust Company,
St. Joseph, Missouri
M&M Consulting, LLC,
Bangor, Maine
Sections 3 and 4
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Associated Banc-Corp,
Green Bay, Wisconsin
Citizens Bankshares, Inc.,
Shawano, Wisconsin
Citizens Bank, National Association,
Shawano, Wisconsin
Wisconsin Finance Corporation,
Shawano, Wisconsin
Citizens Financial Services, Inc.,
Shawano, Wisconsin
Chicago
October 23, 1998
Legal Developments
11
APPLICATIONS APPROVED UNDER BANK MERGER ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Applicant(s)
Bank(s)
Effective Date
Centura Bank,
Laurinburg, North Carolina
Scotland Savings Bank, SSB,
Laurinburg, North Carolina
November 5, 1998
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
The Citizens Banking Company,
Salineville, Ohio
Century National Bank and Trust of
Rochester,
Rochester, Pennsylvania
Winfield Banking Company,
Winfield, Missouri
Cleveland
October 27, 1998
St. Louis
October 28, 1998
Pleasants County Interim Bank,
St. Marys, West Virginia
Household Bank, F.S.B.,
Wood Dale, Illinois
Northside Bank of Tampa,
Tampa, Florida
Farmers and Merchants Bank,
Monticello, Florida
Richmond
November 5, 1998
Atlanta
October 28, 1998
Atlanta
November 9, 1998
Atlanta
November 9, 1998
Peoples Bank and Trust Company
of Lincoln County,
Troy, Missouri
The Pleasants County Bank,
St. Marys, West Virginia
Republic Security Bank,
West Palm Beach, Florida
Republic Security Bank,
West Palm Beach, Florida
Southwest Georgia Bank,
Moultrie, Georgia
PENDING CASES INVOLVING THE BOARD OF GOVERNORS
This list of pending cases does not include suits against the
Federal Reserve Banks in which the Board of Governors is not
named a party.
Jones v. Board of Governors, No. 98-30138 (5th Cir., filed
October 1, 1998). Appeal of district court dismissal of
complaint alleging violations of the Fair Housing Act.
Attorneys Against American Apartheid v. Board of Governors,
No. 98-1483 (D.C. Cir., filed October 21, 1998). Petition
for review of denial of reconsideration of a Board order
dated August 17, 1998, approving the merger of
NationsBank Corporation, Charlotte, North Carolina, and
BankAmerica. Corporation, San Francisco, California.
Cunningham v. Board of Governors, No. 98-1459 (D.C. Cir.,
filed September 30, 1998). Petition for review of a Board
order dated September 23, 1998, conditionally approving
the applications of Travelers Group, Inc., New York, New
York, to become a bank holding company by acquiring
Citicorp, New York, New York, and its bank and nonbank
subsidiaries. On November 12, 1998, the Board filed a
motion to dismiss the petition.
Independent Bankers Association of America v. Board of Governors, No. 98-1482 (D.C. Cir., filed October 21, 1998).
Petition for review of a Board order dated September 23,
1998, conditionally approving the applications of Travelers
Group, Inc., New York, New York, to become a bank
holding company by acquiring Citicorp, New York, New
York, and its bank and nonbank subsidiaries.
Wasserman v. Board of Governors, No. 98-CIV-6017
(S.D.N.Y., filed August 24, 1998). Complaint alleging
wrongful failure to investigate activities of a bank. On
September 14, 1998, the Board filed its motion to dismiss
the complaint, and on October 14 the court dismissed the
action on plaintiff's withdrawal of the complaint.
78
Federal Reserve Bulletin • January 1999
Pharaon v. Board of Governors, No. 98-103 (U.S. Supreme
Court, filed July 15, 1998). Petition for writ of certiorari
seeking review of the decision of the Court of Appeals for
the District of Columbia Circuit affirming the Board's order
dated January 31, 1997, imposing civil money penalties and
an order of prohibition for violations of the Bank Holding
Company Act. On October 19, 1998, the Supreme Court
denied the writ.
Clarkson v. Greenspan, No.98-5349 (D.C. Cir., filed July 29,
1998). Appeal of district court order granting Board's motion for summary judgment in a Freedom of Information
Act case. On September 14, 1998, the Board filed a motion
for summary affirmance of the district court dismissal.
Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK)
(S.D.N.Y., filed May 15, 1998). Action to freeze assets of
individual pending administrative adjudication of civil
money penalty assessment by the Board. On May 26, 1998,
the court issued a preliminary injunction restraining the
transfer or disposition of the individual's assets and appointing the Federal Reserve Bank of New York as receiver for
those assets.
Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed
May 4, 1998). Appeal of partial denial of Board's motion
for summary judgment in action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On May 22, 1998, the appellee filed a cross-appeal from the partial final judgment.
Research Triangle Institute v. Board of Governors, No. 971719 (U.S. Supreme Court, filed April 28, 1998). Petition
for writ of certiorari to review dismissal by the United
States Court of Appeals for the Fourth Circuit of a contract
claim against the Board. On October 5, 1998, the Supreme
Court denied the writ.
Fenili v. Davidson, No. C-98-01568-CW (N.D. California,
filed April 17, 1998). Tort and constitutional claim arising
out of return of a check. On June 5, 1998, the Board filed its
motion to dismiss.
Logan v. Greenspan, No. l:98CV00049 (D.D.C., filed January 9, 1998). Employment discrimination complaint.
Goldman v. Department of the Treasury, No. 1-97-CV-3798
(N.D. Ga., filed December 23, 1997). Declaratory judgment
action challenging Federal Reserve notes as lawful money.
On March 2, 1998, the Board filed a motion to dismiss the
action.
Kerr v. Department of the Treasury, No. CV-S-97-01877DWH (S.D. Nev., filed December 22, 1997). Challenge to
income taxation and Federal Reserve notes. On September 3, 1998, a motion to dismiss was filed on behalf of all
federal defendants.
Allen v. Indiana Western Mortgage Corp., No. 97-7744 RJK
(CD. Cal, filed November 12, 1997). Customer dispute
with a bank. On March 23, 1998, the district court dismissed the action.
Artis v. Greenspan, No. 97-5235 (D.C. Cir., filed September 19, 1997). Appeal of district court order dismissing
employment discrimination class action. On October 20,
1998, the court of appeals affirmed the dismissal.
Towe v. Board of Governors, No. 97-71143 (9th Cir., filed
September 15, 1997). Petition for review of a Board order
dated August 18, 1997, prohibiting Edward Towe and
Thomas E. Towe from further participation in the banking
industry.
In re: Subpoena Duces Tecum Served on the Office of the
Comptroller of the Currency, No. 97-5229 (D.C. Cir., filed
September 12, 1997). Appeal of district court order denying
motion to compel production of pre-decisional supervisory
documents and testimony sought in connection with an
action by Bank of New England Corporation's trustee in
bankruptcy against the Federal Deposit Insurance Corporation. On June 26, 1998, the court of appeals reversed and
remanded the case to the district court. On August 10, 1998,
the Board filed a petition for rehearing and suggestion for
rehearing in bane. On October 6, 1998, the court amended
its opinion and denied the petition.
Bettersworth v. Board of Governors, No. 97-CA-624
(W.D. Tex., filed August 21, 1997). Privacy Act case.
FINAL ENFORCEMENT DECISION
BOARD OF GOVERNORS
ISSUED BY THE
In the Matter of a Notice to Prohibit Further
Participation Against
James J. Redemann
Former Director of Evergreen Bank, N.A.
Evergreen Bank, N.A.
Poy Sippi, Wisconsin
Docket No. AA-EC-98-09
Final Decision
This is an administrative proceeding pursuant to the Federal Deposit Insurance Act ("FDI Act") in which the
Office of the Comptroller of the Currency of the United
States of America ("OCC") seeks to prohibit the Respondent, James J. Redemann ("Redemann"), from further
participation in the affairs of any financial institution because of his conduct as an officer of Evergreen Bank, N.A.,
Poy Sippi, Wisconsin (the "Bank"). Under the FDI Act,
the OCC may initiate a prohibition proceeding against a
former employee of a national bank, but the Board must
make the final determination whether to issue an order of
prohibition.
Upon review of the administrative record, the Board
issues this Final Decision adopting the Recommended Decision ("Recommended Decision") of Administrative Law
Judge Walter Alprin (the "ALJ"), and orders the issuance
of the attached Order of Prohibition.
Legal Developments
I. Statement of the Case
A. Statutory and Regulatory Framework
Under the FDI Act and the Board's regulations, the ALJ is
responsible for conducting proceedings on a notice of
charges. 12 U.S.C. § 1818(e)(4). The ALJ issues a recommended decision that is referred to the deciding agency
together with any exceptions to those recommendations
filed by the parties. The Board makes the final findings of
fact, conclusions of law, and determination whether to
issue an order of prohibition in the case of prohibition
orders sought by the OCC. Id.; 12 C.F.R. 263.40.
The FDI Act sets forth the substantive basis upon which
a federal banking agency may issue against a bank official
or employee an order of prohibition from further participation in banking. In order to issue such an order, the Board
must make each of three findings:
(1) that the respondent engaged in identified misconduct, including an unsafe or unsound practice or a breach of fiduciary duty;
(2) that the conduct had a specified effect, including
financial loss to the institution or gain to the
respondent; and
(3) that the respondent's conduct involved either
personal dishonesty or a willful or continuing
disregard for the safety or soundness of the
institution. 12 U.S.C. § 1818(e)(l)(A)-(C).
An enforcement proceeding is initiated by the filing of a
notice of charges which is served on the respondent. Under
the OCC's and the Board's regulations, the respondent
must file an answer within 20 days of service of the notice.
12 C.F.R. 19.19(a) and 263.19(a). Failure to file an answer
constitutes a waiver of the respondent's right to contest the
allegations in the notice, and a final order may be entered
unless good cause is shown for failure to file a timely
answer. 12 C.F.R. 19.19(c)(l) and 263.19(c)(l).
B. Procedural History
On May 7, 1998, the OCC initiated a Notice of Removal
and Notice of Charges (the "Notice") against Redemann.
The Notice alleged that Redemann engaged in an unsafe
and unsound banking practice while employed at the Bank.
Specifically, the Notice alleged that while a Director of the
Bank, Redemann engaged in a scheme to obtain Bank
funds for the benefit of the Bank's president and vicepresident, who are husband and wife. As a result of the
scheme, the Bank suffered actual or potential loss. The
scheme was carried out by means of money orders issued
to Redemann, recorded as capitalized expenditures for the
Bank. Some of the proceeds of the money orders, however,
were used for payments for the benefit of the Bank president.
The Notice was personally served on Redemann on
May 8, 1998. Through counsel, Redemann obtained an
79
extension to answer to Notice to July 7, 1998. Shortly
before his answer was due, Redemann filed a "Notice of
Default," expressly denying the allegations but indicating
that he chose "not to contest this action because he accepts
the consequences of a final order entering the relief that the
[Notice] seeks . . . ." Enforcement Counsel then moved for
entry of an order of default, and the ALJ issued his Recommended Decision recommending issuance of an order of
prohibition.
II. Discussion
Because Redemann's default prevents him from contesting
the allegations in the Notice, the Board may take those
allegations as established. According to the Notice, Redemann engaged in a scheme in which he obtained cashier's
checks drawn on the Bank and booked as capitalized
expenditures of the Bank. A portion of the funds were paid
over to the Bank's president and his wife, causing actual or
potential loss to the Bank.
These actions meet all of the requirements of an order of
prohibition. Redemann's action in directing Bank funds to
the Bank president personally was both an unsafe or unsound banking practice and a breach of his fiduciary duty.
As a result, the Bank "has suffered or will probably suffer
financial loss," 12 U.S.C. § 1818(e)(l)(B)(i). Finally, Redemann's action evidenced personal dishonesty in that he
arranged for the checks to be recorded as legitimate Bank
expenses while transferring a portion of the funds to the
Bank president. Redemann's action also constituted a willful or continuing disregard for the Bank's safety or soundness, as such action, if continued, could threaten the Bank's
safety or soundness.
In sum, all elements necessary for the issuance of a
prohibition order are presented in this case.
Conclusion
For these reasons, the Board orders the issuance of the
attached Order of Prohibition.
By Order of the Board of Governors, this 30th day of
November, 1998.
Board of Governors of the
Federal Reserve System
JENNIFER J. JOHNSON
Secretary of the Board
Order of
Prohibition
WHEREAS, pursuant to section 8(e) of the Federal Deposit Insurance Act, as amended, (the "Act") (12 U.S.C.
§ 1818(e)), the Board of Governors of the Federal Reserve
System ("the Board") is of the opinion, for the reasons set
forth in the accompanying Final Decision, that a final
Order of Prohibition should issue against JAMES J. REDEMANN ("Redemann");
80 Federal Reserve Bulletin • January 1999
NOW, THEREFORE, IT IS HEREBY ORDERED, pursuant to section 8(e) of the Federal Deposit Insurance Act,
as amended (12 U.S.C. § 1818(e)), that:
1. In the absence of prior written approval by the
Board, and by any other Federal financial institution regulatory agency where necessary pursuant to section 8(e)(7)(B) of the Act
(12 U.S.C. § 1818(e)(7)(B)), Redemann is
hereby prohibited:
(a) From participating in the conduct of the
affairs of any bank holding company, any
insured depository institution or any other
institution specified in subsection
8(e)(7)(A) of the Act (12 U.S.C.
§ 1818(e)(7)(A));
(b) From soliciting, procuring, transferring,
attempting to transfer, voting or attempting to vote any proxy, consent, or authorization with respect to any voting rights in
any institution described in subsection 8(e)(7)(A) of the Act (12 U.S.C.
§ 1818(e)(7)(A));
(c) From violating any voting agreement previously approved by the appropriate Federal banking agency; or
(d) From voting for a director, or from serving or acting as an institution-affiliated
party as defined in section 3(u) of the Act,
(12 U.S.C. § 1813(u)), such as an officer,
director, or employee.
2. This Order, and each provision hereof, is and
shall remain fully effective and enforceable until expressly stayed, modified, terminated or
suspended in writing by the Board.
This Order shall become effective at the expiration of
thirty days after service is made.
By Order of the Board of Governors, this 30th day of
November, 1998.
Board of Governors of the
Federal Reserve System
JENNIFER J. JOHNSON
Secretary of the Board
FINAL ENFORCEMENT ORDERS ISSUED BY THE
BOARD OF GOVERNORS
Frontier Bank of Laramie County
Cheyenne, Wyoming
The Federal Reserve Board announced on November 17,
1998, the issuance of a Cease and Desist Order against the
Frontier Bank of Laramie County, Cheyenne, Wyoming.
William Shilstone
New York, New York
The Federal Reserve Board announced on November 17,
1998, the issuance of a Cease and Desist Order against
William Shilstone, a former institution-affiliated party of
the New York branch of Societe Generale, New York,
New York.
Al
Financial and Business Statistics
A3
DOMESTIC FINANCIAL STATISTICS
Money Stock and Bank
A4
A5
A6
Credit
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions and Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Policy Instruments
A7
A8
A9
Federal Finance—Continued
GUIDE TO TABULAR PRESENTATION
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions
Federal Reserve Banks
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holding
A27 Gross public debt of U.S. T r e a s u r y Types and ownership
A28 U.S. government securities
dealers—Transactions
A29 U.S. government securities dealers—
Positions and financing
A30 Federal and federally sponsored credit
agencies—Debt outstanding
Securities Markets and Corporate Finance
A31 New security issues—Tax-exempt state and local
governments and corporations
A32 Open-end investment companies—Net sales
and assets
A32 Corporate profits and their distribution
A32 Domestic finance companies—Assets and
liabilities
A3 3 Domestic finance companies—Owned and managed
receivables
Real Estate
Monetary and Credit Aggregates
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
Commercial Banking Institutions—
Assets and Liabilities
A15
A16
A17
A19
A20
All commercial banks in the United States
Domestically chartered commercial banks
Large domestically chartered commercial banks
Small domestically chartered commercial banks
Foreign-related institutions
A34 Mortgage markets—New homes
A35 Mortgage debt outstanding
Consumer Credit
A36 Total outstanding
A36 Terms
Flow of Funds
A37
A39
A40
A41
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Financial Markets
A22 Commercial paper and bankers dollar
acceptances outstanding
A22 Prime rate charged by banks on short-term
business loans
A23 Interest rates—Money and capital markets
A24 Stock market—Selected statistics
Federal Finance
A25 Federal fiscal and financing operations
A26 U.S. budget receipts and outlays
A27 Federal debt subject to statutory limitation
DOMESTIC NONFINANCIAL STATISTICS
Selected
A42
A42
A43
A44
A46
A47
A48
A49
Measures
Nonfinancial business activity
Labor force, employment, and unemployment
Output, capacity, and capacity utilization
Industrial production—Indexes and gross value
Housing and construction
Consumer and producer prices
Gross domestic product and income
Personal income and saving
A2 Federal Reserve Bulletin • January 1999
INTERNATIONAL STATISTICS
Summary
Statistics
A50
A51
A51
A51
U.S. international transactions
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A52 Selected U.S. liabilities to foreign official
institutions
Reported by Banks in the United States
A52
A53
A55
A56
Liabilities to, and claims on, foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A56 Banks' own claims on unaffiliated foreigners
A57 Claims on foreign countries—Combined
domestic offices and foreign branches
Reported by Nonbanking Business
Enterprises in the United States
A58 Liabilities to unaffiliated foreigners
A59 Claims on unaffiliated foreigners
Securities Holdings and Transactions
A60 Foreign transactions in securities
A61 Marketable U.S. Treasury bonds and
notes—Foreign transactions
Interest and Exchange Rates
A61 Discount rates of foreign central banks
A61 Foreign short-term interest rates
A62 Foreign exchange rates
A63 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
SPECIAL TABLES
A64 Pro Forma Balance Sheet and Income Statements
for Priced Services Operations
A66 INDEX TO STATISTICAL TABLES
A3
Guide to Tabular Presentation
SYMBOLS AND ABBREVIATIONS
c
e
n.a.
P
r
*
0
ATS
BIF
CD
CMO
CRA
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
Corrected
Estimated
Not available
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Community Reinvestment Act of 1977
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PMI
PO
REIT
REMIC
RP
RTC
SCO
SDR
SIC
VA
Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Metropolitan statistical area
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Private mortgage insurance
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Department of Veterans Affairs
GENERAL INFORMATION
In many of the tables, components do not sum to totals because of
rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also
include not fully guaranteed issues) as well as direct obligations of the Treasury.
"State and local government" also includes municipalities,
special districts, and other political subdivisions.
A4
Domestic Financial Statistics • January 1999
1.10
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted'
1997
Monetary or credit aggregate
1
2
3
4
Reserves of depository institutions"
Total
Required
Nonborrowed
Monetary base3
5
6
7
8
9
Concepts of money, liquid assets, and debt*
Ml
M2
M3
L
Debt
Nontransai'tlon components
10 InM2 5
11 In M3 only6
Q4
Ql
-2.8
-5.6
-1.9
-1.8
-.6
6.9
Q2
Q3
-2.5
-4.3
4.1
-7.4
-9.0
-8.4'
6.9
-3.8
Julyr
Aug.
Sept.
Oct.
-7.9
6.2
15.5
5.0
4.9
1.0
4.6
8.9
-11.0'
-16.1
-10.5
11.5
-5.2
-2.5
-3.2
9.3
June
-5.3
-18.1
.9
7.0
10.0
9.2
6.0
3.0
8.0
11.0
12.9'
6.2
.2
7.5
10.3
8.0
6.2
-2.5'
6.7
7.1'
-3.5
5.9
-3.6
5.3
6.8
7.2
5.8'
-3.0
4.9
1.5
-.3
6.2
-3.1'
8.5'
11.8'
9.6'
5.8'
3.6'
14.8'
14.5'
-67.5
5.6
7.1
12.3
13.6
n.a.
9.3
19.5
9.8
20.3
10.1
18.8
9.9'
8.2'
8.4
10.9
7.6
-8.3
12.5'
21.4'
18.6'
13.7'
14.0
17.3
13.6
14.3
-1.0
18.0
13.8'
.8'
-2.4
10.9
-1.0
16.8
17.0
.2
-29.8
15.2'
5.6
11.7'
18.7'
I.7r
-2.7'
14.5
1.7
1.8
7.5'
1.1
2.8
11.6
.7
6.9
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time 89
Thrift institutions
15 Savings, including MMDAs
16 Small time7
17 Large time
16.3
4.5
9.9
1.5
19.5
1.4
-3.1
5.4
7.6
-.4
14.4
11.6
-5.6
6.9
-5.0'
-4.0
3.6
-1.1
13.9
8.5
-5.3
-9.6
2.7
-12.4'
-8.3
Money market mutual funds
18 Retail
19 Institution-only
15.1
22.0
19.3
18.9
21.7
36.5
21.8
21.6
20.8
28.7
5.5
-5.3
33.1
36.5
48.3
38.4
31.5
60.9
Repurchase agreements and Eurodollars
20 Repurchase agreements10
21 Eurodollars10
39.5
24.3
34.1
7.6
14.5
-7.7
10.3
11.7'
-32.6
13.9
17.9
18.9
32.5
8.4'
32.1
-31.0 1
-20.3
12.9
.4
7.9
.0
8.3
-1.4
8.6'
-.9
8.0'
-.9
8.4
8.0
-3.3
8.4
12
13
14
Debt components
22 Federal
23 Nonfederal
1. Unless otherwise noted, rates of change are calculated from average amounts outstanding during preceding month or quarter.
1. Figures incorporate adjustments for discontinuities, or "breaks." associated with
regulatory changes in reserve requirements. (See also table 1.20.)
3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line I), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose
vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference
between current vault cash and the amount applied to satisfy current reserve requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time
deposits—including retail RPs—in amounts of less than S100,000), and (3) balances in retail
money market mutual funds (money funds with minimum initial investments of less than
$50,000). Excludes individual retirement accounts (IRAs) and Keogh balances at depository
institutions and money market funds. Seasonally adjusted M2 is calculated by summing
savings deposits, small-denomination time deposits, and retail money fund balances, each
seasonally adjusted separately, and adding this result to seasonally adjusted M1.
M3: M2 plus (1) large-denomination time deposits (in amounts of S 100,000 or more), (2)
balances in institutional money funds (money funds with minimum initial investments of
$50,000 or more), (3) RP liabilities (overnight and term) issued by all depository institutions,
and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S.
banks worldwide and at all banking offices in the Uniled Kingdom and Canada. Excludes
-1.5
8.3
amounts held by depository institutions, the U.S. government, money market funds, and
foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large
time deposits, institutional money fund balances, RP liabilities, and Eurodollars, each
seasonally adjusted separately, and adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury
securities, commercial paper, and bankers acceptances, net of money market fund holdings of
these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted
separately, and then adding this result to M3.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfamn
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, lax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances, each seasonally adjusted separately.
6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees, each seasonally adjusted separately.
7. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRA and Keogh account balances at commercial banks and thrift institutions
are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
10. Includes both overnight and term.
Money Stock and Bank Credit A5
1.11
RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT'
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
1998
Aug.
Sept.
Oct.
Sept. 16
Sept. 23
Sept. 30
481,257
486,639
489,496
486,799
486,081
441,902
3,072
444,223
6,303
447,493
3,235
442,785
8,038
444,810
5,675
469
3,013
0
417
1,923
0
394
3,425
0
403
1,729
0
27
247
0
414
32,113
56
177
0
622
32,918
104
0
186
34,572
11,045
9,200
25,950'
11,045
9,200
25,990'
487,952'
120
5,130
167
6,979
347
16,922
9,836
Oct. 7
Oct. 14
Oct. 21
Oct. 28
487,907'
488,458
488,624
490,836
488,188
446,239
5,441
446,736
3,740
447,673
2,672
447,289
4,096
447,209
2.025
403
1.521
0
403
1,170
0
403
2,811
0
400
3,077
0
4,415
0
388
3,457
0
27
167
0
530
33,120
II
174
0
678
32,808
138
172
0
796'
33,549
315
132
0
286
34,036
31
110
0
543
34,117
4
99
0
-178
34,723
13
91
0
281
34,724
11,043
9,200
26,033
11,045
9,200
25,989'
11,045
9,200
25,992'
11,045
9,200
25,995'
11,044
9,200
26,009
11,044
9,200
26,023
11,044
9,200
26,037
11,040
9,200
26,051
492,822'
93
496,396
91
493,832'
92
492,430'
94
492,794'
93
493,934
92
497,334
92
497,191
92
496,617
90
6,296
176
6,907'
360
17,160
9,061'
5,407
224
6,949
414
17,347
8,945
5,869
175
6,827
358
16,998
8,881
7,144
165
6,946
370
17,168
8,002
6,989
201
6,992'
353
17,206
9,519'
5,779
194
6,959
423
17,681
9,649
5,480
321
7,055
417
17,078
7,114
5,322
209
6,953
408
17,218
9,725
5,326
206
6,866
424
17,188
7,761
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments . .
20
Other
21 Other Federal Reserve liabilities and capital .
22 Reserve balances with Federal Reserve Banks4
Wednesday figures
End-of-month figures
Sept. 16
Sept. 23
Sept. 30
Oct. 7
Oct. 14
494,902
486,641
491,427
496,371'
489.458
491,277
492,306
489,075
450,179
4,286
442,835
9,106
445,804
8,630
446,047
12,135
447,457
4,538
447,687
2,045
448,032
4,115
447,966
2,279
403
2,099
0
388
3,538
0
403
795
0
403
2,075
0
403
2,099
0
403
2,840
0
388
4,570
0
388
5,488
0
388
3,440
0
66
226
0
973
32,518
896
159
0
-1,230"
35,862
1
68
0
-314
36,756
31
173
0
142
33,157
9
177
0
836
33,495
896
159
0
-1,230'
35,862
3
128
0
-40
34,131
101
109
0
2,140
34,238
0
94
0
-266
34,455
83
0
116
34,802
11,046
9,200
25,984'
11,044
9,200
25,995'
11,041
9,200
26,065
11,045
9,200
25,989'
11,045
9,200
25,992'
11,044
9,200
25,995'
11,044
9,200
26,009
11,044
9,200
26,023
11,044
9,200
26,037
11,041
9,200
26,051
488,645'
94
494,244'
92
497,402
87
494,005'
94
493,359'
93
494,244'
92
495,888
92
498,474
92
497,594
91
498,039
87
6,704
162
6,870
332
17,420
13,881
4,952
347
6,992'
349
17,654
17,981'
4,440
154
6,864
380
18.241
13,639
6,265
163
6,827
357
16,734
8,430
7,508
166
6,946
388
16,952
12,253
4,952
347
6,992'
349
17,654
17,981'
5,291
196
6,959
427
16,898
9,960
4,895
189
7,055
397
16,878
9,564
4,842
177
6,953
398
17,025
11,506
6,382
213
6,866
467
16.927
6.385
Aug.
Sept.
487,877
496,371'
442,135
7,942
446.047
12.135
451
3,566
0
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10 Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments . .
20 Other
21 Other Federal Reserve liabilities and capital .
22 Reserve balances with Federal Reserve Banks4
1. Amounts of cash held as reserves are shown in table 1.12, line 2.
2. Includes securities loaned—fully guaranteed by U.S. government securities pledged
with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back
under matched sale-purchase transactions.
3. Includes compensation thai adjusts for the effects of inflation on the principal of
inflation-indexed securities.
4. Excludes required clearing balances and adjustments to compensate for float.
A6
1.12
Domestic Financial Statistics • January 1999
RESERVES AND BORROWINGS
Depository Institutions'
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks
Total vault cash3
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks"
Seasonal borrowings
Extended credit9
1998
1995
1996
1997
Dec.
Dec.
Dec.
Apr.
May
June
July
Aug.
Sept.'
Oct.
20.440
42,281
37,460
4,821
57,900
56,622
1,278
257
40
0
13,395
44,525
37,848
6,678
51,242
49,819
1,423
155
68
0
10,673
44,707
37,206
7,500
47,880
46,196
1,683
324
79
0
11,053
41,215
35,423
5,792
46,475
45,131
1,345
72
41
0
9,646
41,482
35.159
6,323
44,805
43,655
1,150
153
94
0
9,668
42,635
35,427
7,208
45,095
43,475
1,620
251
159
0
9.646
42,035
34,954
7,081
44,600
43,235
1,365
258
215
0
9,682
42,121
35,025
7,095
44,707
43,194
1,513
271
242
0
9,284
42,579
34,909
7,670
44,193
42,509
1,684
251
178
0
9,033
43,348
35,089
8,258
44,122
42,543
1,579
174
107
0
Biweekly averages of daily figures for two week periods ending on dates indicated
1998
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks2
Total vault cash
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
July 1
July 15
July 29
Aug. 12
Aug. 26
Sept. 9
Sept. 23
Oct. 7
Oct. 21
Nov. 4
9,969
41,919
35,060
6,859
45,029
43.232
1,797
285
184
0
10,225
42,101
35,102
6,999
45,326
43,999
1,327
198
196
0
8,933
41,984
34,770
7,214
43,703
42,341
1,362
314
233
0
10,428
41,984
35,157
6,827
45,585
44,147
1,437
271
241
0
8.800
42,355
35,024
7,330
43,824
42,392
1,431
280
255
0
10,363
41,793
34,712
7,081
45,075
43,153
1,922
247
209
0
8,439
42,900
35,039
7,862
43,477
42,093
1,384
190
171
0
9,588
42,948
34,905
8,043
44,493
42,514
1,978
379
152
0
8,400
44,084
35,321
8,763
43,720
42,520
1,200
122
105
0
9,531
42,598
34,895
7,703
44,426
42,597
1,829
103
79
0
1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For
ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted.
2. Excludes required clearing balances arid adjustments to compensate for float and
includes other off-balance-sheet L'as-of' adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash may be used
to satisfy reserve requirements. The maintenance period for weekly reporters ends sixteen
days after the lagged computation period during which the vault cash is held. Before Nov. 25,
1992, the maintenance period ended thirty days after the lagged computation period.
4. All vault cash held during the lagged computation period by "bound" institutions (that
is, those whose required reserves exceed their vault cash) plus the amount of vault cash
applied during the maintenance period by "nonbound" institutions (that is, those whose vault
cash exceeds their required reserves) to satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Tolal reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the lenns and conditions established for the extended credit program to help depository instirulions deal with sustained
liquidity pressures. Because there is not the same need to repay such borrowing promptly as
with traditional short-term adjustment credit, the money market effect of extended credit is
similar to that of nonborrowed reserves.
Policy Instruments A7
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Seasonal credit
On
12/4/98
Extended credit"
On
12/4/98
On
12/4/98
Boston
New York
Philadelphia..
Cleveland
Richmond....
Atlanta
11/18/98
11/17/98
11/17/98
11/19/98
11/18/98
11/18/98
Chicago
St. Louis
Minneapolis..
Kansas City ..
Dallas
San Francisco.
11/19/98
11/19/98
11/19/98
11/18/98
11/17/98
11/17/98
Effective date
4.95
Range of rates for adjustment credit in recent years4
Effective date
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
In effect Dec. 31, 1977
1978—Jan.
9
20
11
12
3
10
21
22
16
20
1
3
6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10.5
10.5
10.5-11
II
11-12
12
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
1981—May 5
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13-14
14
May
July
Aug.
Sept.
Oct.
Nov.
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10.5
10.5
II
II
12
12
13
13
13
12
11
11
10
10
II
12
13
13
14
14
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
1981—Nov. 2 .
6.
Dec. 4 .
13-14
13
12
1982—July 20 .
23 .
Aug. 2 .
3.
16 .
27.
30 .
Oct. 12 .
13 .
Nov. 22 .
26.
Dec. 14 .
15 .
17.
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5
9.
13.
Nov. 21 .
26 .
Dec. 24 .
8.5-9
9
8.5-9
8.5
9
9
8.5
8.5
1985—May 20 .
24 .
7.5-8
7.5
7.5
7.5
1986—Mar. 7 .
10 .
Apr. 21 .
23.
July 11 .
7-7.5
7
6.5-7
6.5
6
5.5-6
5.5
7
7
6.5
6.5
6
5.5
5.5
5.5-6
6
6
6
1984—Apr.
Aug
12:
1987—Sept. 4 .
11 .
13
13
12
Effective date
1988—Aug. 9 .
11 .
6-6.5
6.5
1989—Feb. 24
27
6.5-7
7
1990—Dec. 19 .. .
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
1
4
30
2
13
17
6
7
20
24
2 ....
7 ....
1994—May 17
18 . . . .
Aug. 16 . . . .
18 . . . .
Nov. 15
17 . . .
F.R. Bank
of
N.Y.
6.5
6.5
6.5
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5
3-3.5
3
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
3
3
3-3.5
3.5
3.5^t
4
4-4.75
4.75
3.5
3.5
4
4
4.75
4.75
1
9
4.75-5.25
5.25
5.25
5.25
1996—Jan. 31
Feb. 5
5.00-5.25
5.00
5.00
5.00
1998—Oct. 15 ..
Oct. 16 ..
4.75-5.00
4.75
4.75
4.75
1998—Nov. 17
Nov. 19
4.50-4.75
4.50
4.50
4.50
4.50
4.50
1995—Feb.
In effect Dec. 4, 1998
1. Available on a short-term basis to help depository institutions meet temporary needs for
funds that cannot be met through reasonable alternative sources. The highest rate established
for loans to depository institutions may be charged on adjustment credit loans of unusual size
that result from a major operating problem at the borrower's facility.
2. Available to help relatively small depository institutions meet regular seasonal needs for
funds that arise from a clear pattern of intrayearly movements in their deposits and loans and
that cannot be met through special industry lenders. The discount rate on seasonal credit takes
into account rates charged by market sources of funds and ordinarily is reestablished on the
first business day of each two-week reserve maintenance period; however, it is never less than
the discount rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is not
reasonably available from other sources, including special industry lenders. Such credit may
be provided when exceptional circumstances (including sustained deposit drains, impaired
access to money market funds, or sudden deterioration in loan repayment performance) or
practices involve only a particular institution, or to meet the needs of institutions experiencing
difficulties adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is
charged on extended-credit loans outstanding less than thirty days; however, at the discretion
Range (or
level)—All
F.R. Banks
of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
flexible rate somewhat above rates charged on market sources of funds is charged. The rate
ordinarily is reestablished on the first business day of each two-week reserve maintenance
period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis
points.
4. For earlier data, see the following publications of the Board of Governors; Banking and
Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 19701979.
In 1980 and 1981. the Federal Reserve applied a surcharge to short-term adjustment-credit
borrowings by institutions with deposits of $500 million or more that had borrowed in
successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was
in effect from Mar. 17, 1980. through May 7, 1980. A surcharge of 2 percent was reimposed
on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to
4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981,
and to 2 percent effective Oct. 12. 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period. The
surcharge was eliminated on Nov. 17, 1981.
A8
Domestic Financial Statistics • January 1999
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS'
Requirement
Type of deposit
Percentage of
deposits
Net transaction accounts
1 $0 million-$47.8 million3
2 More than $47.8 million
3
10
3
Nonpersonal time deposits5
0
4
Eurocurrency liabilities6
0
1. Required reserves must be held in the form of deposits with Federal Reserve Banks
or vault cash. Nonmember institutions may maintain reserve balances with a Federal
Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For
previous reserve requirements, see earlier editions of the Annual Report or the Federal
Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions
include commercial banks, mutual savings banks, savings and loan associations, credit
unions, agencies and branches of foreign banks, and Edge Act corporations.
2. Transaction accounts include all deposits against which the account holder is permitted
to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized transfers for the purpose of making payments to third
persons or others. However, accounts subject to the rules that permit no more than six
preauthorized, automatic, or other transfers per month (of which no more than three may be
by check, draft, debil card, or similar order payable directly to third parties) are savings
deposits, not transaction accounts.
3. The Monetary Control Act of 1980 requires that the amount of transaction accounts
against which the 3 percent reserve requirement applies be modified annually by 80 percent of
the percentage change in transaction accounts held by all depository institutions, determined
as of June 30 of each year. Effective with the reserve maintenance period beginning
December 31, J998, for depository institutions that report weekly, and with the period
beginning January 14, 1999, for institutions that report quarterly, the amount was decreased
from $47.8 million to $46.5 million.
Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the
amount of reservable liabilities subject to a zero percent reserve requirement each year for the
Effective date
12/31/98
12/31/98
12/27/90
12/27/90
succeeding calendar year by 80 percent of the percentage increase in the total reservable
liabilities of all depository institutions, measured on an annual basis as of June 30. No
corresponding adjustment is made in the event of a decrease. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve
maintenance period beginning December 31, 1998, for depository institutions that report
weekly, and with the period beginning January 14, 1999, for institutions that report quarterly,
the exemption was raised from $4.7 million to $4.9 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on
Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that
report quarterly.
5- For institutions that report weekly, the reserve requirement on nonpersonal time deposits
with an original maturity of less than 1 x/i years was reduced from 3 percent to 1 l/i percent for
the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that
began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on
nonpersonal time deposits with an original maturity of less than 1 [/z years was reduced from 3
percent to zero on Jan. 17, 1991.
The reserve requirement on nonpersonal time deposits with an original maturity of 1 '/£
years or more has been zero since Oct. 6, 1983.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero
in the same manner and on the same dates as the reserve requirement on nonpersonal time
deposits with an original maturity of less than 1 Vi years (see note 5).
Policy Instruments A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1998
Type of transaction
and maturity
Apr.
May
Sept.
July
U.S. TREASURY SECURITIES 2
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
Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
For new bills
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
Matched transactions
26 Gross purchases
27 Gross sales
Repurchase agreements
28 Gross purchases
29 Gross sales
30 Net change in U.S. Treasury securities
10,932
0
405,296
405,296
900
9,901
0
426,928
426,928
0
9,147
0
436,257
435,907
0
0
0
34,025
34,025
0
3,550
0
46,802
46,802
0
0
0
35,190
35,190
0
0
0
32,830
32,830
0
0
0
40,312
40,312
0
0
0
34,607
34,607
0
0
0
33,140
33,140
0
390
0
43,574
-35,407
1,776
524
0
30,512
-41,394
2,015
5,549
0
41,716
-27,499
1,996
1,501
0
1,964
-5,736
0
1,369
0
4,369
-2,601
286
0
0
6,951
-4,990
0
0
0
1,520
-5,084
0
0
0
2,638
-2,242
1,311
986
0
6,367
-8,964
0
1,038
0
2,301
-2,242
0
5,366
0
-34,646
26,387
3,898
0
-25,022
31,459
19,680
0
-37,987
20,274
2,262
0
-1,964
5,736
2,993
0
-4,369
2,201
0
0
-6,620
2,270
0
0
-1,520
5,084
0
0
-2,638
1,842
535
0
-2,168
5,828
3,989
0
-2,301
2,242
1,432
0
-3,093
7,220
1,116
0
-5,469
6,666
3,849
0
-1,954
5,215
283
0
0
0
495
0
0
0
0
0
-331
2,720
0
0
0
0
0
0
0
0
303
0
-3,411
1,364
351
0
0
0
2,529
0
-2,253
1,800
1,655
0
-20
3,270
5,897
0
-1,775
2,360
743
0
0
0
0
0
0
400
0
0
0
0
0
0
0
0
0
0
0
400
1,769
0
-789
1,772
0
0
0
0
20,649
0
2,676
17,094
0
2,015
44,122
0
1,996
4.789
0
0
8,407
0
286
0
0
0
0
0
0
0
0
1,311
3,593
0
0
5,377
0
0
2,197,736
2,202,030
3,092,399
3,094,769
3,577,954
3,580,274
364,307
364,537
354,756
354,741
367,934
368,281
369,358
370,569
373,285
371,142
346,245
348,318
380,594
382,063
331,694
328,497
457,568
450,359
810,485
809,268
40,211
37,010
59,548
50,663
7,722
20,456
57,098
41,414
52,116
63,531
39,078
38,402
63,924
59,731
16,875
19,919
41,022
7,760
-13,081
14,473
-10,584
2,196
8,101
0
0
1,003
0
0
409
0
0
1,540
0
0
50
0
0
74
36,851
36,776
75,354
74,842
160,409
159,369
17,685
18,342
13,547
13,042
FEDERAL AGENCY OBLIGATIONS
Outright transactions
31 Gross purchases
32 Gross sales
33 Redemptions
Repurchase agreements
34 Gross purchases
35 Gross sales
36 Net change in federal agency obligations
37 Total net change in System Open Market Account
1,575
3,300
14,548
12,913
11,236
12,341
33,431
30,625
18,486
19,953
-928
103
-500
-707
431
-1,725
1,610
-1,105
2,731
-1.515
15,948
20,021
40,522
7,053
17,452
-14.806
16,083
-11,689
4,927
6,586
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
0
0
48
0
0
25
2. Transactions exclude changes in compensation for the effects of inflation on the principal
of inflation-indexed securities.
A10
1.18
Domestic Financial Statistics • January 1999
FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements'
Millions of dollars
End of month
Wednesday
Sept. 30
Oct. 14
Oct. 21
Oct. 28
Aug. 31
Sept. 30
Oct. 31
Consolidated condition statement
11,044
9,200
417
11,044
9,200
409
11.044
9.200
411
11,044
9,200
413
11,041
9,200
458
11,046
9,200
423
11,044
9,200
417
11,041
9,200
426
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
1,055
0
0
130
0
0
210
0
0
95
0
0
84
0
0
293
0
0
1,055
0
0
69
0
0
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
403
2,099
403
2,840
388
4,570
388
5,488
388
3,440
451
3,566
403
2,099
388
3,538
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
458,182
451,995
449,732
452,147
450,245
450,077
458,182
454,465
10 Bought outright2
11 Bills
12 Notes
13 Bonds
14 Held under repurchase agreements
446,047
195,864
184,186
65,996
12,135
447,457
196,216
184,187
67,054
4,538
447,687
196,445
184,188
67,054
2,045
448,032
197,387
183,591
67,055
4,115
447,966
196.578
184,333
67,055
2,279
442,135
197,334
178,826
65,975
7,942
446,047
195,864
184,186
65,996
12,135
450,179
197,450
185,033
67,696
4,286
15 Total loans and securities
461,738
455^68
454,899
458,117
454,157
454,386
461,738
458,460
6,454
1,295
8,040
1,296
11,600
1,296
6,965
1,296
6,398
1.295
2,465
1.293
6.454
1,295
4,702
1,293
18,448
15,880
18,458
14.451
18,467
14,532
18,477
14,701
18,486
15,114
17,601
13.671
18,448
15.880
19,573
15,976
524,476
518,266
521,449
520,213
516,148
510,087
524,476
520,672
9 Total US. Treasury securities
16 Items in process of collection.
17 Bank premises
Other assets
18 Denominated in foreign currencies3
19 Allother 4
20 Total assets
LIABILITIES
468.759
470.380
472,955
472,061
472.533
463,179
468.759
471,851
22 Total deposits
31353
23,865
21,861
24,190
20,448
27,520
31,353
25,568
23
24
25
26
25,706
4,952
347
349
17,950
5,291
196
427
16,380
4,895
189
397
18.773
4,842
177
13,385
6.382
213
467
20,321
6,704
162
332
25,706
4,952
347
349
20,592
4,440
154
380
6,711
4,637
7,123
4,506
9,755
4.451
6,937
4,588
6,240
4,477
1,968
4,750
6,711
4.637
5,012
4,518
511,460
505,874
509,022
507,776
503,697
497,417
511,460
506,948
5,910
5,220
1,886
5,914
5,220
1,257
5,915
5,220
1,292
5,916
5.220
1.300
5,919
5,220
1,311
5,866
5,220
1,583
5,910
5,220
1,886
5,920
5,220
2,583
524,476
518,266
521,449
520,213
516,148
510,087
524,476
520,672
569,016
571,910
571.910
576,334
573,571
564.692
576,466
21 Federal Reserve notes
Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
27 Deferred credit items
28 Other liabilities and accrued dividends5
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts.
33 Total liabilities and capital accounts
MEMO
34 Marketable U.S. Treasury securities held in custody for
foreign and international accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Banks) .
36
LESS: Held by Federal Reserve Banks
37
Federal Reserve notes, net
38
39
40
41
Collateral held against notes, net
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities
42 Total collateral
580,575
111,817
468,759
583,371
112,991
470,380
585,227
112,272
472,955
586,916
114,855
472,061
587,780
115,247
472,533
574,813
111,635
463,179
580,575
111,817
468,759
588,229
116,378
471,851
11,044
9.200
0
448.515
11,044
9,200
0
450,137
11,044
9,200
0
452,711
11,044
9,200
0
451,817
11,041
9,200
0
452,292
11,046
9,200
0
442,932
11,044
9,200
0
448,515
11,041
9,200
0
451,610
468,759
470,380
472,955
472,061
472,533
463,179
468,759
471,851
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical
release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with
Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on
the principal of inflation-indexed securities. Excludes securities sold and scheduled to be
bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury
bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at market
exchange rates of foreign exchange commitments.
Federal Reserve Banks A11
1.19
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
Millions of dollars
Wednesday
Type of holding and maturity
Sept. 30
1 Total loans
2 Within fifteen days'
3 Sixteen days to ninety days
4 Total US. Treasury securities2
5
6
7
8
9
]0
11
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
Total federal agency obligations
12
13
14
15
16
17
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
1,055
Oct. 14
Oct. 28
Aug. 31
Sept. 30
Oct. 30
293
233
76
8
176
117
155
78
51
18
95
130
973
82
26
104
113
97
458,182
451,995
449,732
452,147
450,245
442,135
458,182
454,465
20,310
90,644
145.875
105,789
41,628
53,936
13.238
93,791
142,555
105,789
41,628
54,994
17.052
93,953
136.315
105.789
41,629
54,994
13.874
94,188
141,674
105,383
42,033
54,994
12,666
92,901
142,266
105.384
42,033
54,994
15.104
92,231
145,997
101,535
41,276
53,935
20.310
90,644
145,875
105.789
41.628
53,936
8.752
100,244
141,715
106,109
42,034
55,611
2,502
3,243
4,958
5,876
3,828
4,017
2,502
3,926
2,099
50
75
93
185
2,840
50
85
83
185
0
4,570
50
85
68
185
0
5,488
50
85
68
185
0
3,440
50
85
58
185
0
3,614
5
120
93
185
n.a.
2,099
50
75
93
185
n.a.
3,538
52
93
58
185
0
1. Holdings under repurchase agreements are classified as maturing within fifteen days in
accordance with maximum maturity of the agreements.
Oct. 21
2. Includes compensation that adjusts for the effects of inflation on the principal of
^Ration-indexed securities.
A12
1.20
Domestic Financial Statistics • January 1999
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1
Billions of dollars, average:* of daily figures
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
Apr.
Total reserves3
Nonborrowed reserves4
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base
July
Aug.
Sept.
45.39
45.14
45.14
43.77
491.63
44.81
44.56
44.56
43.45
493.70'
45.00
44.73
44.73
43.48
497.37'
44.59
44.33'
44.33'
42.90
502.16'
44.39
44.22
44.22
42.81
506.06
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS
1
2
3
4
5
May
59.41
59.20
59.20
58.24
418.12
56.40
56.14
56.14
55.12
434.17
50.08
49.93
49.93
48.66
452.38
46.67
46.35
46.35
44.99
480.15
46.05
46.00
46.00
44.73
485.86
45.96
45.89
45.89
44.61
487.20
45.59
45.44
45.44
44.44
489.10
Not seasonally adjusted
6
7
8
9
10
7
Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves8
Monetary base9
61.13
60.92
60.92
59.96
422.51
58.02
57.76
57.76
56.74
439.03
51.52
51.37
51.37
50.10
456.72
47.97
47.65
47.65
46.29
485.11
45.54
45.50
45.50
44.23
484.00
46.53
46.45
46.45
45.18
487.36
44.87
44.71
44.71
43.72
488.28
45.17
44.92
44.92
43.55
491.18
44.69
44.43
44.43
43.32
495.35'
44.81
44.54
44.54
43.30
497.56'
44.31
44.06
44.06
42.63
501.04'
44.25
44.08
44.08
42.67
504.55
61.34
61.13
61.13
60.17
427.25
1.17
.21
57.90
57.64
57.64
56.62
444.45
1.28
.26
51.24
51.09
51.09
49.82
463.49
1.42
.16
47.88
47.56
47.56
46.20
491.92
1.68
.32
45.51
45.47
45.47
44.19
490.96
1.31
.04
46.48
46.40
46.40
45.13
494.11
1.35
.07
44.81
44.65
44.65
43.66
494.95
1.15
.15
45.10
44.84
44.84
43.48
497.93
1.62
.25
44.60
44.34
44.34
43.24
502.2O1
1.37
.26
44.71
44.44
44.44
43.19
504.46'
1.51
.27
44.19'
43.94
43.94
42.51
507.85'
1.68'
.25
44.12
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 1
11
12
13
14
15
16
17
Total reserves"
Nonborrowed reserves
NonboiTowed reserves plus extended credit5
Required reserves
Monetary base
Excess reserves13
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly
statistical release. Historical data starting in 1959 and estimates of the effect on required
reserves of changes in reserve requirements are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory
changes in reserve requirements. (See also table 1.10.)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted,
break-adjusted total reserves (line 1) less total borrowings of depository institutions from the
Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under the terms and
conditions established for the extended credit program to help depository institutions deal
with sustained liquidity pressures. Because there is not the same need to repay such
borrowing promptly as with traditional short-term adjustment credit, the money market effect
of extended credit is similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters
whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess
reserves (line 16).
43.95
43.95
42.54
511.40
1.58
.17
8. To adjust required reserves for discontinuities that are due to regulatory changes in
reserve requirements, a multiplicative procedure is used to estimate what required reserves
would have been in past periods had current reserve requirements been in effect. Breakadjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus
(2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no
adjustments to eliminate the effects of discontinuities associated with regulatory changes in
reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve
requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total
reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float
at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for
all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current reserve
requirements. Since the introduction of contemporaneous reserve requirements in February
1984, currency and vault cash figures have been measured over the computation periods
ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
Monetary and Credit Aggregates A13
1.21
MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1
Billions of dollars, averages of daily figures
1998'
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
July
Aug.
Sept.
Oct.
Seasonally adjusted
1
2
3
4
5
Measures
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency
Travelers checks4
Demand deposits
Other checkable deposits6
1,150.7
3,503.0
4,333.6
5.315.8
12,999.5
1,128.7
3,651.2
4,595.6
5,702.3
13,697.6
1,082.8
3,826.1
4,931.1
6,083.6
14,425.2
1,076.0
4,046.4
5,376.8
6,611.3
15,167.4'
1,071.8
4,213.2
5,653.0
6,926.3
15.714.3
1,069.0
4,243.2
5,708.7
6,981.5
15,790.9
1,072.2
4,295.6
5,777.7
6,588.6
15,864.3
1,078.5
4,339.6
5,843.2
n.a.
n.a.
354.3
8.5
384.0
403.9
372.4
8.9
391.0
356.4
394.9
8.6
403.6
275.9
425.5
8.2
397.1
245.2
441.3
7.7
378.0
244.8
443.8
7.8
374.2
243.2
449.6
7.9
373.6
241.2
453.4
8.0
374.1
243.1
2,352.3
830.6
2,522.6
944.4
2,743.2
1.105.0
2,970.4
1.330.4
3,141.4
1,439.8
3,174.2
1,465.5
3,223.4
1,482.2
3,261.1
1,503.6
Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits
14 Large time deposits10" "
752.6
503.2
298.7
775.0
575.8
345.4
904.8
594.5
413.2
1,020.9
625.7
487.5
1,103.8
623.6
522.7
1,117,8
626.5
527.8
1,135.2
627.4
526.6
1,148.9
628.3
527.4
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits
17 Large time deposits
397.3
314.2
64.7
359.7
357.2
74.2
366.9
354.3
78.0
376.6
343.9
85.4
399.2
337.4
86.8
400.1
333.9
86.2
402.6
334.2
86.4
406.5
334.4
86.9
Money market mutual funds
18 Retail
19 Institution-only
385.0
203.1
454.9
253.9
522.8
310.3
603.2
376.2
677.4
430.2
696.1
443.3
724.1
457.5
743.1
480.7
Repurchase agreements and Eurodollars
20 Repurchase agreements
21 Eurodollars12
183.3
80.8
182.4
88.6
194.2
109.2
236.1
145.3
258.1
142.1
265.1
143.1
272.2
139.4
267.6
140.9
3,492.4
9,507.0
3,638.9
10,058.7
3,780.6
10,644.7
3,798.4
ll^.O1
3,772.9
11,941.4
3,770.3
12,020.6
3,760.0
12,104.3
n.a.
n.a.
Nontransaction components
10 In M27
U In M3 only8
Debt components
22 Federal debt
23 Nonfederal debt
Not seasonally adjusted
24
25
26
27
28
Measures2
Ml
M2
M3
L
Debt
29
30
31
32
Ml components
Currency3
Travelers checks
Demand deposits5
Other checkable deposits
1,174.4
3,523.4
4,353.2
5,344.6
13,002.0
1,152.4
3,672.0
4,615.2
5,732.8
13,699.1
1,104.9
3,845.4
4,948.9
6,111.6
14,425.5
1,097.6
4,065.3
5,394.0
6,636.7
15,166.9'
1,072.8
4,213.7
5,644.9
6,911.6
15,666.0
1,067.7
4,247.6
5,709.8
6,983.1
15,746.0
1,068.9
4,286.9
5,762.1
6,574.0
15,828.1
1.074.7
4.325.5
5,834.2
n.a.
n.a.
357.5
8.1
400.3
408.6
376.2
8.5
407.2
360.5
397.9
8.3
419.9
278.8
429.0
7.9
413.0
247.7
442.7
8.2
378.8
243.1
444.3
8.2
374.2
241.0
448.3
8.1
372.6
239.9
452.5
8.1
372.8
241.3
2,349.0
829.7
2,519.6
943.2
2,740.5
1,103.5
2,967.8
1,328.6
3,141.0
1,431.2
3,179.9
1,462.2
3,217.9
1,475.3
3,250.8
1,508.7
Commercial banks
35 Savings deposits, including MMDAs . .
36 Small time deposits9
37 Large time deposits10' "
751.7
501.5
298.9
774.1
573.8
345.8
903.3
592.7
413.6
1,019.0
624.1
488.0
1,106.3
624.3
521.8
1,120.1
626.6
528.0
1,133.5
627.0
529.0
1,144.7
628.3
535.5
Thrift institutions
38 Savings deposits, including MMDAs .
39 Small time deposits9
40 Large time deposits
396.8
313.2
64.8
359.2
355.9
74.3
366.4
353.2
78.1
375.9
3*3.0
85.4
400.1
337.8
86.7
400.9
333.9
86.2
402.0
333.9
86.8
405.0
334.4
88.3
Money market mutual funds
41 Retail
42 Insiitution-only
385.9
204.6
456.4
255.8
524 8
312.7
605.8
378.9
672.6
425.3
698.4
441.1
721.6
451.3
738.4
475.4
Repurchase agreements and Eurodollars
43 Repurchase agreements
44 Eurodollars12
179.6
81.8
178.0
89.4
188.8
110.3
229.4
146.9
258.4
139.0
265.6
141.4
270.2
137.9
270.1
139.5
3,499.0
9.503.1
3,645.9
10,053.1
3,787.9
10,637.6
3,805.8
11,361.1'
3,740.8
11,925.2
3,749.6
11,996.4
3,743.4
12,084.7
Nontransaction components
33 In M27
34 In M3 only8
Debt componrnis
45 Federal debt
46 Nonfederal debt
Footnotes appear on following page.
n.a.
n.a.
A14
Domestic Financial Statistics • January 1999
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly
statistical release. Historical data starting in 1959 are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demzind deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time
deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3)
balances in retail money market mutual funds (money funds with minimum initial investments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh
balances at depository institutions and money market funds. Seasonally adjusted M2 is
calculated by summing savings deposits, small-denomination time deposits, and retail money
fund balances, each seasonally adjusted separately, and adding this result to seasonally
adjusted Ml.
M3: M2 plus (I) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds (money funds
with minimum initial investments of $50,000 or more), (3) RP liabilities (overnight and term)
issued by all depository institutions, and (4) Eurodollars (overnight and term) held by US.
residents at foreign branches of U.S. banks worldwide and at all banking offices in the United
Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Seasonally adjusted
M3 is calculated by summing large time deposits, institutional money fund balances, RP
liabilities, and Eurodollars, each seasonally adjusted separately, and adding this result to
seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury
securities, commercial paper, and bankers acceptances, net of money market fund holdings of
these assets. Seasonally adjusted L is computed by summing US. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted
separately, and then adding this result to M3.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizaiions, nonfinancia) corporate and nonfami
noncorporate businesses, and farms). Nonfederal debl consisls of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuilies in the data have been smoolhed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
3. Currency outside the US. Treasury, Federal Reserve Banks, and vaults of depository
institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbanV issuers.
Travelers checks issued by depository institutions are included in demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other than those
owed to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions, credit union
share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) savings deposils (including MMDAs), (2) small lime deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of US. addressees.
9. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are
subtracted from small time deposils.
10. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
12. Includes both overnight and term.
Commercial Banking Institutions—Assets and Liabilities A15
1.26
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities1
A. All commercial banks
Billion? of dollars
Wednesday figures
Monthly averages
1998r
Apr.
May
June
July
1998
Aug.
Sept.
Oct. 7
Oct. 28
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities . ..
Other securities
Loans and leases in bank credit2
Commercial and industrial . . .
Real estate
Revolving home equity . .
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets"
Other assets5
16 Total assets*
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due torelatedforeign offices .
Other liabilities
4,250.2
1,126.1
772.0
354.0
3,124.1
883.2
1,271.4
97.8
1,173.6
506.0
123.0
340.5
202.7
251.0
312.5
4,260.9
1,120.4
755.7
364.7
3,140.5
896.7
1,267.8
97.5
1,170.4
502.0
130.1
343.8
218.1
251.3
312.4
4,276.7
1,128.6
759.7
368.9
3,148.1
901.5
1.269.6
97.2
1,172.4
494.3
132.3
350.4
214.4
244.2
308.4
4,338.5
1,154.0
769.9
384.1
3,184.5
910.0
1,278.8
97.1
1,181.7
493.3
139.0
363.3
209.0
252.5
310.7
4,394.4
1,173.7
765.6
408.0
3,220.7
921.8
1,280.1
97.5
1,182.6
496.5
144.4
377.9
222.8
253.4
315.2
4,490.5
1,218.3
773.0
445.3
3,272.2
943.1
1,285.9
96.9
1,189.0
495.9
159.5
387.9
226.2
243.8
310.5
4,463.0
1.204.7
758.8
445.8
3,258.3
931.5
1,284.1
95.9
1,188.2
496.0
161.6
385.1
223.2
241.2
310.9
4,473.0
1,203.8
766.9
436.9
1,219.5
95.9
1,123.6
507.9
104.3
314.4
195.2
261.5
290.3
4,222.1
1,109.9
764.9
345.0
3,112.2
869.8
1,273.5
98.4
1,175.1
506.1
117.8
345.0
214.6
268.8
308.5
4,721.7
4^>5&5
4.9S&8
4,9853
4.986.4
5^053.7
5,1283
5,213.4
3,065.7
685.5
2,380.2
620.2
1,760.0
799.9
293.2
506.7
189.4
269.6
3,211.9
696.5
2,515.4
674.5
1,840.8
870.8
305.8
565.0
179.8
295.4
3,205.4
687.4
2,518.1
674.9
1,843.2
861.9
282.1
579.8
174.4
299.3
3,223.0
682.7
2,540.3
685.1
1,855.2
857.8
287.9
569.9
170.6
308.3
3,197.1
666.8
2,530.3
667.3
1,863.0
857.4
289.6
567.8
186.1
317.1
3,228.8
667.6
2,561.2
679.2
1,882.0
861.4
293.5
567.9
201.2
325.4
3,250.1
677.1
2,573.0
684.3
1,888.7
889.7
303.2
586.5
200.1
335.0
4557.9
4^41.0
4^59.7
4557.7
4,616.7
398.6
417.8
425.7
428.7
436.9
4,031.3
1,043.7
731.5
312.2
2,987.5
841.4
27 Total liabilities
28 Residual (assets less liabilities)7
4,513.6
3,269.2
939.9
1,281.7
95.9
1.184.8
494.0
160.5
393.2
216.7
249.2
310.3
4.503.5
1.232.5
mi
454.9
3,271.0
948.0
1,281.3
97.2
1,184.1
496.5
159.5
385.7
230.7
247.5
311.4
5,180.6
5,191.5
5,235.4
5,237.1
3,274.1
668.2
2,605.9
697.0
1,908.9
939.6
318.5
621.1
2211
355.5
3,253.8
648.9
2,604.9
692.0
1,912.9
920.5
314.5
606.0
211.2
362.4
3,283.9
674.1
2,609.9
695.0
1,914.8
921.4
317.5
603.9
211.0
360.3
3,269.6
670.1
2,599.6
699.7
1,899.8
949.4
321.4
628.1
231.0
362.1
3.278.9
683.8
2,595.1
699.6
1,895.5
957.4
320.8
636.6
235.6
344.5
4^75.0
4,7923
4,747.9
4,776.7
4.812.2
4^163
453.5
421.1
432.7
414.7
423.2
420.8
1,230.0
783.6
446.5
3,283.6
950.3
1.2901
97.2
1,192.9
496.4
157.3
389.5
234.9
238.7
307.8
Not seasonally adjusted
Assets
29 Bank credit
30
Securities in bank credit
31
U.S. government securities
32
Other securities
33
Loans and leases in bank credit2 ..
34
Commercial and industrial
35
Real estate
36
Revolving home equity
37
Other
38
Consumer
4,036.1
40
Other loans and leases
41 Interbank loans
42 Cash assets4
43 Other assets5
1.041.9
730.1
3)1.8
2.994.2
839.3
1,225.7
96.7
1,129.0
509.8
104.4
315.0
191.2
265.5
289.5
44 Total assets'
4,725.9
39
45
46
47
48
49
50
51
52
53
54
Security'
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
55 Total liabilities
56 Residual (assets less liabilities)7
4,227.1
1,121.1
773.3
347.8
3,106.0
877.4
1267.0
97.5
1.169.5
501.1
119.2
341.4
217.3
264.2
306.9
4,245.2
1.130.8
776.7
354.1
3.114.4
888.7
1,265.1
97.5
1,167.7
500.7
122.5
337.3
198.3
246.6
311.9
4,262.4
1,123.4
758.2
365.2
3,139.0
899.4
1,265.4
97.2
1.168.3
499.2
130.0
344.9
214.8
246.3
310.9
4.270.6
1.123.0
755.8
367.2
3,147.7
901.1
1,271.7
97.2
1,174.5
492.4
130.1
352.4
208.0
239.8
309.7
4,324.9
1,145.5
765.1
380.4
3,179.4
904.0
1,282.4
97.3
1,185.1
495.0
134.4
363.7
2019
240.1
312.7
4,381.3
1.161.6
760.5
401.1
3,219.7
916.3
1,285.1
98.2
1,186.9
499.3
141.0
378.1
217.2
251.3
316.4
4 494.1
1,214.6
770.4
444.2
3,279.4
941.1
1,292.6
97.7
1,194.9
497.7
160.0
388.1
222.3
247.6
309.7
4,460.6
1,197.5
754 2
443.3
3,263.1
930.1
1,291.0
96.7
1.194.3
496.9
159.4
385.6
221.8
239.6
311.4
4.477.9
1,199.3
762.4
436.8
3,278.6
936.9
1,289.2
97.7
1,191.5
495.3
162.1
395.1
214.1
272.2
311.0
4,501.3
1,225.1
775.0
450.1
3,276.2
945.0
1,287.3
97.9
1,189.4
498.6
160.3
385.0
222.0
242.1
307.9
4,517.4
1,229.2
782.6
446.7
3,288.1
947.8
1,295.9
98.0
1,197.8
499.1
157.4
387.9
227.0
238.2
305.7
4.944.6
4^76.9
4^>70.7
5,0223
5,108.6
5,215.9
5,175.4
5,217.5
5,215.6
5,230.5
3.188.9
675.5
2,513.4
675.2
1,838.3
867.5
283.3
584.2
183.0
298.8
3,215.0
677.7
2,537.3
682.8
1,854.6
867.5
290.8
576.7
176.5
307.5
3,189.6
661.9
2,527.7
664.0
1,863.6
861.9
289.8
572.1
188.2
316.4
3,218.6
654.2
2,564.4
678.2
1,886.2
854.4
289.5
564.9
201.6
325.4
3,254.3
672.4
2,581.9
686.0
1,895.9
893.2
302.0
591.1
200.2
334.8
3,277.8
664.1
2.613.7
701.0
1,912.7
935.8
314.5
621.4
220.0
355.2
3,270.7
647.7
2,623.0
696.2
1.926.7
910.8
309.0
601.8
203.9
361.5
3,308.2
688.8
2,6194
697.3
1,922.1
917.0
313.1
603.8
208.6
359.8
3,253.3
650.6
2,602.7
702.8
1,899.9
946.3
317.2
629.1
228.4
361.7
2,593.0
705.2
1,887.8
958.4
317.8
640.7
237.5
344.9
3,068.6
681.8
2,386.8
624.0
1,762.8
796.0
289.7
506.3
187.0
269.4
3,211.3
701.6
2,509.7
669.0
1,840.6
870.3
305.0
565.3
178.9
294.6
4321.0
435S.1
4.566.6
4356.1
4,600.0
4,682.4
4,788*
4,746.9
4,793.6
4,789.7
4^02.1
404.9
403.1
410.3
414.6
422.2
426.2
427.1
428.5
423.9
425.9
428.4
79.7
83.9
92.8
92.8
95.7
109.5
133.0
143.2
135.4
134.8
125.2
90.8
90.6
110.3
131.0
140.6
133.6
132.6
123.4
3,261.3
668.3
MEMO
57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items*
Footnotes appear on p. A21.
81.3
84.5
85.9
85.0
96.5
A16
1.26
Domestic Financial Statistics • January 1999
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities'—Continued
B. Domestically chartered commercial banks
Billions of dollars
Wednesday figures
Monthly averages
Account
1997
Oct.
1998
1998"
Apr.
May
June
July
Aug.
Sept.
Oct.
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
16 Total assets6
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the US
From others
Net due to related foreign offices
Other liabilities
....
27 Total liabilities
28 Residual (assets less liabilities)7
3,493.2'
868.6
650.7
217.9
2,624.6'
618.9'
1,192.1'
95.9
1,096.2'
507.9
57.3
248.4'
174.7
227.1
246.6
3,664.1
915.6
675,8
239,9
2,748.5
656.8
1,248.5
98.4
1.150.1
506.1
63.6
273.5
192 0
233.2
272.3
3,686.1
928.9
682.9
246.0
2.757.2
671.5
1,247.0
97.8
1,149.2
506.0
61.8
270.8
180.9
216.3
278.4
3,693.7
921.2
668.3
252.9
2,772.5
683.9
1,243.7
97.5
1,146.2
502.0
67.5
275.4
194 2
216.0
278.3
3,704.3
928.6
669.5
259.1
2,775.7
685.6
1,245.7
97.2
1,148.5
494.3
69.8
2803
192.4
209.0
274.2
3,748.4
943.1
677.0
266.1
2,8053
693.1
1,255.1
97.1
1,158.0
493.3
73.5
290.2
186.5
218.5
275.0
3,788.2
960.2
684.8
275.4
2,828.0
700.5
1.256.8
97.5
1,159.3
496.5
75.3
298.8
191.7
219.1
2773
3,858.6
994.8
694.5
300.4
2,863.8
714.7
1,262.9
96.9
1,166.0
495.9
87.9
302.4
196.8
208.0
271.0
3,826 0
978.3
679.9
298.4
2.847.7
705.6
1,260.3
95.9
1,164.4
496.0
86.7
299.1
192.9
205.1
270.4
3,847.4
986.6
690.8
295.8
2,860.7
712.7
1,259.0
96.9
1,162.1
494.0
88.1
307.0
188.2
212.8
269.4
3,868.2
1,005.5
700.0
305.5
2,862.6
717.5
1,258.7
97.2
1,161.5
496.5
89.3
300.7
199.5
210.4
272.5
3,881.3
1,007.3
703.3
304.0
2,874.1
720.7
1,267.0
97.2
1,169.8
496.4
86.8
303.2
206.4
204.4
269.4
4,085.4'
4304.5
43043
4325.0
4322.8
4371.7
4,419.3
4,477.0
4,437.0
4,460.2
4,493.0
4,504.1
2,798.0'
675.0'
2,123.0
366.1
1,756.8
644.1'
259.4'
384.7
70.9
177.9
2,917.8
684.2
2,233.6
394.5
1,839.1
704.8
279.2
425.6
77,4
210,2
2,910.2
675.8
2,234.3
391.7
1,842.7
698.5
259.7
438.8
73.3
211.9
2,920.3
671.6
2,248.8
393.2
1,855.6
690.7
258.3
432.4
73.4
218.1
2,899.8
653.4
2,246.4
384.5
1,861.9
687.5
262.8
424.7
793
224.0
2,922.6
655.8
2,266.8
384.0
1,882.8
691.4
269.5
422.0
92.8
226.6
2.935.3
6623
2,273.0
382.9
1,890.1
705.4
270.7
434,8
105,0
230.5
2,953.7
653.6
2,300.1
395.1
1,905.0
745.4
282.6
462.8
117.7
241.7
2.927.5
634.6
2.292.9
386.9
1,906.0
730.7
282,4
448 2
101.6
246.2
2,962.2
658.2
2,304.0
391.6
1,9123
725.8
282.7
443.1
113.7
242.6
2.949.2
655.2
2,294.0
396.9
1,897.0
754.1
282.0
472.1
124.6
242.1
2,963.0
670.0
2,293.0
401.3
1,891.7
761.2
282.7
478.5
130.0
239.7
3,691.0'
3,910.2
3,893.8
3,902.5
3,890.6
3,933.5
3,976.3
4,058.4
4,005.9
4,0443
4,070.0
4,093.8
394.4
394.3
410.6
422.6
432.2
438.2
443.0
418.5
431.1
416.0
423.0
410.2
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
....
44 Total assets6
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
55 Total liabilities
3,498.3'
866.0
648.8
217.3
2,632.3'
617.1"
1,198.0"
96.7
1,101.3'
509.8
57.4
250.0'
170.7
230.8
246.8
3,668.9
924.8
685.5
239.3
2,744.1
6643
1,242.2
97,5
1,144,7
501,1
65 7
270^8
194.7
230.3
272.7
3.679.5
929.7
687.0
242.7
2,749.8
677.6
1,240.9
97.5
1,143.4
500.7
61.9
268.7
176.5
212.2
277.4
3,692.1
921.0
670.7
250.3
2,771.1
686.7
1,241.5
97.2
1,144.3
499.2
67 7
276.1
190.9
210.0
277.5
3,695.4
920.2
666.0
254.3
2,775.2
685.5
1,248.0
97.2
1,150.8
492.4
68.2
281.1
186.0
204.7
275.9
3,732.4
930.4
671.4
259.0
2,802.0
688.2
1,258.8
97.3
1,161.5
495.0
69 8
2903
179.4
206.1
276.1
3,780.3
951.5
679.8
271.7
2,828.8
696.1
1,261.7
98.2
1.163.5
4993
72.2
299.5
186.0
216.9
278.5
3,862.8
990.8
691.4
299.5
2,872.0
712.8
1,269.3
97.7
1,171.6
497.7
88 3
303.9
192.9
211.6
271.2
3,827.5
974.1
676.0
298.1
2,853.4
704.3
1,266.9
96.7
1,170.2
496.9
84 3
30l'i
191.5
203.9
271.8
3.851.0
979.8
686.1
293.7
2,871.1
7103
1.2663
97.7
1,168.6
495.3
89 1
3io!i
185.6
235.7
271.1
3.867.2
997.9
696.5
301.4
2,869.3
715.1
1,264.5
97.9
1,166.5
498.6
90.2
301.0
190.8
204.7
270.1
3.885.2
1,005.1
701.3
303.8
2,880.1
718.0
1,272.5
98.0
1,174.5
499.1
87 2
3033
198.5
203.1
268.4
4,090.5'
4309.7
4,288.4
4313.4
4304.8
4336.9
4,404.4
4,480.9
4,437.0
4,485.8
4,475.3
4,497.8
2 801 2'
671.3'
2,129.8
369.1
1,760.7'
640.2'
255.9'
384.3
69.3
177.9
29189
689.8
2,229 2
3903
1,838.9
704 2
278.4
425.9
78.0
210.2
2 890 9
664.3
2 226 7
389^9
1,836.7
704.1
260.9
443.2
80.9
211.9
29106
666.6
2,244 0
390.8
1,853.2
700 4
261.2
439.2
80.1
218.1
2,894.1
648.4
2.245.7
383.4
1,8623
692.0
263.0
429.0
84.9
224.0
2,913.7
642.4
2,271.2
'386.4
1,884.9
684.5
265.5
419.0
96.7
226.6
2.937.9
656.9
2.280.9
386.4
1.894.6
708.9
269.5
439.4
106.7
230.5
2,958.0
649.6
2,308.4
398.5
1,909.9
741.7
278.6
463.1
115.5
241.7
2.943.6
633.6
2 309 9
'390.4
1,919,5
721.0
276.9
444 1
98.6
246.2
2,988.0
672.8
2,315.2
394.4
1.920.8
721.4
2783
443.1
111.4
242.6
2,934.2
635.8
2,298.4
400.0
1.898.4
751.0
277.9
473.1
123.6
242.1
2 945.1
'654.4
2,290.8
404.8
1,886.0
762.2
279.6
482.6
128.7
239.7
3,688.6'
3,911.3
3,887.8
3,909.2
3,895.0
3,921.5
3,984.0
4,056.8
4,009.3
4,063.3
4,050.8
4,075.7
56 Residual (assets less liabilities)7
401.8
398,4
400.6
404.2
409.8
415.5
420.3
424.1
427.7
422.5
424.5
422.1
MEMO
57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items8
59 Mortgage-backed securities9
37.9
43.9
45.6
50.5
51.0
51.9
61.5
78.2
84.1
80.6
77.2
74.8
41.0
265.6
45.3
295.6
46.3
298.0
50.1
291.2
50.4
294.4
54.2
301.9
65.0
314.0
79.9
336.9
85.0
322.6
81.7
334.1
79.0
340.9
77.3
345.2
Footnotes appear on p. A21.
Commercial Banking Institutions—Assets and Liabilities A17
1.26 COMMERCIAL BANKS IN THE UNITED STATES
C. Large domestically chartered commercial banks
Assets and Liabilities1—Continued
Billions of dollars
Wednesday figures
Monthly averages
Account
1997
Oct.'
1998
1998'
Apr.
May
June
July
Aug.
Sept.
Oct.
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Seasonally adjusted
Assets
1 Bank credit
2
Securities in bank credil
3
U.S. government securities
4
Trading account
..
5
Investment account
6
Other securities
7
Trading account
8
Investment account
9
State and local government .
10
Other
]I
Loans and leases in bank credit- .. .
12
Commercial and industrial
13
Bankers acceptances
14
Other
15
Real estate
16
Revolving home equity
17
Other
[8
Consumer
19
Security3
20
Federal funds sold to and
repurchase agreements
with broker-dealers
21
Other
22
State and local government
...
23
Agricultural
24
Federal funds sold lo and
repurchase agreements
with others
25
All other loans
26
Lease-financing receivables
27 Interbank loans
28
Federal funds sold to and
repurchase agreements with
commercial banks
29
Other
30 Cash assets4
31 Other assets5
12 Total assets 6
33
34
35
36
37
38
39
40
41
42
Liabilities
Deposits
Transaction
,
Nontransaction
Large time
Other
Borrowings
From banks in the U S
From others
Nel due lo related foreign offices
Other liabilities
....
43 Total liabilities
44 Residual (assets less liabilities)
7
Footnotes appear on p. A21.
....
2.114.2
469.0
333.9
25.0
308.9
135 1
63,3
71.8
22.3
495
1,645.2
441.8
1.3
440.5
665.3
67.6
597.7
303.5
52.3
2,236.3
513.4
361.9
225
339.4
1515
70.6
80.9
23.0
580
1,722.8
471.7
1.2
470.4
689.6
69.4
620.2
302.2
57.4
2,248.6
522.3
365.3
23.3
342.1
157.0
75.6
814
22.8
58.6
1,726.3
484.0
1.3
482.7
685.5
68.7
616.8
301.3
55.9
2.246.3
514.2
351.6
234
328.2
1627
79.5
83.2
22.2
609
1,732.1
494.3
1.2
493.1
675 9
68.1
607.8
297.7
61.4
2.246.1
516.3
350.1
20.4
329.7
166.1
81.1
85.0
22.4
62 6
1,729.8
494.5
1.3
493.2
672.3
67.6
604.7
292.2
63.6
2.276.8
527.0
356.1
2).3
33J.8
170.9
83.1
87 7
22.6
65.]
1,749.7
498.9
1,3
497.6
674 5
67.5
607.0
293.0
67.1
2,307.6
541.8
362.7
22.0
340.7
179.1
89.3
898
23.2
66.6
1,765.9
504.0
1.3
502.7
6725
67.8
604.7
296.0
68.7
2,362.1
567.0
366.9
20.9
345.9
200.1
108.6
91.6
23.9
67.7
1,795.1
516J
1.2
515.1
673.7
67.2
606.5
296.0
81.1
2.332.8
552.2
353.4
20.5
332.9
198.8
109.1
897
23.3
66.4
1,780.6
507.3
1.3
507.9
672.4
66.4
606.0
296.2
79.8
2,355.2
560.2
364.2
191
345.1
1960
105.8
90.2
23.8
664
1,794.9
514.6
1.3
515.1
6720
67.4
604.6
295.0
81.3
2 371.7
577.1
372.6
21.9
350.7
204.5
113.5
910
24.0
67.0
1.794.7
519.7
1.3
520.2
669.8
67.5
602.4
295.9
82.7
2,381.5
578.3
374.3
20.5
353.8
204.0
110.4
93.6
24.3
694
1,803.3
521.7
1.3
522.2
676.0
67.5
608.5
296.2
80.2
35.4
16.9
12.0
9.5
39.8
17.6
11.2
9.9
37.6
18.3
11.2
9.8
42.8
18.6
11.0
9.8
44.8
18.7
10.9
9.7
47.9
19.2
11.0
9.7
50.1
18.6
11.1
9.7
63.2
17.9
11.2
9.7
61.8
18.0
112
9.7
62.8
18.4
11.2
9.8
64.8
17.9
11.0
9.7
62.9
17.3
11.0
9.7
9.2
72.5
79.1
120.6
7.3
82.8
90.8
128.3
5.7
80.0
92.8
116.4
5.5
82.9
93.6
126.2
8.7
82.9
95.0
121.7
9.8
88.0
97.6
113.8
12.1
92.5
99.2
115.5
12.6
93.4
101.0
120.6
12.5
91.0
100.4
118.2
13.1
97,3
100.7
111.9
11.7
93.2
101.1
123.3
13.4
93.4
101.6
129.7
80.0
40.6
158.9
188.1
76.7
51.7
166.6
210.0
65.6
50.8
1493
214.8
75.0
51.2
148.2
211.6
68.2
53.6
142.8
208.9
60.8
52.9
150.1
208.0
62.4
53.1
1501
207.6
71.6
49.0
139.6
199.4
65.1
53.0
138.0
198.5
65.0
46.8
143 8
199.3
75.4
47.9
141.7
199.6
81.4
48.3
135.6
197.7
2^447
2.703.6
2^913
2.6*4.8
2,682.0
2,711.7
2,743.7
2,784.1
2,749.9
2,7725
2J9&8
2^07.0
1,562.5
3844
1,178.1
204.6
973.5
494.2
189.6
3046
65.8
150.9
1,637.8
393.3
134.5
222.8
1,021.7
547.1
210.0
337.1
73.9
179.8
1,621.7
385.1
1,236.6
218.1
1,018.5
538.4
190.0
3484
69.4
181.7
1,618.6
379.0
1,239.6
219.5
1,020.1
529.0
187.6
341.5
69.5
188.2
1.594.6
363,9
1.230.7
213.2
1,017.5
522.8
189.2
'33.5
75.6
194.2
1,602.2
365.6
1,236.6
212.0
1,024.6
527.7
196.1
331.6
89.1
196.2
1,602.5
369.2
1,233.3
206.9
1,026.4
540.3
196.9
343.4
101.3
199.8
1,613.4
362.9
1250.5
217.8
1,032.7
573.6
205.8
367.9
113.0
210.0
1,594.1
350.9
1,243.1
209.9
1,033.2
559.9
205.7
354.2
96.7
214.4
1.623.8
370.1
I.Z53.7
215.5
1,038.2
554.4
204.6
349.8
109.0
211.2
1.608.7
361.9
1.246.8
219.8
1.027.0
582.2
205.5
376.8
119.8
210.4
1,618.8
372.1
1,246.7
222.9
1,023.8
588.9
206.6
382.3
125.6
208.1
2^73.4
2AS8.7
2,411.2
2,4053
2387.2
2415.2
2444.0
2^10.1
2,465.1
2,4983
2jsn.i
24414
264.9
280.0
299.8
274.0
284.9
274.2
277.7
265.6
271.3
289.5
294.8
296.6
A18
1.26
Domestic Financial Statistics • January 1999
COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued
C. Large domestically chartered commercial banks—Continued
Monthly averages
Account
1998'
1997
Oct.'
Wednesd ly figures
Apr.
May
June
July
1998
Aug.
Sept.
Oct.
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Not seasonally adjusted
Assets
45 Bank credit
46
Securities in bank credit
47
U.S. government securities
48
Trading account
49
Investment account
50
Mortgage-backed securities . .
51
Other
52
One year or less
53
One to five years
54
More than five years . . .
55
Other securities
56
Trading account
57
Investment account
58
State and local government . .
59
Other
60
Loans and leases in bank credit2 . .
61
Commercial and industrial
62
Bankers acceptances
63
Other
64
Real estate
65
Revolving home equity
66
Other
67
Commercial
68
Consumer
69
Security1 .
70
Federal funds sold to and
repurchase agreements
with broker-dealers . . . .
71
Other
72
State and local government . . . .
73
Agricultural
74
Federal funds sold to and
repurchase agreements
with others
75
All other loans
76
Lease-financing receivables . . . .
77 Interbank loans
78
Federal funds sold to and
repurchase agreements
with commercial banks
79
Other
80 Cash assets4
81 Other assets5
82 Total assets6
83
84
85
86
87
88
89
90
91
92
Uabililirs
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . ..
Other liabilities
93 Total liabilities .
94 Residual (assets less liabilities)7
2,119.2
469.2
334.1
26.1
308.0
202.0
106.1
27.6
54.4
24.0
135.1
63.0
720
22.4
49.7
1,650.0
441.4
1.4
440.0
668.9
68.2
367.8
232.9
304.5
52.4
2235.4
517.1
366.6
22.7
343.9
224.9
119.0
32.0
52.1
34.9
150.5
70.2
80.3
22.9
57.3
1,718.3
476.7
1.2
475.6
683.7
68.4
380.6
234.7
298.2
59.5
2,234.8
518.9
366.1
22.5
343.6
224.7
118.9
30.5
50.7
37.7
152.8
72.1
807
22.7
58.0
1.715.9
487.6
1.2
486.4
Sill
68.2
376.0
233.4
297.3
56.0
2,240.0
510.9
351.3
22.5
328.8
216.1
112.7
30.6
47.5
34.7
159.6
76.7
82.9
22.4
60.6
1,729.1
495.4
1.2
494.2
673.0
67.8
374.1
231.1
296.4
61.5
239.1
509.2
347.9
19.9
328.0
217.5
110.5
29.4
50.3
30.8
161.3
77.0
84.3
22.3
62.1
1,729.9
494.6
1.2
493.3
674.6
67.8
375.5
231.3
292.0
62.0
2,261.3
515.4
351.3
21.2
330.2
224.2
105.9
28.0
47.2
30.7
164.0
76.8
87.2
22.7
64.6
1.745.9
495.5
1.3
494.2
677.8
67.8
377.8
232.2
294.6
63.4
2.297.6
533.7
358.0
21.9
336.1
234.8
101.3
26.8
42.7
31.9
175.7
86.3
89.4
23.2
66.2
1,763.8
501.1
1.3
499.8
675.8
68.4
374.0
233.5
298.0
65.6
2,366.5
566.0
366.0
21.9
344.1
253.4
90.7
25.2
35.9
29.5
200.0
108.2
91.8
24.0
67.8
1,800.5
516.1
1.3
514.8
677.7
67.8
376.1
233.8
296.9
81.5
2,337.3
551.4
352.0
21.2
330.8
240.8
90.0
24.8
36.8
28.5
199.4
109.1
90.3
23.4
66.8
1,785.8
508.0
1.3
506.7
678.0
67.1
376.8
234.1
297.2
77.5
2,358.2
556.1
361.4
20.0
341.5
252.1
89.4
25.7
35.9
27.8
194.6
104.4
90.2
23.8
66.4
1,802.1
513.9
1.3
512.6
676.5
68.0
376.6
231.9
295.7
82.3
2,370.2
572.5
371.2
23.1
348.0
257.2
90.9
25.0
35.6
30.3
201.3
110.2
91.1
24.2
66.9
1,797.7
518.7
1.3
517.4
672.9
68.1
371.1
233.7
296.8
83.5
2.384.2
578.8
374.5
21.3
353.1
261.0
92.1
25.4
35.9
30.9
204.3
110.7
93.6
24.4
69.2
1,805.4
520.6
1.3
519.3
678.5
68.1
375.5
234.9
297.3
80.6
35.6
16.8
9.7
41.7
17.8
111
9.5
37.6
184
11.1
9.7
42.5
19.0
11.0
9.9
43.8
18.2
10.9
10.1
45.0
184
11.1
10.1
47.5
18.1
11.2
10.0
63.6
17.8
11.3
9.9
60.5
17.0
11.3
10.0
64.0
18.3
11.3
10.0
65.5
18.0
11.1
9.8
62.7
17.9
11.1
9.8
92
73.0
78 8
117.4
7.3
81.8
90.5
129.0
5.7
78.8
92.2
115.7
5.5
83.1
93.2
126.7
87
82.6
94.6
120.7
9.8
87.3
96.4
111.2
12.1
92.0
98.1
114.3
12.6
93.9
100.6
117.7
12.5
91.3
100.2
114.9
13 1
99.1
100.2
110.2
11.7
92.8
100.4
118.0
13.4
93.2
100.9
126.7
77.0
40.4
162.7
188.1
77.8
51.2
1642
210X)
65.2
50.5
145 3
214.8
75.4
51.3
143.1
211.6
67.4
53.2
1391
208.9
59.0
52.2
140.0
208.0
61.9
52.4
148.6
207.6
68.9
48.8
143.2
199.4
62.4
52.5
137.0
198.5
62.9
47.2
162.3
199.3
70.2
47.8
138.5
199.6
78.9
47.8
136.4
197.7
24503
2,7013
2^73.1
2*83.7
2*703
2*83.2
2,730.6
2,789.2
2,750.0
2,7923
2,788*
2*074
1,567.6
382.3
1.185.2
207.6
977.6
489.9
186.5
303.4
64.1
150.9
1,630.6
395.3
1,235.3
218.6
1,016.8
548.4
209.5
338.9
74.5
179.8
1.602.0
375.7
1,226.3
216.4
1,010.0
543.6
190.5
353.1
77.1
181.7
1,612.2
375.6
1,236.7
217.1
1 019.5
538.3
190.0
348.4
76.2
188.2
1,594.6
361.7
1,232.9
212.1
1,020.8
527.3
189.3
338.0
81.2
194.2
1,599.8
356.4
1,243.4
214.4
1,029.0
519.5
191.4
328.0
92.9
196.2
1,608.6
366.1
1,242.5
210.4
1,032.1
540.5
194.7
345.7
103.0
199.8
1,619.7
360.7
1,259.0
221.2
1,037.8
569.4
202.2
367.1
110.9
210.0
1,608.4
348.8
1,259.5
213.4
1,046.1
551.5
201.6
349.9
93.8
214.4
1,645.5
381.5
1,264.0
218.2
1,045.7
550.1
201.0
349.0
106.7
211.2
1,601.9
349.6
1,252.3
222.9
1,029.5
577.9
201.5
376.4
118.8
210.4
1,610.6
363.5
1,247.1
226.4
1,020.8
587.0
202.9
384.2
124.3
208.1
2^724
24333
24044
2415.0
23973
24084
245L8
2409.9
2468.0
24134
2409.0
2430.1
277.8
267.9
268.7
268.7
273.0
274.8
278.8
279.3
281.9
278.9
279.8
277.4
MEMO
95 Revaluation gains on off-balancesheet items8
96 Revaluation losses on off-balancesheet items8
97 Mortgage-backed securities5
98
Pass-through securities
99
CMOs, REMICs, and other
mortgage-backed securities . .
100 Net unrealized gains (losses) on
available-for-sale securities1 . . .
101 Offshore credit to U.S. residents" . ..
Footnotes appear on p. A21.
37.9
43.9
45.6
50.5
51.0
51.9
61.5
78.2
84.1
80.6
77,2
74.8
41.0
220.2
150.0
45.3
245.1
165.4
46.3
245.9
164.8
50.1
238.0
156.9
50.4
240.6
157.0
54.2
247.3
160.3
65.0
258.0
166.3
79.9
277.9
188.4
85.0
264.9
174.7
81.7
275.9
186.4
79.0
281.2
192.0
77.3
285.5
197.2
70.2
79.7
81.1
81.0
83.6
86.9
S>1.7
89.5
90.3
89.5
89.2
88.3
2.4
14.2
3.0
35.5
2.8
36.0
3.2
36.1
3.5
35.3
3.1
35.6
3.8
36.8
4.5
38.5
4.9
37.8
4.6
38.1
4.5
38.9
4.5
38.8
Commercial Banking Institutions—Assets and Liabilities A19
1.26
COMMERCIAL BANKS IN THE UNITED STATES
D. Small domestically chartered commercial banks
Assets and Liabilities'—Continued
Billions of dollars
Monthly averages
Apr.
May
June
July
Wednesday figures
Aug.
Sept.
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities ..
Other securities
Loans and leases in bank credit2
Commercial and industrial . .
Real estate
Revolving home equity
Other
Consumer
Security'
Other loans and leases
Interbank loans
Cash assets4
Other assets5
16 Total assets6
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
27 Total liabilities
28 Residual (assets less liabilities)7 .
1,379.0
316.8
82.7
979.5
177.1
526.8
28.3
498.5
204.4
5.0
66.1
54.1
68.2
58.5
1,427.9
402.2
313.8
88.4
1,025.7
185.2
558.9
29.0
529.9
203.9
6.2
71.5
63.6
66.6
62.4
1,437.6
406.6
317.6
89.0
1,031.0
187.5
561.6
29.1
532.5
204.7
5.9
1,458.2
64.5
67.0
63.6
1,447.4
407.0
316.8
90.2
1,040.4
189.6
567.8
29.4
538.4
204.4
6.1
72.5
68.0
67.8
66.6
6.2
73.0
70.7
66.3
65.3
6.4
74.0
72.7
1,540.7
1.600.9
1,613.1
1,630.2
1,235.5
290.6
944.9
161.5
783.4
149.9
69.8
80.1
5.2
27.0
1,280.0
290.9
989.1
171.7
817.4
157.7
69.2
88.5
3.5
30.3
1,288.5
290.7
997.7
173.6
824.2
160.1
69.7
90.4
3.8
30.2
1,301.7
292.6
1,009.2
1,417.6
1,471.5
148Z5
123.1
129.4
130.5
399.6
71.3
1,493.2
426.1
326.5
99.6
1,067.1
198.3
587.8
29.5
558.4
199.8
6.9
74.3
74.7
67.2
71.8
1,492.2
426.4
326.6
99.8
1,065.8
198.2
587.0
29.5
557.6
199.0
76.4
69.0
70.1
76.2
76.7
68.3
67.0
554.6
200.5
6.6
74.2
76.1
69.0
69.7
1,496.6
427.8
327.6
100.2
1.068.7
198.4
589.2
29.7
559.4
199.9
6.8
74.5
76.2
68.5
71.6
68.8
72.8
68.8
1,640.7
1,659.9
1,675.5
1,692.9
1,687.1
1,687.8
1,6943
1,697.0
1.305.2
289.5
1,015.7
171.3
844.4
164.7
73.6
91.2
3.7
29.8
1,320.4
290.2
1,030.2
1,332.8
293.1
1,039.7
176.0
863.7
165.1
73.7
91.4
37
30.7
1,340.3
290.7
1,049.6
177.3
872.3
171.7
76.9
94.9
4.7
31.7
1,333.4
283.7
1,049.7
177.0
872.7
170.8
76.7
94.1
4.9
31.8
1,338.4
288.1
1,050.3
176.1
874.2
171.4
78.1
93.4
4.7
31.4
1,340.5
293.3
1,047.2
177.1
870.1
171.9
76.5
1,344.1
297.9
1,046.3
178.4
867.8
172.3
95.3
4.8
31.7
96.2
4.4
31.6
1,4*7.1
1,5323
13484
1.540.8
1,545.9
1,548.9
13524
133.1
143.2
144.5
146.2
141.8
145.4
144.6
173.7
835.5
161.6
70.7
90.9
3.9
29.9
412.4
319.4
93.0
1,045.8
191.1
573.4
29.6
543.8
202.1
1,471.7
416.1
320.9
95.2
1,055.5
194.2
580.6
29.6
551.0
200.3
172.0
858.2
163.7
73.3
90.4
3.7
30.5
1,480.6
418.5
322.1
96.4
1,062.1
196.5
584.3
29.7
6.8
74.8
1,496.4
428.5
327.5
101.0
1,067.9
197.8
588.8
29.7
559.1
200.6
6.6
74.1
1,499.8
429.0
329.0
100.0
1,070.8
199.0
591.0
29.7
561.2
200.2
6.6
74.1
71.7
76.1
Not seasonally adjusted
Assets
Bank credit
Securities in bank credit
U.S. government securities .
Other securities
Loans and leases in bank credit2
Commercial and industrial .
Real estate
Revolving home equity .
Other
Consumer
Security'
Other loans and leases
Interbank loans
Cash assets4
Other assets5
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44 Total assets'1
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
55 Total liabilities
56 Residual (assets less liabilities)7
1,379.1
396.8
314.7
82.2
982.3
175.6
529.1
28.5
500.6
205.3
5.0
67.2
53.3
68.2
58.7
1,433.6
407.7
318.9
88.8
1,025.8
187.6
558.5
29.1
529.4
202.9
6.2
1,482.7
417.7
321.7
96.0
1,065.0
195.1
586.0
29.8
556.1
201.4
6.6
76.0
71.7
68.3
70.9
1,496.4
424.9
325.4
99.5
1,071.5
196.8
591.6
29.9
561.7
200.8
6.8
75.6
75.1
68.4
71.7
1,490.2
422.6
323.9
98.7
1,067.6
196.3
588.9
29.6
559.3
199.6
6.9
75.9
76.6
66.8
73.3
1,492.7
423.7
324.7
99.1
1,069.0
196.4
589.8
29.6
560.1
199.6
6.8
76,3
75.4
73.4
71.8
1,497.0
425.5
325.3
65.6
67.0
1,471.2
415.1
320.1
95.0
1,056.1
192.7
581.0
29.5
551.5
200.4
6.4
75.6
68.2
66.1
68.1
66.2
70.4
1J01.0
426.3
326.9
99.4
1,074.6
197.4
594.0
29.9
564.1
201.8
6.6
74.8
71.9
66.8
70.7
1,629.6
1,6343
1,653.8
1,673.8
1,691.7
1,687.0
1,6933
1,6863
14903
1,298.4
291.0
1,007.4
1,299.5
286.7
1,012.8
171.3
841.5
164.8
73.7
1,329.3
290.8
1,038.5
176.0
1,338.3
1,335.2
284.8
1,050.4
177.0
873.4
169.5
75,3
94.2
4.9
31.8
1,342.5
291.3
1,051.2
176.1
875.1
171.3
77.2
94.1
47
1,332.2
288.9
1,049.4
177.3
872.1
172.3
76.3
95.9
4.7
31.7
1,334.5
290.9
1,043.6
178.4
865.2
175.1
1,546.9
1,5413
1,452.2
410.1
319.5
90.7
1,042.1
191.3
568.4
29.3
539.1
202.8
6.1
73.4
64.2
66.9
65.9
1,456.3
411.0
318.1
92.9
1,045.2
190.9
573.5
29.4
544.0
200.4
6.2
74.3
65.3
62.7
1,444.6
410.8
320.9
89.9
1.033.9
190.1
563.2
29.2
534.0
203.4
5.9
71.3
60.8
66.9
62.7
1,540.1
1,608.4
1,615.4
1,233.6
289.0
944.6
161.5
783.1
150.3
69.4
80.9
5.2
27.0
1,288.3
294.5
993.8
1,288.9
288.6
1,000.3
173.6
826.8
160.5
70.4
90.0
1.416.1
70.6
65.7
66.0
3.8
30.2
71.2
90.8
3.9
29.9
29.8
1,313.9
286.0
1,027.9
172.0
855.9
165.0
74.1
90.9
3.7
30.5
1,478.0
1.483.4
1,4942
1,497.8
1,513.1
124.0
130.5
132.0
135.5
136.7
45.4
50.4
52.1
53.2
171.7
822.1
155.9
68.9
87.0
3.5
30.3
173.7
833.7
162.0
91.0
3.7
862.4
168.5
74.8
93.7
3.7
30.7
31.4
Footnotes appear on p. A21.
72.9
286.1
1,046.1
177.1
869.0
173.1
76.4
96.7
4.8
31.7
140.7
145.7
143.6
57.7
58.2
141.6
59.0
76.7
98.4
4.4
31.6
1341.8
1,5312
MEMO
57 Mortgage-backed securities9
100.2
1,071.5
196.3
591.6
29.9
561.7
201.9
6.6
75.1
144.6
1345.7
144.6
A20
1.26
Domestic Financial Statistics • January 1999
COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued
E. Foreign-related institutions
Billions of dollars
Wednesday figures
Monthly averages
1998
1998
Oct.
Apr.
Ma/
June'
July
Aug.
Sepl.'
Oct.
Oct. 7
Oct. 14
Oct. 28
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
Assets
Bank credit
Securities in bank credit
U.S. government securities ..
Other securities
Loans and leases in bank creditCommercial and industrial . .
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets 4
Other assets5
13 Total assets 6
14
15
16
17
18
19
20
21
Liabilities
Deposits
Transaction
Nontransaclion
Borrowings
From banks in the U S
From others
Net due to related foreign offices . . .
Other liabilities
538.1'
175.2'
80.9
94.3'
362.91
222.5
27.5
47.01
66.0
20.5
34.4
43.7
557^
194.2'
89.2
105.1'
363.7'
213.0"
25.0
54.2'
71.5'
22.6
35.6
36.2
564.0
197.1
89.1
108.0
366.9
211.7
24.4
61.2
69.7
21.8
34.8
34.1
567.2
199.1
87.4
111.8
368.0
212.9
24.2
62.5
68.5
23.9
35.3
34.1
572.5'
200.0*
90.2
109.8'
372.51
215.^
23.9
6Z.6'
70.1'
22.0
35.2
34.2
590.0*
210.9'
92.9
117.9*
379.2'
216.91
23.7
65.5'
73.1'
22.5
34.0
35.8
606.2
213.4
80.8
132.6
392.8
221.2
23.4
69.1
79.1
31.2
34.3
37.9
631.9
223.5
78.6
144.9
408.4
228.4
23.0
71.6
85.5
29.5
35.8
39.5
637.0
226.4
78.9
147.5
410.6
225.9
23.9
74.9
86.0
30.3
36.1
40.5
625.7
217.2
76.1
141.1
408.5
227.2
22.7
72.4
86.2
28.5
36.4
40.9
635.4
227.0
77.6
149.4
408.3
230.6
22.6
70.1
85.0
31.2
37.1
39.0
632.3
222.8
80.2
142.5
409.5
229.6
23.1
70.5
86.3
28.5
34.2
38.3
6364'
65ir
6545
660-3
6A3.6'
6810'
7093
7364
743.6
731.2
7424
733.1
267.7
10.4
257.2
155.8
33.8
122.0
118.5
294.0
12.3
281.8
1660
26.6
139.4
102.4'
85.2'
295.3
11.5
283.7
163.4
22.4
141.0
101.1
87.4
302.6
11.1
291.6
167.1
M.6
137JS
97.2
90.2
297.2
13.4
283.9
169.9
26.8
143.1
106.8
93.1'
306.2
11.8
294.4
169.9
24.0
145.9
108.3
314.8
14.8
300.0
184.3
32.6
151.7
95.1
104.5
320.4
14.6
305.8
194.2
35.9
158.3
105.5
113.8
326.3
14.3
312.0
189.8
32.1
157.7
109.6
116.3
321.7
15.8
305.9
195.6
34.9
160.7
97.3
117.8
320.4
14.8
305.6
195.3
39.3
156.0
106.4
120.0
315.9
13.9
302.1
196.3
38.2
158.1
105.6
104.7
itn.r
647.2
657.2
667.1'
683.2
698.7
7319
741.9
7314
7412
7215
4.3'
7.3
-3.5'
-1.2'
10.5
91.r
22 Total liabilities
23 Residual (assets less liabilities)7 .
2.7
0.2
Not seasonally adjusted
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment account
Other securities
Trading account
Investment account
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
40 Total assets6
41
42
43
44
45
46
47
48
Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
49 Total liabilities
81.3
14.3
67.0
94.5'
57.2'
37.3
361.9
222.2
27.7
47.0*
65.0
20.5
34.6
42.7
558.1'
196.2'
87.8
18.5
69.3
108.5'
64 9*
43.6
361.9
213.1
24.7
53.5'
70.61
22.6
33.9
34.2
565.7
201.1
89.7
20.8
68.9
111.4
66.7
44.7
364.6
211.1
24.3
60.6
68.6
21.8
34.4
34.5
570.2
202.3
87.4
18.9
68.5
114.9
70.3
44.6
367.9
212.8
24.0
62.4
68.8
23.9
36.3
33.4
575.2'
202./
89.8
24.9
64.9
112.9*
70.2'
42.7
372.5'
215.71
23.6
61.91
71.3'
22.0
35.1
33.8
592.4'
215.1'
93.7
30.7
63.1
121.4'
75.3'
46.1'
377.4'
215.8'
23.6
64.6'
73.4'
22.5
34.0*
36.6
601.1
210.2
80.8
20.2
60.6
129.4
83.2
46.1
390.9
220.1
23.3
68.8
78.6
31.2
34.4
37.9
631.2
223.8
79.1
16.2
62.9
144.7
92.9
51.8
407.4
228.3
23.3
71.7
84.2
29.5
36.1
38.6
633.1
223.4
78.2
15.6
62.6
145.2
95.5
49.7
409.6
225.8
24.1
75.1
84.6
30.3
35.7
39.5
627.0
219.5
76.3
15.7
60.6
143.2
93.1
50.0
407.5
226.6
22.9
72.9
85.0
28.5
36.6
39.9
634.2
227.2
78.5
16.3
62.2
148.7
96.6
52.1
406.9
229.9
22.9
70.1
84.0
31.2
37.4
37.8
632.2
224.1
81.2
16.3
64.9
142.9
88.8
54.1
408.1
229.9
23.4
70.2
84.6
28.5
35.0
37.3
6354'
648V
6563
663.5
665.8'
6853'
7042
735.0
7384
731.6
7403
7318
267.5
10.5
257.0
155.8
33.8
122.0
117.7
91.4'
292.3
11.8
280.5
166.0
26.6
139.4
101.0
84.5'
298.0
11.2
286.8
163.4
22.4
141.0
102.1
86.9
304.4
11.1
293.3
167.1
29.6
137.5
96.4
89.4
295.4
13.5
282.0
169.9
26.8
143.1
103.3
92.4'
304.9
11.8
293.2
169.9
24.0
145.9
105.0
98.7
316.4
15.4
300.9
184.3
32.6
151.7
93.5
104.2
319.9
14.6
305.3
194.2
35.9
158.3
104.5
113.5
327.1
14.1
313.0
189.8
32.1
157.7
105.3
115.3
320.2
16.0
304.2
195.6
34.9
160.7
97.2
117.2
319.2
14.9
304.3
195.3
39.3
156.0
104.8
119.6
316.2
14.0
302.2
196.3
38.2
158.1
108.8
105.2
6324'
643JC
6504
6574
661#
6984
7310
737.6
7303
738J)
726.4
5.7
6.1
4.8'
6.8'
5.9
0.8
1.4
537.8'
nssr
50 Residual (assets less liabilities)'
MEMO
51 Revaluation gains on off-balance-sheet
items 8
52 Revaluation losses on off-balancesheet items8
Footnotes appear on p. A21.
6.4
41.8'
40.C
40.3
42.3
41.8'
43.8
48.0
54.8
59.1
54.7
57.6
50.4
40.3'
39.1'
38.7
40.7
40.3'
42.3'
45.3
51.1
55.6
51.9
53.6
46.0
Commercial Banking Institutions—Assets and Liabilities A21
NOTES TO TABLE 1.26
NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8
statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table
1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28,
"Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer
being published in the Bulletin. Instead, abbreviated balance sheets for both large and small
domestically chartered banks have been included in table 1.26, parts C and D. Data are both
merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S.
branches and agencies of foreign banks have been replaced by balance sheet estimates of all
foreign-related institutions and are included in table 1.26, part E. These data are breakadjusted.
The not-seasonally-adjusted data for all tables now contain additional balance sheet items,
which were available as of October 2, 1996.
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of condition
(large domestic); other domestically chartered commercial banks (small domestic); branches
and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related
institutions). Excludes International Banking Facilities. Data are Wednesday values or pro
rata averages of Wednesday values. Large domestic banks constitute a universe; data for
small domestic banks and foreign-related institutions are estimates based on weekly samples
and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications
of assets and liabilities.
The data for large and small domestic banks presented on pp. A17-19 are adjusted to
remove the estimated effects of mergers between these two groups. The adjustment for
mergers changes past levels to make them comparable with current levels. Estimated
quantities of balance sheet items acquired in mergers are removed from past data for the bank
group that contained the acquired bank and put into past data for die group containing the
acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a
ratio procedure is used to adjust past levels.
2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks
in the United Stales, all of which are included in "Interbank loans."
3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry
securities.
4. Includes vault cash, cash items in process of collection, balances due from depository
institutions, and balances due from Federal Reserve Banks.
5. Excludes the due-from position with related foreign offices, which is included in "Net
due to related foreign offices."
6. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
7. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the
seasonal patterns estimated for total assets and total liabilities.
8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and
equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39.
9. Includes mortgage-backed securities issued by U.S. government agencies, U.S.
government-sponsored enterprises, and private entities.
10. Difference between fair value and historical cost for securities classified as availablefor-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are
restated to include an estimate of these tax effects.
11. Mainly commercial and industrial loans but also includes an unknown amount of credit
extended to other than nonfinancial businesses.
A22
1.32
Domestic Financial Statistics • January 1999
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
A. Commercial Paper
Millions of dollars, seasonally adjusted, end of period
Year ending December
1998
Item
1 All issuers
1993
Dec.
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
Apr.
May
June
July
Aug.
Sept.
555,075
595,382
674,904
775,371
966,699
1,041,681
1,053,995
1,091,554
1,102,307
1,119,816
1,152,337
218,947
180,389
223,038
207,701
275,815
210,829
361,147
229,662
513.307
252.536
558,817
275,415
569,065
274,469
597,193
276,476
616.382
266,022
606,355
281,927
639,571
271,526
155,739
164,643
188,260
184,563
200,857
207,449
210,460
217,885
219,904
231.534
241,239
Financial companies'
2
3
Dealer-placed paper2, total
Directly placed paper1, total
4 Nonfinancial companies4
1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales,
personal, and mortgage financing; factoring, finance leasing, and other business lending;
insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. As reported by financial companies that place their paper direcily with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.
B. Bankers Dollar Acceptances 1
Millions of dollars, not seasonally adjusted, year ending September2
1995
1996
1997
1998
1 Total amount of reporting banks acceptances in existence
29,242
25,832
25,774
14,363
2 Amount of other banks" eligible acceptances held by reporting banks
3 Amount of own eligible acceptances held by reporting banks (included in item 1)
4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries
(included in item 1)
1,249
10,516
709
7,770
736
6,862
523
4,884
11,373
9,361
10,467
5,414
Item
1
1. Includes eligible, dollar-denominated blinkers acceptances legally payable in the United
States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks;
that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal
Reserve Act (12 U.S.C. §372).
1.33
PRIME RATE CHARGED BY BANKS
2. Data on bankers dollar acceptances are gathered from approximately 65 institutions;
includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and
agencies of foreign banks, and Edge and agreement corporations. The reporting group is
revised every year.
Short-Term Business Loans1
Percent per year
Date of change
1995—Jan.
1
Feb. 1
July 7
Dec. 20
1996—Feb.
Period
Rate
8.50
9.00
8.75
8.50
1
8.25
1997—Mar. 26
8.50
1998—Sept. 30
Oct. 16
Nov. 18
8.25
8.00
7.75
Average
rate
1995
1996
1997
8.83
8.27
8.44
1995—Jan
Feb
Mar.
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
8.50
9.00
9.00
9.00
9.00
9.00
8.80
8.75
8.75
8.75
8.75
8.65
Period
1996—Jan
Feb
Mar.
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
Average
rate
8.50
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
1997
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1998—Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Nov
1. The prime rate is one of several base rates that banks use to price short-term business
loans. The table shows the date on which a n«:w rate came to be the predominant one quoted
by a majority of the twenty-five largest banks by asset size, based on the most recent Call
Average
rate
Period
»
8.25
8.25
8.30
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.49
8.12
7.89
Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415)
monthly statistical releases. For ordering address, see inside front cover.
Financial Markets A23
1.35
INTEREST RATES
Money and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
1998
1995
Item
1996
1998, weekending
1997
July
Aug.
Sept.
Oct.
Oct. 2
Oct. 9
Oct. 16
Oct. 23
Oct. 30
MONEY MARKET INSTRUMENTS
1 Federal funds 123
Commercial paper356
Nonfinancial
3
I-month
5.83
5 21
5.30
5 02
5.46
5 00
5.54
5 00
5.55
5 00
5.51
5 00
5.07
4 86
5.58
5 00
5.22
5 00
5.14
5 00
4.87
4 75
4.95
4 75
n.a.
n.a.
n.a.
n.a.
5.57
5.57
5 56
5.51
5.50
5 48
5.50
5.50
5 48
5.44
5.37
5 31
5.14
5.08
5 04
5.23
5.16
5 11
5.25
5.17
5 11
5.22
5.12
5 09
5.03
5.02
4 98
5.05
4.99
4 98
n.a.
n.a.
n.a.
n.a.
5.59
5.59
5 60
5.52
5.51
5 50
5.51
5.51
5 50
5.45
5.38
5 "P
5.18
5.12
5 09
5.23
5.16
5 11
5.28
5.19
5 18
5.25
5.17
5 12
5.09
5.06
5 03
5.09
5.03
504
5.93
5.93
5 93
5.43
5.41
5 42
5.54
5.58
5 62
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
5.81
5.78
5 68
5.31
5.29
5 21
5.44
5.48
5 48
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
5.81
5 80
5.31
531
5.54
5 57
5.50
5 46
5.49
5 46
5.38
5 27
5.12
4 88
5.19
5 02
5.20
5 03
5.17
4 94
5.03
4 73
5.07
4 79
5.87
5.92
5 98
5.35
5.39
5 47
5.54
5.62
5 73
5.57
5.59
5 65
5.56
5.58
5 61
5.49
5.41
5 33
5.24
5.21
499
5.29
5.22
5 09
5.34
5.29
5 08
5.30
5.26
5 04
5.15
5.14
4 89
5.17
5.16
4.91
5.93
5.38
5.61
5.57
5.56
5.39
5.17
5.20
5.23
5.23
5.09
5.13
5.49
5.56
5.60
5.01
5.08
5.22
5.06
5.18
5.32
4.96
5.03
5.08
4.90
4.95
4.94
4.61
4.63
4.50
3.96
4.05
3.95
4.26
4.33
4.22
3.96
4.10
4.01
3.84
3.99
3.96
3.85
3.94
3.84
4.12
4.11
3.93
5.51
5.59
5 69
5.02
5.09
5 23
5.07
5.18
5 36
4.96
5.03
5 10
4.94
4.97
5 00
4.74
4.75
451
4.08
4.15
4 06
4.43
4.46
4.16
4.19
3.91
4.09
406
3.85
3.87
4.07
4.16
5.94
6.15
6.25
6.38
6.50
6.57
6.95
6 88
5.52
5.84
5.99
6.18
6.34
6.44
6.83
671
5.63
5.99
6.10
6.22
6.33
6.35
6.69
6 61
5.36
5.46
5.47
5.46
5.52
5.46
5.78
5 68
5.21
5.27
5.24
5.27
5.36
5.34
5.66
5 54
4.71
4.67
4.62
4.62
4.76
4.81
5.38
5 20
4.12
4.09
4.18
4.18
4.46
4.53
5.30
5 01
4.41
4.31
4.26
4.24
4.38
4.46
5.19
5 00
4.18
4.11
4.18
4.18
4.41
4.41
5.16
4 88
4.14
4.05
4.22
4.22
4.57
4.58
5.39
5 02
4.01
4.07
4.15
4.17
4.49
4.59
5.42
5 08
4.10
4.10
4.20
4.22
4.47
4.63
5.35
5 12
6.93
6.80
6.67
5.76
5.64
5.34
5.24
5.15
5.10
5.32
5.34
5.29
5.80
6.10
5 95
5.52
5.79
5 76
5.32
5.50
5 52
5.01
5.12
5 14
5.01
5.15
5 10
4.84
5.11
4 99
4.76
5.10
4 93
4.70
5.05
4 82
4.60
5.05
4 88
4.82
5.10
4 96
4.84
5.15
4.99
4.85
5.17
5.00
7.83
7.66
7.54
6.84
6.83
6.75
6.77
6.62
6.65
6.85
6.87
6.85
7.59
7.72
7.83
8.20
7.37
7.55
7.69
8.05
7.27
7.48
7.54
7.87
6.55
6.78
6.89
7.15
6.52
6.77
6.89
7.14
6.40
6.68
6.82
7.09
6.37
6.70
6.85
7.18
6.25
6.54
6.70
7.01
6.25
6.58
6.73
7.05
6.45
6.78
6.92
7.25
6.47
6.79
6.94
7.28
6.44
6.76
6.93
7.26
2.56
2.19
1.77
1.39
1.48
1.59
1.59
1.60
1.68
1.64
1.52
1.53
Financial
Commercial paper (historical )3'S'7
10
3-month
Finance paper, directly placed (historical) 3-5'8
12
13
15
1-month
3-month
. . . .
Bankers acceptances^59
3-month
Certificates of deposit, secondary market*'10
18
19
3-month
6-month
20 Eurodollar deposits. 3-month3"
US. Treasury bills
Secondary markei
21
3-month
23
1-year.
Auction high 3512
24
3-month
26
1-year
U.S. TREASURY NOTES AND BONDS
27
28
29
30
31
32
33
34
Constant maturities*3
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite
35 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moodv's series14
36 Aaa ". .
37 Baa
CORPORATE BONDS
39 Seasoned issues, all industries
40
41
42
43
Rating group
Aaa
Aa . . .
A
Baa
MEMO
Dividend-price ratio*"1
44 Common slocks
1. The daily effective federal funds rate is a weighted average of rates on trades through
New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday of the
current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. Interest rates interpolated from data on certain commercial paper trades settled by the
Depository Trust Company. The trades represent sales of commercial paper by dealers or
direct issuers to investors (that is, the offer side). See Board's Commercial Paper Web pages
(http://www.federalreserve.gov/releases/cp) for more information.
7. An average of offering rates on commercial paper forfirmswhose bond rating is AA or
the equivalent. Series ended August 29, 1997.
8. An average of offering rates on paper directly placed by finance companies. Series
ended August 29, 1997.
9. FRASER
Representative closing yields for acceptances of the highest-rated money center banks.
Digitized for
10. An average of dealer offering rates on nationally traded certificates of deposit.
11. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for
indication purposes only.
12. Auction date for daily data; weekly and monthly averages computed on an issue-date
basis. On or after October 28, 1998, data are stop yields from uniform-price auctions. Before
that, they are weighted average yields from multiple-price auctions.
13. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Department of the Treasury.
14. General obligation bonds based on Thursday figures; Moody's Investors Service.
15. State and local government genera] obligation bonds maturing in twenty years are used
in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'
Al rating. Based on Thursday figures.
16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected
long-term bonds.
17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in
the price index.
NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and
G.13 (415) monthly statistical releases. For ordering address, see inside front cover.
A24
1.36
Domestic Financial Statistics • January 1999
STOCK MARKET
Selected Statistics
1998
Indicator
1996
1995
1997
Feb.
Apr.
Mar.
May
June
July
Aug.
Sept.
Oct.
Prices and trading volume (averages of daily figures)1
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2 Industrial
3
Transportation
4
Utility
5
Finance
291.18
367.40
270.14
110.64
238.48
357.98
453.57
327.30
126.36
303.94
456.99
574.97
415.08
143.87
424.84
532.15
660.91
485.73
170.96
508.97
560.70
693.13
508.06
191.67
539.47
578.05
711.89
523.73
207.32
563.07
574.46
712.39
505.02
198.25
551.28
569.76
731.01
492.98
188.26
548.57
586.39
718.54
503.89
189.95
579.67
539.16
665.66
441.36
186.24
511.22
506.56
629.51
408.75
186.17
454.28
511.49
636.62
396.61
195.09
448.12
6 Standard & Poor's Corporation
(1941-43 - I0)2
541.72
670.49
873.43
1,023.74
1,076.83
1,112.20
1,108.42
1,108.39
1,156.58
1,074.62
1,020.64
1,032.47
7 American Stock Exchange
(Aug. 31, 1973 = 50)'
498.13
570.86
628.34
685.73
722.37
742.33
735.02
704.59
724.83
655.67
621.48
607.16
345,729
20,387
409,740
22.567
523,254
n.a.
610,958
26.808
619,366
28,943
647,110
29.544
569,239
27,004
605,576
25,447
639,744
26,473
712,710
32.721
790,238
33,331
808,816
31,946
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Slock Exchange
Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers4
76,680
97,400
126,090
135,590
140,340
140,240
143,600
147,700
154370
147,800
137,540
130,160
Free credit balances at brokers^
11 Margin accounts6
12 Cash accounts
16,250
34,340
22,540
40,430
31,410
52,160
27,450
48,640
27,430
51,340
28,160
51,050
26,200
47,770
29,840
51,205
31,820
53,780
38,460
53,850
41.970
54,240
43,500
54.610
Margin requirements (percent of market value and effective date)7
13 Margin slocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. Daily data on prices are available upon request to the Board of Governors. For ordering
address, see inside from cover.
2. In July 1976 a financial group, composed of banks and insurance companies, was added
to the group of stocks on which the index is based. The index is now based on 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and
40 financial.
3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has
included credit extended against stocks, convertible bands, stocks acquired through the
exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bond:;, and subscription issues was discontinued in
April 1984.
5. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.
Jan. 3, 1974
50
50
50
6. Series initialed in June 1984.
7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant
io the Securities Exchange Act of 1934, limit the amount of credit that can be used to
purchase and carry "margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities are the difference between the
market value (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 ihe current
market value of ihe stock underlying the option. On Sept. 30, 1985, the Board changed the
required initial margin, allowing it to be the same as the option maintenance margin required
by the appropriate exchange or self-regulatory organization; such maintenance margin rules
must be approved by the Securities and Exchange Commission.
Federal Finance A25
1.38
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
Type of account or operation
1997
May
US. budget'
1 Receipts, tota]
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
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase (—)).
12 Other 2
July
Sept.
Oct.
1,351,830
1,000,751
351,079
1,515,729
1,227,065
288,664
-163,899
-226,314
62,415
1,453,062
1,085,570
367,492
1,560,512
1,259,608
300,904
-107,450
-174,038
66,588
1,579,292
1,187,302
391,990
1,601,235
1,290,609
310,626
-21,943
-103,307
81,364
95,278
61,790
33,488
134,057
102,381
31,676
-38,779
-40,591
1,812
187.860
144,973
42,887
136,754
125,606
11,148
51,106
19,367
31,739
119,723
87,820
31,903
143,807
115,714
28,094
-24,084
-27,894
3,809
111,741
79,135
32,606
122,907
92,555
30,352
-11,166
-13,420
2,254
180,936
149,726
31,210
142,725
107,900
34,814
38,222
41,826
-3,604
119,974
90,064
29.910
152,436
123,687
28,749
-32,462
-33,623
1,161
171,288
-2,007
-5,382
129,712
-6,276
-15,986
38.171
604
-16,832
-8,597
51,899
-4,523
-12,618
-36,144
-2.344
-16,370
36.210
4,244
33,989
-362
-22,461
-46,413
-2,451
10,642
15,330
2,661
14,471
37,949
8,620
29,329
44,225
7,700
36.525
43,621
7,692
35,930
36,131
5,693
30,438
72,275
18,140
54,135
36,065
4,648
31,417
36,427
6,704
29,722
38,878
4,952
33.926
36,217
4,440
31,776
MEMO
13 Treasury operating balance (level, end of
period)
14
15
Federal Reserve Banks
Tax and loan accounts
1. Since 1990. off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets,
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on gold;
net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold.
SOURCE. Monthly totals; U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the US. Government: fiscal year totals: U.S. Office of Management
and Budget, Budget of the US. Government.
A26
1.39
Domestic Financial Statistics • January 1999
U.S. BUDGET RECEIPTS AND OUTLAYS1
Millions of dollars
Calendar year
Fiscal year
1998
Source or type
1998
Aug.
Sept.
RECEIPrs
1 All sources
2 Individual income taxes, net
3
Withheld
4
Nonwithheld
5
Refunds
Corporation income taxes
6
Gross receipts
7
Refunds
8 Social insurance taxes and contributions, r»et .
9
Employment taxes and contributions . .. .
]0
Unemployment insurance
11
Other net receipts 3
L2
13
14
15
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 4
1,579,292
1,721,421
707,552
845,527
773,812
922,632
111,741
180,936r
119,974
737,466
580,207
250,753
93,560
828,597
646,483
281,527
99,476
323,884
279,988
53,491
9,604
400,436
292.252
191,050
82,926
354,072
306,865
58.069
10,869
447,514
316.309
219.136
87,989
55,300
51.881
4,944
1,525
90,479
53,342'
39,853
2,729
60,255
54,277
7,098
1.120
204,493
22,198
539,371
506,751
28.202
4,418
213,270
24,593
571,835
540,016
27,484
4,335
95,364
10,053
240,326
227,777
10,302
2,245
106,451
9,635
288,251
268,357
17,709
2,184
104.659
10,135
260,795
247,794
10,724
2,280
109,353
14,220
312,713
293,520
17,080
2.112
2,952
1,484
45,806
41,973
3,502
331
38,928
2,128
43,079
42,540
206
333
6,547
4,789
41,237
39,690
1,142
405
56,924
17,928
19,845
25,465
57,669
18,297
24,076
32,270
27,016
9,294
8,835
12.889
28,084
8,619
10,477
12,866
31,133
9,679
10,262
13,348
29,922
8.546
12,971
15,837
3,181
1,732
1.718
2,535
2,961
1,701
2,356
3,572
9,630
1,776
2,089
3,228
OUTLAYS
1,601,235
1,651,383
800,177
797,418
824,370
815.886
122,907
142,725
152,436
17
18
19
20
21
22
National defense
International affairs
General science, space, and technology.
Energy
Natural resources and environment . . . .
Agriculture
270,473
15,228
17,174
1,483
21,369
9,032
270,407
13,144
19,632
1,359
21,897
14,306
139,402
8,532
8,260
695
10,307
11,037
132,698
5,740
8,938
803
9,628
1,465
140,873
9,420
10,040
411
11,106
10,590
129,351
4,610
9,426
957
10,051
2,387
18,502
443
1,581
-113
1,855
1,656
24,748
1,123
1,824
892
2,115
2,780
25,730
169
1,550
-135
1,859
3,287
23
24
25
26
Commerce and housing credit
Transportation
Community and regional development .
Education, training, employment, and
social services
-14,624
40.767
11,005
907
36,610
10,437
-5,899
21,512
5,498
-7,575
16,847
5,678
-3,526
20,414
5,749
-2,483
16,196
4.863
-1,423
8,136'
3,997
1,115
1,078
3,445
1,260
16 All types
3,218
770
53,008
52,214
27,524
25,080
26,851
25,928
4,708
4,455
4,861
27 Health
28 Social security and Medicare
29 Income security
123,843
555,273
230,886
131,015
572,046
232,949
61,595
269.412
107,631
61,809
278,863
124,034
63,552
283,109
106,353
65,053
286.305
125,196
10,704
44,240
14.281
11.293
47,555
17.309
12,572
50.544
20,104
30
31
32
33
34
39,313
20,197
12,768
244,013
-49,973
41,782
22,612
13,903
243,353
-47,194
21,109
9.583
6.546
122,573
-25,142
17,697
10,670
6,623
122.655
-24,235
22,077
10,212
7,302
122,620
-22,795
19,615
11,287
6,139
122,345
-21,340
1,749
2,012
579
21,366
-3,221
3,432
1,675
2,199
15,976
-7,909
5,465
1,899
2,377
19,442
-3,078
Veterans benefits and services
Administration of justice
General government
Net interest 5
Undistributed offsetting receipts 6 ..
1. Functional details do not sum to total outlays for calendar year data because revisions to
monthly totals have not been distributed among functions. Fiscal year total for receipts and
outlays do not correspond lo calendar year data because revisions from the Budget have not
been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retir
irement accounts.
3. Federal employee retirement contributions and civil service retirement and
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust funds.
6. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the US.
Government, Fiscal Year 1999; monthly and half-year totals: U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government.
Federal Finance
1.40
All
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1997
1996
1998
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
1 Federal debt outstanding
5,260
5,357
5,415
5,410
5,446
5,536
5,573
5,578
5,556
2 Public debl securities
3
Held by public
5,225
3,778
1 447
5,323
3,826
1 497
5.381
3,874
1 507
5,376
3,805
1 572
5,413
3,815
1 599
5,502
3,847
1 656
5.542
3,872
1 670
5,548
3,790
I 758
5,526
n.a.
35
27
8
34
27
8
34
26
8
34
26
7
33
26
7
34
27
7
31
26
5
30
26
4
29
n.a.
n.a.
5 Agency securities
7
Held by agencies
8 Debt subject to statutory limit
10 Other debt1
5,137
5.237
5.294
5,290
5.328
5,417
5,457
5,460
5,440
5,137
0
5,237
0
5,294
0
5,290
0
5,328
0
5,416
0
5,456
0
5,460
0
5.439
0
5,500
5,500
5,500
5,500
5.950
5,950
5,950
5,950
5,950
MEMO
1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District of Columbia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCE. US. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
1997
Type and holder
1 Total gross public debt
2
3
4
5
By type
Interest-bearing
Marketable
Bills . . .
Notes
7
Inflation-indexed notes and bonds'
9
State and local government series
12
13
Public
Savings bonds and notes
15 Non-imerest-bearing
By holders
16 U.S. Treasury and other federal agencies and trust funds
17 Federal Reserve Banks
.
....
20
Money market funds
22
Other companies
Individuals
26
27
Foreign and international
Other miscellaneous investors79
1994
1996
1998
1997
Q4
Ql
Q2
Q3
4,800.2
4,988.7
5,323.2
5,502.4
5,502.4
5,542.4
5,547.9
5,526.2
4,769.2
3,126.0
733.8
1,867.0
510.3
n.a.
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,964.4
3,307.2
760.7
2,010.3
521.2
n.a.
1,657.2
104.5
40.8
40 8
.0
181.9
1.299.6
24.3
5,317.2
3,459.7
777.4
2,112.3
555.0
n.a.
1,857.5
101.3
37.4
47 4
.0
182.4
1.505.9
6.0
5,494.9
3,456.8
715.4
2,106.1
587.3
33.0
2,038.1
124.1
36.2
36 2
.0
181.2
1.666.7
7.5
5,494.9
3,456.8
715.4
2,106.1
587.3
33.0
2,038.1
124.1
36.2
36.2
.0
181.2
1,666.7
7.5
5,535.3
3,467.1
720.1
2,091.9
598.7
41.5
2,068.2
139.1
35.4
36 4
.0
181.2
1,681.5
7.2
5.540.2
3,369.5
641.1
2,064.6
598.7
50.1
2,170.7
155.0
36.0
36.0
.0
180.7
1,769.1
7.7
5.518.7
3,331.0
637.7
2,009.1
610.4
41.9
2,187.7
164.4
35.1
35.1
.0
180.8
1,777.3
7.5
1,257.1
374.1
3 168 0
290.4
67.6
240.1
224.5
541.0
1,304.5
391.0
3 294 9
278.7
71.5
241.5
228.8
469.6
1,497.2
410.9
3411 2
261.8
91.6
214.1
258.5
482.5
1,655.7
451.9
3.393.4
269.8
88.9
224.9
265.0
493.0
1,655.7
451.9
3.393 4
269.8
88.9
224.9
265.0
493.0
1,670.4
400.0
3 430.7
279.2
84.8
225.5
268.1
442.4
1,757.6
458.4
3,330 6
275.0
82.9
228.0
267.2
441.0
180.5
150.7
688.7
784.6
185.0
162.7
862.2
794.9
187.0
169.6
1,135.6
610.5
186.5
168.4
1,278.0
418.8
186.5
168.4
1,278.0
418.8
186.3
165.8
1.240.2
538.4
186.0
165.0
1,247.4
438.0
1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of
1997.
2. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
3. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners
4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds.
5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual
holdings; data for other groups are Treasury estimates.
6. Includes state and local pension funds.
1995
n a.
7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable
federal securities was removed from "Other miscellaneous investors" and added to "State and
local treasuries." The data shown here have been revised accordingly.
8. Consists of investments of foreign balances and international accounts in the United
States.
9. Includes savings and loan associations, nonprofit institutions, credit unions, mutual
savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury
deposit accounts, and federally sponsored agencies.
SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the
Public Debt of the United Stales; data by holder, Treasury Bulletin.
A28
1.42
Domestic Financial Statistics • January 1999
U.S. GOVERNMENT SECURITIES DEALERS
Transactions1
Millions of dollars, daily averages
1998, week ending
1998
July
Aug.
Sept,
Sept. 2
Sept. 9
Sept. 16
Sept. 23
Sept. 30
151,592
85,936
1,657
141,650
84,597
130,825
85,452
Oct. 28
OUTRIGHT TRANSACTIONS 2
1
2
3
4
5
6
7
8
9
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years . . . .
More than five years
Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
13 U.S. Treasury
14 Federal agency
15 Mortgage-backed
10
11
12
25,889
32,286
35,694
51,929
35,909
82,094
59,741
137,256'
77,455'
141,855'
85,071'
187,521'
105,015'
120,894'
74,135'
1,212'
1,205
717'
1,173'
862'
35,439
37,530
46,151'
42,747
39,628
1,325
1,095
1,127'
905
4,908
5,058
77,327
517
45.984
1,544
143,434
118,793
35,896
28,238
151,181
105,846
114,620
84,090
124,634
77,072
817
1,140
2,373
1,269
1,631
949
48,277
50,771
53,568
52,068
44,117
35,723
5.078
2,569
103,767
1,378
4,466
2,817
82,526
1,036
551
484
521
1,260
4,003
2,769
71,093
4,308
5,025
108.039
3,584
6,617
128,064
6,699
3,610
79,636
5,164
3,304
73,179
143,203
3,556
29,255
135.153
3,264
26,631
168,025
3,447
35.696
162,670
3,866
38,483
132,907
4,178
28,725
129,516
2,960
26,810
122,973
52,406
66,375
115,623
53,382
53,271
110,769
55,315
44,462
129,272
60,004
72,343
131,521
58,886
89,581
95,673
50,769
50,912
96,236
42,490
46,369
3,498
16,714
5.087
22,287
3,506
20,808
2,724
15,948
3,238
25,518
4,181
23,107
2,969
16,867
2,932
15,132
6,093
2,561
111,619'
2,892
2,700
61,434
4,118
3,583
72,609
4,853
2,911
89,908'
92,782
1,904
19,316
135,577
3,012
22,350
146,046
3,186
30,665
185,792
4,094
25,054
130,450
2,696
31,866
156.360
2.768
37,391
76,148
40,451
42,118
112,136'
43,314
50,258
117,747'
51,856
59,243'
159.536'
49,524
52,272
101,70C
46,102
79,753'
4,378
20,105
10,680
30,063
FUTURES TRANSACTIONS 3
By type of deliverable security
16 U.S. Treasury bills
Coupon securities, by maturity
17 Five years or less
18 More than five years
19 Inflation-indexed
Federal agency
20 Discount notes
Coupon securities, by maturity
21
One year or less
22
More than one year, but less than
or equal to five years
23
More than five years
24 Mortgage-backed
54
1,764
11,813
5,907
18,177
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
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
0
0
1,856
5,124
1,790
6,496
1,984'
6,152'
2,263
5,986
2,691
6,440
1,407
5,485
1,950
6,383
2,139
9,520
1,006
8,843
1,067
4,910
0
1,723
6,421
0
0
OPTIONS TRANSACTIONS 4
By type of underlying security
25 U.S. Treasury bills
Coupon securities, by maturity
26
Five years or less
27
More than five years
28 Inflation-indexed
Federal agency
29 Discount notes
Coupon securities, by maturity
30 One year or less
31
More than one year, but less than
or equal to five years
32
More than five years
33 Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
0
0
745
1,050
623
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Monthly averages are based on the number of trading days in the month.
Transactions are assumed to be evenly distributed among the trading days of the report week.
Immediate, forward, and futures transactions an; reported at principal value, which does not
include accrued interest; options transactions are reported at the face value of the underlying
securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other ijian mortgage-backed federal agency securities) for which delivery is scheduled in five business days or less and "when-issued"
securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities arereportedat market value by maturity of coupon or corpus.
0
0
0
0
793
0
0
0
0
0
0
0
0
3,083
10,416
0
0
0
0
0
0
0
0
0
n.a.
0
0
0
0
0
1,005
0
533
387
0
1,531
925
Forward transactions are agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
3. Futures transactions are standardized agreements arranged on an exchange. All futures
transactions are included regardless of time to delivery.
4. Options transactions are purchases or sales of put and call options, whether arranged on
an organized exchange or in the over-the-counter market, and include options on futures
contracts on U.S. Treasury and federal agency securities.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
0
0
815
0
0
0
786
0
0
0
348
0
Federal Finance
1.43 U.S. GOVERNMENT SECURITIES DEALERS
A29
Positions and Financing1
Millions of dollars
1998, week ending
July
Aug.
Sept.
Sept. 2
-18,708
-11,060
-5,360
-2,004
2,305
1,554
-4,625
-820
1,786
Sept. 9
Sept. 16
-7.456
597
-6,121
-3,598
Sept. 23
Sept. 30
Oct. 7
Oct. 14
Oct. 2
-2,612
-981
-2,708
-13,643
-6,447
-7,089
851
4,129
3,442
-4,303
5,759
2,895
1.875
7,872
2,397
25,268
19,174
12,984
1,649
3,678
7,320
48,856
1,692
1,923
1,872
4,140
7,996
57,363
4,447
7,630
49.939
6,601
6.904
52,229
-8,941
-22,013
-7,958
-25,637
-10,275
-23,512
-9,776
-23,713
NET OUTRIGHT POSITIONS 3
B\ type of security
1 U.S. Treasury bills
Coupon securities, by maturity
2
Five years or less
3
More than five years
4 Inflation-indexed
Federal agency
5 Discount notes
Coupon securilies, by maturity
6
One year or less
7
More than one year, but less than
or equal to five years
8
More than five years
9 Mortgage-backed
1,766
-16,440
-17,653
2,671
19,296
2,782
7,435
10,759
64,705
NET FUTURES POSITIONS 4
10
11
12
13
14
15
16
17
18
By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less thai
or equal to five years . . . .
More than five years
Mortgage-backed
4,845
16,408
2,756
17,211
17,042
3,355
1,536
1.327
1,403
19,191
20,889
17.117
11,696
3.37B
7,280
58,637
1,474
1,617
-4,879
-32,741
-8,716
-25.612
-5,851
-30,879
-6,506
-29,025
5,821
8,784
61,657
-7,093
-2,644
1,883
2,668
4.801
6,913
58,415
1,144
-4,346
-26,100
-896
3,211
5,033
6,512
62,539
2,961
5,992
6,371
66,404
-10,554
-26,815
2.653
4,906
7,344
55,797
-9,681
-23.089
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
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
0
0
-1,050
-3,065
-827
-2,842
-1,153
-2,553
-957
-2,815
-1,878
-3,497
-911
-1,015
-2,147
-3,227
-1,125
-6,126
-1,377
-3,371
-1.560
-3,080
n.a.
0
0
0
0
0
0
267
-2,398
0
0
0
0
0
0
0
0
0
0
0
0
0
n.a.
n.a.
1,477
4,126
0
n.a.
3.670
NET OPTIONS POSITIONS
19
20
21
22
23
24
25
26
27
B\ t\pe of deliverable security
U.S.'Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less th
or equal to five years
More than five years
Mortgage-backed
0
n.a.
2,332
0
n.a.
n.il.
1,954
0
1,629
0
n.a.
n.a.
1,222
0
n.a.
n.a.
1,692
0
n.a.
n.a.
1,706
0
0
n.a.
2,517
0
0
Financing5
Reverse repurchase agreements
28 Overnight and continuing
29 Term
320,143
895,133
333,413
829,365
316,256
784,437
345,156
765,937
305,452
778.038
309.408
798,530
336,627
820,842
305,281
745,625
312,432
840.221
294,925
828.127
279.853
852,680
Securities borrowed
30 Overnight and continuing
31 Term
218,172
95,894
221,150
95.383
229,685
99,774
226,495
95,375
223,820
99.144
231,670
103,598
232,824
101.204
231,337
96,405
244.842
112.224
241,930
109,744
234,178
108,871
3,140
n.a.
2,770
n.a.
3,152
n.a.
2,641
n.a.
3,120
3,413
3,470
n.a.
2,752
n.a.
2,805
n.a.
2,772
2,886
n.a.
Repurchase agreements
34 Overnight and continuing
35 Term
720,678
799,633
735,478
728.531
718,744
704,430
758,591
664,056
726,556
675,410
747,092
718,248
735,625
746,038
654,319
689,560
715.752
764.886
694,273
762,433
669,662
785,555
Securities loaned
36 Overnight and continuing
37 Term
10,999
3,623
12,518
3,830
11,057
4,119
10,495
3,803
10,932
10,016
3,936
10,007
3.897
13,432
4,925
8,473
4,121
8,511
4,186
6.495
3,673
Securities pledged
38 Overnight and continuing
39 Term
54,477
6,425
49,094
5,612
52,222
5,624
47,376
5,732
46,482
5.794
52,344
5,560
55.635
5,878
55,811
5,231
57,482
5,063
52,978
4,797
49,743
5,412
Collateralized loans
40 Total
16,787
21,580
14,140
18,238
13,879
14,678
16,520
10,311
24,276
19,091
23,000
Securities received as pledge
32 Overnight and continuing
33 Term
1. Data for positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar
days of the report week are assumed to be constant. Monthly averages are based on the
number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that
have been delivered or are scheduled to be delivered in five business days or less and
"when-issued" securities that settle on the issue date of offering. Net immediate positions for
mortgage-backed agency securities include securities purchased or sold that have been
delivered or are scheduled to be delivered in thirty business days or less.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
4. Futures positions reflect standardized agreements arranged on an exchange. All futures
positions are included regardless of time to delivery.
5. Overnight financing refers to agreements made on one business day that mature on the
next business day; continuing contracts are agreements that remain in effect for more than one
business day but have no specific maturity and can be terminated without advance notice by
either party; term agreements have a fixed maturity of more Ihan one business day. Financing
data are reported in terms of actual funds paid or received, including accrued interest
NOTE, "n.a." indicates that data are not published because of insufficient activity.
A30
1.44
Domestic Financial Statistics • January 1999
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department'
4
Export-Import Bank •
5
Federal Housing Administration4
6
Government National Mortgage Association certificates of
participation5
7
Postal Service6
8
Tennessee Valley Authority
9
United States Railway Association
10 Federally sponsored agencies7
I 1 Federal Home Loan Banks
12
Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks8
15 Student Loan Marketing Association9
16 Financing Corporation
17 Farm Credit Financial Assistance ^Corporation11
18 Resolution Funding Corporation1'
Apr.
May
738,928
844,611
925,823
1,022,609
1,048,661
1,044,575
1,061,253
39,186
6
3.455
116
37,347
6
2,050
97
29,380
6
1,447
84
27.792
6
552
102
27,104
6
542
102
26.995
6
542
108
26,817
6
1,295
144
n.a.
8.073
27.536
n.a.
5,765
29,429
n.a.
n.a.
27.853
n.a.
n.a.
n.a.
27,786
n.a.
n.a.
n.a.
27,098
n.a.
n.a.
n.a.
26,989
n.a.
n.a.
n.a.
26,811
n.a.
699.742
205,817
93,279
257,230
53,175
50,335
8,170
1.261
29,996
807.264
896,443
263,404
1,021,557
323,208
119.961
299,174
57,379
47,529
8,170
1,261
29.996
156,980
331,270
60,053
44,763
8,170
1.261
29.996
994,817
313,919
169.200
369,774
63,517
37,717
8,170
1,261
29.996
395,977
62,799
36,256
8.170
1,261
29.996
1,017,580
322,155
204.751
399,489
63,744
35,952
8,170
1,261
29,996
1,034,436
243 194
103,817
78,681
58,172
49,090
44,893
44,223
3,449
8,073
n.a.
3,200
n.a.
2,044
5,765
n.a.
3,200
n.a.
1,431
n.a.
552
33,719
17,392
37,984
21,015
17,144
29,513
18,325
16,702
21,714
200,800
July
Aug.
26,990
6
26.668
6
n.a.
155
n.a.
26,984
n.a.
n.a.
n.a.
26,507
n.a.
64,717
33,231
8,170
1.261
29,996
1,090,715
328,009
208,800
415.229
64.528
33,270
8,170
1,261
29.996
1,103,596
334,494
213,800
423,188
57,910
33,350
8,170
1,261
29,996
136,892
42,610
42,396
328,514
200.314
406.162
MEMO
19 Federal Financing Bank debt13
20
21
22
23
24
Lending to federal and federally sponsored agencies
Export-Import Bank3 . '
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association*
Other lending'"
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
1. Consists of mortgages assumed by the Defense Department between 1957 and 1963
under family housing and homeowners assislance programs.
2. Includes participation certificates reclas:sified as debt beginning Oct. 1, 1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration insurance
claims. Once issued, these securities may be sold privately on the securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government National
Mortgage Association acting as trustee for the Farmers Home Administration, the Department
of Health, Education, and Welfare, the Department of Housing and Urban Development, the
Small Business Administration, and the Veterans Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes
Federal Agricultural Mortgage Corporation, therefore details do not sum to total. Some data
are estimated
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
shown on line 17.
9. Before late 1982, the association obtained financing through the Federal Financing Bank
(FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.
1,295
n.a.
n.a.
n.a.
n.a.
t
n.a.
n.a.
n.a.
13.530
14.898
20.110
12,380
14,203
17,768
11,955
14,207
17,519
13,530
14,819
107,248
10,900
14,126
17,584
9,756
14,284
18,356
10. The Financing Corporation, established in August 1987 to recapitalize the Federal
Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January 1988 to
provide assistance to the Farm Credit System, undertook its first borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations
issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the
purpose of lending to other agencies, its debt is not included in the main portion of the table to
avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans
guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally
being small. The Farmers Home Administration entry consists exclusively of agency assets,
whereas the Rural Electrification Administration entry consists of both agency assets and
guaranteed loans.
Securities Markets and Corporate Finance A31
1.45
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
Type of issue or issuer,
or use
1 All issues, new and refunding1
Apr.
May
July
Aug.
Sept.
145,657
171,222
214,694
27,859
20,271
22,862
29,665
22,599
20,344
17,526
19,528
By type of issue
2 General obligation . .
3 Revenue
56.980
88,677
60,409
110.813
69,934
134,989
9.597
18.261
8,154
12,117
4,827
18,035
10,135
19,530
6,515
16,084
5,812
14,532
5,619
11,907
6,791
12,737
By type of issuer
4 State
5 Special district or statutory authority
6 Municipality, county, or township
14.665
93.500
37,492
13.651
113,228
44,343
18,237
134,919
70,558
2,375
19,629
5,859
3,548
12,504
4,219
1,146
16,865
4,851
2,809
18,099
7,220
1,972
16,244
5,673
1,483
14,233
4,628
1,280
12,490
3,756
1,865
12,924
4,739
102,390
112,298
135,519
15,134
12,616
15,281
19,341
15,895
11,258
9,106
12,736
23,964
11,890
9,618
19,566
6,581
30,771
26,851
12,324
9,791
24,583
31,860
13,951
12,219
27,794
6,667
35,095
4,297
771
1,866
3,104
1.236
3.860
4.080
1.089
749
n.a.
2,819
1,043
5,971
n.a.
576
2.482
4,911
2,962
2.368
n.a.
563
5,279
2,733
3,677
795
n.a.
1,002
4,674
2,435
1,982
1,179
n.a.
2,041
918
831
n.a.
315
2,726
2.605
1.598
2,785
n.a.
471
3,359
7 Issues for new capital
8
9
10
11
12
13
By use of proceeds
Education
Transportalion
Utilities and conservation
Social welfare
Industrial aid
Other purposes
6,287
32,462
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
NEW SECURITY ISSUES
678
3,255
709
2,764
SOURCE. Securities Data Company beginning January 1990; Investment
Digest before then.
Dealer's
U.S. Corporations
Millions of dollars
1998
Type of issue, offering,
or issuer
1 All issues'
2
1995
1996
1997
673,571
Feb.
Mar.
Apr.
May
June
75,961
115,694
83,646
84,449
109,687r
July
Aug.'
Sept.
572,998
n.a
n.a.
64,996
97,323
71,929
70,313
93,243r
n.a.
n.a.
n.a.
By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad
408,707
87,492
76,799
465,489
n.a.
83,433
537,880
n.a.
103,188
50,453
7,600
6,943
81,778
7,600
7,946
55,452
7,600
8.878
56,965
7,600
5,748
78.280
7,600
7.363
54,266
n.a.
6,267
45,745
n.a.
3,800
70,322
n.a.
2,618
By industry group
6 Nonfinancial
7 Financial
156,763
416,235
n.a.
429,157
n.a.
510,953
19,733
45.263
24.901
72,422
24.585
47,345
20.456
49,857
24,444'
68,799'
n.a.
43,313
n.a.
36,746
n.a.
63.876
2 Bonds
8 Stocks
2
105 323
122 006
117 880
11,182
19 271
12 470
14 700
17,111
9 772
3,725
4,640
By type of offering
9 Public
10 Private placement1
73,223
32,100
122,006
n.a.
117,880
n.a.
11,182
n.a.
19,271
n.a.
12,470
n.a.
14,700
n.a.
17,111
n.a.
9,772
n.a.
3,725
n.a.
4,640
n.a.
By industry group
11 Nonfinancial
12 Financial
52,707
20,516
80,460
41,546
60,386
57,494
5,737
5.445
10,756
8.515
5.551
6,919
9.271
5,429
10,248
6,863
6.390
3,382
2,560
1,165
2,266
2.374
1, Figures represent gross proceeds of issues maturing in more than one year; they are the
principal amount or number of units calculated by multiplying by the offering price. Figures
exclude secondary offerings, employee stock plans, investment companies other than closedend, intracorporate transactions, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.
2, Monthly data cover only public offerings.
3, Monthly data are not available.
SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of
the Federal Reserve System.
A3 2 Domestic Financial Statistics • January 1999
1.47
Net Sales and Assets1
OPEN-END INVESTMENT COMPANIES
Millions of dollars
1998
Mar.
Apr.
May
June
July
Aug.
Sept.'
Oct.
1 Sales of own shares2
934,595
1,190,900
128,348
128,828
113,593
122,288
134,801
111,587
118,478
116,150
2 Redemptions of own shares
3 Nel sales5
702,711
231,885
918,728
272,172
97,248
31,100
97,087
31.741
84,421
29,172
97,899
24,389
107,368
27.433
118.812
-7,225
107,049
11,429
109,438
6,712
4 Assets4
2,624,463
3,409,315
3,S43,971
3,909,932
3,882,061
3.986,952
3,957,093
3.479,401
3,625,841
3,804,731
5 Cash5
6 Other
138,559
2,485,904
174,154
3.235,161
174,058
3,669.913
170,045
3,739,887
171,425
3,710,636
199,135
3,787,817
195,966
3,761,127
194.435
3,284,967
211.253
3,414.588
210.481
3,594,249
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debi securities.
SOURCE. Investment Company Institute. Data based on reports of membership, which
comprises substantially all open-end investment companies registered with the Securities and
Exchange Commission. Data reflect underwritings of newly formed companies after their
initial offering of securities.
1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual
funds.
2. Excludes reinvestment of net income dividends and capital gains distributions and share
issue of conversions from one fund to another in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of money
market mutual funds within the same fund family.
1.48
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1996
Account
1995
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-lax liability
4 Profits after taxes
6
Undistributed profits
8 Capital consumption adjustment
1996
1997
1998
1997
Q4
Ql
Q2
Q3
Q4
Ql
Q2
Q3
672.4
635.6
211.0
424.6
205.3
219.3
750.4
680.2
226.1
454.1
261.9
192.3
817.9
734.4
246.1
488.3
275.1
213.2
762.0
685.7
224.2
461.5
273.6
187.9
794.3
712.4
238.8
473.6
274.1
199.5
815.5
729.8
241.9
487.8
274.7
213.2
840.9
758.9
254.2
504.7
275.1
229.5
820.8
736.4
249.3
487.1
276.4
210.6
829.2
719.1
219.9
479.2
277.3
201.8
820.6
723.5
241.6
481.8
278.1
203.7
823.9
717.0
243.8
473.2
279.0
194.3
-22.6
59.4
-1.2
71.4
6.9
76.6
3.0
73.3
8.1
73.8
10.3
75.5
4.8
77.2
4.3
80.1
25.3
84.9
7.8
89.4
12.1
94.9
SOURCE. U.S. Department of Commerce, Survey of Current Business.
1.51
DOMESTIC FINANCE COMPANIES
Assets and Liabilities'
Billions of dollars, end of period; not seasonally adjusted
1996
Account
1994
1998
1997
1996
1995
Q4
Ql
02
Q3
Q4
Ql
Q2'
ASSETS
1 Accounts receivable, gross2
543.7
201.9
274.9
66.9
607.0
233.0
301.6
72.4
637.1
244.9
309.5
82.7
637.1
244 9
309.5
82.7
648.0
249.4
315.2
83.4
651.6
255.1
311.7
84.8
660.5
254.5
3195
86.4
663.3
256.8
318.5
87.9
667.2
251.7
325.9
R9.6
676.0
251.3
134.9
89.9
52.9
11 3
60.7
12 8
55.6
13 1
55.6
13 1
51.3
12 8
57.2
13 3
54.6
127
52.7
13 0
52.1
13 1
53.2
11 2
479.5
216.8
533.5
250.9
568.3
290.0
568.3
290.0
583.9
289.6
581.2
306.8
593.1
289.1
597.6
312.4
601.9
329.7
609.6
340.1
696 1
784 4
858 3
858 3
873 4
887.9
882 3
910 0
931 6
9497
14.8
171 6
15.3
168 6
19.7
177 6
19.7
177 6
18.4
185 3
18.8
193 7
20.4
189 6
24.1
201 5
22.0
211 7
22.3
225 9
14 All other liabilities
41.8
247.4
146.2
74 6
51.1
300.0
163.6
85 9
60.3
332.5
174.7
93 5
60.3
332.5
174.7
93 5
61.0
324.6
189.2
94 9
60.0
345.3
171.4
98 7
61.6
322.8
190.1
97 9
64.7
328.8
189.6
101 3
64.6
338.2
193.1
102 1
60.0
348.7
188.9
103 9
16 Total liabilities and capital
«9(U
784.4
858.3
858.3
873.4
887.9
882.3
910.0
931.6
949.7
3
4
Business
Real estate
5 LESS: Reserves for unearned income
8 All other
9 Total assets
LIABILITIES AND CAPITAL
10 Bank loans
. ...
Debt
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.
2. Before deduction for unearned income and losses.
Securities Market and Corporate Finance A33
DOMESTIC FINANCE COMPANIES Owned and Managed Receivables1
1.52
Billions of dollars, amounts outstanding
1998
Type of credit
1995
1996
1997
Apr.
May
June
July
Aug.
Sept.
Seasonally adjusted
1 Total
682.4
761.9
809.8
825.3
833.0
831.3
840.6
846.4r
SSI.4
1
283.1
72.4
326.8
307.7
111.9
342.4
327.7
121.1
361.0
328.9
121.9
374.5
330.2
124.2
378.6
332.5
120.9
377.9
336.6
125.2
378.7
339.1'
128.1
379.2
341.8
128.8
380.7
3
4
Real estate
Not seasonally adjusted
5 Total
6
7
8
9
10
II
12
13
14
IS
16
17
18
19
20
21
22
•>1
24
25
26
V
28
29
30
31
32
31
34
35
36
Consumer
Motor vehicle leases
Revolving"
Other3 . . .
Securitized assets4
Motor vehicle leases
Revolving
Other
Real estate
One- to four-family
Other
Securitized real estate assets4
One- to four-family
Other
Business
Motor vehicles
Retail loans
Leases
Loans
Other business receivables
Securilized assets4
Motor vehicles
Retail loans
Leases
Loans
Leases
Other business receivables6
689.5
769.7
818.1
825.3
832.2
836.0
835.2
842.6r
847.8
285.8
81.1
80.8
28.5
42 6
310.6
86.7
92.5
32.5
33.2
130 9
87.0
96.8
38.6
34 4
326.7
90.6
95.9
30.4
114
329.4
89.6
95.9
30.5
31.5
335.4
89.9
97.0
29.9
34 4
338.5
91.7
97.3
29.6
15 0
140 5'
95.1
96.9
30.2
14.7
342.8
96.2
94.9
297
14.6
34 8
3.5
n.a.
14 7
72.4
n.a.
36.8
8.7
0.0
20 1
111.9
52.1
10 5
44.3
10.8
0.0
19 0
121.1
59.0
28 9
42.8
10.4
5.3
18 1
121.9
62.4
28 1
45.7
10.8
5.3
18 1
124.2
65.2
28.1
49.3
10.9
5.3
18 6
120.9
62.3
27.5
50.2
10.8
5.3
185
125.2
65.9
28 5
49.2
10.7
5.3
182
128.1
68.6
28.7
51.8
n.a.
331.2
66.5
21.8
16 6
8.0
8.0
8.0
80
8.0
28.9
0.4
147.2
67.1
25.1
110
9.0
9.0
9.0
9.0
9.0
33.0
0.2
366.1
6.1.5
25.6
27 7
10.2
10.2
10.2
10.2
10.2
.11.2
0.2
376.7
68.2
28.3
29 5
10.4
207.8
51.2
156.7
54.0
30.7
0.2
378.6
69.1
29.3
29 5
10.4
209.3
51.3
158.0
54.3
30.9
0.1
379.7
68.4
29.2
28 2
11.0
212.8
52.7
160.2
53.7
30.6
0.1
371.5
61.1
29.2
21 0
10.9
212.8
51.6
161.2
54.5
30.7
0.1
374.0
62.5
29.6
22.0
10.9
212.0
51.8
160.2
57.0
8.0
8.0
8.0
8.0
8.0
8.0
8.0
8.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
10.2
10.2
10.2
10.2
10.2
10.2
10.2
10.2
31.6
1.9
29.6
0.0
10.3
4.1
6.2
4.7
31.0
1.9
29.2
0.0
10.2
4.0
6.2
4.7
29.1
2.3
26.7
0.0
10.5
4.1
6.4
5.3
26.1
2.2
24.1
0.0
11.5
5.1
6.4
5.4
25.9
2.1
23.8
0.0
11.4
4.9
6.4
5.2
NOTE. This table has been revised to incorporate several changes resulting from the
benchmarking of finance company receivables to the June I996 Survey of Finance Companies. In that benchmark survey, and in the monthly surveys that have followed, more detailed
breakdowns have been obtained for some components. In addition, previously unavailable
data on securitized real estate loans are now included in this table. The new information has
resulted in some reclassitication of receivables among the three major categories (consumer,
real estate, and business) and in discontinuities in some component series between May and
June 1996.
Includes finance company subsidiaries of bank holding companies but not of retailers and
banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For
ordering address, see inside front cover.
I. Owned receivables are those carried on the balance sheet of the institution. Managed
receivables are outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator. Data are shown
53
188
I288
68.4
30.1
30.2
0.1
376.2
65.5
30.0
24.2
210.8
47.9
162.9
58.9
24.5
2.0
22.5
0.0
4.9
6.4
5.3
before deductions for unearned income and losses. Components may not sum to totals
because of rounding.
2. Excludes revolving credit reported as held by depository institutions that are subsidiaries of finance companies.
3. Includes personal cash loans, mobile home loans, and loans to purchase other types of
consumer goods such as appliances, apparel, boats, and recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Credit arising from transactions between manufacturers and dealers, that is, floor plan
financing.
6. Includes loans on commercial accounts receivable, factored commercial accounts, and
receivable dealer capital; small loans used primarily for business or farm purposes; and
wholesale and lease paper for mobile homes, campers, and travel trailers.
A34
1.53
Domestic Financial Statistics • January 1999
MORTGAGE MARKETS
Mortgages on New Homes
Millions of dollars except as noted
1998
Apr
May
June
July
Aug.
Sept.
Oct.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
Terms
5 Fees and charges (percent of loan amount)2
Yield (percent per year)
6 Contract rate1
7 Effective rate'-
175.8
134.5
78.6
27.7
1.21
182.4
139.2
78.2
27.2
1.21
180.1
140.3
80.4
28.2
1.02
189.5
147.1
80.4
28.4
0.87
195.6
150.2
79.1
28.3
0.85
193.7
151.0
81.0
28.3
0.85
208.7
160.1
78.7
28.5
0.90
191.5
150.4
81.3
28.6
0.87
192.7
150.8
80.9
28.7
0.85
201.4
155.8
79.8
28.6
0.86
7.65
7.85
8.05
7.56
111
8.03
7.57
7.73
7.76
7.05
7.19
7.20
7.05
7.18
7.11
7.03
7.16
7.08
6.99
7.13
7.05
6.95
7.09
6.86
6.85
6.98
6.64
6.72
6.85
6.86
8.18
7.57
8.19
7.48
7.89
7.26
7.37
6.63
7.07
6.63
7.07
6.54
7.05
6.48
7.03
6.42
6.53
6.05
7.07
6.10
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203)5
10 GNMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA insured
13 Conventional
253,511
28,762
224,749
287,052
30,592
256,460
316,678
31,925
284,753
333,571
32,734
300,837
343,922
32,771
311,151
349,249
32,896
316,353
359,827
33,036
326,791
366,890
32,929
333,961
375,665
32,903
342,762
386,452
32,814
353,638
14 Mortgage transactions purchased (during period)
56,598
68,618
70,465
14,668
17,423
11,916
17,326
14,316
15,681
18,967
Mortgage commitments (during period)
15 Issued7
16 To sell8
56,092
360
65,859
130
69.965
1,298
17,556
0
10,612
0
16.921
0
13,217
419
17.016
233
16,282
249
30,551
393
107,424
267
107,157
137,755
220
137,535
164,421
177
164,244
189,471
162
189,309
192,603
158
192,445
196,634
422
196,212
202,582
456
202,126
206,856
489
206,367
216,521'
569'
215,952'
231,458
575
230,833
98,470
85,877
125,103
119.702
117,401
114,258
25,132
24,479
23,743
23,338
22.394
21,133
22,605
22,263
21,507
20,634
25.366'
24,294
20,629
19,472
118,659
128,995
120,089
24,468
26,100
20,008
23,528
24,694
23,375
25,024
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings (end of period^
17 Total
18 FHA/VA insured
Mortgage transactions (during periods
20 Purchases
21 Sales
22 Mortgage commitments contracted (during period)9
1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups for purchase of newly built homes; compiled by the Federal Housing
Finance Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or die
seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built homes,
assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S.
Department of Housing and Urban Development (HUD). Based on transactions on the first
day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured
by the Federal Housing Administration (FHA) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month.
6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year mortgages insured by the
Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments
converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal Home Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity
under mortgage securities swap programs, whereas the corresponding data for FNMA
exclude swap activity.
Real Estate
1.54
A35
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
Type of holder and property
2
3
4
5
Q3
Q4
Ql
Q2P
All holders
433,545
4,604,609
4,930,487
5,062,766
5,180,917
5,279,333
5,380,907
5,505,783
By type of property
One- to four-family residences
Mullifamily residences
Nanfarm, nonresidential
Farm
3,355,868
271.823
682,883
82,971
3,530,400
281,788
707.861
84,561
3.761,560
300,665
781,129
87,134
3,860,763
305,963
807,361
88,680
3.956,815
308.418
825,923
89,760
4,029.268
314.590
845.058
90,417
4,102,830
320,237
866,414
91,425
4,195,738
326,527
890,538
92,980
1,819,806
1,012,711
615,861
1,894,420
1,090,189
669,434
43,837
353.088
23,830
596,763
482.353
61,987
52,135
288
207,468
7.316
23,435
167,095
9,622
1.979,114
1,145,389
698,508
46,675
375,322
24,883
628,335
513,712
61,570
52,723
331
205,390
6,772
23.197
165,399
10,022
2,033,599
1,196,461
733,694
49,116
387,588
26,063
629,062
516,521
60,070
52,132
338
208,077
6,842
23,499
167,548
10,188
2,068,002
1,227,131
752,323
49,166
398,841
26,801
631,444
519,564
60,348
51,187
346
209,426
7,080
23,615
168,374
10,358
2,086,721
1,244,108
762,531
50,642
403,957
26,978
631.822
520.672
59.543
51,252
354
210,792
7,186
23,755
169,377
10,473
2,119,279
1,270,032
779.927
51,790
410,859
27,456
637,012
527,036
59,074
50,532
369
212,235
7,321
23,902
170,423
10.589
2,124.259
1,280,732
784,929
52,175
415,311
28,316
629,882
520.276
58,704
50,519
383
213.645
7.488
24,038
171,393
10.726
306,774
300.935
292,581
293,499
0
41,791
17,705
11,617
6,248
6,221
9,809
5.180
4,629
1,864
691
647
525
0
4,303
492
428
3,383
0
176,824
161,665
15,159
28,428
1,673
26,755
43,753
39,901
3,852
292.966
7
7
0
41.400
17,239
11,706
7,135
5,321
4,200
2,299
1,900
0
0
0
0
0
1,816
272
309
1,235
0
170,386
157,729
12,657
29,963
1.763
28,200
45.194
40,092
5,102
291,410
7
2
0
41,596
17,303
11,685
6,841
5,768
6,244
3,524
2,719
0
0
0
0
0
2,431
365
413
1,653
0
174,556
160,751
13,805
29,602
1,742
27,860
46,504
41,758
4,746
0
41,332
17,458
11,713
7,246
4,916
3,462
1,437
2,025
0
0
0
0
0
1,476
221
251
1,004
0
168,458
156,363
12,095
30,346
1,786
28,560
46.329
40,953
5,376
0
41,195
17,253
11,720
7,370
4.852
3.821
1.767
2.054
0
0
0
0
0
724
109
123
492
0
167,722
156,245
11,477
30,657
1.804
28.853
48.454
42,629
5,825
0
40,972
17,160
11,714
7,369
4,729
3.694
1,641
2,053
0
0
0
0
0
786
118
134
534
0
166,670
155,876
10,794
31,005
1,824
29,181
50,364
44,440
5,924
294,547
8
8
0
40,921
17,059
11,722
7,497
4,644
3,631
1.610
2,021
0
0
0
0
0
564
85
96
384
0
167,202
156.769
10,433
31,352
1,845
29,507
50,869
44,597
6.272
2,145,995
520,938
507,618
13.320
567,187
564,445
2,742
673,931
654,826
19,105
2
0
0
0
383,937
279,450
24,355
80.132
0
2,202,549
529,867
516,217
13,650
569,920
567,340
2,580
690,919
670,677
20,242
2
0
0
0
2
411,841
299,400
25,655
86,786
0
2,272,999
536,810
523,156
13.654
579,385
576,846
2,539
709,582
687,981
21.601
2
0
0
0
2
447,219
318,000
29.264
99.955
0
2,330,674
533,011
519,152
13,859
583.144
580.715
2,429
730,832
708,125
22,707
2
0
0
0
2
483,685
336,824
33,477
113,384
0
2,442,603
537,586
523.243
14,343
609,791
607.469
2,322
761,359
737,631
23,728
2
0
0
0
2
533,865
364,316
38,144
131,405
0
590,206
377,966
82,081
111,591
18,567
618,955
405,990
81,702
112,486
18,777
627,033
413.082
82,392
112.655
18,904
637,4.55
422,663
82,379
113,312
19,100
644,375
428,413
82.529
114,031
19.402
By type of holder
6 Major financial institutions
7
Commercial banks'
8
One- to four-family
9
Mullifamily
10
Nonfarm. nonresidential
11
Farm
12 Savings institutions
13
One- to four-family
14
Multifamily
15
Nonfarm, nonresidential
16
Farm
17 Life insurance companies
18
One- to four-family
19
Multifamily
20
Nonfarm, nonresidential
21
Farm
22 Federal and related agencies
23 Governmenl National Mortgage Association
One- to four-family .
Multifamily
Fanners Home Administration
One- to four-family
Multifamily
Nonfarm. nonresidential
Farm
Federal Housing and Veterans' Administrations
One- to four-family
Multifamily
Resolution Trust Corporation
One- to four-family
Multifamily
Nonfarm. nonresidential
Farm
Federal Deposit Insurance Corporation
One- lo four-family
Mullifamily
Nonfarm, nonresidential
Farm
Federal National Mortgage Association
One- to four-family
Multifamily
Federal Land Banks
One- to four-family
Farm
Federal Home Loan Mortgage Corporation
One- to four-family
Multifamily
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
Q2
One- to four-family
Multifamily
Federal Home Loan Mortgage Corporation
One- to four-family
Multifamily
Federal National Mortgage Association
One- to four-family
Multifamily
Farmers Home Administration
One- to four-family
Multifamily
Nonfarm. nonresidential
Farm
Private mortgage conduits
One- lo four-family
Multifamily
Nonfarm. nonresidential
Farm
73 Individuals and others7
74 One- to four-family
75 Multifamily
76 Nonfarm. nonresidential . .
77
Farm
39,346
334,953
22,551
596,191
477,626
64,343
53,933
289
210,904
7,018
23,902
170,421
9.563
315,580
6
6
0
41,781
18,098
11,319
5,670
6,694
10,964
4,753
6,211
10.428
5,200
2,859
2,369
0
7,821
1,049
1,595
5,177
0
174,312
158,766
15,546
28,555
1,671
26,885
41,712
38,882
2,830
1,730,004
450,934
441,198
9.736
490,851
487,725
3,126
530,343
520,763
9.580
19
3
0
9
7
257.857
208,500
11,744
37,613
0
1,863,210
472,283
461,438
10,845
515,051
512,238
2,813
582,959
569,724
13,235
11
0
5
4
292,906
227,800
15,584
49,522
0
2,064,882
506,340
494,158
12.182
554.260
551,513
2,747
650,780
633,210
17,570
3
0
0
0
3
353,499
261,900
21,967
69,633
0
528,155
368,749
69,686
72,738
16,983
540,206
372,786
73.719
75,859
17.841
585,556
376,341
81.389
109.558
18.268
1. Multifamily debt refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by bank trust
departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from
FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting
changes by ihe Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by
the agency indicated.
7
6. Includes securitized home equity loans.
7. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
SOURCE. Based on data from various institutional and government sources. Separation of
nonfarm mortgage debt by type of property, if not reported directly, and interpolations and
extrapolations, when required for some quarters, are estimated in part by the Federal Reserve.
Line 69 from Inside Mortgage Securities and other sources.
A36
1.55
Domestic Financial Statistics • January 1999
CONSUMER CREDIT1
Millions of dollars, amounts outstanding, end of period
1998
Holder and type of credit
1995
1996
1997
Apr.
May
June
July
Aug.
Sept.
Seasonally adjusted
1,095,711
1 Total
364,209
443,183
288.319
3 Revolving
4 Other2
1,181,913
392,321
499,486
290,105
1,233,099
1,251,864'
1,254,302'
1,263,683'
1,269,266'
1,273,725'
1.282.08S
421,213'
541,834'
288,817'
422,624'
541,184'
290,495'
425,510'
545,339'
292,834'
427,749'
543.140'
298,377'
431,499'
545.258'
296.969'
433,354
548,360
300,374
413,369
531,140
288,590
Not seasonally adjusted
1,122,828
1,211,590
1,264,103
1,241,238'
1,243,178'
1,256,897'
1,262,382'
1,273,941'
1,285,123
501,963
152,123
131,939
40,106
85,061
211,636
526.769
152.391
144,148
44.711
77,745
265,826
512,563
160.022
152.362
47,172
78,927
313,057
500.207
154,328
151,056'
47,500
65,093'
323,054
497.389
153.556
152.218'
47,915
65,227'
326,873
491,509
154.275
152,400'
48.329
65,265'
345,119
491,777
156,366
153,735'
48,744
65,481'
346,279
498,775
160,151
154,146'
49,158
66,011'
345,700
499,958
160,457
155,666
49,571
65,601
353,870
Finance companies
Pools of securitized assets4
367,069
151,437
81,073
44,635
395.609
157,047
86,690
51,719
416,962
155,254
87,015
64,950
415.975'
151.278
90,564
63,737
418,244'
151.677
89.569
65,988
425,227'
150.877
89,948
71,615
429.350'
153,203
91,741
72,470
434,178'
155.508
95,257
70,766
437,340
155,970
96,183
72,477
16 Revolving
17 Commercial banks
18 Finance companies
19 Nonfinancial business^
20
Pools of securitized assets4
464,134
210,298
28,460
53,525
147,934
522,860
228,615
32,493
44.901
188,712
555,858
219,826
38,608
44,966
221,465
535,602'
209,171
30,398
33.487
233,668
535,576'
207,318
30,495
33,412
235,347
539,572'
200,901
29,893
33,544
245,635
536,882'
197,646
29,605
33,807
246,031
542,095'
200,424
30,155
34,009
247,422
545,704
198,946
29,691
33,743
253,366
21 Other
291,625
140,228
42,590
31,536
19,067
293,121
141,107
33,208
32,844
25,395
291,283
137,483
34,399
33,961
26,642
289,661'
139,758
33,366
31,606'
25,649
289.358'
138.394
33,492
31,815'
25,538
292.098'
139.731
34,434
31,721'
27,869
296,150'
140,928
35.020
31,674'
27,778
297,668'
142,843
34,739
32,002'
27,512
302,079
145,042
34,583
31,858
28,027
5 Total
By major holder
6 Commercial banks
7 Finance companies
9 Savings institutions
10 Nonfinancial business1
11 Pools of securitized assets
By major type of credit5
12 Automobile
14
15
23
24
25
Finance companies
Nonfinancial business3
Pools of securitized assets
1. The Board's scries on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Comprises mobile home loans and all other loans that are not included in automobile or
revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be
secured or unsecured.
1.56
3. Includes retailers and gasoline companies.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Totals include estimates for certain holders for which only consumer credit totals are
available.
TERMS OF CONSUMER CREDIT1
Percenl per year except as noted
1998
Item
1995
1996
1997
Mar.
Apr.
May
June
July
Aug.
Sept.
INTEREST RATES
Commercial banks1
2 24-month personal
9.57
13.94
9.05
13.54
9.02
13.90
n.a.
n.a.
n.a.
n.a.
8.69
13.76
n.a.
n.a.
n.a.
n.a.
8.71
13.45
n.a.
n.a.
Credit card plan
3 All accounts
4 Accounts assessed interest
15.90
15.64
15.63
15.50
15.77
15.57
n.a.
n.a.
n.a.
n.a.
15.67
15.62
n.a.
n.a.
n.a.
n.a.
15.83
15.85
n.a.
n.a.
Auto finance companies
5 New car
6 Used car
11.19
14.48
9.84
13.53
7.12
13.27
5.94
12.79
6.20
12.76
6.07
12.73
6.02
12.63
6.25
12.51
6.00
12.68
5.92
12.65
54.1
52 2
51.6
51 4
54.1
510
51.5
52 6
50.7
52 9
50.8
52 9
50.9
54 0
51.7
54 1
53.0
54 1
53.1
54 2
92
99
91
100
92
99
92
97
91
98
93
99
91
100
92
100
93
101
93
101
16.210
11,590
16.987
12,182
18.077
12.281
18,932
12,431
18,922
12.716
18,793
12,607
18,878
12,698
19,084
12,733
19,068
12,407
19,028
12,731
OTHER TERMS 1
Maturity (months)
1 New car
8 Used car
Loan-to-value ratio
9 New car
10 Used car
Amount financed (dollars)
12 Used car
I. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Data are available for only the second month of each quarter.
3. At auto finance companies.
Flow of Funds A37
1.57
FUNDS RAISED IN U.S. CREDIT MARKETS1
Billions of dollars; quarterly data at seasonally adjusted annual rates
Transaction category or sector
1996
1993
Q2
Ql
Q3
Q4
Ql
Q2'
Q3
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancia! sectors.
588.0
571.5'
700.4'
726.7'
769.6r
675.9r
617.7'
829.6
955.1r
922.1'
938.0
930.6
By sector and instrument
2 Federal government
3 Treasury securities
4 Budget agency securities and mortgages
256.1
248.3
7.8
155.9
155.7
.2
144.4
142.9
1.5
145.0
146.6
-1.6
23.1
23.2
-.1
64.9
66.3
-1.4
-43.5
-43.8
.2
30.3
31.2
-.9
40.8
39.0
1.7
-30.0'
-27.6'
-2.4
-70.9
-69.4
-1.4
-136.5
-136.1
-.4
415.6'
555.9'
581.7'
746.4'
611.0'
661.2'
799.2'
914.3'
952.1'
1,008.9
1,067.0
18.1
-48.2
73.3
102.3
67.2
204.3'
173.9'
8.0'
20.8'
1.6
138.9
-.9
2.6
72.5
66.2
33.8
318.8'
265.3'
12.7'
38.3'
2.6
88.8
13.7
71.4
90.7
107.3'
68.7'
342.1'
268.3'
11.5'
59.1'
3.3
52.5
7.2
34.1
79.4
140.7
34.2
253.0'
218.2'
4.1'
28.6'
2.1
62.5
20.3
59.6
86.1
118.1
20.8'
296.7'
211.4'
12.9'
68.4'
4.1
59.5
14.5
88.9
122.9
31.6
78.0'
413.01
334.2'
6.6'
67.9r
4.3
50.3
12.8
103.2
74.4
138.7'
141.6'
405.8
309.3
22.3
71.6
2.6
37.8
53.9
116.7
157.2
55.8'
83.2'
428.1'
324.1'
19.9
80.0'
4.0
57.3'
6.6
100.1
160.8
157.3
37.9
481.2
360.5
22.6
91.9
6.2
65.1
88.4
84.1
88.0
1.0
60.7
21.4
-35.9
23.3
75.2
34.0
172.7'
178.2'
-1.3'
-6.4'
2.2
124.9
207.8
57.9
52.1
3.2
2.6
66.2
311.0'
150.9'
143.3'
3.3
4.4
-46.2
343.7'
263.7'
236.8'
23.9
2.9
-51.5
370.3'
218.2'
171.4'
42.0'
4.8
-6.8
355.6'
334.8'
265.0'
63.5
6.4
56.1
334.9'
259.2'
206.4'
47.8
4.9
16.9
329.7'
289.1'
214.5'
68.6
6.0
42.5
362.9'
363.8'
291.5'
66.8'
5.5
72.6
394.9'
427.1'
347.5'
70.6'
9.0
92.3
437.2'
420.6'
331.4'
81.4'
7.9
94.3
469.8
460.2
354.6
98.2
7.4
78.9
472.7
521.6
404.7
69.8
-9.6
82.9
.7
-4.2
-14.0
-26.1
12.2
71.1
13.5
49.7
8.5
-.5
76.9
11.3
55.8
9.1
.8
56.9
3.7
46.7
8.5
-2.0
31.2
15.5
15.5
-.7
.9
61.7
10.4
38.7
11.5
1.2
92.5
-11.6
100.3
7.3
-3.5
42.3
.7
32.4
15.7
-6.5
68.5'
56.0
14.3
5.2'
-7.0
86.6
-24.8
107.5
-27.0
6.9
-4.4
8.4
3.5
-2.6
990.6'
1,024.7
903.5
839.8'
1,012.9
5 Nonfederai
6
7
8
9
10
11
12
13
14
15
16
By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
Slate and local government
23 Foreign net borrowing in United States
24 Commercial paper
25 Bonds
26 Bank loans n.e.c
27 Other loans and advances
28 Total domestic plus foreign
10.0
74.8
75.2
6.4
-18.9
123.7
156.2
-6.8
-26.7
657.8
1.4
-1.5
557.5'
771.5'
803.6
r
826.5'
707. l
r
679.3'
922.1'
997.4
r
142.6
78.0
497.8
365.8
22.9
103.9
5.3
88.2
110.2
6.7
72.7
-34.8
Financial sectors
29 Total net borrowing by financial sectors
30
31
32
33
By instrument
Federal government-related
Government-sponsored enterprise securitii
Mortgage pool securities
Loans from U.S. government
34 Private
35 Open market papier . .
36
Corporate bonds
37
Bank loans n.e.c
38 Other loans and advances
39 Mortgages
40
41
42
43
44
45
46
47
48
49
50
51
By borrowing sector
Commercial banking
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs) .
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations
657.1r
595.5'
286.2
198.1
88.1
.0
161.0
46.4
114.6
.0
298.1
157.9
140.3
.0
6.2
370.9'
77.0
229.4'
-6.0
63.0
7.5
434.5'
168.8
194.8'
23.2
37.5
10.1
244 2
345.8
30.7
61.7
7.3
14.4
-16.8
-.2
.8
-8.9
114.6
85.8
5.6
-.7
15.1
-2.9
129.7
76.4
31.9
.2
.1
198.1
88.1
120.7'
120.5
-12.2
19.8
34.9
-21.5
32.5
22.3
.2
.2
61.0
41.7
.3
-.3
157.9
294.4
468.4
456.4
556.2
644.3'
336.5
165.3
80.6
287.5
176.9
115.4
-4.8
204.1
105.9
98.2
.0
231.5
90.4
141.1
.0
212.8
98.4
114.4
.0
114.6
.0
180.9
40.5
121.8
-13.7
22.6
9.8
252.3
42.7
196.7
3.9
3.4
5.6
324 7
92.2
179.7
16.9
27.9
7.9
431.5'
166.7
20.1
22.5
2.6
13.0
46.1
19.7
.1
84.7
.0
129.1
-5.5
123.1
-14.4
22.4
3.6
13.4
11.3
.2
.2
80.6
84.7
83.6
-1.4
.0
3.4
12.0
6.3
12.8
.2
.3
172.1
115.4
72.9
48.7
-11.5
13.7
.5
23.1
-A
105.9
98.2
141.1
50.2
.4
5.7
-5.0
34.9
25.5
.1
1.1
90.4
141.1
153.6
45.9
12.4
11.0
-2.0
64.1
207.9'
13.6
35.6
7.8
T
98^4
114.4
204.4'
48.7
-1.3
24.8
8.1
80.7
230.9
176.6
61.7
6.5
-20.1
46.4
114.6
226.2'
8.9
3.6
32.0
-6.9
115.4
140.3
385.1'
59.6
4.2
32.1
7.0
99.2
227.3
142.5
84.8
.0
612.5'
237.4
315.5'
18.9
32.7
8.0
83.5
10.6
.5
.0
142.5
84.8
254.4'
80.1
5.2
36.3
-1.0
142.8
413.4
166.4
247.0
.0
561.6
294.0
267.5
.0
599.5
134.8
373.5
7.2
76.0
8.0
431.2
141.0
158.8
41.1
82.3
8.0
80.0
31.2
78.2
63.7
-.6
166.4
247.0
367.2
101.8
-5.5
1.0
1.6
294.0
267.5
272.4
-13.6
3.0
27.4
33.9
20.0
-28.6
16.5
-19.1
A38
1.57
Domestic Financial Statistics • January 1999
FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued
1996
Transaction category or sector
Ql
Q2
Q3
Q4
Ql
Q2'
Q3
52 Total net borrowing, all sectors
952.2
l,025.9 r
l,227.8 r
1,359.8'
l,470.7r
1,043.7'
1,336.4'
l,517.6 r
1,985.3'
l,830.3 r
2,037.6
1,896.3
53
54
55
56
57
58
59
60
-5.1
421.4
74.8
281.2
-7.2
35.7
448.1
-35.9
157.3
62.9
50.3
182.5'
124.9
74.3
348.5
-48.2
319.6
114.7
70.2
209.9'
138.9
102.6
376.5
2.6
308.0
92.1
62.5
326.8'
88.8
184.1
235.9
71.4
345.4'
129.3'
102.2'
149.9'
52.5
199.3
170.6
34.1
156.6
146.5
15.0
259.2'
62.5
107.7
242.6
59.6
354.2'
123.6
85.0'
304.2'
59.5
171.7
191.3
88.9
418.1'
62.2
112.01
423.1'
50.3
257.7
338.9
103.2
452.7'
185.1'
196.8'
413.1
37.8
347.3
197.3'
116.7
487 0'
79.9'
108.9'
436.1'
57.3'
116.6
342.5
100.1
641.8
172.9
109.4
489.2
65.1
236.2
425.1
84.1
212.0
187.2
157.6
505.8
Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit
-.8
127.3
60.7
Funds raised through mutual funds and corporate equities
61 Total net issues
429.7
125.2
143.9
234.2'
183.3'
171.7'
175.0'
240.8'
145.9'
209.4'
260.3
62 Corporate equities
63
Nonfinancial corporations
64 Foreign shares purchased by U.S. resident!
65 Financial corporations
66 Mutual fund shares
137.7
21.3
63.4
53.0
292.0
24.6
-44.9
48.1
21.4
100.6
-3.5
-58.3
50.4
4.4
147.4
-3.4'
-64.2
60.0
.8'
237.6
-"81.8
-114.4'
41.3
-8.6'
265.1
-77.9'
-90.4
46.6
-34.1'
249.6
-75.1'
-100.0
54.4
-29.4'
250.1
-59.1'
-124.0
64.3
.5'
299.9
-115.1'
-143.3'
-.3
28.5'
261.0
-112.0'
-139.2'
13.6
13.6'
321.4
-123.4
-128.7
4.0
1.3
383.7
1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
F.2 through F.4. For ordering address, see inside front cover.
-266.7
-221.8
-33.1
Flow of Funds
1.58
SUMMARY OF FINANCIAL TRANSACTIONS'
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1997
Transaction category or sector
1993
1994
1995
1996
1998'
1997
Ql
Q2
Q3
Q4
Ql
Q2
NET LENDING IN CREDIT MARKETS 2
1 Total net lending in credit markets
952.2
1,227.8'
1,359.8'
1,470.7'
1,043.7'
1,336.4'
1,517.6'
1,985.3'
1,830.3
2,037.6
2 Domestic nonfederaJ nonfinancial sectors
41.6
1.0
9.1
-1.1
32.6
-18.4
129.3
799.7
36.2
142.2
149.6
-9.8
.0
2.4
-23.3
21.7
9.5
100.9
27.7
49.5
22.7
20.4
159.5
20.0
87.8
84.7
81.0
-20.9
.0
.6
14.8
-35.3
238.0'
274.7'
17.7
.6
-55.0
-27.5
132.3
683.0
31.5
163.4
148.1
11.2
.9
3.3
6.7
28.1
7.1
66.7
24.9
45.5
22.3
30.0
-7.1
-3.7
117.8
115.4
65.8
48.3
-24.0
4.7
-44.2
-16.2
-W7.W
-11.5'
-8.8
4.7
-91.4
—2
273.9
1,061.1'
12.7
265.9
186.5
75.4
-.3
4.2
-7.6
16.2
-8.3
99.2
21.5
61.3
27.5
86.5
52.5
10.5
84.7
98.2
119.3
49.9
-3.4
2.2
90.1
-17.8'
-10.7'
-11.4'
20.0'
4.4
-23.7
-7.7
414.7
963.5'
12.3
187.5
119.6
63.3
3.9
.7
19.9
25.5
-7.7
72.5
22.5
48.3
45.9
88.8
48.9
4.7'
92.0
141.1
123.4
18.4
8.2
2.0
-15.7
25.2'
-108.2'
-125.4'
14.8'
2.7
-.3
4.9
312.5'
1,261.5'
38.3
324.3'
274.9
40.2
5.4
3.7'
-4.7
16.8
7.6
101.0
25.2
67.6
36.6
87.5
80.9
-3.4'
95.0
114.4
166.0'
21.9
16.4
-2.0
13.7
58.6'
-253.6'
-285.4'
58.8'
2.5
-29.5
1.7
330.6
964.9'
34.4
3)6.0
206.1
101.7
2.2
6.1
-5.3
20.5
3.4
88.3
6.0
55.0
23.2
58.2
63.9
-3.4'
44.9
114.6
62.3
39.8
-1.3
-2.1
-14.5
60.9'
-59.8'
-75.5'
-28.7'
2.7
41.8
5.7
308.6'
1,081.8'
42.9
290.0
286.7
-3.6
5.1
1.8
23.8
25.2
10.7
174.4
28.0
58.5
34.6
26.1
90.0
-3.4'
119.9
88.1
105.9'
.9
-24.4
-2.1
-11.7
4.7'
-160.3'
-153.7'
31.7
2.8
-41.0
3.3
402.9'
1,271.7'
22.9
226.2
220.7
4.6
-5.0
5.8
-35.3
13.6
7.3
106.0
32.0
66.2
79.1
121.5
108.0
-3.4'
55.8
114.6
163.7'
68.3
82.9
-2.1
15.8
28.7'
40.7'
12.9'
-2.6'
2.9
27.5
9.0
208.01
1,727.7'
52.9
464.9'
386.2
58.2
19.4
1.1'
-2.0
7.7
8.8
35.3
34.7
90.7
9.5
144.2
61.8
-3.4'
159.2
140.3
332.2
-21.3'
8.3
-1.7
65.3
140.2'
-232.0
-261.4
33.8
3.0
-7.4
15.5
237.4
1,809.4
27.4
292.9
260.5
11.6
15.3
5.5
10.1
16.5
2.4
102.9
23.4
72.6
81.7
172.0
143.6
-2.4
166.0
84.8
195.3
28.7
10.4
-2.0
250.4
132.6
433.9
321.6
-27.8
3.2
136.9
12.8
317.5
1,273.4
7.7
136.1
130.5
18.1
-17.6
5.1
-11.7
22.7
3.1
67.2
-1.5
141.8
60.6
200.1
152.6
-2.4
143.4
247.0
336.1
27.1
-11.0
-2.0
-188.6
-54.8
952.2
l,025.9 r
1,227.8'
1,359.8'
1,470.7'
1,043.7'
1,336.4'
1,517.6'
1,985.3'
1,830.3
2,037.6
.8
.0
.4
-18.5
50.5
117.3
-70.3
-23.5
20.2
71.3
137.7
292.0
52.2
61.4
36.0
255.7'
11.4
.9
25.5
340.0
-5.8
.0
.7
52.9
89.8
-9.7
-39.9
19.6
43.3
78.2
24.6
100.6
94.0
-.1
34.5
246.2
2.6
17.8
55.6
252.4'
8.8
2.2
.6
35.3
9.9
-12.7
96.6
65.6
142.3
110.4
-3.5
147.4
101.5'
26.7
44.9
233.2
6.2
4.0
71.3'
457.3'
-6.3
-.5
.1
85.9
-51.6
15.8
97.2
114.0
145.8
40.0
-3.4'
237.6
76.9'
52.4
43.6
230.8
16.2
-8.6
49.3'
451.4'
.7
-.5
.0
107.4
-19.4'
41.5
97.1
122.5
157.6
115.2
-81.8'
265.1
9Z.C?
110.1
52.9
296.8
14.6'
75.0
40.6'
593.4'
-17.6
-2.1
.4
186.7
-78.4
81.8
151.5
56.3
157.6
32.7
-77.9'
249.6
59.9'
110.4
49.8
256.6
21.7
68.8
49.6'
787.2'
.4
.0
.2
23.9
-57.0
50.6
34.0
174.7
98.9
218.9
-75.1'
250.1
48.8'
127.5
62.5
318.9
14.1'
71.8
47.5'
532.0'
2.4
.0
1.3
116.1
-21.7'
-38.4
47.0
188.4
226.2
111.2
-59.1'
299.9
130.0'
90.6
62.8
326.9
30.2'
80.8
48.2'
636.7'
17.5
.0
-1.9
103.0
79.6'
71.9
155.9'
70.7'
147.8
98.1
-115.1'
261.0
153.2'
111.9
36.6
284.8
-7.6'
78.4
17.2'
417.7'
1.0
.0
.3
-45.3
-107.1
65.6
154.9
186.2
248.0
242.8
-112.0
321.4
90.6
168.9
47.3
253.8
9.4
50.3
36.5
1,220.1
8.1
.0
.2
89.0
23.3
109.3
36.2
-16.5
186.4
-45.4
-123.4
383.7
4.7
-110.3
36.8
280.6
-6.7
57.5
9.9
422.0
2,313.0'
2,083.2'
2,776.0' 2,946.5'
3,557.6'
3,188.3'
3,279.2'
3,797.0'
3,966.0'
4,663.0
3383.0
-.2
-5.7
4.2
46.4
15.8
-170.8
-.2
43.0
-2.7
69.4
16.6
-150.0'
-.5
25.1
-3.1
22.9
21.1
-213.5'
-.9
59.4
-3.3
-.7
20.4
-82.0'
-.6
107.4
-19.9'
59.5'
17.2'
-254.9'
-.3
176.9
30.3
-107.3
19.3
26.9'
-.5
10.7'
-26.7
185.3
29.3'
-414.3'
.7
93.8'
-50.0
-10.6'
15.3'
-94.8'
-2.4
148.3
-33.0'
170.5'
5.2'
-537.4'
-.2
-94.7
30.7
99.3
6.5
92.5
-.3
145.1
11.4
-107 3
9
-108.2
-1.5
-1.3
-4.0
-4.8
-2.8
1.5
-6.0
-3.8
-11.7'
.5
-4.0
-27.0 1
-2.7
-3.9
15.1'
-4.6
-3.3
-8.7'
-8.3
-4.3
-58.7'
10.0
-3.0
48.C
-7.9
-5.0
79.7'
7.5
-4.0
12.6
-41.7
-3.0
-97.1
2,113.3' 2,945.3'
2,984.2'
3,640.4'
3,059.2'
3,566.7'
3,787.6'
4,148.1'
4,512.9
3,583.2
3
Household
4
Nonfinancial corporate business
5
Nonfarm noncorporate business
6
State and local governments
7 Federal government
8 Rest of the world
9 Financial sectors
10 Monetary authority
11
Commercial banking
12
U.S.-chartered banks
13
Foreign banking offices in United States ..
14
Bank holding companies
15
Banks in U.S.-affiliated areas
16 Savings institutions
17 Credit unions
18 Bank personal trusts and estates
19 Life insurance companies
20
Oiher insurance companies
21
Private pension funds
22
State and local government retirement funds . . . .
23
Money market mutual funds
24
Mutual funds
25
Closed-end funds
26
Government-sponsored enterprises
27
Federally related mortgage pools
28
Asset-backed securities issuers (ABSs)
29
Finance companies
30
Mortgage companies
31
Real estate investment trusts (REITs)
32
Brokers and dealers
33
Funding corporations
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Net flows through credit markets
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank transactions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Corporate equities
Mutual fund shares
Trade payables
Security credit
Life insurance reserves
Pension fund reserves
Taxes payable
Investment in bank personal trusts
Noncorporate proprietors" equity
Miscellaneous
55 Total financial sources
56
57
58
59
60
61
Liabilities not identified as assets ( —)
Treasury currency
Foreign deposits
Net interbank liabilities
Security repurchase agreements
Taxes payable
Miscellaneous
Floats not included in assets ( - )
62 Federal government checkable deposits
63 Other checkable deposits
64 Trade credit
65 Total identified to sectors as assets
2,430.0r
1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tables
F.J and F.5. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares.
A39
A40
1.59
Domestic Financial Statistics • January 1999
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1
Billions of dollars, end of period
1998
1994
Transaction category or sector
Q2
Ql
Q3
Q4
Q3
Nonnnancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
13,013.7'
13,714.1'
14,440.8'
15,208.8'
14,608.2'
14,727.5'
14,931.5'
15,208.8'
15,440.4'
15,636.0'
15,865.1
3,492.3
3,636.7
3,608.5
28.2
3,781.8
3.755.1
26.6
3,804.9
3,778.3
3,829.8
3,803.5
26.3
3,760.6
3 771.2
3,745.1
3,804.9
26.1
26.5
3.830.8'
3,804.8'
25.9
3,749.0
3.723.4
25.6
3,720.2
3,694.7
25.5
10,077.3'
10,659.0'
11,403.9'
10,778.4'
10,966.9'
11,160.2
11,403.9'
11,609.7'
11,887.1'
12,145.0
156.4
1,296.0
1,398.8
928.3
770.6
4,897.2'
3 761 ff
289.9'
759.1'
87.1
1,211.6
168.6
1.367.5
1,489.5
1,035.6'
839.3'
5,239.3
4.029.3
301.4
818.3
90.4
1.264.1
168.7
1,305.1
1,418.7
964.5
784.4
4,950.6'
179.3
1,326.8
1,440.2
1,000.2
788.5r
5,026.8'
3,860.6'
294.2
783.4'
168.6
1,367.5
1,489.5
1.035.6'
839.3'
5,239.3
4.029.3
301.4
818.3
90.4
1.264.1
1,236.1'
202.5
1,429.3'
1,569.0
1.097.01
873.8'
5,458.6'
4,192.4'
312.0
861.2'
93.0
1,256.9'
216.9
1,440.0
1,591.0
1,123.9
887.6
5,596.9
4,297.6
317.7
1,205.0
176.6
1,340.2
1,470.9
1,000.1
802.9'
5.142.7
3,956.8
295.8
800.3'
89.8
1,226.7
193.1
1,397.1
1,528.8
1,051.6'
865.6'
5,337.4'
4,101.3'
83.0
983.9
157.4
1,293.5
1,326.3
862.1
736.9
4,578.4'
3 529 4'
273.6'
690.8'
84.6
1.122.8
By borrowing sector
Household
Nonnnancial business
Corporate
Nonfarm noncorporate
Farm
State and local government
4,452.5'
3,947.3'
2,683.2'
1,121.8
142.2
1.121.7
4,801.1'
4,206.0'
2,915.1'
1,145.8
145.1
1,070.2
5,142.7'
4,452.9'
3,115.3'
1,187.7'
149.9
1,063.4
5,500.9'
4,783.5'
3,376.1'
1,251.2'
156.3
1,119.5
5.177.1'
4.532.3'
3.184.3'
1.199.7'
148.3
1.069.0
5.268.6r
4.612.2'
3.241.9'
1,216.8'
153.4
1,086.1
5 379.0'
4,685.7'
3,297.4'
1,232.9'
155.4
1,095.5
5,500.9'
4,783.5'
3,376.1'
1.251.2'
156.3
1,119.5
5,558.5'
4.906.9'
3,479.9'
1,271.6'
155.4
1,144.3
5,683.7'
5,032.5'
3,575.5'
1,296.1
160.9
1,170.8'
5,823.5
5,142.7
3,656.7
1,323.0
163.0
1,178.8
23 Foreign credit market debt held in
United States
370.8
441.9
518.8
569.6
524.3
539.2
557.7
569.6
584.1
606.6'
600.3
24
25
26
27
42.7
242.3
26.1
59.8
56.2
291.9
34.6
59.3
67.5
347.7
43.7
60.0
65.1
394.4
52.1
58.0
69.3
71.3
361.2
64.3
386.3
46.4
48.2
58.9
65.1
394.4
52.1
58.0
76.7
398.0
53.4'
55.9
71.4
424.9'
55.5
54.8
74.0
416.2
56.4
53.8
....
By set lor and instrument
2 Federal government
3
Treasury securities
4
Budget agency securities and mortgages
3.465.6
26.7
5 Nonfederal
By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit
17
18
19
20
21
22
Commercial paper
Bonds
Bank loans n.e.c
Other loans and advances
28 Total credit market debt owed by nonnnancial
sectors, domestic and foreign
139.2
1,341.7
1.253.0
759.9
669.6
4,374.1'
3,355.5'
265.6
670.0'
13,384.5'
14,156.0'
14,959.6'
26.5
15,778.4'
3,805.7'
290.9'
766.3'
87.7
1.186.4
351.6
43.5
59.9
15,132.5'
3,734.3
26.3
88.7
60.3
15,266.7'
3.778.3
306.4
838.3
91.4
887.2
94.3
1,288.7
15,489.2'
15,778.4'
16,024.5'
16,242.6'
16,465.5
Financial sectors
29 Total credit market debt owed by
financial sectors
30
31
32
33
34
35
36
37
38
39
By instrument
Federal government-related
Government-sponsored enterprise securities
Mortgage pool securities
Loans from U.S. government
Private
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
40
41
42
43
44
45
46
47
48
49
50
51
52
By borrowing sector
Commercial banks
Bank holding companies
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Brokers and dealers
Finance companies
Mortgage companies
Real estate investment trusts (RFJTs)
Funding corporations
3,822.2
4,281.2
4,837.3
5,448.6'
4,916.5
5,084.9'
5,205.3'
5,448.6'
5,653.5'
5,911.5'
6,164.5
2,172.7
700.6
1.472.1
.0
1,649.5
2,376.8
806.5
1,570.3
.0
2,608.3
896.9
1,711.4
.0
2,229.1
579.1
1,385.1
69.7
162.9
32.2
2,821.0
995.3
1,825.8
.0
2,627.5'
745.7
1.560.0'
2.634.7
2,706.2
944.2
1,762.1
.0
2,746.5
2,821.0
995.3
1,825.8
.0
2,627.5'
745.7
1,560.0'
83.3
198.5
40.0
2,877.9
1,030.9
1,847.0
.0
2.775.6'
804.9
1,634.7'
87.3
206.6
42.0
2,981.2
1,072.5
1,908.7
.0
2,930.3'
838.9
1,732.5'
89.3
225.6
44.0
3,121.6
1,146.0
1,975.6
.0
3,042.9
874.2
1,777.3
99.3
246.2
46.0
148.7
181.2
162.9
.7
1.8
1,030.9
1,847.0
159.6'
190.5'
363.4
140.6
168.6
160.3
.6
1.8
995.3
1,825.8
1.089.3'
35.3
554.5
30.3
72.6
373.8
35.1
571.9
31.6
81.7
412.9
.8
1.6
1,072.5
1,908.7
1,236.7'
40.1
596.9
30.2
90.1
413.0'
169.6
20O.3
186.6
1.0
2.0
1,146.0
1,975.6
1,308.7
44.2
589.5
30.9
97.0
413.1
20,694.5
21,227.0
21,678.0'
22,154.1'
22,630.0
1,074.8
6,708.6'
1,397.1
3,561.5'
1,192.3'
1,128.2'
5,379.4'
1,236.1'
1,112.7
6,730.2
1.429.3'
3,726.4'
1,241.8'
1.154.3'
5.502.6'
1,256.9'
1.165.1
6,841.8
1.440.0
3,784.5
1,279.6
1,187.5
5,642.9
1,288.7
441.6
1.008.8
48.9
131.6
18.7
1.904.4
486.9
1.205.4
52.8
135.0
24.3
94.5
102.6
133.6
148.0
115.0
.4
112.4
.5
.6
700.6
1,472.1
579.0
34.3
433.7
18.7
31.1
211.0
s
113.6
150.0
140.5
.4
1.6
806.5
896.9
1,570.3
720.1
29.3
483.9
19.1
36.8
248.6
1,711.4
873.8
27.3
529.8
31.5
47.8
312.7
83.3
198.5
40.0
140.6
168.6
160.3
.6
1.8
995.3
1,825.8
1,089.3'
35.3
554.5
30.3
72.6
373.8
894.7
1,740.0
.0
2,281.8
623.0
2,378.6'
642.5
1,396.5
70.6
157.9
33.8
1,457.6'
69.2
173.7
35.6
115.3
151.6
136.3
.4
1.8
894.7
1,740.0
889.9
26.6
528.4
31.4
51.6
348.6
125.7
160.5
144.3
.4
1.8
944.2
1.762.1
917.9'
35.3
557.8
28.3
56.6
350.0
955.8
1,790.7
.0
2,458.8'
684.7
1,478.1'
74.8
183.0
38.2
130.0
164.0
149.8
.5
1.9
955.8
1,790.7
989.0'
33.6
532.7
29.2
64.6
1.147.2'
170.7
All sectors
53 Total credit market debt, domestic and foreign
54
55
56
57
58
59
60
61
Open market paper
US. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit
17,206.8'
18,437.2r
19,797.0'
623.5
5.665.0
1,341.7
2.504.0
834.9
860.9
4,392.8'
983.9
700.4
6,013.6
1,293.5
2,823.6
949.6
931.1
4,602.7'
1,122.8
803.0
6,390.0
1,296.0
3.131.7
1,041.7
993.6
4,929.4'
1,211.6
1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.
21,227.0
979.4
6,625.9
1,367.5
3,444.0'
1,171.0'
1,095.8'
5.279.3
1,264.1
20,049.0'
861.1
6,464.5
1,305.1
3,166.8
1,078.6
1,002.3
4,984.3'
1,186.4
20,351.5'
893.1
6,466.8
1,326.8
3,259.1'
1,115.8
1,022.5'
5,062.5'
1,205.0
925.7
6,517.7
1,340.2
3,335.3'
1,123.1
1,044.9'
5,180.9
1,226.7
979.4
6,625.9
1,367.5
3,444.0'
1,171.0'
1,095.8'
5,279.3
1,264.1
Flow of Funds
1.60
A41
SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars except as noted, end of period
1998'
Transaction category or sector
1994
Qi
Q2
Q3
Q4
Ql
Q2
Q3
21227.0
21,678.0
22,154.1
22,630.0
2,761.1'
1,791.3'
305.8'
49.4
614.5
200.4
2,258.9'
16,006.6'
431.4
4,031.9'
3,450.7
2,699.8
2,766.7
1,778.2
289.7
51.0
2,758.4
1,739.5
291.8
51.8
675.3
210.9
CREDIT MARKET DEBT OUTSTANDING
1 Total credit market assets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
2S
29
30
31
32
33
Domestic nonfederal nonfinancial sectors
Household
Nonfinancial corporate business
Nonfarm noncorporate business
State and local governments
Federal government
Rest of the world
Financial sectors
Monetary authority
Commercial banking
U.S.-chartered banks
Foreign banking offices in United States . .
Bank holding companies
Banks in U.S.-afnliated areas
Savings institutions
Credit unions
Bank personal Irusts and estates
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Money market mutual funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (RElTsj
Brokers and dealers
Funding corporations
17,206.8'
18,437.2'
19,797.0'
21,227.0
3,038.1"
1,981.4'
289.2
37.6
729 9
203.4
2,890,0'
1,928.7'
280.4
42.3
1,216.0
1,5303
13,813.7'
2.919.3'
1,966.7'
291.0'
46.7
614.8
195.5
1,931.2
14,750.9'
393.1
3,707.7
2,761.1'
1,791.3'
305.8'
49.4
614.5
200.4
2,258.9'
16,006.6'
431.4
4,031.9'
3,450.7
516.1
27.4
37.8'
12,749.2
368.2
3,2543
2,869.6
337.1
18.4
638.6
203.2
380.8
920.8
246.8
248.0
1,482.6
446.4
656.9
455.8
459.0
718.8
86.0
663.3
1,472.1
541.7
476.2
36.5
133
93.3
109.3
3,520.1
3,056.1
412.6
18.0
33.4
913.3
263.0
239.7
1,581.8
468.7
718.2
483.3
545.5
7713
96.4
748.0
1,570.3
661.0
526.2
33.0
15.5
183.4
94.1'
17,206.8r
18,437.2'
29.2
3,175.8
475.8
22.0
34.1
933.2
288.5
232.0
1,654.3
491.2
766.5
529.2
634.3
820.2
101.1'
813.6
1,711.4
784.4
544.5
41.2
17.5
167.7
119.3'
928.5
305.3
239.5
1,755.2
515.3
834.2
565.8
721.9
901.1
97.7'
908.6
1,825.8
950.4'
566.4
57.6
15.5
20,049.0' 20,351.5' 20,694.5
2,849.1'
1,909.6'
286.8
47.4
605.4
195.9
2,019.4
14.984.6'
397.1
3.775.7
3,218.1
499.5
225
356
9319
291.2
2,798.0'
1,849.7'
281.4'
48.0
618.9
197.3
2,095.0'
15,261.2'
412.4
3,856.8
3,295.2
501.8
23.8
36.1
937.8
299.9
235.5
1,724.1
498.6
794.9
542.7
656.5
861.3
99.4'
854.8
1,762.1
818.9'
553.1
34.8
16.5
161.2
139.9'
2,739.4'
1,793.7'
290.4'
48.7
606.6
198.2
2,196.4'
15,560.5'
412.7
3,912.9
3.351.9
501.0
22.5
37.5
929.0
303.9
2373
1,750.4
506.6
811.5
516.1
27.4
37.8'
928.5
305.3
239.5
1.755.2
515.3
834.2
565.8
721.9
901.1
1,744.4
294.7
50.2
610.5
204.3
2.323.5
16,450.3
433.8
4,093.3
3,505.1
517.9
31.2
39.2
931.0
306.7
647.8
207.5
2,401.6
16.7783
440.3
4,136.4
3.543.6
525.6
26.8
40.4
928.1
315.1
2,421.7
17,239.0
446.5
4.195.6
3,616.2
510.0
283
41.1
937.8
320.7
241.4
1.8233
5183
912.1
240.1
240.9
908.6
1,825.8
950.4'
566.4
57.6
15.5
181.4
1,784.8
521.1
852.3
582.5
775.0
939.3
97.1
949.5
1,847.0
993.5
572.0
60.2
15.0
244.0
1.801.9
520.8
887.7
600.2
815.9
977.6
96.5
985.9
173.2'
212.0
1,075.3
579.0
57.4
14.5
196.9
199.2
21,678.0
22,154.1
22,630.0
48.9
9.2
18.3
619.4
219.7'
1,286.6
2,474.1
713.4
1,048.7
815.1
2,989.4
468.2
646.7
7,399.0'
1,417.0'
138.4'
1,082.8
6,504.4'
48.2
9.2
18.4
608.1
182.7
1,259.4
2,525.2
760.9
1,130.7
879.5
3,340.2
505.3
658.6
7.957.6
1.407.0
149.4
1.179.3
6.789.6
50.1
9.2
18.4
192.2
1.321.0
2,530.8
754.0
1,153.7
867.0
3,439.0
481.0
667.8
8,052.7
1,413.9
140.4
1,207.2
6.874.4
54.5
9.2
18.8
649.6
192.8
1,282.8
2.553.4
776.2
1,249.7
913.6
3.1173
491 8
674.3
7.528.6
1,422.8
150.8
1.112.4
7,210.9
49,126.2' 4S.244.2'
46,629.6' 48,102.1' 49,126.2'
51,087.1
51,957.0
52,039.5
181.4
173 2'
232.8
1,680.2
491.6
780.3
531.6
659.0
838.5
100.3'
824.3
1,740.0
794.6
552.4
40.9
17.0
164.1
141.1'
562.0
678.7
890.4
98.5'
868.7
1,790.7
863.3'
554.4
55.5
15.9
165.1
142.9'
97.7'
1,908.7
621.4
869.9
1,007.0
95.9
1,048.1
1,975.6
1,138.4
593.7
58.9
14.0
227.8
192 7
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Total credit market debt
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Other liabilities
Official foreign exchange
Special drawing rights certificates .. .
Treasury currency
Foreign deposits
Net interbank liabilities
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Mutual fund shares
Security credit
Life insurance reserves
Pension fund reserves
Trade payables
Taxes payable
Investment in bank personal trusts . . .
Miscellaneous
53 Total liabilities
Financial assets not included in liabilities (+)
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business
57
58
59
60
61
62
Liabilities not identified as assets ( —)
Treasury currency
Foreign deposits
Net interbank transactions
Security repurchase agreements
Taxes payable
Miscellaneous
Floats not included in assets (—)
63 Federal government checkable deposits
64 Other checkable deposits
65 Trade credit
66 Total identified to sectors as assets
53.2
8.0
17.6
373.9
280.1
1,242.0
2,183.2
411.2
602.9
549.5
1,477.3
279.0
5053
4,870.5
1,140.6
101.4
699.4
5,331.6'
37,333.7'
63.7
10.2
18.2
418.8
290.7
1,229.3
2.279.7
476.9
745.3
659.9
1,852.8
305.7
550.2
5,589.4'
1,242.2'
107.6
803.0
5,705.9'
19,797.0'
53.7
9.7
18.3
516.1
240.8
1,245.1
2,377.0
590.9
891.1
699.9
2,342.4
358.1
593.8
6,315.4'
1,319.0'
123.8
871.7
6,028.5'
40,786.5' 44,392.1'
48.9
9.2
18.3
619.4
219.7'
1,286.6
713.4
1,048.7
815.1
2,989.4
468.2
646.7
7.399.0'
1.417.0'
138.4'
1,082.8
6,504.4'
20,049.0'
46.3
9.2
18.4
562.8
210.9
1,220.0
2,427.1
606.0
950.8
713.8
2,410.6
380.0
606.2
6,402.3'
1.301.8'
137.3
888.7
6,302.8'
20,351.5' 20,694.5
46.7
9.2
18.4
568.8
197.1
1,265.3
2,432.3
646.7
952.4
766.7
2,717.5
414.8
621.9
6,907.5'
1,319.8'
133.9'
982.9
6,276.1'
46.1
9.2
18.7
597.8
189.4'
1,234.2
2,438.8
696.1
1,005.1
795.4
2,973.6
4322
6376
7,290.6'
1,352.0'
143.2'
1,058.9
6,488.9'
21,227.0
630.4
22.1
8331.3
3.598.7"
21.4
10,062.4
3,806.7'
21.1
12,776.0
4,129.6'
20.9
10,063.5
3,903 4'
21.1
11,627.0
3,992.9'
21.0
12,649.4
4,059.6'
21.1
12,776.0
4,129.6'
21.2
14,397.6
4,140.2
21.0
14,556.1
4.169.2
21.2
12,758.4
4,151.0
-5.4
-5.8
325.4
360.2
-6.5
-9.0
67.8
90.7
48.8
62.4
-1,039.2' -1.324.3'
-6.7
431.2
-10.6
90.0
76.9
-1,698.4'
-7.3
534.5
-32.2'
149.5'
91.5'
-2,106.4'
-6.8
475.4
-1.6
68.1
74.8
-1,576.9'
-6.9
478.1'
-8.1
108.6
77.6'
-1,675.4'
-6.7
-73
501.5
534.5
-22.1
-32.2'
116.4'
149.5'
88.0'
91.5'
-1.656.8' -2,106.4'
-7 4
510.8
-21.2
177.8
87.3
-2,017.5
-7.4
547.1
- 17.1
145.7
91.6
-2,022.3
-7.1
558.1
-15.5
170.4
97.9
-1,990.9
26.2
-280.5'
-9.7
25 6
-339.5'
-6.8
27.9
-366.6'
26.2
-280.5'
-10.4
21.4
-330.0
-16.1
24.2
-365.9
-12.0
15.7
-390.4
67,685.8' 60,522.6' 63,642.1' 66,172.6' 67,685.8'
71,235.2
72,323.7
70,543.7
21.1
6.237.9
3,380.4'
3.4
38.0
-245.9
3.1
34.2
-257.6'
-1.6
30.1
-284.5'
47,786.6'
53,784.7'
59,656.3'
1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
L. 1 and L.5. For ordering address, see inside front cover.
21,227.0
-8.1
19.5
-372.3'
2. Excludes corporate equities and mutual fund shares.
A42
2.10
Domestic Nonfinancial Statistics • January 1999
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
Monthly data seasonally adjusted, and indexes 1992=100, except as noted
1996
1 Industrial production
2
3
4
5
6
7
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
122.5
124.2
115.2
140.3
117.1
142.5
123.2
125.3
115.8
142.4
116.9
142.7
Apr.
May
June
July'
Sept.'
Oct.
131.3
131.9
130.6
130.5
132.5
132.0
132.0
124.0
126.2
116.4
143.6
117.3
143.1
124.5
126.6
116.8
144.2
118.2
143.6
123.6
125.5
115.1
144.1
118.0
141.8
123.3
124.7
114.0
143.9
119.1
141.9
125.1
127.0
116.1
146.5
119.1
144.5
124.4
126.1
115.2
145.8
118.9
144.5
124.4
126.4
115.1
146.6
118.4
144.4
110.7
111.5
109.5
114.9
108.1
120.4
114.4
115.5
111.3
122.7
110.9
127.8
119.6
121.1
114.1
133.9
115.2
138.2
115.9
121.4
129.7
82.7
81.4
82.0
81.8
81.6
81.7
81.6
80.2
122.1
130.9'
142.2'
148.O1
144.01
149.0'
149.0'
149.0'
150.0
148.0
140.0
136.0
122.5
102.4
99.1
100.5
128.9
180.9
179.5
151.2
176.7
172.4
122.8
102.7
99.1
100.4
129.3
181.4
180.3
151.0
177.0
173.7
123.2
102.5
99.0
100.1
129.7
182.2
181.5
151.5
177.5
175.8
123.3
102.6
98.9
99.9
130.0
182.7
181.8
150.5
177.9
176.0
123.5
101.9
97.9
98.4
130.4
183.4
182.8
149.6
178.6
174.8
123.8
102.4
98.4
99.1
130.6
184.2
184.1
151.4
179.2
174.9
123.9
102.2
98.3
99.2
130.9
184.5
184.3
151.8
179.4
175.4
124.0
102.1
98.1
98.9
131.1
n.a.
n.a.
n.a.
n.a.
177.1
162.2
130.1
162.5
130.4
162.8
130.6
163.0
130.7'
163.2
130.9
163.4
130.6
163.6
130.6
164.0
131.4
Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing (percent)
10 Construction contracts^
11 Nonagricultural employment, total4
12 Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15 Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
19 Disposable personal income 5
20 Retail sales5
Prices6
21 Consumer (1982-84=100)
22 Producer finished goods (1982= 100)
114.9
98.3
97.5
99.0
120.2
156.1
150.9
130.3
156.4
151.5
117.2
99.0
97.2
98.4
123.0
165.2
159.8
135.7
164.0
159.6
119.9
100.3
97.6
98.9
126.2
174.5
171.2
144.7
171.7
166.9
122.4
102.6
99.1
1O0.6
128.8
180.2
178.9
151.0
176.0
172.2
152.4
127.9
156.9
131.3
160.5
131.8
161.9
130.2
1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1998. The receni! annual revision is described in an article in the
January 1999 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the Federal
Reserve, DRI McGraw-Hill, US. Department of Commerce, and other sources.
2.11
3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge
Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers
employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price
indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics,
Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series
mentioned in notes 3 and 6, can also be found in the Survey of Current Business.
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted
Category
1995
1996
1997
Mar.
Apr.
May
Sept.'
July
HOUSEHOLD SURVEY DATA 1
1 Civilian labor force2
Employment
2
Nonagricultural industries3
3
Agriculture
Unemployment
4
Number
5
Rate (percent of civilian labor force)
132,304
133,943
126,297
137,242
137,364
137,447
137,296
137,415
138,075
137,976
121,460
3,440
123,264
3,443
126,159
3.399
127,862
3,132
128,033
3,350
128,118
3,335
127,867
3,343
127,626
3,441
127,640
3,529
128,247
3,518
128,075
3,603
7,404
5.6
7,236
5.4
6,739
4.9
6.529
4.7
5,859
4.3
5,910
4.3
6.237
4.5
6,230
4.5
6,247
4.5
6,310
4.6
6,299
4.6
117,191
119,523
122,257
124,914
125,234
125,562
125,751
125,869
126,191r
126,348
126,464
18.524
581
5,160
6,132
27,565
6,806
33,117
19,305
18,457
574
5,400
6,261
28,108
6,899
34,377
19,447
18,538
573
5,627
6,426
28,788
7,053
35,597
19,655
1-8,829
587
5,860
6,504
29,042
7,258
37,106
19,728
18,827
582
5,930
6,513
29,133
7,289
37,196
19,764
18,805
579
5,917
6,534
29,238
7,311
37,350
19,828
18,780
578
5,946
6,538
29,269
7,333
37,494
19,813
18,594
571
5,970
6,550
29,374
7,370
37,614
19,826
18,693
571
5,989'
6,570'
29,383'
7,372
37,691'
19,922'
18,683
570
5,968
6,572
29,472
7,385
37,756
19,942
18,631
565
5,987
6,591
29,463
7,410
37,851
19,966
ESTABLISHMENT SURVEY DATA
6 Nonagricultural payroll employment4
7
8
9
10
11
12
13
14
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
1. Beginning January 1994, reflects redesign of current population survey and population
controls from the 1990 census.
day;
population figures.
3. Includes self-employed, unpaid family, and domestic service workers.
4. Includes all full- and part-time employees who worked during, or received pay for, the
pay period that includes the twelfth day of the month; excludes proprietors, self-employed
persons, household and unpaid family workers, and members of the armed forces. Data are
adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this
time.
SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings.
Selected Measures A43
2.12
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION'
Seasonally adjusted
1997
Q4'
1998'
Ql
Q2
Q3
Output (1992=100)
1 Total industry ..
129.8
130.4
2 Manufacturing.. .
3
4
Q4r
Ql
Q2
Q3
Capacity (percent of 1992 output)
Q4r
Ql
Q2
Q3
Capacity utilization rate (percent)
131.3
131.7
155.7
159.6
161.5
83.4
82.7
82.3
81.5
134.7
134.9
161.3
165.8
168.1
82.5
81.8
81.2
80.3
Primary processing
Advanced processing4
121.0
139.0
121.2
140.1
121.1
141.4
120.4
142.1
141.8
170.7
143.0
173.5
144.0
176.4
145.1
179.2
85.3
81.4
84.8
80.8
84.1
80.2
83.0
79.3
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment.
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
153.0
114.5
128.5
127.9
129.1
187.5
273.7
147.5
154.4
115.6
128.2
128.3
128.0
194.1
278.2
140.8
156.1
116.4
125.3
124.0
127.0
203.0
282.8
135.3
157.8
117.9
122.5
119.0
126.7
208.3
290.7
136.8
186.5
140.8
139.7
139.4
139.8
219.5
335.1
181.4
190.2
142.0
140.8
140.9
140.4
226.5
351.2
182.8
193.9
143.0
142.0
142.8
140.8
234.7
366.6
183.9
197.5
143.9
143.2
144.6
141.3
242.9
381.6
184.9
82.1
81.3
92.0
91.8
92.3
85.4
81.7
81.3
81.2
81.4
91.0
91.0
91.2
85.7
79.2
77.0
80.5
81.4
88.3
86.9
90.1
86.5
77.1
73.6
79.9
81.9
85.5
82.3
89.7
85.7
76.2
74.0
99.3
102.7
106.1
107.1
126.7
127.0
127.5
128.0
78.4
80.8
83.2
83.7
14
15
16
17
18
19
Nondurable goods
Textile mill products . ..
Paper and products
Chemicals and products.
Plastics materials
Petroleum products
112.4
113.5
115.8
116.6
128.2
110.3
112.7
113.6
115.5
116.8
127.3
111.6
112.7
113.2
115.0
116.9
127.5
112.0
111.6
112.7
115.0
115.0
131.3
113.0
135.0
133.9
129.6
146.1
138.2
115.8
135.8
134.8
1306
147.1
139.4
116.2
136.6
134.9
131.6
148.0
140.7
116.5
137.5
135.1
132.5
148.9
141.9
116.8
83.3
84.7
89.3
79.8
92.8
95.2
83.1
84.3
88.5
79.4
91.3
96.1
82.5
83.9
87.4
79.0
90.6
96.1
81.1
83.5
86.8
77.2
91.7
96.8
105.9
114.2
115.1
107.0
110.9
112.8
105.3
115.6
118.3
104.0
119.5
121.6
119.4
125.8
123.5
119.7
125.9
123.5
119.9
126.2
123.8
120.1
126.5
124.0
88.6
90.8
93.2
89.4
88.1
91.3
87.8
91.6
95.6
86.6
94.5
98.0
Oct.
May
June
July'
Aug.'
Sept.
Oct.p
20 Mining ..
21 Utilities...
22
Electric .
Previous cycle
High
Hjgh
Low
Latest cycle"
High
Low
Capacity utilization rate (percent)2
1 Total industry
72.6
87.3
71.1
85.4
78.1
83.4
82.6r
81.5r
81.1
82.0
81.4
81.1
2 Manufacturing
70.5
86.9
69.0
85.7
76.6
82.3
81.6'
80.2'
79.8
80.9
80.1
80.1
91.2
87.2
68.2
71.8
88.1
86.7
66.2
70.4
88.9
84.2
77.7
76.1
85.2
81.3
84.3'
80.7'
83.3'
79.2'
83.4
78.5
83.3
80.1
82.4
79.4
82.1
79.4
88.7
100.2
105.8
90.8
68.9
61.2
65.9
66.6
59.8
87.7
87.9
94.2
95.8
91.1
63.9
60.8
45.1
37.0
60.1
84.6
93.6
92.7
95.2
89.3
73.1
75.5
73.7
71.8
74.2
82.0
80.9
92.0
92.3
91.9
81.1'
81.4'
89.1'
87.9'
90.6'
79.3'
81.5'
85.8'
83.5'
88.6'
78.6
81.8
85.9
83.5
88.9
81.0
82.3
87.2
85.2
89.7
80.0
81.6
83.6
78.1
90.4
80.1
81.9
82.8
76.7
90.4
96.0
89.2
93.4
74.3
64.7
51.3
93.2
89.4
95.0
64.0
71.6
45.5
85.4
84.0
89.1
72.3
75.0
55.9
85.7
81.9
80.1
86.3'
76.9'
78.3'
86.6'
76.8'
65.7'
87.0
76.8
58.3
85.4
76.2
83.4
84.8
75.5
80.2
84.0
75.4
81.3
78.4
67.6
81.9
66.6
87.3
79.2
78.1
83.4'
83.2'
83.8
84.0
83.2
84.7
87.8
91.4
97.1
87.6
102.0
96.7
71.7
60.0
69.2
69.7
50.6
81.1
87.5
91.2
96.1
84.6
90.9
90.0
76.4
72.3
80.6
69.9
63.4
66.8
87.3
90.4
93.5
86.2
97.0
88.5
80.7
77.7
85.0
79.3
74.8
85.1
83.1
84.8
89.0
79.8
91.7
96.0
82.7'
84.8'
87.4'
79.0'
90.5'
95.7'
81.8'
83.0'
87.1'
78.3'
89.7'
95.7'
81.7
83.9
87.7
77.9
91.6
97.2
81.1
83.5
87.0
77.0
92.9
97.6
80.6
83.0
85.6
76.8
90.7
95.5
80.4
83.0
84.9
76.8
90.8
92.4
94.3
96.2
99.0
88.2
82.9
82.7
96.0
89.1
88.2
80.3
75.9
78.9
88.0
92.6
95.0
87.0
83.4
87.1
89.0
92.3
95.0
87.9'
91.3'
96.0'
87.3'
94.0'
97.7'
87.2
93.7
96.7
86.6
94.3
97.7
86.0
95.6
99.7
84.6
92.0
95.5
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Primary processing3
Advanced processing4
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment .
Nondurable goods.
Textile
mill products
"
Paper and products
Chemicals and products
Plastics materials
Petroleum products
20 Mining
21 Utilities
22 Electric
1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1998. The recent annual revision is described in an article in the
January 1999 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Histoncal Revision and Recent Developments." Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Histoncal Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2 Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted
index of industrial production to the corresponding index of capacity.
3. Primary processing includes textiles: lumber; paper; industrial chemicals; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;
primary metals; and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing
and publishing; chemical products such as drugs and toiletries; agricultural chemicals, leather
and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
A44
2.13
Domestic Nonfinancial Statistics • January 1999
INDUSTRIAL PRODUCTION
Indexes and Gross Value1
Monthly data seasonally adjusted
Group
1992
proportion
1997'
1997
avg.
Feb.'
Mar.'
Apr.'
June'
July'
Aug.'
Sept.
131.9
130.6
130.5
132.5
132.0
132.0
123.3
124.7
114.0
124.6
107.3
92.8
75.8
110.0
125.6
138.7
125.1
127.0
116.1
140.0
141.7
151.4
124.4
178.9
127.6
138.3
124.4
126.1
115.2
137.5
135.8
143.4
128.3
161.2
124.7
138.7
124.4
126.4
115.1
139.7
140.3
150.3
119.9
180.6
125.8
138.9
May'
Index (1992 - 100)
MAJOR MARKETS
1 Total index
100.0
2 Products
3
Final products
4
Consumer goods, total
5
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods
11
Other
12
Appliances, televisions, and air
conditioners
13
Carpeting and furniture
14
Miscellaneous home goods
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
18
Chemical products
39
Paper products
20
Energy
21
Fuels
22
Residential utilities
60.5
46.3
29.1
6.1
23
24
25
26
27
28
29
30
31
32
33
34
35
36
126.8
129.3
129.9
130.3
130.3
130.2
130.7
131.3
.9
3.5
119.6
121.1
114.1
129.6
129.1
135.7
114.9
157.1
118.5
130.1
121.5
123.1
114.9
131.0
132.0
141.1
114.4
166.6
118.0
130.1
122.2
124.1
115.9
135.1
138.4
149.1
119.4
177.3
122.1
132.4
122.3
124.0
115.4
133.3
134.5
144.1
113.1
173.5
119.8
132.3
122.6
124.5
116.0
135.1
133.0
141.0
115.1
166.1
120.5
136.7
122.5
124.2
115.2
134.5
131.5
138.6
104.8
170.5
120.3
136.9
123.2
125.3
115.8
135.9
132.7
138.9
106.5
169.8
122.7
138.5
124.0
126.2
116.4
136.9
134.6
141.3
107.4
173.8
123.7
138.8
124.5
126.6
116.8
138.3
136.8
143.5
108.4
177.1
126.0
139.4
123.6
125.5
115.1
130.7
121.7
118.2
93.8
142.2
125.4
137.8
1.0
.8
1.6
23.0
10.3
2.4
4.5
2.9
2.9
.8
2.1
176.1
112.8
114.2
110.2
108.2
101.1
119.5
108.0
111.6
109.3
112.3
181.3
113.0
112.2
110.8
107.8
101.1
121.3
108.2
115.6
111.5
117.1
186.5
116.8
112.4
111.2
109.2
100.0
120.9
110.8
112.0
107.4
113.9
187.4
112.6
114.1
110.9
108.4
100.6
121.8
109.5
112.5
110.2
113.2
195.5
119.2
115.6
111.3
110.4
100.7
121.3
109.2
109.1
111.0
107.6
197.9
115.8
116.8
110.5
1(0.1
99.3
121.2
107.7
106.5
110.4
104.0
203.8
114.3
118.3
110.8
109.1
100.4
121.3
106.3
113.2
111.2
113.7
203.4
115.9
118.2
111.4
110.2
99.9
123.2
106.2
111.5
111.6
111.0
202.7
119.1
117.9
111.5
110.8
98.8
122.5
105.7
112.5
110.9
112.9
199.9
117.0
117.1
111.2
108.5
98.8
122.8
105.3
118.2
111.4
121.2
207.8
117.3
115.9
111.2
108.5
98.4
122.2
106.3
118.4
112.9
120.7
209.2
116.1
115.3
110.3
107.8
97.2
119.1
106.6
119.4
112.1
122.7
206.1
117.1
116.5
109.8
107.1
96.1
119.0
106.3
118.8
109.3
123.2
208.3
118.4
115.4
109.2
107.6
94.6
118.9
106.3
114.0
105.0
118.1
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
17.2
13.2
5.4
1.1
4.0
2.5
1.2
1.3
3.3
.6
133.9
148.7
181.6
415.8
136.1
116.7
124.0
136.0
76.2
149.3
141.4
137.9
154.4
190.3
465.0
138 6
123.7
127.7
139.7
75.8
150.6
139.8
138.6
155.4
191.8
474.3
138 0
127.0
133.4
138.8
75.7
151.6
141.5
139.4
156.5
194.5
496.8
139.8
125.6
127.4
138.7
75.8
149.6
142.3
139.5
156.3
195.3
520.3
138.4
126.0
126.2
137.7
76.2
153.9
147.1
140.3
157.0
199.2
547.4
136.6
126.8
120.9
136.9
76.3
157.4
149.6
142.4
160.1
202.3
584.9
139.4
130.3
121.6
139.8
75.9
155.7
148.0
143.6
162.2
206.0
601.5
139.4
133.6
123.4
140.8
75.9
147.6
148.0
144.2
163.1
209.2
620.6
138.1
135.5
125.1
139.6
76.0
147.1
149.0
144.1
163.6
210.3
638.6
142.9
128.2
108.6
141.7
75.8
136.7
146.1
143.9
163.5
211.8
654.6
144.2
121.9
91.7
146.6
76.1
131.9
151.1
146.5
167.3
214.0
674.2
142.8
142.5
136.9
132.6
76.5
127.7
145.7
145.8
166.8
215.6
696.5
139.6
139.5
131.0
141.0
75.7
123.4
145.0
146.6
167.7
217.6
715.8
139.2
141.7
129.6
140.7
76.7
119.4
146.0
Intermediate products, total
Construction supplies
Business supplies
14.2
5.3
115.2
122.4
111.0
116.5
122.3
113.0
116.3
123.6
112.0
117.0
124.2
112.6
117.0
125.5
112.0
117.1
125.7
112.1
116.9
124.7
112.2
117.3
125.4
112.5
118.2
126.6
113.3
118.0
126.1
113.2
119.1
128.5
113.6
119.1
128.5
113.6
118.9
127.5
113.7
118.4
127.9
112.8
39.5
20.8
4.0
7.6
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3
138.2
165.0
143.1
238.5
127.2
121.9
113.4
111.2
115.9
114.4
110.0
103.7
101.4
108.0
141.9
171.9
146.1
256.6
129.6
124.0
114.4
112.8
117.7
116.1
108.4
104.2
101.6
109.2
142.4
173.2
147.0
259.2
130.5
125.8
115.5
112.4
116.8
116.9
113.0
102.2
99.7
107.1
143.4
174.1
150.0
261.1
130.0
123.5
116.1
113.5
117.9
117.6
112.3
103.8
101.1
109.1
142.6
173.6
143.1
263.4
130.7
126.1
114.8
109.9
117.2
117.2
110.0
103.0
101.6
105.8
142.5
173.5
144.2
264.5
129.7
125.9
114.9
111.1
117.0
116.5
111.4
102.8
101.4
105.6
142.7
173.7
143.7
265.8
129.7
123.7
114.2
110.6
116.3
115.6
111.0
103.7
101.0
109.0
143.1
174.5
144.4
266.9
130.3
123.5
114.4
110.5
116.3
116.2
110.9
103.8
101.3
108.6
143.6
175.4
147.9
268.6
129.6
123.0
114.1
111.0
115.5
115.6
111.2
104.3
101.0
110.8
141.8
171.7
131.9
271.0
128.3
120.1
113.9
110.2
117.3
114.8
110.6
104.8
101.8
110.7
141.9
171.8
129.7
274.1
128.1
120.2
114.1
110.1
117.3
114.6
111.7
104.8
102.9
108.6
144.5
177.5
149.6
277.3
128.6
122.4
113.7
109.7
116.4
114.3
111.8
104.4
101.3
110.4
144.5
177.0
147.5
279.0
128.0
118.4
113.0
109.3
114.9
113.6
111.5
105.9
102.4
112.5
144.4
178.0
149.2
281.2
128.2
117.6
112.7
109.5
113.8
113.4
111.4
103.7
100.1
110.7
97.1
95.1
126.6
126.1
129.2
128.6
129.6
129.0
130.2
129.5
130.2
129.7
130.2
129.7
130.7
130.3
131.3
130.9
131.8
131.3
131.2
131.2
131.6
131.7
132.2
131.5
131.9
131.2
131.8
131.1
98.2
27.4
26.2
123.8
112.9
114.4
126.0
113.4
114.8
126.6
114.2
116.4
126.9
113.8
115.7
126.7
114.7
116.8
126.4
113.9
116.2
126.7
114.5
116.1
127.3
115.1
117.0
127.7
115.3
117.3
126.4
114.8
114.7
126.2
114.9
113.5
128.1
114.3
115.8
127.5
113.7
114.8
127.4
113.3
115.3
Durable goods materials....
Durable consumer parts . .
Equipment parts
Other
Basic metal materials ..
Nondurable goods materials.
Textile materials
Paper materials
Chemical materials
Other
Energy materials
Primary energy
Converted fuel materials. .
2.6
1.7
.9
.7
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and tmcks
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
12.0
12.1
29.8
134.4
149.0
157.5
157.9
159.9
159.7
161.1
164.6
166.7
167.4
170.0
171.8
170.7
170.8
138.5
153.7
139.2
155.1
139.7
155.8
138.8
155.0
138.7
155.0
140.8
154.9
142.3
155.5
142.6
156.0
142.7
153.4
142.2
153.6
145.4
157.1
144.4
156.6
144.9
157.1
Selected Measures A45
2.13
INDUSTRIAL PRODUCTION
1992
proportion
SIC
code
Group
Indexes and Gross Value1—Continued
1997r
1997
avg.
Nov.
Dec.
Jan.'
Feb.r
Mar.r
Apr.1
May'
June1
July'
Aug.'
Sepl.
Oc(. p
Index (1992 = 100)
MAJOR INDUSTRIES
59 Total index
126.8
129.3
129.9
130.3
130.3
130.2
130.7
131.3
131.9
130.6
130.5
132.5
132.0
132.0
85.4
26.5
58.9
129.7
119.1
134.7
132.2
120.3
138.1
133.3
121.1
139.3
133.7
121.5
139.7
133.8
121.6
139.8
133.7
121.1
140.0
134.1
121.0
140.6
134.9
121.5
141.6
135.4
121.4
142.3
133.7
120.2
140.4
133.6
120.7
139.9
135.9
120.8
143.5
135.3
119.8
143.0
135.7
119.7
143.8
24
25
45.0
2.0
1.4
147.1
114.2
117.7
151.8
113.5
118.6
153.3
114.8
119.7
154.0
115.0
120.4
153.9
115.2
119.4
154.0
116.2
118.6
155.2
115.3
121.5
156.2
116.1
121.0
157.2
116.4
120.6
154.8
116.7
122.0
154.4
117.5
120.8
160.0
118.5
119.7
159.1
117.7
121.6
160.2
118.4
122.9
32
33
331,2
331PT
333-6,9
34
2.1
3.1
1.7
.1
1.4
5.0
122.3
125.3
124.2
115.9
126.7
124.7
123.0
128.2
128.2
118.5
128.2
126.1
123.7
129.3
128.0
120.2
130.9
126.8
125.0
127.8
127.6
119.6
128.1
128.2
124.6
129.2
128.9
122.5
129.7
127.6
124.0
128.1
128.2
123.3
128.0
126.6
124.5
127.1
127.7
120.0
126.4
127.2
124.0
127.5
126.7
122 A
128.4
127.8
124.5
126.5
125.5
121.9
127.6
128.7
123.5
122.1
119.8
116.0
124.9
128.0
125.4
122.6
120.2
118.3
125.4
127.8
126.7
124.8
123.2
120.3
126.7
126.6
126.9
120.0
113.5
112.6
127.9
126.2
127.1
119.2
112.0
110.4
127.9
126.8
179.4
186.4
187.3
189.0
191.8
192.3
198.4
200.6
202.5
205.8
209.0
207.5
208.3
208.9
357
36
37
371
371PT
1.8
7.3
9.5
4.9
2.6
423.7
253.4
117.1
139.9
127.8
472.0
269.8
121.7
144.9
131.9
481.3
274.9
123.8
149.0
139.2
502.2
276.5
124.1
148.6
134.1
526.3
277.7
121.3
141.9
132.0
552.6
278.5
121.5
140.4
128.2
589.6
278.2
122.3
140.0
128.8
605.4
280.8
123.3
140.8
130.9
623.9
282.0
125.2
144.1
132.7
641.4
285.5
114.2
121.1
110.1
657.0
289.4
108.2
107.6
86.9
676.3
290.7
130.6
154.2
141.9
698.4
291.8
127.5
148.6
136.4
717.7
295.0
129.7
151.0
140.2
372-6,9
38
39
4.6
5.4
1.3
94.7
110.3
119.1
98.9
112.5
119.0
99.0
111.8
118.5
100.0
112.0
119.9
100.9
111.5
119.7
102.6
112.5
119.9
104.5
112.8
120.0
105.7
113.0
120.1
106.3
113.8
119.1
106.3
112.4
118.5
107.1
112.6
118.5
107.5
113.4
117.7
106.6
113.7
117.4
108.7
114.0
116.6
40.4
9.4
1.6
1.8
2.2
3.6
6.7
9.9
1.4
3.5
.3
111.3
108.0
110.9
112.2
102.8
114.4
105.2
114.9
109.8
128.2
81.9
112.0
107.5
112.0
113.1
102.7
115.0
106.4
116.3
III I
129.2
80.0
112.6
109.1
112.1
114.1
101.8
116.1
107.1
116.2
109.1
130.9
78.7
112.7
109.0
106.4
113.1
102.3
116.2
107.0
117.3
110.6
130.9
78.8
113.1
110.5
110.1
115.0
102.5
115.7
106.4
117.0
111.2
131.0
77.3
112.8
109.9
112.7
113.2
101.1
115.9
106.4
116.7
110.5
131.1
78.3
112.4
109.7
105.3
112.6
101.6
115.0
105.4
116.6
113.0
131.4
77.9
113.0
110.3
109.8
113.3
101.0
115.2
105.5
117.7
112.8
133.2
76.3
113.0
110.7
111.5
114.5
100.4
115.0
105.6
116.9
111.5
133.1
75.8
112.0
109.2
104.7
112.0
100.5
114.9
105.5
116.2
111.6
132.4
74.5
112.1
109.0
106.0
113.2
100.1
115.9
105.4
115.7
113.4
132.7
75.3
111.5
108.2
107.0
112.8
98.8
115.3
105.1
114.6
114.0
132.3
74.4
111.2
107.9
104.2
112.2
97.6
113.7
105.5
114.6
111.6
132.9
74.2
108.7
101.8
112.2
96.7
113.1
105.4
114.8
108.1
133.6
72.8
92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
96 Stone and earth minerals . . . .
6.9
.5
1.0
4.8
.6
105.8
110.0
107.8
103.1
120.3
106.2
113.2
107.7
103.5
119.8
104.9
115.9
100.3
102.6
122.0
106.4
107.5
116.1
102.2
121.9
107.6
110.9
112.4
103.6
127.5
107.5
123.2
104.3
104.6
123.1
105.8
109.3
103.4
104.0
120.0
105.7
106.9
107.2
102.9
123.3
105.4
108.5
106.0
102.4
124.4
104.7
108.0
110.4
1O0.4
125.6
104.6
105.7
112.8
100.0
125.4
104.0
109.4
109.7
99.3
126.4
103.5
107.7
115.8
97.6
124.2
101.9
107.2
110.8
96.4
97 Utilities
98 Electric
99 Gas
7.7
6.2
1.6
112.8
113.2
111.2
116.1
117.4
110.2
113.6
114.1
111.0
113.1
113.8
109.9
109.8
111.4
102.2
109.0
111.2
99.3
114.0
115.7
106.3
112.8
115.2
102.0
115.2
118.9
98.3
118.7
121.0
108.4
118.3
119.8
111.7
119.3
121.2
110.5
120.9
123.7
108.2
116.6
118.5
107.6
80.5
129.1
131.5
132.4
132.8
133.4
133 4
133.8
134.6
134.9
134.5
135.1
134.9
134.5
134.9
83.6
126.3
128.4
129.4
129.7
129.6
1294
129.5
130.2
130.6
128.8
128.6
130.8
130.0
130.4
60 Manufacturing
61 Primary processing
62 Advanced processing
63
64
65
66
79
80
Durable goods
Lumber and products
Furniture and fixtures
Stone, clay, and glass
products
Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products. .
Industrial machinery and
equipment
Computer and office
equipment
Electrical machinery
Transportation equipment..
Motor vehicles and parts
Autos and light trucks
Aerospace and
miscellaneous
transportation
equipment
Instruments
Miscellaneous
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing. . . .
Chemicals and products . . .
Petroleum products
Rubber and plastic products
Leather and products
67
68
69
70
71
72
73
74
75
76
77
78
35
491.493PT
492.493PT
124.7
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding office
and computing machines . .
Gross value (billions of 1992 dollars, annual rates)
MAJOR MARKETS
102 Products, total
2,001.9 2,406.1 2,440.1 2,456.3 2,455.0 2,462.9 2,456.2 2,474.5 2,489.8 2,498.5 2,470.3 2,454.6 2,525.7 2,504.0 2,504.2
103 Final
104 Consumer goods . . .
105 Equipment
106 Intermediate
1,552.1
1,049.6
502.5
449.9
1,886.0 1,914.7 1,931.2 1,927.4 1,935.8 1,928.6
1,198.0 1,208.8 1,218.8 1,212.7 1,220.1 1,210.8
687.3
708.3
714.8
717.3
718.2
720.6
528.2
528.0
528.3
521.1
525.9
526.0
I. Data in this table appear in the Board's G. 17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1998. The recent annual revision is described in an article in the
January 1999 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
1,948.1 1,961.6 1,966.1 1,938.2 1,915.6
1,218.7 1,224.8 1,225.2 1,201.8 1,185.0
734.3
732.5
739.9
744.2
740.1
538.4
527.6
529.7
533.6
532.6
1,987.4
1,226.6
764.9
539.6
1,967.8
1,212.5
759.5
537.3
1,971.2
1,212.2
763.5
534.4
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92. and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Standard industrial classification.
A46
2.14
Domestic Nonfinancial Statistics • January 1999
HOUSING AND CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1998
1997
Item
1995
1996
1997
Jan.
Dec.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Private residential real estate activity (thoi sands of units except as noted)
NEW UNITS
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped
1,333
997
335
1,354
1,076
278
776
554
222
1,319
1,073
247
341
1,426
1.070
356
1,477
1,161
316
820
584
235
1,405
1,123
283
361
1,442
1,056
387
1,474
1.134
340
834
570
264
1.407
1.122
285
354
1.467
1,094
373
1.540
1,130
410
872
580
292
1,413
1,094
319
353
1,553
1,142
411
1,545
1,225
320
888
593
295
1.314
1,007
307
362
1,635
1,176
459
1,616
1,263
353
907
609
298
1,461
1,142
319
377
1,569
1.136
433
1,585
1,239
346
911
616
295
1,486
1,130
356
374
1,517
1,145
372
1,546
1,237
309
911
619
292
1.509
1.198
311
370
1,543
1,152
391
1,538
1.224
314
917
627
290
1.458
1,112
346
374
1.517
1,128
389
1,620
1,269
351
930
639
291
1.484
1.166
318
362
1,581
1,173
408
1,704
1,300
404
937
643
294
1,549
1,225
324
380
1,618
1,180
438
1,621
1,261
360
942
647
295
1,514
1,172
342
368
1,544
1,164
380
1,579
1,248
331
949
650
299
1,470
1,183
287
369
Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1
667
374
757
326
803
287
805
282
853
281
878
281
836
285
892
286
892
287
919
287
873
285
830
286
822
292
13 V9
158.7
140.0
166.4
145.9
175.8
145.9
175.8
148.0
178.6
156.0
181.6
152.0
178.9
148.0
176.7
153.2
183.5
148.0
175.9
149.8
178.4
150.0
182.0
152.0
180.6
18 Number sold
3,812
4,087
4,215
4,370
4,370
4,770
4,890
4.770
4,830
4,740
4.910
4,730
4,680
Price of units sold (thousands
vf dollars)1
19 Median
20 Average
113.1
139.1
118.2
145.5
124.1
154.2
125.9
157.5
126.1
156.8
124.5
153.9
127.1
157.2
128.2
159.7
130.5
162.3
134.0
169.2
133.8
168.4
132.9
165.9
131.3
163.2
1
2
3
4
5
6
7
8
9
10
11
12
13
Price of units sold {thousands
of dollars)2
16 Median
17 Average
EXISTING UNITS (one-family)
Value of new construction (millions of dollars)'
CONSTRUCTION
21 Total put in place
538,158
581,813
618,051
626,290
633,714
638,180
639,913
645,974
635,396
650,341
657,710
657,834
660,643
22 Private
23
Residential
24
Nonresidential
25
Industrial buildings . . .
26
Commercial buildings.
27
Other buildings
28
Public utilities and other.
408,012
231,191
176,821
32,535
68.245
27.084
48,957
444,743
255,570
189,173
32,563
75,722
30,637
50.252
470,969
487.807
278,956
208.851
31.055
85.807
490,896
37,694
54,295
31.457
86.064
39,168
53.723
496,495
288,003
208,492
29,642
86,321
37,678
54,851
503,592
291.907
211.685
30.936
84,152
39,151
54.161
494,333
286,045
208,288
31,474
81981
37,812
55.021
500,078
289.666
52,906
478,363
273,020
205,343
29,794
83,214
39,275
53.060
510,650
299,196
211,454
28,588
87,999
37,436
57,431
511,655
299,471
212,184
31.020
85.590
37.470
58.104
511,730
302,725
209,005
28,092
84,815
38,079
58,019
29 Public
30 Military
31
Highway
32 Conservation and development
33 Other
130,147
2,983
38,126
6,371
82,667
137,070
2.639
41,326
5,926
87.179
147,082
2,625
45,246
5,628
93,583
147,927
2,342
45,306
6,422
93,857
145,907
2,474
46,067
5,281
92,085
147.284
2.916
45,561
6,305
92,502
145.580
2,818
45,559
5,488
145.896
2,850
46,175
4,985
91,886
138,901
2,471
42,030
5,146
89,254
146,749
2,659
44,541
5,989
93,560
147,060
3,309
43,776
5,445
146.180
2,912
44,757
5,370
148,913
2,513
94.530
93.141
93,996
265,536
205,433
31.417
83,727
37,382
1. Not al annual rates.
2. Nott seasonally aadjusted
3 Recent data on value of new construction may not be strictly comparable with data for
previous periods because
ecause of changes by the Bureau of the Census in its estimating techniques.
techniques
For a description of these changes, see Construction Reports (C-30-76-5), issued by the
Census Bureau in July 1976.
282,496
208,400
91,715
210.412
30.067
88,480
37.334
55,804
46,364
6,040
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are
private, domestic shipments as reported by (he Manufactured Housing Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are
published by the National Association of Realtors. All back and current figures are available
from the originating agency. Permit authorizations are those reported to the Census Bureau
from 19,000 jurisdictions beginning in 1994.
Selected Measures A47
2.15
CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 3 months earlier
(annual rate)
Change from 12
months earlier
Item
1997
1997
Oct.
1998'
level,
Oct
1998'
1998
1998
Oct.
Dec.
CONSUMER PRICES
Change from 1 month earlier
Mar.
June
Sept.
June
July
Aug.
Sept.
Oct.
2
(1982-84-100)
1 All items
2 Food
3 Energy items
4 AH items less food and energy
6
Services
2.1
1.5
1.5
.2
2.5
1.5
.1
.2
.2
.0
.2
164.0
1.8
.9
2.3
.5
3.0
2.4
-9.1
2.3
.8
3.0
1.5
-7.7
2.4
.6
3.3
1.3
-21.1
2.4
.8
3.0
3.0
-1.9
2.6
1.1
3.2
2.0
-8.7
2.3
1.1
3.0
.1
-.7
.1
.0
.2
.2
.0
.2
.1
.2
.2
-1.0
.2
.2
.3
.0
-1.3
-.1
.3
.6
.9
.2
.0
->
162.0
101.3
174.7
143.8
192.3
-.3
-1.1
-1.9
.7
-.3
-.7
.3
-10.1
2.0
-.4
-1.2
1.5
-5.7
-.3
-2.0
-3.0
-1.8
-27.0
3.9
.0
.3
.9
-1.1
1.4
-1.2
.3
1.8
-10.2
3.3
.9
-.2
.1'
-1.2'
.0
-.1'
.2
.4
-.3'
.3
.1
-.4
-.4
-2.3
.0
-.3
.3
.4
-.1
.5
.4
.2
.4
1.2
.0
.0
131.4
135.5
74.8
148.9
138.0
_ 2
.4
-2.3
-1.1
-.6
.0
-4.4
-.9
-1.3
-1.2
-1.9
-1.5
-.3'
-.1
-A'
.0
-.2
-.1
-.3
-.2
-.3
122.7
132.7
-7.9
12.2
1.8
-6.1
-29.5
-13.7
4.1
5.4
-8.2
-14.3
-53.5
-13.6
-.7
-14.6
-5.6
-22.6
-15.2
-18.3
.6'
-8.0'
-.4'
-3.4'
2.8'
-1.7'
-1.1
-5.1
-2.0
-1.9
-1.7
-1.3
4.0
1.9
-2.7
103.4
65.4
133.7
PRODUCER PRICES
(1982-100)
7 Finished goods
8
Consumer foods
9
Consumer energy
10 Other consumer goods
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
A48
2.16
Domestic Nonfinancial Statistics • January 1999
GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1996
Q3
04
Ql
Q2
Q3
8,254.5
8,384.2
8,440.6
8,526.5
GROSS DOMESTIC PRODUCT
1 Total
7,269.6
7,661.6
8,110.9
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
4,953.9
611.0
1,473.6
2,869.2
5,215.7
5,493.7
673.0
1,600.6
3,220.1
5,540.3
681.2
1,611.3
3,247.9
5,593.2
682.2
1,613.2
3,297.8
5,676.5
705.1
1,633.1
3,338.2
5,773.7
720.1
1,655.2
3,398.4
5,843.0
715.5
1,539.2
3,033.2
6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
1,043.2
1,012.5
727.7
201.3
526.4
284.8
1,131.9
1,099.8
787.9
216.9
571.0
311.8
1,256.0
1,188.6
860.7
240.2
620.5
327.9
1,265.7
1,211.1
882.3
243.8
638.5
328.8
1,292.0
1,220.1
882.8
246.4
636.4
337.4
1,366.6
1,271.1
921.3
245.0
676.3
349.8
1,345.0
1,305.8
941.9
245.4
696.6
363.8
1,361.8
1,303.0
931.1
241.7
689.4
372.0
30.7
40.1
32.1
24.5
67.4
63.1
54.6
47.3
71.9
66.9
95.5
90.5
39.2
31.5
58.7
51.7
-83.9
819.4
903.3
-91.2
873.8
965.0
-93.4
965.4
1,058.8
-94.7
981.7
1,076.4
-98.8
988.6
-123.7
1,087.4
973.3
1,097.1
-159.3
949.6
1,108.9
-168.7
935.7
1.104.4
17 Government consumption expenditures and gross investment.
18 Federal
19 State and local
1,356.4
509.1
847.3
1,405.2
518.4
1,454.6
520.2
934.4
1,459.5
521.0
938.5
1,468.1
520.1
947.9
1,464.9
511.6
953.3
1,481.2
520.7
960.4
1,490.5
518.7
971.8
By major type of product
20 Final sales, total
21
Goods
22
Durable
23
Nondurable
24
Services
25
Structures
7,238.9
2,644.9
1,143.4
1,501.5
3,974.9
619.1
7,629.5
2,780.3
1,228.8
1,551.6
4,179.5
669.7
8,043.5
2,911.2
1,310.1
1,601.0
4,414.1
718.3
8,116.2
2,944.3
1,337.1
1,607.2
4,448.0
723.9
8,182.6
2,948.7
1,334.3
1,614.4
4,501.2
732.7
8,288.7
3,005.8
1,376.9
1,628.8
4,538.4
744.6
8,401.3
3,025.3
1,380.8
1,644.4
4,619.5
756.6
8,467.8
3,024.3
1,365.9
1,658.4
4,678.9
764.6
30.7
32.4
-1.7
32.1
20.8
11.4
67.4
33.6
33.8
54.6
19.9
34.7
71.9
34.0
37.9
95.5
49.9
45.6
39.2
4.5
34.7
58.7
25.9
32.8
6,761.7
6,994.8
7,269.8
7,311.2
7,364.6
7,464.7
7,498.6
7,559.5
5,923.7
6,256.0
6,646.5
6,704.8
6,767.9
6,875.0
6,945.5
4,208.9
3,441.9
622.7
2,819.2
767.0
365.3
401.6
4,409.0
640.9
2,999.5
768.6
381.7
387.0
4,687.2
3,893.6
664.2
3,229.4
793.7
400.7
392.9
4,715.5
3,919.3
666.7
796.2
402.7
393.6
4,798.0
3,993.6
671.4
3,322.2
804.4
407.4
397.0
4,882.8
4,065.9
679.5
3,386.4
816.8
414.1
402.8
4,945.2
4,121.6
685.8
3,435.8
823.5
417.9
405.7
5,009.7
4,179.4
692.4
3,487.0
830.3
422.0
408.3
488.1
465.6
22.4
527.7
488.8
38.9
551.2
515.8
35.5
556.5
520.2
36.3
558.0
526.6
31.4
564.2
536.8
27.4
571.7
544.0
27.7
574.9
550.7
24.2
163.6
2
3
4
5
12
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
15 Exports
16 Imports
26 Change in business inventories
27
Durable goods
28
Nondurable goods
643.3
1,670.7
3,456.8
MEMO
29 Total GDP in chained 1992 dollars
NATIONAL INCOME
30 Total
31 Compensation of employees
32 Wages and salaries
33
Government and government enterprises
34
Other
35
Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
38 Proprietors' income1
39
Business and professional
40
Farm1
3,640.4
3,252.6
41 Rental income of persons2
133.7
150.2
158.2
158.6
158.8
158.3
161.0
42 Corporate profits1
43
Profits before tax3
44
Inventory valuation adjustment
45 Capital consumption adjustment
672.4
635.6
817.9
734.4
6.9
76.6
840.9
758.9
4.8
77.2
820.8
736.4
4.3
80.1
829.2
719.1
25.3
84.9
820.6
723.5
59.4
750.4
680.2
-1.2
71.4
420.6
418.6
432.0
433.3
432.4
440.5
447.1
46 Net interest
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
-22.6
7.8
89.4
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
n.a.
96.8
Selected Measures
2.17
A49
PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
Q3
Q4
Ql
Q2
Q3
PERSONAL INCOME AND SAVING
1 Total personal income
6,072.1
6,425.2
6,784.0
6,820.9
6,904.9
7,003.9
7,081.9
7,155.6
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
,
5
Distributive industries
6
Service industries
7
Government and government enterprises
3,428.5
863.9
647.9
782.9
1,158.9
622.7
3.631.1
909.0
674.6
823.3
1,257.9
640.9
3,889.8
975.0
719.5
879.8
1,370.8
664.2
3,915.5
979.4
722.3
886.3
1.383.2
666.7
3,989.9
4,061.9
1,019.0
750.4
918.9
1,444.5
679.5
4,117.6
1,023.2
750.8
932.2
4,175.4
685.8
750.3
946.0
1,510.1
692.4
401.6
488.1
465.6
22.4
392.9
551.2
515.8
35.5
158.2
1,110.4
31.4
158.8
261.3
753.0
1,120.5
402.8
564.2
536.8
27.4
1,068.0
393.6
556.5
520.2
36.3
158.6
260.4
750.5
1,114.0
397.0
558.0
192.8
704.9
1,015.9
387.0
527.7
488.8
38.9
150.2
248.2
719.4
1,139.0
538.0
565.9
568.3
581.6
408.3
574.9
550.7
24.2
163.6
263.0
767.6
1,152.2
588.7
507.8
572.2
405.7
571.7
544.0
27.7
161.0
262.1
763.0
1,145.8
585.0
293.6
306.3
326.2
328.2
333.6
340.9
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income
Business and professional1
Farm'
Rental income of persons2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
20 EQUALS: Disposable personal income
21
LESS: Personal outlays
22 EQUALS: Personal saving
133.7
260.3
747.3
1,003.7
741.3
904.5
1,410.2
671.4
526.6
158.3
261.6
757.0
6,072.1
6,425.2
6,784.0
6,820.9
6,904.9
7,003.9
795.0
890.5
989.0
999.0
1,025.5
1,066.8
5,277.0
5,534.7
5,795.1
5,821.8
5,879.4
5,937.1
5,097.2
5,376.2
5,674.1
5,723.3
5,781.2
5,864.0
1,476.4
1.026.8
345.1
349.4
7.081.9
7,155.6
1.092.9
1,113.2
5,988.9
6,042.4
5,963.3
6,036.4
25.6
5.9
27,946.2
19,147.0
19,799.0
179.8
158.5
121.0
98.5
25,690.5
17,498.4
18,640.0
26.335.7
17,893.0
18.989.0
27.136.2
18.340.9
19.349.0
27,260.4
18,445.2
19,385.0
27,398.2
18,530.5
19,478.0
27,718.8
18,771.1
19,632.0
27.783.0
19.007.8
19,7190
1,187.4
1,274.5
1,406.3
1,427.0
1,428.0
1,482.5
1,448.5
n.a.
1,130.1
1,079.0
n.a.
73.0
MEMO
Per capita (chained 1992 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
27 Gross saving
28 Gross private saving . . .
1.106.2
1,114.5
1,141.6
1,139.0
1,131.6
29 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
179.8
256.1
-22.6
158.5
262.4
-1.2
1210
296.7
98.2
295.0
4.3
73.0
312.0
25.3
25.6
300.9
6.9
98.5
311.5
4.8
7.8
5.9
n.a.
n.a.
Capital consumption allowances
32 Corporate
33 Noncorporate
431.1
225.9
452.0
232.3
477 3
242.8
480.8
244.4
487.7
247.0
492.5
248.6
497.8
250.7
503.1
253.6
34 Gross government saving
35
Federal
36
Consumption of fixed capital
37
Current surplus or deficit ( - ) , national accounts
38
State and local
39
Consumption of fixed capital
.
40
Current surplus or deficit ( - ) , national accounts
81.2
-103.7
70.7
-174.4
160.0
-39.6
288.0
70.0
70.3
-.3
184.8
73.2
111.7
-110.3
199.7
77.1
122.6
264.7
49.5
70.6
-21.1
215.2
81.1
134.1
218.0
81.4
136.6
296.4
72.3
70.2
2.2
224.1
82.7
141.4
352.4
128.7
69.9
58.8
223.7
83.5
140.2
369.4
143.9
69.5
74.4
225 6
84.3
141.3
41 Gross investment
1,160.9
U42.3
1,350.5
1,361.9
1360.7
1.428.4
1,362.7
42 Gross private domestic investment
43 Gross government investment
44 Net foreign investment
1,043.2
218.4
-100.6
1.131.9
229.7
-119.2
1,256.0
235.4
1,265.7
237 3
-141.0
1,292.0
1,366.6
237.4
-175.6
1,345.0
232.5
-214.8
45 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
70.6
-32.2
-140.9
236.5
-167.8
-85.7
SOURCE. U.S. Department of Commerce, Survey of Current Business.
69.6
n.a.
n.a.
85.2
1,361.8
238.9
n.a.
A50
3.10
International Statistics • January 1999
U.S. INTERNATIONAL TRANSACTIONS
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted1
hem credits or debits
1 Balance on current account
2
Merchandise trade balance2
3
Merchandise exports
4
Merchandise imports
5
Military transactions, net
6
Other service transactions, net
7
Investment income, net
8
U.S. government grants
9
U.S. government pensions and other transfers
10 Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
-115,254
-173,729
575,845
-749,574
4,769
69,069
19,275
-11,170
-3,433
-20,035
-134,915
-191,337
611,983
-803,320
4,684
78,079
14,236
-15,023
-4.442
-21,112
Q2
Q3
Q4
Ql
Q2P
-155,215
-197,954
679,325
-877,279
6,781
80,967
-5,318
-12,090
-4,193
-23,408
-35,090
-49,096
169,240
-218,336
2,191
20,390
460
-2,274
-1,055
-5,706
-38,094
-49,296
172,302
-221,598
1,945
20,246
-1,544
-2,362
-1,056
-6,027
-45,043
-49,839
174,284
-224,123
1,103
20,277
-4,247
-5,213
-1,069
-6,055
-46,735
-55,698
171,469
-227,167
1,527
19,164
-2,248
-2,266
-1,126
-6,088
-56,525
-64,831
164,666
-229,497
1,036
19,842
-3,238
-2,060
-1,130
-6,144
-589
-708
174
-269
436
29
-9,742
0
-808
-2,466
-6,468
6.668
0
370
-1,280
7,578
-1,010
0
-350
-3,575
2,915
-236
0
-133
54
-157
-730
0
-139
-463
-128
-4,524
0
-150
-4,221
-153
-444
0
-182
-85
-177
-1,945
0
72
-1,031
-986
-317,122
-75,108
-45,286
-100,074
-96,654
-374,761
-91,555
-86,333
-115,801
-81,072
-477,666
-147,439
-120,403
-87,981
-121,843
-86,101
-26,625
-9,825
-23,263
-26,388
-123,023
-29,577
-24.791
-41,167
-27,488
-118,946
-27,539
-47,907
-8,030
-35,470
-44,816
3,074
-6,596
-6,973
-34,321
-95,049
-24,979
22 Change in foreign official assets in United States (increase, +)
23 U.S. Treasury securities
24 Other U.S. government obligations
25
Other U.S. government liabilities4
26 Other U.S. liabilities reported by U.S. banks'
27
Other foreign official assets'
109,768
68,977
3.735
-217
34,008
3,265
127,344
115,671
5.008
-362
5,704
1,323
15,817
-7,270
4,334
-2,521
21,928
-654
-5,411
-11,689
827
-523
5,043
931
21,258
6.686
2,667
-1,167
12,439
633
-26,979
-24,578
86
-244
-3,250
1,007
11,324
11,336
2,610
-1,059
-607
-956
-10,483
-20,317
254
-422
9,170
832
28 Change in foreign private assets in United States (increase, +)
29 U.S. bank-reported liabilities3
30
U.S. nonbank-reported liabilities
31 Foreign private purchases of U.S. Treasury securities, net
32 Foreign purchases of other U.S. securities, net
33 Foreign direct investments in United States, net
355,681
30,176
59,637
99,548
96,367
57,653
436,013
16,478
39.404
154,996
130,151
77,622
717,624
148,059
107,779
146,710
196,845
93,449
155,184
28,067
5,274
42,614
54,258
20,149
160,180
12,606
26,275
35,432
60,327
18,964
247,470
89,643
47,390
35,301
36,783
28,453
84,205
-50,497
32,707
-1,701
77,019
25,931
173,908
40,888
0
-22,742
0
-59,641
0
-99,724
-59,641
-99,724
0
-28,077
685
-28.762
0
-20,027
-10,018
-10,009
0
-52,007
3,528
-55,535
0
-3,146
6,217
-9,363
0
-9,410
1,562
-10,972
12 Change in U.S. official reserve assets (increase, —)
13 Gold
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies
17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims3
19 Nonbank-reported claims
20 U.S. purchases of foreign securities, nel
21
U.S. direct investments abroad, net
....
34 Allocation of special drawing rights
35 Discrepancy
36 Due to seasonal adjustment
37 Before seasonal adjustment
MEMO
Changes in official assets
38 U.S. official reserve assets (increase, - )
39 Foreign official assets in United States, excluding line 25
(increase, +)
40 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)
-23,446
-40,261
25,715
69.531
22,036
-9,742
6,668
-1.010
-236
-730
-4,524
-444
-1,945
109,985
127.706
18.338
-4,888
22,425
-26,735
12,383
-10,061
4,239
14,911
10.822
1.970
3.031
-1,282
-968
-350
1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38^10.
2. Data are on an international accounts basis. The data differ from the Census basis data,
shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from
merchandise trade data and are included in line 5.
3. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
-496
4. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.
Summary Statistics A51
U.S. FOREIGN TRADE 1
3.11
Millions of dollars; monthly data seasonally adjusted
1998
Item
1995
1996
1997
Mar.
Apr.
May
June
July
Aug.
Sept.p
3 Goods and services, balance
2 Merchandise
3
Services
-101,857
-173.560
71,703
-111,040
-191,170
80,130
-113,684
-198,975
85,291
-13,497
-20,503
7.006
-14,148
-21,335
7.187
-15,777
-22,578
6.801
-13,639
-20,530
6,891
-14,547
-21,029
6,482
-15,899
-22,735
6,836
-14,031
-20,596
6,565
4 Goods and services, exports
5
Merchandise
794,610
575,871
218,739
848,833
612,069
236,764
931,370
678,150
253.220
79,058
57,217
21.841
77,515
55,335
22,180
76,399
54,719
21,680
76,375
54,767
21,608
75,101
53,825
21,276
75,426
53,862
21,564
77,125
55,873
21,252
7 Goods and services, imports
-896,467
-749,431
-147.036
-959,873
-803,239
-156,634
-1.045,054
-877,125
-167,929
-92,555
-77,720
-14.835
-91,663
-76,670
-14,993
-92,176
-77,297
-14,879
-90,014
-75,297
-14,717
-89,648
-74,854
-14,794
-91,325
-76,597
-14,728
-91,156
-76,469
-14,687
9
Services
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.
U.S. RESERVE ASSETS
Millions of dollars, end of period
1998
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights2'3
4 Reserve position in International Monetary
Fund
5 Foreign currencies4
1995
1996
1997
Mar.
Apr.
May
June
July
Aug.
Sept.p
Oct.p
85,832
75,090
69,954
69,354
70,328
70,723
71,161
72,264
73,544
75,66
79,186
11,050
11.037
11,049
10.312
11,050
10,027
11,050
10,108
11,048
10.188
11,049
10,296
11,047
10,001
11,046
9,586
11,046
9,891
11,044
10.106
11,044
10.379
14,649
49.096
15,435
38,294
18,071
30.809
17,976
30,220
18,218
30.874
18,957
30,421
18,945
31,168
20,780
30,852
21,161
31,446
21,644
32,882
22,278
35.485
1. Gold held "under earmark" at Federal Reserve Banks for foreign and international
accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold
stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted by the
International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of
exchange rates for the currencies of member countries. From July 1974 through December
1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S.
3.13
SDR holdings and reserve positions in the IMF also have been valued on this basis since July
1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year
indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979—
$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1998
Asset
1995
1996
1997
Mar.
1 Deposits
Held in custody
2 U.S. Treasury securities2
3 Earmarked gold"
May
June
July
Aug.
Sept.p
Oct.p
386
167
457
167
162
156
200
161
161
347
154
522,170
11,702
638.049
11,197
620,885
10,763
630,602
10,664
622,220
10,651
622,557
10,641
616,569
10,617
613,893
10,586
588,337
10,510
578,403
10,457
588,768
10,403
1. Excludes deposits and U.S. Treasury securities held for international and regional
organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury
securities, in each case measured at face (not market) value.
Apr.
3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not
included in the gold stock of the United States.
A52
3.15
International Statistics • January 1999
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1998
Item
1 Total1
By type
2 Liabilities reported by banks in the United States
1996
1997
Mar.
Apr.
May
June'
July'
Aug.
Sept.tp
758,624
778,538
790,921
788,310
786,184
781,069
775,137
760,814
735,112
113,098
198,921
135,326
148,301
134,719
153,335
144,929
138,418
142,658
137,652
144,099
134,324
142,140
131,089
144,070
130,398
131,492
128,146
379,497
5,968
61,140
423,456
5,994
65,461
429,642
6,110
67,115
430,804
6,149
68,010
431,702
6,189
67,983
428,216
6,229
68,201
428,685
6,269
66,954
411,765
6,311
68,270
401,461
6,350
67,663
257,915
21,295
80,623
385,484
7,379
5,926
263,103
18.749
97.616
382,423
10,118
6,527
259,053
20,280
98,028
397.283
11.440
4,835
268,848
20,254
101,191
382,027
11,281
4,707
269,178
20,122
101,792
379,188
10,574
5,328
264,657
19,396
100,849
378,113
11,555
6,497
270.195
19.963
100,826
367.687
11.904
4,560
266,625
16,387
98,405
363,902
11,501
3,992
258,234
16,170
79,779
365,681
11,721
3,525
U.S. Treasury bonds and notes
6 U.S. securities other than U.S. Treasury securities
7
8
9
10
11
12
By area
Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper,
negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of
zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning
March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue;
3.16
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Millions of dollars, end of period
Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April
1993, 30-year maturity issue.
5. Debt securities of U.S. government corporations and federally sponsored agencies, and
U.S. corporate stocks and bonds.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the United
States, and on the 1989 benchmark survey of foreign portfolio investment in the United
States.
Reported by Banks in the United States1
1998
1997
Item
3
Deposits
5 Claims of banks' domestic customers2
1994
89,258
60,711
19,661
41,050
10,878
I. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1995
109,713
74,016
22,696
51,320
6,145
1996
103,383
66,018
22,467
43,551
10,978
Sept.
Dec.
Mar.
June
120,105
91,158
32,154
59,004
10,090
117,524
83,038
28,661
54,377
8,191
100,342
81,977
27,934
54,043
7,926
90,119
68,095
27,213
40,882
7,354
2. Assets owned by customers of the reporting bank located in the United States that
represent claims on foreigners held by reporting banks for the accounts of the domestic
customers.
Bank-Reported Data
3.17
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
A53
Reported by Banks in the United States'
Millions of dollars, end of period
1995
1996
Mar.
Apr.
May
1,283,686
1,255,075
1,270,626
1,160,273
861,727
32,107
185,948
204,294
439.378
July
Aug.
Sept.'
1,288,032' 1,306,488'
1,341,622
1,348,596
852,052
31,201
185,160
192.167
443.524
884,734'
36,246
186,686'
183,451
478,351
896,972'
30,928
188,056'
192,536
485,452
928,137
33,038
183,506
190,542
521,051
915,312
33,556
170,738
168,609
542,409
By HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
1,099,549
2 Banks' own liabilities
3
Demand deposits
4
Time deposits2
5
Other3
6
Own foreign offices4
7 Banks' custodial liabilities5
8
U.S. Treasury bills and certificates6
9
Other negotiable and readily transferable
instruments7
10
Other
11 Nonmonetary international and regional organization:
12
Banks' own liabilities
13
Demand deposits
14
Time deposits
15
Other3
16
17
18
19
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
20 Official institutions9
21
Banks' own liabilities
22
Demand deposits
23
Time deposits2
24
Other'
25
26
27
28
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
29 Banks10
30
Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits2
34
Other3
35
Own foreign offices4
36
37
38
39
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
43
Time deposits
44
Other3
45
46
47
48
5
Banks' custodial liabilities
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1,162,148
753,461
24,448
192,558
140,165
396,290
758,998
27.034
186,910
143,510
401.544
883,639
32.104
198.470
168.013
485,052
843,906
32,588
183,109
188,425
439,784
346,088
197,355
403,150
236,874
400,047
193.239
411,169
191,571
408,899
174,256
408,221
173,873
403.298'
169,225
409,516'
164,274
413,485
162,235
433,284
160,598
52,200
96,533
72,011
94,265
93.641
113,167
96,364
123,234
111,398
123,245
107,797
126,551
112,598'
121,475
117.433'
127.809
123.378
127.872
142,169
130.517
11,039
10.347
21
4,656
5,670
13,972
13,355
29
5,784
7,542
11,690
11,486
16
5,466
6,004
15,246
14,925
98
5,957
8,870
14,894
14,478
365
6,646
7,467
14,186
13,559
229
7,029
6,301
14,103'
13,441
226
6,784
6,431
14.314'
12,188'
19
6,354'
5,815
15,188
13,684
59
6,252
7,373
15,199
13,846
408
5,760
7,678
692
350
617
352
204
69
321
247
416
344
627
359
662'
338
2,126'
349
1,504
490
1,353
435
1
265
0
133
2
72
2
72
0
268
0
322'
2
1,777'
0
1,012
2
818
100
275,928
83,447
2,098
30,717
50.632
312.019
79,406
1,511
33,336
44,559
283.627
101.910
2.314
41,420
58,176
288,054
104,006
2,051
40.265
61,690
283,347
105,731
2,532
38,865
64,334
280,310
104,358
2,052
36,060
66,246
278,423'
102,256
2,582
36,068
63,606
273,229'
102,040
3,560
36,358
62,122
274,468
101,558
3.456
35,603
62,499
259,638
85,251
3,607
28.067
53.577
192,481
168,534
232.613
198,921
181,717
148,301
184,048
153,335
177,616
138,418
175,952
137,652
176,167'
134,324
171,189'
131,089
172,910
130,398
174,387
128,146
23,603
344
33,266
426
33,211
205
30,183
530
38,745
453
38.010
290
41,180'
663
39,792'
308
41,759
753
45.684
557
691,412
567,834
171,544
11,758
103,471
56,315
396,290
694,835
562.898
161,354
13,692
89.765
57,897
401,544
816,064
642,324
157,272
17.527
83,433
56.312
485,052
763,349
585,083
145,299
18,350
70,060
56.889
439,784
776,269
596,509
157,131
17,152
72,703
67,276
439,378
782,828
601,967
158,443
16,111
74,018
68,314
443,524
809,251'
633.032
154.681
20,772
75,231
58,678
478.351
825,245'
643,982
158,530
15,097
78,252
65,181
485,452
853,292
673,157
152,106
16,063
74.151
61,892
521,051
874,621
685,982
143,573
15,799
67,644
60,130
542,409
123,578
15,872
131,937
23,106
173,740
31,915
178,266
28.499
179,760
26.650
180,861
26,920
176,219'
25,337
181,263'
22,929
180,135
20,696
188,639
21,563
13,035
94,671
17,027
91,804
35,333
106.492
34,962
114.805
37,942
115,168
38,186
115.755
38,122'
112,760
39,203'
119.131
40,180
119,259
44,807
122,269
121.170
91,833
10,571
53,714
27,548
141,322
103,339
11,802
58,025
33,512
172,305
127,919
12,247
68,151
47,521
188.426
139,892
12,089
66,827
60,976
196,116
145,009
12,058
67,734
65,217
182.949
132,168
12,809
68,053
51,306
186,255'
136,005'
12,666
68,603'
54,736
193.700'
138,762
12,252
67,092
59,418
198,674
139,738
13.460
67.500
58,778
199,138
130,233
13,742
29,337
12,599
37,983
14.495
44,386
12,954
48,534
9.490
51,107
8.844
50.781
8.942
50,250
9,226
54,938'
9.907
58,936
10.651
68,905
10.454
15,221
1.517
21,453
2,035
24,964
6,468
31,147
7,897
34,639
7,624
31,333
10,506
32,974
8,050
36,661'
8,370
40,427
7,858
50,860
7,591
9,103
14,573
16,083
22,416
22,503
23.440
21,229
22,847
25,867
27,391
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
2. Excludes negotiable time certificates of deposit, which are included in "Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For US banks, includes amounts owed to own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and to foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term securities, held
by or through reporting banks for foreign customers.
69,267
47,224
6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time certificates of
deposit.
8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for International
Settlements.
10. Excludes central banks, which are included in "Official institutions."
A54
3.17
International Statistics • January 1999
LIABILITIES TO FOREIGNERS Reported by Banks in the United States'—Continued
Mar
Apr
May
June
July
Aug.
Sept
50 Total, all foreigners
1,099,549
1,162,148
1,283,686
1,255,075
1,270,626
1,260,273 1,288,032' 1,306.488' 1,341,622' 1,348,596
51 Foreign countries
1.088,510
1,148,176
1,271,996
1,239,829
1.255.7J2
1,246,087 1,273,929' 1,292.174' 1,326,434'
362.819
3,537
24,792
2,921
2.831
19.218
420,438
2,717
41,007
1,514
2,246
10.868
13.745
1.394
2,761
7,948
10,011
3.246
43.625
4.124
139.183
176.590
5.128
24,084
2,565
1,958
35,078
24.660
1,835
10,946
11,110
1,288
3.562
7.623
17,707
1.623
44 538
6.738
153.420
177
206
26,389
22,521
390,750
2,375
33,244
1.094
1.549
44.027
20,971
2.020
9.631
8,208
346
1.426
6.466
16.315
1.967
35.463
4,154
174.198
236
27.060
406,391
2.957
38,530
2,588
1,768
48,468
24,895
2,383
10,600
8,051
514
2.279
5.381
18.071
1.785
32.341
4.340
172.829
246
28,365
52 Europe
53 Austria
54
Belgium and Luxembourg
55
Denmark
56
Finland
57
France
58 Germany
59
Greece
60
Italy
61
Netherlands
62
Norway
63
Portugal
64
Russia
65
Spain
66
Sweden
67
Switzerland
68
Turkey
69
United Kingdom
70
Yugoslavia"
71
Other Europe and other former U.S.S.R.12
72 Canada
24,035
2.014
46.607
2.1.737
1.552
11.378
7.185
317
2.262
7,968
18,989
1,628
39,172
4,054
181.904
239
25,762
405.348
3,012
35,518
1,443
1,365
47,869
26,452
2,610
11,127
7,265
774
2,160
1952
15,520
2,197
33,893
4,467
178,185
270
27,269
402,103'
2,268
35.454
1.989
1.438
46.162
25.470
2,429
11,509
6,845
607
2,334
4.654
11,649
1,148
39,071'
4,894'
176,703
234
25.245r
431.783'
2,602
31,845
2.013
1,211
47,140
23.730
2,784
11,114
7,097
1,179
2.823
6,398
12.079
2.198
44,861
5,077'
196.859
322
28,451'
457,487'
2,671
35,086
2,128
1,350
48,328
28,751
2,941
10,625
9.239
1,469
2,424
2,718
14,283
1.769
39,362
4,317'
219.147
242
30.637'
1.333,397
450,599
3,137
33.936
1.578
1.181
50,354
25.810
2,544
9.1R4
8,066
688
2.292
3.085
20,487
3,285
48,613
4,264
204,843
25.3
26.999
30.468
38.920
28,341
27,121
27.398
26,021
28,864
29.526
27,844
28.566
73 Latin America and Caribbean . . .
74
Argentina
75
Bahamas
76 Bermuda
77
Brazil
78
British West Indies
79
Chile
80
Colombia
81
Cuba
82 Ecuador
83 Guatemala
84 Jamaica
85
Mexico
86
Netherlands Antilles
87 Panama
88 Peru
89 Uruguay
90
Venezuela
91
Other
440,213
467,529
13,877
88,895
5.527
27.701
251.465
8,670
529,446
18.S35
109,041
8,273
34.017
261.542
3,975
4,200
55
1.814
1,438
431
35.708
11,351
3,958
878
2,228
21,474
10.228
552,896
17,766
112,510
6,657
36,777
273.565
4.330
4.212
57
1.737
1.478
449
37,623
17.569
4.211
878
2,097
20,696
10,284
550,714
16,938
114,222
7,142
38,463
277,929
4,230
4 183
59
1,783
1.353
438
37.682
7.447
4.106
964
1,991
21,600
9.984
568,228'
18.502'
116.435
7,769
35.345'
295,321
4,356'
4,805
63
1,616'
1,363
522
38.044
6,861
3.723
925
1,982
20.442
10.154
564,388'
21,010'
115,309
7,216
34.292'
290,.142r
4.987'
4,023
63
1,772'
1,273
519
38,554
8.922
3,596
984
2,097
19.492
9,937
557,071'
21,655'
113,543
7,332
27.824
291.470'
4.726'
4.102'
62
1,608'
1.237'
550
38,087
8.340
3,675'
900
2,091
20,125'
9,744'
560,067
18,384
122,806
7.531
536.365
20.199
112.217
6.911
31.037
276.389
4 072
3.652
66
2,078
1,494
450
33,972
5.085
4,241
893
2.382
21,601
9,626
92 Asia
240.595
249,083
269,299
275,173
251,423
244.779
254,412'
247,952'
266,485'
275.623
33.750
11.714
20.197
3.373
2.708
4.041
109,193
5,749
3,092
12,279
15,582
18.917
30,438
15,995
18.789
3,930
2,298
6,051
117.316
5.949
' 178
10.912
16.285
17.742
18,252
11,760
17,722
4,567
3,554
6.281
143,401
1.1,060
3.250
6,501
14.059
25,992
20,701
1.1,619
17,825
5,586
4,015
7.589
137,700
11,233
3,009
9,073
16,217
28.606
20.122
13,776
19.762
4,813
4,266
7,348
113.283
13,711
2,870
7,928
17.095
26,449
20,209
12,648
18,106
4,882
3,197
6.251
111,621
14.010
2,802
8.876
15.296
26.879
21.558
11,619
19,720
4.821
3.848
6,095
118,669
13.269
3,418
7.148
13,829'
30.418
18,919
11,333
15,826
4,678
3,938
5,969
123.167
12.713
2,609
6,780
13,902'
28,118
18,506
11,290
18.349
6,437
5.651'
5.296
131.376
12.498
2,777
7.869
14,532'
31,904
18,523
12,080
16.627
5.144
5,470
5,984
142,757
12.986
2,712
6.664
16,575
30.101
105 Africa
106 Egypt
107 Morocco
108 South Africa
109 Zaire
110 Oil-exporting countriesIJ
111
Other
7.641
8,116
2.012
10,347
1,663
138
2,158
10
3,060
3,318
11.385
1,449
88
2.547
10
4.275
3.016
11.160
1.236
131
2.556
1
4.3.12
2.902
10.965
1,460
115
2,465
5
4,079
2.841
10.735'
1,523
84
2.642
5
3.552
2,929'
10,788'
1.319
74
2,446
7
3 893
3.049'
10,562'
1,459
76
2.428
35
.1.684
2.880'
11.098
1.616
88
2,658
6
112 Other
113 Australia . .
114 Other . . . .
6.774
5,647
1.127
7.938
6.479
1.459
7.206
6.304
902
5.954
4,989
965
6,464
5.450
1,014
8,260
7,416
844
9,587
8,510
1,077
7.737
6.490
1.247
6.985
5,931
1.054
7.444
6.427
1,017
13.972
11,690
10,517
424
749
15,246
14,331
536
.179
14.894
13.431
762
701
14.186
12,509
830
847
14,103'
12,548
694'
861
14,314'
11,220'
750'
2,344
15,188'
12,825'
721'
15.199
12.769
800
1.630
.
12,235
94,991
4,897
21.797
239.083
2.826
3,659
8
1,314
1.276
481
24.560
4,673
4,264
974
1,836
11,808
2.915
3,256
21
1,767
1.282
628
31.240
6.099
4,099
834
1,890
17,363
7.920
18.496
298.530
5,725
4,463
62
1,540
1,241
541
35,681
S.588
3,826
843
2,277
19,303
9,841
China
93
94
95
96
97
98
99
100
101
102
103
104
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
q
Middle Eastern oil-exporting countries'3
Other
115 Nonmonetary international and regional organizations
116 International15
117
Latin American regional16
118
Other regional17
2,136
104
739
10
1.797
2.855
11,039
9,300
893
846
458
10
2.626
12,099
1,339
534
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Seillements. Since December 1992. Im
included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Truciat States).
14. Comprises Algeria, Gabon. Libya, and Nigeria.
1,642
1,727
3.003
15. Principally the International Bank lor Reconstruction and Development. Excludes
"holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian. African, Middle Eastern, and European regional organizations, except the Bank
for International Settlements, which is included in "Other Europe."
Bank-Reported Data
3.18
A55
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States'
Payable in U.S. Dollars
Millions of dollars, end of period
1998
Area or country
1995
Mar.
Apr.
May
July
Aug.
Sept.p
1 Total, all foreigners
532,444
599,925
708,272
687,648
700,035
703,532
727,942r
740,236r
764.022
754,467
2 Foreign countries
530,513
597,321
705,809
684,700
696,742
701,140
725,027'
735,826'
759,632
749,125
132,150
165,769
1,662
199,880
1,354
6,641
208,567
2.130
6.115
1.286
931
16,276
15,301
428
6,533
3.980
736
1.496
1.117
6,218
3,181
29,317
2,386
102,889
19
8.228
223,277'
1,259
7,782
1,198
1,146
15,474
15,751
364
6 435
5,763
680
17.314
12,029
16,783
1.057
5.560
3,069
34,970
2,414
109,755'
53
9.659
229,928
1,892
8,459
933
1,032
14,421
11,327
450
6,345
5,642
553
1,156
1,345
6.424
4,553
49,359
2,010
104.197
79
9.551
231,839
1,849
8,190
1,059
1,073
4,355
207,154
1,827
5.482
968
1,018
17,383
16,931
442
6,938
5.851
662
935
1,133
7,458
2,975
25,069
2.324
101,772
59
7.927
226.823
1.856
6.779
1.374
1.161
6,457
7,117
808
418
1.669
3,211
1,739
19,798
1,109
85,234
115
3,956
1,233
16,239
12,676
402
6,230
6,141
555
777
1,248
2,942
1,854
28,846
1,558
103,143
52
7,009
205,528
1,566
6.148
895
1,686
18,206
13.047
503
6,601
6,618
850
589
1,115
5,778
2,798
31,306
1,914
97,588
61
8,259
20,874
26,436
27,176
29,827
25,785
24,961
32.703
36.007
41,402
41.127
256,944
6,439
58,818
5,741
13,297
124,037
274,153
7,400
71,871
4,129
17,259
105,510
5,136
6,247
0
1,031
338,909
8,726
77,585
8,997
25,283
147.910
8,171
6,783
0
1,476
904
364
20.680
17,618
4,108
3,538
920
2,169
3,677
354,302
8,540
82,711
9,462
26,033
159,649
8,444
6,772
0
1,522
955
373
20.913
14,073
4,422
3,644
773
2,194
3.822
361,082
8,207
78.083
8.890
25.354
168,124
8,482
7,208
0
1,498
955
385
21,2)5
17,352
4,393
3,792
807
2,381
3.956
365,814'
8,518
77,595
9.452
24,552
176.825
8,497
7,102
0
1,430
932
320
20,371'
14.294
4,233
3,965
959
2,495
4,274
359,277'
8.421
78,770
10,622
24,187
166,203
8,434
6,914
0
1.649
911
335
20.062'
16.278
4,308
4,009
1,154
2,436
4,584
379,383
8,724
77,875
9.629
23.530
192.334
8,307
362,826
8,777
75,925
6,905
0
1,518
6,816
4,354
4.435
102,391
104,211
2.701
661
1,363
1,031
10,547
1,824
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10 Greece
11
Italy
12 Netherlands
13 Norway
14 Portugal
15 Russia
16
Spain
17
18
19
20
21
22
Sweden
Switzerland
Turkey
United Kingdom
Yugoslavia:
Other Europe and other former U.S.S.R.3 .. .
23 Canada
24 Latin America and Caribbean
25 Argentina
26 Bahamas
27
Bermuda
28
Brazil
29 British West Indies
30
Chile
31
Colombia
32
Cuba
33
Ecuador
34
Guatemala
35
Jamaica
565
7,624
403
1,055
15,0.13
9,263
469
5.370
5,346
665
888
660
2,166
2,080
7,474
803
67,784
147
6,727
492
971
15,246
8,472
568
36
Mexico
37
38
39
40
41
Netherlands Antilles
Panama
Peru
Uruguay
Venezuela
9,229
3,008
1,829
1,661
1,702
42
Other
3,376
3,174
343.820
8,924
89.379
8,782
21,696
145,471
7,913
6,945
0
1,311
886
424
19.518
17,838
4,364
3,491
629
2.129
4.120
115,336
122.478
125.063
101.353
99,183
96,813
94,804
100,196
1,023
1,713
12.821
1,401
1,894
12,802
1,946
1,762
633
59,967
18,901
1,697
2,679
10,424
8,372
1,579
921
13,990
2.200
2,634
768
59,540
18,162
1,689
2,259
10,790
10.531
2,762
740
12,628
1,927
2,291
812
46.660
11.520
1,813
2,144
8,921
9,135
2,921
939
10,162
1,807
2.210
874
44,970
10,852
1,561
1,971
11,028
9,888
2,934
723
12,884
1,913
2.099
893
42,071
11,936
1,614
1,906
9,338
8,502
1.989
835
12,871
1,972
2,098
954
43,010
11.001
1,541
1,889
8,448
8,196
1,679
595
11,045
1,822
2,010
1,116
45,566
12,863
1.243
1,820
2,776
247
524
584
0
420
1.001
3,530
247
511
805
0
1.212
755
3,567
289
518
559
0
1,364
837
3,337
294
483
490
0
1,194
876
3.693
281
490
859
0
1.078
985
2.484
283
430
653
0
308
810
3 497
294
5,709
4,577
1,132
6,340
5,299
1,041
5,516
5.011
505
6,981
6,513
468
6.024
5.704
320
5.945
5.419
506
2,604
2,463
2,948
3,293
2,392
43 Asia
China
44
Mainland
45
Taiwan
46
Hong Kong
47
India
48
Indonesia
49
Israel
50
Japan
51
Korea (Souch)
52
Philippines
53
Thailand
54
Middle Eastern oil-exporting countries4
55
Other
4.864
4,550
0
825
457
323
18.024
466
1.846
1.696
739
61.468
13.975
1,318
2,612
9.639
6,486
56 Africa
57
Egypt
58
Morocco
59
South Africa
60 Zaire
61
Oil-exponing countries^
62
Other
2,742
210
514
465
1
552
63 Other
64
Australia .
65
Other . .
2,467
66 Nonmonetary international and regional organizations6
1,000
1,622
845
620
345
18,425
25,209
2,786
2,720
589
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
2. Since December 1992, has excluded Bosnia. Croatia, and Slovenia.
3. Includes the Bank for International Settlements. Since December 1992, has included all
parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
11,207
9,230
530
8.617
4,321
1.110
725
15,210
373
6,514
4.802
629
975
1.209
920
5.225
4,456
49,258
1,990
98,309
53
7 980
4,319
55.797
1,902
94.921
53
8,490
10.507
950
118
20.078
12,939
4.157
4,061
1,055
2,649
13,821
1.878
2.031
898
44.822
11,508
1,258
1,883
12,136
8,792
10,604
19.089
182,742
8.345
1,456
1.713
305
20.666
10.294
4,237
3.826
954
2,640
2.108
941
52,213
9,831
1,280
2,128
12,292
8,651
630
0
1.331
771
1,262
279
426
653
0
1.046
858
1.012
272
190
694
0
6,921
6,067
854
6.371
5.999
372
6,110
471
770
886
5,78.1
327
4,390
4. Comprises Bahrain. Iran. Iraq. Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trvicial States)
5. Comprises Algeria. Gabon, Libya, and Nigena.
6. Excludes the Bank for International Settlements, which is included in "Other Europe."
A56
3.19
International Statistics • January 1999
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1998
Type of claim
1995
1996
1997
Mar.
1 Total
3
4
5
Foreign public borrowers
Own foreign offices2
Unaffiliated foreign banks
7
8
Other
All other foreigners
9 Claims of banks' domestic customers''
10 Deposits
11 Negotiable and readily transferable
instruments
12 Outstanding collections and other
claims
Apr.
May
700,035
32,465
409,955
104,622
24,324
80,298
152,993
703,532
28.986
415,175
105,501
21,282
84,219
153,870
June
July'
Aug.
Sepl.p
740.236
35.634
446,536
101,777
23,283
78,494
156,289
764,022
29,757
465,154
105,862
24,593
81,269
163,249
754,467
26,397
472,082
108,844
30,250
78,594
147,144
32.347
28,860
28,345
881,218r
655,211
743,919
852,899
842,461
532,444
22,518
307,427
101,595
37,771
63,824
100,904
599,925
22,216
341,574
113,682
33,826
79,856
122,453
708,272
20,660
431,685
109,224
31,042
78,182
146,703
687,648
28,232
402,387
107,794
25,657
82.137
149,235
122,767
58,519
143,994
77.657
144,627
73.110
154,813
85.406
153,276
86,408
44,161
51,207
53,967
51,594
52,171
20,087
15,130
17,550
17,813
14,697
8,410
10,388
9,624
7,496
6,604
30,717
39,661
34.046
31,958
727,942'
27,780'
435,201
107,525'
22,843
84,682'
157,436
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United Stales5
32,172
25,287
principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.
1. For banks' claims, data are monthly, for claims of banks' domestic customers, data are
for quarter ending with month indicated.
Reporting banks include all types of depository institution as well as some brokers and
dealers.
2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority owned subsidiaries of foreign banks, consists
3.20
31,633
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States'
Millions of dollars, end of period
1997
Maturity, by borrower and area"
1994
1995
1996
Sept.
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
Allother 1
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3
202.282
224,932
258,106
281,000
276,597
285,518
292,324
170,411
15,435
154,976
31,871
7,838
24,033
178,857
14,995
163,862
46,075
7,522
38,553
211.859
15,411
196,448
46,247
6.790
39.457
217,981
20,123
197.858
63,019
8,752
54,267
205,859
12,069
193,790
70,738
8.525
62,213
214,822
16,952
197,870
70.696
11.310
59,386
211,029
17,023
194,006
81,295
10,651
70,644
56,381
6,690
59,583
40,567
1,379
5,811
55,622
6,751
72,504
40,296
1,295
2,389
55.690
8,339
103,254
38,078
1,316
5,182
69,204
8,460
99.929
34.650
2,157
3,581
58,294
9,917
97,277
33,972
2,211
4,188
69,245
9,304
101,013
28,748
2,228
4,284
73,787
8,766
99,294
23,569
1,116
4,497
4,358
3,505
15,717
5,323
1,583
1,385
4,995
2,751
27,681
7,941
1.421
1,286
6,965
2,645
24,943
9,392
1.361
941
11.202
3,842
34,988
10,393
1,236
1,358
13,240
2,512
42,069
10,198
1,236
1,483
15,118
2,752
39,337
10.731
1,254
1,504
15,606
2,573
47,881
12.569
1,259
1. Reporting banks include all types of depository inslitutions as well as some brokers and
dealers.
2. Maturity is time remaining until maturity.
3. Includes nonmonetary international and regional organizations.
1,407
Bank-Reported Data A57
3.21
CLAIMS ON FOREIGN COUNTRIES
Held by U.S. and Foreign Offices of U.S. Banks1
Billions of dollars, end of period
1996
Area or country
Sept.
1 Total
Sept.
499.5
551.9
612.8
586.2
645.3
647.5
678.8
711.0
725.9
739.2
191.2
7.2
19.1
24.7
11.8
3.6
2.7
5.1
85.8
10.0
21.1
206.0
13.6
226.9
11.4
18.0
31.4
14.9
4.7
2.7
228.3
11.7
231.4
14.1
19.7
32.1
14.4
4.5
3.4
6.0
99.2
16.3
21.7
250.0
9.4
17.9
34.1
20.2
247.7
II 4
20.2
242.8
101.6
12.2
23.6
220.0
11.3
17.4
33.9
15.2
5.9
3.0
6.3
90.5
14.8
21.7
113.4
13.7
28.6
249.1
112
15.6
25.5
19.7
7.3
4.8
5.6
120.1
13.5
25.8
13 Other industrialized countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21 Turkey
22
Other Western Europe
23
South Africa
24
Australia
45.7
1.1
1.3
.9
4.5
2.0
1.2
50.2
.9
2.6
.8
5.7
3.2
1.3
11.6
1.9
4.7
1.2
16.4
55.5
1.2
3.3
.6
5.6
2.3
1.6
13.6
2.3
3.4
2.0
19.6
62.1
1.0
1.7
.6
6.1
3.0
1.4
16.1
2.8
4.8
1.7
22.8
65.7
1.1
1.5
.8
6.7
8.0
.9
13.2
2.7
4.7
2.0
24.0
66.4
1 9
1.7
.7
6.3
5.3
1.0
14.4
2.8
6.3
1.9
24.4
71.7
1.5
2.8
1.4
6.1
4.7
1.1
15.4
3.4
5.5
1.9
27.8
73.8
1.7
3.7
1.9
6.2
4.6
1.4
13.9
4.4
6.1
1.9
64.5
1.5
2.4
1.3
5.1
3.6
.9
11.7
4.5
8.2
2.2
23.1
74.3
1.7
2.0
1.5
6.1
4.0
.7
16.5
4.9
9.9
3.7
2.3.2
25 OPEC2
26 Ecuador
27
Venezuela
28
Indonesia
29
Middle Easl countries
30
African countries
24.1
.5
3.7
3.8
15.3
.9
22.1
19.2
19.7
1.1
2.4
5.2
10.7
.4
21.8
1.1
1.9
4.9
13.2
.7
22.3
.9
2.1
5.6
12.5
1.2
22.9
1.2
2.2
6.5
.6
20.1
.9
2.3
4.9
11.5
.5
26.0
1.3
2.5
6.7
14.4
1.2
25.7
1.3
3.3
5.5
14.3
1.4
31 Non-OPEC developing countries
96.0
112.6
126.5
130.3
128.1
140.6
138.7
147.4
11.2
8.4
6.1
2.6
18.4
.5
2.7
12.9
13.7
6.8
2.9
17.3
14.1
21.7
6.7
2.8
15.4
1.2
3.0
15.0
17.8
6.6
3.1
16.3
1.3
3.0
14.3
20.7
7.0
4.1
16.2
1.6
3.3
14.3
22.0
6.8
3.7
16.4
27.3
7.6
3.3
16.6
1.4
3.4
17.1
26.1
8.0
3.4
16.4
1.8
3.6
18.4
28.6
8.7
3.4
17.4
2.0
4.1
19.3
32.4
9.0
3.3
17.7
2.1
4.0
1.1
1.8
9.4
4.4
.5
19.1
4.4
4.1
4.9
4.5
2.9
9.8
4.2
2.6
10.4
3.8
2.7
10.5
.5
21 9
5.5
5.4
4.8
4.1
2.5
10.3
4.3
.5
21.5
6.0
5.8
5.7
4.1
3.6
10.6
5.3
.8
16.3
6.4
7.0
7.3
4.7
4.3
9.7
4.9
1.0
16.2
5.6
5.7
6.2
4.5
3.2
90
4.9
.7
15.6
5.1
5.7
5.4
4.3
4.2
11.7
5.0
.7
16.2
4.5
5.0
5.5
4.2
.6
.7
.0
1.0
7
.7
.1
.9
.9
.6
.0
.9
1.1
.7
.0
.9
.7
.0
.9
2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
5
Germany
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa'
13.6
1.6
3.2
1.0
15.4
.
52 Eastern Europe
53
Russia4
54 Other
55 Offshore banking centers
56
Bahamas
57
Bermuda
58
Cayman Islands and other British West Indies
59 Netherlands Antilles
60
Panama5
61
Lebanon
62
Hong Kong, China
63
Singapore
64
Other*
65 Miscellaneous and unallocated7
9.2
4.2
.4
16.2
3.1
3.3
2.1
4.7
19.4
27.3
11.5
3.7
2.7
6.7
82.4
10.3
28.5
.7
2.7
4.8
13.3
.6
21.7
5.3
4.7
5.4
4.8
.4
.7
.0
.9
.9
2.3
5.4
10.2
.4
17.2
1.6
3.4
4.9
.6
14.6
6.5
6.0
6.8
4.3
6.4
3.6
5.4
110.6
15.7
26.8
14.7
19.3
7.2
4.1
4.8
108.3
15.1
22.6
28.1
11.0
15.4
28.6
15.5
6.2
3.3
7.2
1.0
.6
.0
1.1
2.7
.8
1.9
4.2
1.0
3.2
5.1
1.0
4.1
5.3
1.8
3.5
6.9
3.7
3.2
8.9
3.5
5.4
7.1
4.2
2.9
9.8
5.1
4.7
9.1
5.1
4.0
12.0
7.5
4.6
72.9
99.2
11.0
6.3
32.4
10.3
1.4
.1
25.0
13.1
.1
57.6
106.1
17.3
4.1
26.1
13.2
1.7
.1
27.6
15.9
.1
72.7
105.2
14.2
4.0
32.0
134.7
20.3
4.5
37.2
26.1
2.0
.1
27.9
16.7
.1
59.6
131.3
20.9
6.7
32.8
19.9
2.0
.1
30.8
17.9
I
59.6
129.6
16.1
7.9
35.1
158
2.6
.1
35.2
16.7
.3
57.6
138.9
19.8
9.8
45.7
21.7
2.1
.1
27.2
145.7
29.9
9.8
43.4
129.3
29.2
9.0
24.9
14.6
14.0
3.2
12.7
.1
12.7
.1
99.1
10.2
8.4
21.4
1.6
1.3
.1
20.0
10.1
.1
66.9
1. The banking offices covered by these data include U.S. offices and foreign branches of
U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered
include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include
large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository
institutions as well as some types of brokers and dealers. To eliminate duplication, the data
are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign
branch of the same banking institution.
These data are on a gross claims basis and do not necessarily reflect the ultimate country
risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks
are available in the quarterly Country Exposure Lending Survey published by the Federal
Financial Institutions Examination Council.
6.3
16.6
29.8
16.0
4.0
2.6
5.3
104.7
14.0
23.7
11.7
1.7
.1
26.0
15.5
.1
50.0
80.8
3.1
.1
32.2
.1
33.8
15.0
.1
101.3
2. Organization of Petroleum Exporting Countries, shown individually, other members of
OPEC (Algeria, Gabon, Iran, Iraq, Kuwait. Libya. Nigeria, Qatar, Saudi Arabia, and United
Arab Emirates); and Bahrain and Oman (not formally members of OPEC).
3. Excludes Liberia. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. Includes Canal Zone.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
A58
3.22
International Statistics • January 1999
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
Type of liability, and area or country
Sepl.
1 Tola!
54,309
46,448
54,798
58,667
56,501
55,8»1
59,618
56,741
52,022
2 Payable In dollars
3 Payable in foreign currencies . .
38,298
16,011
33,903
12,545
38,956
15,842
39,861
18,806
38,651
17,850
39,746
16,145
41,888
17.730
42,237
14,504
40,914
11,108
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
32,954
18,818
14,136
24,241
12.903
11,338
26,065
11,327
14,738
29,633
11,847
17,786
28,263
11,442
16,821
26,461
11,487
14,974
29,113
12,975
16.138
26,751
13,547
13,204
22,669
12,634
10,035
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities
21,355
10,005
11,350
22,207
11.013
11,194
28,733
12,720
16.013
29.034
11,432
17,602
28,238
11,040
17,198
29.430
10.885
18,545
30.505
10,904
19,601
29,990
10,107
19,883
29.353
9,842
19,511
19,480
1,875
21,000
1,207
27.629
1,104
28.014
1.020
27.209
1,029
28,259
1,171
28,913
1,592
28,690
1,300
28,280
1,073
21,703
15.622
369
999
1.974
466
895
10.138
16,195
632
1,091
1.834
556
699
10.177
20,081
769
1,205
1,589
507
694
13.863
18,530
238
1,280
1.765
466
591
12,968
18,019
89
1,334
1,730
507
645
12,165
19,238
186
1,684
2,018
494
776
12,318
19,008
127
1,795
2,578
472
345
11,846
15,722
75
1,965
2,441
484
189
8,463
1,401
10
11
Payable in dollars
Payable in foreign currencies
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
495
1,727
1,961
552
688
15,543
19
Canada
629
652
602
1.616
651
2.392
1.045
539
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,034
101
80
207
998
0
5
1,783
59
147
57
86c
12
1,668
236
50
78
1,030
17
1
1,876
293
27
75
965
16
1
1.285
124
55
97
775
15
1
1,067
10
64
52
669
76
1
1,386
141
229
143
604
26
1
965
17
86
91
517
1.320
6
49
76
845
51
1
27
28
29
Asia
Japan ..
Middle Eastern oil-exporting countries'
8,403
7,314
35
5,988
5,436
27
6.423
5,869
25
6.370
5,794
72
6.248
5,668
39
6,239
5,725
23
5,394
5,085
32
5,024
4,767
23
4,408
3,869
0
30
31
Africi
Oil-exporting countries2
135
123
150
122
38
0
29
0
29
0
33
0
60
0
33
0
29
0
8,683
736
708
845
288
429
3,818
9,343
703
782
945
452
400
3,829
10.228
666
764
1,274
439
375
4.086
9,951
565
840
1,068
443
407
4.041
9.924
557
612
1,219
485
349
3,743
32
33
34
35
36
37
38
39
All other'
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
675
6,773
241
728
604
722
327
2,444
7,700
331
481
767
500
413
3,568
9,767
479
680
1,002
766
624
4,303
9,524
639
679
1.043
551
480
4,158
40
Canada
1,037
1,040
1,090
1,068
1,136
1,150
1.175
1.347
1,511
41
42
43
44
45
46
47
Lann America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,857
19
345
161
23
574
276
1.740
1
205
98
56
416
221
2,574
63
297
196
14
665
328
2,562
43
479
200
14
633
318
2.500
33
397
225
26
594
304
2,224
38
180
233
23
562
322
2.176
16
203
220
12
565
261
2,051
27
174
249
5
520
219
2,285
14
209
246
27
557
196
48
49
50
Asia
Japan
Middle Eastern oil-exporting countries'
10,741
4,555
1,576
10,421
3,315
1,912
13,422
4,614
2,168
13,915
4,465
2,495
13.875
4,430
2.420
14.628
4,553
2,984
14,966
4,500
3,111
14,672
4,372
3,138
13,611
3,995
3,194
51
52
Africa
Oil-exporting countries . . -
428
256
619
254
1,040
532
1,037
479
941
423
929
504
874
408
833
376
921
354
53
Other 3 ...
1,103
1,156
1,086
1,136
687
1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar. Saudi Arabia, and United Arab
Emirates (Trucial States).
840
2. Comprises Algeria, Gabon. Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
Nonbank-Reported Data A59
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
Type of claim, and area or country
Sept.
Dec.
Mar.
Junep
57,888
52,509
63,542
68,266
70,760
70,077
72.837
64,020
53.805
4,083
48,711
3,798
58,630
5,012
62,126
5,976
62.082
6.184
64,144
6.616
62,173
7.904
65,359
7,478
58,463
5,557
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
33.897
18.507
18,026
481
15,390
1,084
27,398
15,133
14.654
479
12,265
10,976
1,289
35,268
21,404
20,631
773
13,864
12,069
1,795
40.547
22.150
20,499
1.651
18,397
15.381
3,016
40,717
24.308
22.817
1,491
16,409
13,152
3.257
42,059
24,125
22,566
1,559
17,934
14,621
3,313
38,908
23,139
21,290
1,849
15,769
11,576
4.193
42.134
21.030
19.322
1.708
21.104
16,814
4,290
33,120
15,922
14.244
1,678
17,198
14,567
2,631
11 Commercial claims
12 Trade receivables
i3
Advance payments and other claims .
23,991
21,158
2,833
25,111
22,998
2,113
28.374
25,751
2.623
27.555
24.801
2,754
27,549
24,858
2,691
28,701
25,110
3,591
31,169
27,536
3,633
30.703
26.888
3,815
30,900
26,817
4,083
14
15
Payable in dollars
Payable in foreign currencies
21,473
2.518
23,081
2,030
25,930
2,444
26,246
1,309
26,113
1.436
26,957
1,744
29,307
1,862
29,223
1.480
29,652
1,248
16
17
18
19
20
21
22
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
'. .
Germany
Netherlands
Switzerland
United Kingdom
7.936
86
800
540
429
523
4,649
7,609
193
803
436
517
498
4,303
9.282
185
694
276
493
474
6,119
13.076
119
760
324
567
570
9.837
12.904
203
680
231
519
447
9,814
15,862
360
1.112
352
764
448
11.254
16.948
406
1,015
427
677
434
12,286
16.020
378
902
393
911
401
11,122
14,047
518
796
290
975
403
9,595
2 Payable in dollars
3 Payable in foreign currencies
23
Canada
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British Wesl Indies
Mexico
Venezuela
31
32
33
Asia
Japan
Middle Eastern oil-exporting countries1
34
15
Africa
Oil-exporting countries
36
37
38
39
40
41
42
43
14,306
3.5S1
2,851
3.445
4,917
6.422
4.279
.3.313
4,688
3,035
19,536
2,424
27
520
15,228
723
35
14,500
1,965
81
830
10,393
554
32
19,577
1,452
140
1,468
15,182
457
31
19,742
1,894
157
1.404
15.176
517
22
18,725
2.064
188
1,617
13,553
497
21
19.176
2,442
190
1,501
12.957
508
15
15,54.3
2,459
108
1,313
10.311
537
36
18,207
1.316
66
1.408
13.551
967
47
12,775
1,310
48
1,394
8,153
1,089
57
1.871
953
141
1,579
871
2,221
1.035
22
2.068
831
12
1.934
lib
20
2,015
999
15
2,133
823
2,174
791
9
2.376
886
12
373
0
276
5
174
14
182
14
179
15
174
16
319
15
125
16
155
15
569
562
10,443
226
1,644
1,337
562
642
2,946
9,863
364
1.514
1.364
582
418
2.626
9.603
327
1,377
1.229
613
389
2,836
10,486
331
1,642
1,395
573
381
2,904
12,120
328
1,796
1,614
597
554
3,660
12,854
232
1,939
1.670
534
476
4,828
12,935
216
1,955
1.757
492
418
4,654
All other'
Commercial claims
Europe
Belgium and Luxembourg
France
T
Germany
Netherlands
Switzerland
United Kingdom
9,540
21?
1,881
1.027
311
557
2,556
9,824
231
1.830
1,070
452
520
2,656
44
Canada
1,988
1.951
2,165
2.381
2,464
2,649
2,660
2.882
2,779
4?
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
4,117
9
234
612
83
1,243
348
30
272
898
79
993
285
5,276
35
275
1,303
190
1,128
357
5.067
40
159
1.216
127
1.102
330
5.241
29
197
1.136
98
1,140
451
5.028
22
128
1,101
98
1,219
418
5.750
27
244
1,162
109
1,392
576
5.481
1.3
238
1.128
88
1.302
441
6,082
12
359
1,183
110
1,462
585
52
53
54
Asia
6,982
2.655
708
7.312
1,870
974
8,376
2.003
971
8,348
2,065
1,078
8,460
2,079
1,014
8,576
2.048
987
8,713
1,976
1,107
7,638
1,713
987
7,367
1,757
1,127
55
56
Africa
Oil-exporting countries
454
67
654
87
746
166
718
100
618
81
764
207
680
119
57
Other'
Japan
Middle Eiastern oil-exporting countries'
1,006
1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial Stales).
1,198
2. Comprises Algeria, Gabon, Libya, and Nigena.
3. Includes nonmonetary international and regional organizations.
657
116
A60 International Statistics D January 1999
3.24
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1998
1998
Transaction, and area or country
Jan.—
Sepl.
Mar.
May
Apr.
July
Aug.
Sept.p
141,566
139,722
139,171
149,535
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
3 Net purchases, or sales (—) . . . .
4 Foreign countries
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean .
Middle East1
Other Asia
Japan
Africa
Other countries
Nonmonetary international and
regional organizations
..
590,714
578,203
1,097,958
1,028,361
1,186,876
1.147,565
136,184
122,769
134,177
130,628
129,528
121,355
146,147
142,591
152,833
150,308
12,511
69,597
39,311
13,415
3,549
8,173
3,556
2,525
1,844
-10,364
12,585
69,754
39,679
13,419
3,570
8,193
3.581
2,739
1,843
-10,321
5,367
-2,402
62,688
6,641
9,059
3,831
65,795
6,046
10,417
5,195
9.023
18,736
-3,072
-8,025
-354
-14,530
-3,017
784
-919
11,144
5,511
-260
1,453
161
974
595
55
-3,689
346
1,563
555
128
-344
10,670
650
1,834
564
2,234
2,968
-506
7,227
1,734
1,020
830
1,490
695
-1,600
1,798
286
-3,949
-540
204
-385
6,983
199
1,503
1,265
1,092
1,154
-443
-614
-134
-2,905
-306
-14
-134
5,459
988
1,326
2,226
-172
1,340
902
-261
788
-153
-11,735
146
-684
469
-98
-23
1,104
1,415
2,715
4,478
2.226
5,816
-1,600
918
-372
-85
-57
7,848
22,478
-1,406
5,203
383
2,072
4,787
472
342
1.480
627
557
1.956
3.402
566
2,110
-170
-202
-1,422
83
-112
-1.333
-234
-611
275
-74
163
-277
1,740
-276
610
-157
-4,112
214
159
160
-43
-214
BONDS 2
19 Foreign purchases
20 Foreign sales
21 Net purchases, or sales ( - ) . . .
22 Foreign countries
2.1 Europe
24
25
26
27
28
29
30
31
32
33
34
35
36
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean .
Middle East'
Other Asia
Japan
Africa
Other countries
Nonmonetary international and
regional organizations . . .
393,953
268.487
610,116
415.958
654,469
516,206
70,079
50.208
76,452
52,225
65,495
52,584
74,100
53.167
73,772r
62,213
67,229'
58,678
102.374
92.746
125,466
134,158
138,263
19,871
24,227
12,911
20,933
11,559'
8,551r
9.628
r
8,513'
9,578
9,41 l r
451
812
108
234
5,411'
640
2.029
171
-588
-511
-48
21
5.513'
233
139
32
100
3.624'
439
1,592
-188
1,709
-10
-17
-535
14,446
92
264
275
1.005
11,965
441
-2,948
-58
-1.842
-713
-61
-400
125,295
133,595
137,725
19,732
24,097
12,853
20,834
77,570
4,460
71,631
3,300
2,742
3,576
187
54,134
6,264
34,733
2,155
16,996
9,357
1,005
811
92,413
2.532
4,068
1.944
4,693
68,826
5,041
31,691
1,685
6,596
3,327
76
223
12,669
727
249
364
358
9,833
400
4,835
522
19,024
33
1,727
523
772
12,117
667
302
344
404
1,166
742
-72
212
363
2,256
69
2.078
2,904
45
262
5,555
-17
-133
532
794
4,585
628
6,703
109
-106
460
-31
-5
538
139
130
58
4,439
2,107
1,170
60,509
4,486
17,737
1,679
23,762
14,173
624
-563
14.346
8,696
607
6,371
162
1.266
527
82
229
ll,636
38
Foreign securities
37 Stocks, net purchases, or sales ( - )
38
Foreign purchases
39 Foreign sales
40 Bonds, net purchases, or sales ( - )
41
Foreign purchases
42
Foreign sales
43 Net purchases, or sales (—), of stocks and bonds
44 Foreign countries
45
46
47
48
49
50
51
Europe
Canada
Latin America and Caribbean
Asia
Japan
Africa
Other countries
52 Nonmonetary international and
regional organizations
-59,268
450,365
509,633
-51,369
1,114,035
796,957
-48,171
1,451,704
4,305
709,964
705.659
-29,007
1.120,208
1,165,404
1.499,875
1,149,215
-110,637
-89,113
-24,702
-40,942
756,015
-137
80,736
80,873
-12,158
118,296
130,454
-3,393
80,941
84,334
-1,882
110,403
112,285
-6,248
-12,295
-5,275
-451 r
6,570
9,040
-6,220
-12,331
-5,443
-9,794
-380 r
6,587
9,041
2.328'
2,195
-4,864
-64
-316
-269
294
1,211
2,631
-1,205
4,227
1,741
-122
-155
5,755
-1,158
1.206
3.399
2.088
-163
-17
-1
2.535
88,508
85,973
-12,355
151.477
163,832
-109,766
-88,921
-24,632
-57,139
-7.685
-11,507
-27,831
-5,887
-29,874
-5,196
2,061
-12,591
-6,634
-3,682
-1,364
-908
-1,783
618
-7,902
-7,118
-152
101
-1,457
-475
-6,108
-3,520
1,265
-302
-469
-2,035
-1,335
-1,092
-779
-681
-79
-123
-7,240
214
-2.548
516
-38
-32
-704
-70
-28
36
168
-26
-1,517
-4,087
-3,085
-25,258
-25,123
-10,001
-3,293
-2.288
-871
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar.
Saudi Arabia, and United Arab Emirates (Trucial States).
-1,689
81,360
83,049
-4,559
128.396
132,955
-3,516'
82,130'
85,646'
3,065
118,890
115,825
-71
5,552
74.358
68,806
1.018
139,341
138,323
6,074
89.467
83,393
2,966
152,650
149,684
2. Includes state and local government securities and securities of U.S. government
agencies and corporations. Also includes issues of new debt securities sold abroad by US.
corporations organized to finance direct investments abroad.
Securities Holdings and Transactions/Interest and Exchange Rates A61
3.25
MARKETABLE US. TREASURY BONDS AND NOTES
Millions of dollars; net purchases, or sales (-) during period
Foreign Transactions'
Area or country
Jan.—
Sept.
Apr.
May
July
Aug.
Sept.p
1 Total estimated .
232,241
184,171
16,061
-4,091
6,078
21,267
1,674
-3,578
-15,776
-4,984
2 Foreign counlries
234,083
183,688
15.277
-5,287
6,769
21,116
1,978
-3,631
-15,776
-4.975
118,781
1,429
17,980
-582
2,242
328
144,921
3,427
21,025
1,744
-1,058
-4,845
6,530
-165
-829
130
-202
-483
5,785
2.294
1.457
788
176
-143
341
184
44
-2,720
2.906
-223
715
-513
-1,181
731
335
-973
-1,426
3,742
-66
-5,903
215
82
-265
239
-827
-5,769
422
-569
-2,804
667
-1,799
-3,081
-152
-680
8,019
-5,778
-2,088
-2,457
104
1,722
20,523
2.813
-2,432
-857
704
1,897
-1,733
400
170
-3,705
1,410
-517
-8,383
-128
-11
-8,244
3,522
-168
154
794
-7.981
14
-632
-7,363
20.033
-339
-335
20.707
1,455
1,582
13
-950
2.578
693
3,513
-1,628
-1,153
-2,442
145
-241
949
450
2,305
-1,806
1,327
774
-23
588
-5.940
-1,233
6
1,524
1,041
-1.471
-509
16,396
-17,358
1,645
754
547
-4.037
-1,842
-1,390
-779
483
621
170
784
-116
203
1.196
900
10
-691
-715
-4
151
136
-304
-226
0
53
-135'
192
0
-10
234,083
85,807
148,276
183,688
43,959
139,729
15,277
-21,995
37,272
-5,287
6,133
-11,420
6,769
1,162
5,607
21,116
898
20,218
1,978
-3,486
5,464
-3,631
469
-4,100
-15,776
-16,920
1,144
-10.304
5,329
10.232
1
7,636
-12
- 14,069
2
1,325
0
-380
0
951
0
-1.388
0
-2,578
0
-4,160
1
-5,837
0
3
4
5
6
7
8
9
10
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R.
Canada
12
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
Other
65,658
31,726
2,331
20.785
-69
8,439
12,415
89,735
41,366
1,083
1,368
20 Nonmonetary international and regional organizations
21
International
22
Latin American regional
22,471
1,746
-465
6,028
98,253
13,461
-811
-2,554
655
-549
-2,660
39,567
20,360
126
7,966
6,301
-18
-1,185
904
-579
-330
362
2,585
-5,503
-691
-1,308
3,914
-8,546
-3,856
299
2,982
-4,221
-207
128
81
-468
62
-1,150
-9
MEMO
23 Foreign countries
24
Official institutions
25
Other foreign
Oil-exporting countries
26 Middle East 2
T 7 A A-!,.,.-'
1. Official and pnvate transactions in marketable U.S. Treasury securities having an
original maturity of more than one year. Data are based on monthly transactions reports.
Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.
3.26
-4.975
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar. Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria. Gabon, Libya, and Nigeria.
DISCOUNT RATES OF FOREIGN CENTRAL BANKS1
Percent per year, averages of daily figures
Rate on Nov 30, 1998
Rate on Nov. 30, 1998
Country
Country
Austria . . . .
Canada
Denmark . . .
Percent
Month
effective
2.5
2.75
5.25
4.25
3.3
Apr. 1996
Oct. 1997
Nov. 1998
Sept. 1998
Ocl. 1997
1. Rates shown are mainly those at which the central bank either discounts or makes
advances against eligible commercial paper or government securities for commercial banks or
brokers. For countries with more than one rate applicable to such discounts or advances, the
rate shown is the one at which it is understood that the central bank transacts the largest
proportion of its credit operations.
3.27
Month
effective
Percent
2.5
4.0
.5
2.5
1.0
Germany .
Italy
Japan . ..
Netherlands
Switzerland
Apr.
Oct.
Sept.
Apr.
Sept.
1996
1998
1995
1996
1996
2. Since February 1981. the rale has been that at which the Bank of France discounts
Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES1
Percent per year, averages of daily figures
1998
Type or country
I Eurodollars
2 United Kingdom
6 Netherlands
8 Italy
9 Belgium
10 Japan
1995
5.93
6.63
7 14
4.43
2.94
4.30
6 43
10.43
4.73
1.20
1996
5.38
5.99
4 49
3.21
1.92
2.91
381
8 79
3.19
.58
1997
5.61
6.81
3 59
3.24
1.58
3.25
3 35
6 86
3.40
.58
1. Rates are for three-month interbank loans, with the following exceptions: Canada,
finance company paper; Belgium, three-month Treasury bills; and Japan, CD rale.
May
June
July
Aug.
Sept.
Oct.
Nov.
5.57
7.37
5 09
3.55
1.52
3.53
3 50
4.98
3.67
.56
5.57
7.61
5 10
3.49
1.81
3.51
3 47
4.99
3.62
.57
5.57
7.67
5.10
3.46
1.98
3.46
3.44
4.75
3.59
.67
5.56
7.61
5 35
3.42
1.68
3.43
3.44
4.78
3.48
.69
5.39
7 35
5.66
3.40
1.43
3.33
3.43
4.86
3.42
.45
5.17
7.11
5.43
3.50
1.20
3.28
3.45
4.40
3.41
.49
5.21
6.84
5.42
3.56
1.44
3 48
3.49
3.82
3.47
.52
A62
3.28
International Statistics • January 1999
FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR1
Currency units per dollar except as noted
1998
Hem
1995
1996
1997
June
July
Aug.
Sept.
Oct.
Nov.'
Exchange Rates
COUNTRY/CURRKNCY UNIT
1
2
3
4
5
6
7
8
9
10
11
Australia/dollar2
Austria/schilling
Belgium/franc
Brazil/real
Canada/dollar
China. P.R./yuan
Denmark/krone
Finland/markka
France/franc
German y/deutsche mark
Greece/drachma
12
13
14
15
16
17
18
19
20
21
22
Hong Kong/dollar
India/rupee
Ireland/pound2
Italy/lira
Japan/yen
Malaysia/ringgil
Mexico/peso
Netherlands/guilder
New Zealand/dollar
Norway/krone
Portugal/cscudo
23
24
25
26
27
28
29
30
31
32
33
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound
Venezuela/bolivar
74.07
10.076
29.47
0.9162
1.3725
8.3700
5.5999
4.3763
4.9864
1.4321
231.68
78.28
10.589
30.97
1.0051
1.3638
8.3389
5.8003
4.5948
5.1158
1.5049
240.82
74.37
12.206
35.81
1.0779
1.3849
8.3193
6.6092
5.1956
5.8393
1.7348
273.28
60.46
12.615
36.98
1.1543
1.4655
8.3100
6.8294
5 4503
6.0118
1.7928
304.24
61.80
12.650
37.07
1.1614
1.4869
8.3100
6.8499
5.4653
6.0280
1.7976
299.35
58.88
12.574
36.85
1.1717
1.5346
8.3100
6.8067
5.4340
5.9912
1.7869
301.21
58.89
11.955
35.05
1.1805
1.5218
8.3055
6.4717
5.1734
5.6969
1.6990
292.47
61.79
11.524
33.81
1.1889
1.5452
8.2778
6.2294
4.9845
5.4925
1.6381
281.64
63.49
11.840
34.71
1 1932
1.5404
8.2778
6.3960
5.1163
5.6422
1.6827
282.64
7.7357
32.42
160.35
1,629.45
93.96
2.5073
6.447
1.6044
65.63
6.3355
149.88
7.7345
35.51
159.95
1.542.76
108.78
2.5154
7.600
1.6863
68.77
6.4594
154.28
7.7431
36.36
151.63
1,703.81
121.06
2.8173
7.918
1.9525
66.25
7.0857
175 44
7.7471
42.37
140.51
1.766.32
140.33
4.0006
8.920
2.0208
51.23
7.5785
183.58
7.7483
42.61
139.88
1.772.42
140.79
4.1591
8.899
2.0267
51.85
7.6246
183.93
7.7494
42.84
140.37
1,763.01
144.68
4.2036
9.371
2.0148
50.11
7.7248
182.99
7 7480
42.58
147.24
1,678.92
134.48
3.8050
10.219
1.9169
50.44
7.5564
174.19
7.7483
42.39
152.21
1,620.96
121.05
3.8000
10.159
1.8479
52.13
7.4294
168.01
7.7432
42.43
147.77
1,664.91
120.29
3.8000
9.969
1.8969
53.40
7.4562
172.52
1.4171
3.6284
772.69
124.64
51.047
7.1406
1.1812
26.496
24.921
157.85
174.85
1.4100
4.3011
805.00
126.68
55.289
6.7082
1.2361
27.468
25.359
156.07
417.19
1.4857
4.6072
950.77
146.53
59.026
7.6446
1.4514
28.775
31.072
163.76
488.39
1.6941
5.3910
1,397 77
152.18
65.150
7.9174
1.4949
34.553
42 332
165.04
543.82
1.7085
6.2285
1,295.76
152.58
65.908
7 9942
1.5136
34.387
41.300
164.37
558.47
1.7571
6.3198
1,314.29
151.72
66.642
8.1282
1.4933
34.731
41.720
163.42
571.88
1.7226
6.0966
1.375.54
144.33
66.260
7.8816
1.4000
34.646
40.402
168.23
583.85
1.6378
5.7991
1,344.14
139.23
66.345
7.8395
1.3373
33.121
38.118
169.44
570.68
1.6378
5.6511
1,294.01
143.05
67.578
8.0140
1.3852
32.603
36.527
166.11
569.66
Indexes1
NOMINAL
34
35
36
37
G-10 (March 1973= 1(X))4
Broad (January 1997= lOOr
Major currencies (March 1973= 100)6
Other important trading partners (January
1997-100) 7
* ....
38 Broad (March 1973= 100)5
39 Major currencies (March 1973- 100)fc
40 Other important trading partners, (March
1973= 100)7
84.25
92.52
81.39
87.34
97.41
85.23
96.38'
104.47
91.85
100.90
117.87
98.68
101.38
118.17
99.31
101.80
120.14
100.96
97.17
118.85
96.99
93.69
115.46
93.46
95.46
115.34
94.23
92.51
98.25
104.67
125.97
125.64
127.77
131.38
129.02
127.31
83.95
80.78
85.89
85.83
90.49
93.20
99.89
100.42'
100.25
101.41
101.76
103.21
100.05
99.05
97.06
95.47'
96.66
96.27
109.80
106.57
106.51
106.42
105.91
107.14
108.77
106.42
104.24
1. Averages of cenified noon buying rates in New York for cable transfers. Data in this
table also appear in the Board's G.5 (405) monthly statistical release. For ordering address,
see inside front cover.
2. Value in U.S. cents.
3. For more information on the indexes of the toreign exchange value of the dollar, see
Federal Reserve Bulletin, vol. 84 (October 1998), pp. 811-18.
4. Weighted average of the foreign exchange value of the U.S. dollar against the currencies
of the other G-10 countries. The weight for each of the ten countries is the 1972-76 average
world trade of lhat country divided by the average world trade of all ten countries combined.
Series revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978),
p. 700)
5. Weighted average of the foreign exchange value of the US. dollar against the currencies
of a broad group of U.S. trading partners. The weight for each currency is computed as an
average of U.S. bilateral import shares from and export shares to the issuing country and of a
measure of the importance to U.S. exporters of that country's trade in third country markets.
6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of
broad index currencies that circulate widely outside the country of issue. The weight for each
currency is its broad index weight scaled so that the weights of the subset of currencies in the
index sum to one.
7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of
broad index currencies that do not circulate widely outside the country of issue. The weight
for each currency is its broad index weight scaled so that the weights of the subset of
currencies in the index sum to one.
A63
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—-List Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases
Issue
December 1998
Page
A72
Issue
Page
SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Assets and liabilities of commercial banks
September 30, 1997
December 31, 1997
March 31, 1998
June 30, 1998
February
May
August
November
1998
1998
1998
1998
A64
A64
A64
A64
Terms of lending at commercial banks
November 1997
February 1998
May 1998
August 1998
February
May
August
November
1998
1998
1998
1998
A68
A66
A67
A66
and liabilities of U.S. branches and agencies offoreign banks
September 30, 1997
December 31, 1997
March 31, 1998
June 30, 1998
February
May
August
November
1998
1998
1998
1998
A72
A70
A72
A72
July 1998
October 1998
January 1999
A64
A64
A64
Residential lending reported under the Home Mortgage Disclosure Act
1995
1996
1997
September 1996
September 1997
September 1998
A68
A68
A68
Disposition of applications for private mortgage insurance
1996
1997
September 1997
September 1998
A76
A72
Small loans to businesses and farms
1997
September 1998
A76
Community development lending reported under the Community Reinvestment Act
1997 .....'
September 1998
A79
Pro forma balance sheet and income statements for priced sen'ice operations
March 31, 1998
June 30, 1998
September 30, 1998
A64
4.31
Special Tables • January 1999
PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES
A.
Pro forma balance sheet
Millions of dollars
Item
Short-term assets (Note 1)
Imputed reserve requirement on clearing balances
Sept. 30, 1997
Sept. 30, 1998
655.7
5,901.3
68 8
4.5
17.1
4,169.0
646.3
5,816.7
66 2
2.9
28.7
5,238.6
10,816.4
Total short-term assets
11,799.4
Long-term assets (Note 2)
Leases and leasehold improvements
396.4
126.0
22.9
415.5
389.1
132.5
33.7
334.5
Total long-term assets
Total assets
960.9
889.8
11,777.3
12,689.1
Short-term liabilities
Clearing balances and balances arising from early credit
Deferred-availability items
Short-term debt
6,146.8
4,579.2
90.4
6,974.7
4,726.8
97.8
108164
11,799.4
Long-term liabilities
Long-term debt
Postretirement/postemployment benefits obligation
0.0
190.9
214.6
.7
187.8
203.8
Total long-term liabilities
Total liabilities
405.5
392.3
11,221.9
12,191.6
Equity
Total liabilities and equity (Note 3)
NOTE. Components may not sum to totals because of rounding. The priced services
financial statements consist of these tables and the accompanying notes.
(1) SHORT-TERM ASSETS
The imputed reserve requirement on clearing balances held at Reserve Banks by depository
institutions reflects a treatment comparable to that of compensating balances held at correspondent banks by respondent institutions. The reserve requirement imposed on respondent
balances must be held as vault cash or as nonearning balances maintained at a Reserve Bank;
thus, a portion of priced services clearing balances held with the Federal Reserve is shown as
required reserves on the asset side of the balance sheet. The remainder of clearing balances is
assumed to be invested in three-month Treasury bills, shown as investment in marketable
securities.
Receivables are (1) amounts due Che Reserve Banks for priced services and (2) the share of
suspense-account and difference-account balances related to priced services.
Materials and supplies are the inventory value of short-term assets.
Prepaid expenses include salary advances and travel advances for priced-service personnel.
Items in process of collection is gross Federal Reserve cash items in process of collection
(CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustments for
intra-System items that would otherwise be double-counted on a consolidated Federal
Reserve balance sheet; adjustments for items associated with non-priced items, such as those
collected for government agencies; and adjustments for items associated with providing fixed
availability or credit before items are received and processed. Among the costs to be
recovered under the Monetary Control Act is the cost of float, or net CIPC during the period
(the difference between gross CIPC and deferred-availability items which is the portion of
gross CIPC that involves a financing cost), valued at ihe federal funds rate.
555.5
497.5
11,777.3
12,689.1
(2) LONG-TERM ASSETS
Consists of long-term assets used solely in priced services, the priced-services portion of
long-term assets shared with nonpriced services, and an estimate of the assets of the Board of
Governors used in the development of priced services. Effective Jan. 1, 1987, the Reserve
Banks implemented the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly,
the Federal Reserve Banks recognized credits to expenses of $20.4 million in the third quarter
of 1998, $28.7 million in the second quarter of 1998, $ 16.2 million in the first quarter of 1998,
$15.8 million in the third quarter of 1997, $15.6 million in the second quarter of 1997, $15.6
million in the first quarter of 1997, and corresponding increases in this asset account.
(3) LIABILITIES AND EQUITY
Under the matched-book capital structure for assets that are not "self-financing," short-term
assets are financed with short-term debt. Long-term assets are financed with long-term debt
and equity in a proportion equal to the ratio of long-term debt to equity for the fifty largest
bank holding companies, which are used in the model for the private-sector adjustment factor
(PSAF). The PSAF consists of the taxes that would have been paid and the return on capital
that would have been provided had priced services been furnished by a private-sector firm.
Other short-term liabilities include clearing balances maintained at Reserve Banks and
deposit balances arising from float. Other long-term liabilities consist of obligations on capital
leases.
Bank-Reported Data A65
4.31
PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES
B.
Pro forma income statement
Millions ot dollars
Item
Quarter ending Sept. 30, 1998
Revenue from services provided to depository institutions (Note 4)
Operating expenses (Note 5)
Income from operations
Inputed costs (Note 6)
Interest on float
Interest on debt
Sales taxes
FDIC insurance
1.8
4.3
2.4
0.7
Income from operations after imputed costs
Other income and expenses (Note 7)
Investment income on clearing balances
Earnings credits
Income before income taxes
Inpuled income taxes (Note 8)
Net income
Quarter ending Sept. 30, 1997
205.5
197.8
167.0
166.6
38.4
31.1
9.1
2.8
4.4
2.1
2.9
29.3
89.8
(85.6)
MEMO
Targeted return on equity (Note 9)
4.2
33.5
10.7
22.7
93.5
85.9
17.1
Nine months ending Sept. 30, 1998
Revenue from services provided to depository institutions {Note 4)
Operating expenses (Note 5)
Income from operations
Imputed costs (Note 6)
Interest on float
Interest on debt
Sales taxes
FDIC insurance
!).]
12.8
6.1
0.7
Income from operations after imputed costs
Other income and expenses (Note 7)
Investment income on clearing balances
Earnings credits
7.6
26.5
8.5
18.0
13.5
Nine months ending Sept. 30, 1997
602.5
483.9
586.6
494.8
118.6
91.9
30.7
8.9
13.1
7.1
4.0
88.0
271.3
(251.2)
12.3
18.9
20.2
33.1
58.8
273.6
(251.6)
22.0
108.1
80.8
Imputed income taxes (Note 8)
34.7
25.9
Nel income
73.4
54.9
49.9
40.5
Income before income taxes
MEMO
Targeted return on equity (Note 9)
NOTE. Components may not sum to totals because of rounding. The priced services
financial statements consist of these tables and the accompanying notes.
(4)
REVENUE
Revenue represents charges to depository institutions for priced services and is realized from
each institution through one of two methods, direct charges to an institution's account or
charges against its accumulated earnings credits.
(5) OPERATING EXPENSES
Operating expenses consist of the direct, indirect, and other general administrative expenses
of the Reserve Banks for priced services plus the expenses for staff members of the Board of
Governors working directly on the development of priced services. The expenses for Board
staff members were $.7 million per quarter in the first three quarters of 1998 and 1997. The
credit to expenses under SFAS 87 (see note 2) is reflected in operating expenses.
(6) IMPUTED COSTS
Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC
assessment. Interest on float is derived from the value of float to be recovered, either
explicitly or through per-item fees, during the period. Float costs include costs for checks,
book-entry securities, noncash collection, ACH. and funds transfers.
Interest is imputed on the debt assumed necessary to finance priced-service assets. The
sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a
private-sector firm are among the components of the PSAF (see note 3).
The following lisl shows the daily average recovery of float by the Reserve Banks for the
third quarter of 1998 and 1997 in millions of dollars:
Total float
Unrecovered float
Float subject to recovery
Sources of float recovery
Income on clearing balances
As-of adjustments
Direct charges
Per-itern fees
1998
1997
386.2
19.7
366.5
480.8
39.1
441.7
36.6
240.2
113.7
(23.9)
44.4
242.2
99.6
55.5
Unrecovered float includes float generated by services to government agencies and by other
central bank services. Float recovered through income on clearing balances is the result of the
increase in investable clearing balances; the increase is produced by a deduction for float for
cash items in process of collection, which reduces imputed reserve requirements. The income
on clearing balances reduces the float to be recovered through other means. As-of adjustments
and direct charges are mid-week closing float and interterritory check float, which may be
recovered from depositing institutions through adjustments to the institution's reserve or
clearing balance or by valuing the float at the federal funds rate and billing the institution
directly. Float recovered through per-item fees is valued at the federal funds rate and has been
added to the cost base subject to recovery in the third quarters of 1998 and 1997.
(7) OTHER INCOME AND EXPENSES
Consists of investment income on clearing balances and the cost of earnings credits.
Investment income on clearing balances represents the average coupon-equivalent yield on
three-month Treasury bills applied to the total clearing balance maintained, adjusted for the
effect of reserve requirements on clearing balances. Expenses for earnings credits granted to
depository institutions on their clearing balances are derived by applying the average federal
funds rate to the required portion of the clearing balances, adjusted for ihe net effect of
reserve requirements on clearing balances.
(8) INCOME TAXES
Imputed income taxes are calculated at the effective tax rate derived from the PSAF model
(see note 3).
(9) RETURN ON EQUJTY
Represent the after-lax rale of return on equity that the Federal Reserve would have earned
had it been a private business firm, as derived from the PSAF model (see note 3). This amount
is adjusted to reflect the recover)' of automation consolidation costs of $4.0 million for the
third quarter of 1998, $4.1 million for the second quarter of 1998, $2.6 million for the first
quarter of 1998, $2.0 million for the third quarter of 1997, $1.9 million for the second quarter
of 1997, and $2.3 million for the first quarter of 1997. The Reserve Banks plan to recover
these amounts, along with a finance charge, by the end of the year 2001.
A66
Federal Reserve Bulletin • January 1999
Index to Statistical Tables
References are to pages A3-A65 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Assets and liabilities (See also Foreigners)
Commercial banks. 15-21
Domestic finance companies, 32. 33
Federal Reserve Banks, 10
Foreign-related institutions, 20
Automobiles
Consumer credit, 36
Production, 44, 45
BANKERS acceptances, 5, 10, 22, 23
Bankers balances, 15-21. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 31
Rates, 23
Business activity, nonfinanciat, 42
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 43
Capital accounts
Commercial banks, 15-21
Federal Reserve Banks, 10
Central banks, discount rates, 61
Certificates of deposit, 23
Commercial and industrial loans
Commercial banks, 15-21
Weekly reporting banks, 17, 18
Commercial banks
Assets and liabilities, 15-21
Commercial and industrial loans, 15-21
Consumer loans held, by type and terms, 36
Real estate mortgages held, by holder and property, 35
Time and savings deposits, 4
Commercial paper, 22, 23, 32
Condition statements (See Assets and liabilities)
Construction, 42, 46
Consumer credit, 36
Consumer prices, 42
Consumption expenditures, 48, 49
Corporations
Profits and their distribution, 32
Security issues, 31, 61
Cost of living (See Consumer prices)
Credit unions, 36
Currency in circulation, 5, 13
Customer credit, stock market, 24
DEBT (See specific types of debt or securities)
Demand deposits, 15-21
Depository institutions
Reserve requirements, 8
Reserves and related items, 4, 5, 6, 12
Deposits (See also specific types)
Commercial banks, 4, 15-21
Federal Reserve Banks, 5, 10
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 32
EMPLOYMENT, 42
Eurodollars, 23, 61
FARM mortgage loans, 35
Federal agency obligations, 5, 9, 10, 11, 28, 29
Federal credit agencies. 30
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 27
Receipts and outlays, 25, 26
Treasury financing of surplus, or deficit, 25
Treasury operating balance, 25
Federal Financing Bank, 30
Federal funds, 23, 25
Federal Home Loan Banks, 30
Federal Home Loan Mortgage Corporation, 30, 34, 35
Federal Housing Administration, 30, 34, 35
Federal Land Banks. 35
Federal National Mortgage Association, 30, 34, 35
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 5, 10, 11, 27
Federal Reserve credit, 5. 6, 10, 12
Federal Reserve notes, 10
Federal Reserve System
Balance sheet for priced services, 64, 65
Condition statement for priced services, 64, 65
Federally sponsored credit agencies, 30
Finance companies
Assets and liabilities, 32
Business credit, 33
Loans, 36
Paper, 22, 23
Float, 5
Flow of funds, 37-41
Foreign currency operations, 10
Foreign deposits in U.S. banks, 5
Foreign exchange rates, 62
Foreign-related institutions, 20
Foreign trade, 51
Foreigners
Claims on, 52, 55, 56, 57, 59
Liabilities to, 51, 52, 53, 58, 60, 61
GOLD
Certificate account, 10
Stock, 5, 51
Government National Mortgage Association, 30, 34. 35
Gross domestic product. 48, 49
HOUSING, new and existing units, 46
INCOME and expenses, Federal Reserve System, 64, 65
Income, personal and national, 42, 48, 49
Industrial production, 42, 44
Insurance companies, 27, 35
Interest rates
Bonds, 23
Consumer credit, 36
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 61
Money and capital markets, 23
Mortgages, 34
Prime rate. 22
International capital transactions of United States, 50-61
International organizations, 52, 53, 55, 58, 59
Inventories, 48
Investment companies, issues and assets, 32
A67
Investments (See also specific types)
Commercial banks, 4, 15-21
Federal Reserve Banks. 10. 11
Financial institutions, 35
LABOR force. 42
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Commercial banks, 15-21
Federal Reserve Banks, 5, 6, 7, 10. 11
Federal Reserve System, 64, 65
Financial institutions, 35
Insured or guaranteed by United States. 34, 35
MANUFACTURING
Capacity utilization, 43
Production, 43. 45
Margin requirements, 24
Member banks {See also Depository institutions)
Reserve requirements, 8
Mining production. 45
Mobile homes shipped, 46
Monetary and credit aggregates, 4, 12
Money and capital market rates, 23
Money stock measures and components. 4. 13
Mortgages (See Real estate loans)
Mutual funds, 13, 32
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays. 26
National income. 48
OPEN market transactions. 9
PERSONAL income, 49
Prices
Consumer and producer, 42, 47
Stock market, 24
Prime rate. 22
Producer prices, 42, 47
Production, 42. 44
Profits, corporate, 32
REAL estate loans
Banks, 15-21,35
Terms, yields, and activity. 34
Type of holder and property mortgaged, 35
Reserve requirements, 8
Reserves
Commercial banks, 15-21
Depository institutions, 4, 5. 6, 12
Federal Reserve Banks, 10
U.S. reserve assets, 51
Residential mortgage loans. 34, 35
Retail credit and retail sales. 36. 42
SAVING
Flow of funds, 37-41
National income accounts, 48
Savings institutions. 35, 36, 37^41
Savings deposits (See Time and savings deposits)
Securities {See also specific types)
Federal and federally sponsored credit agencies, 30
Foreign transactions, 60
New issues. 31
Prices, 24
Special drawing rights, 5. 10. 50. 51
State and local governments
Holdings of U.S. government securities. 27
New security issues, 31
Rates on securities. 23
Stock market, selected statistics. 24
Stocks (See also Securities)
New issues, 31
Prices, 24
Student Loan Marketing Association, 30
TAX receipts, federal, 26
Thrift institutions, 4. (See also Credit unions and Savings
institutions)
Time and savings deposits, 4, 13, 15-21
Trade, foreign, 51
Treasury cash. Treasury currency, 5
Treasury deposits, 5. 10.25
Treasury operating balance, 25
UNEMPLOYMENT, 42
U.S. government balances
Commercial bank holdings, 15-21
Treasury deposits at Reserve Banks, 5. 10, 25
U.S. government securities
Bank holdings, 15-21,27
Dealer transactions, positions, and financing. 29
Federal Reserve Bank holdings, 5. 10. 11, 27
Foreign and international holdings and
transactions, 10. 27. 61
Open market transactions, 9
Outstanding, by type and holder. 27, 28
Rates, 23
U.S. international transactions, 50-62
Utilities, production. 45
VETERANS Administration, 34, 35
WEEKLY reporting banks. 17, 18
Wholesale (producer) prices. 42. 47
YIELDS (See Interest rates)
A68
Federal Reserve Bulletin • J anuary 1999
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
ALICE M. RIVLIN, Vice Chair
EDWARD W. KELLEY, JR.
LAURENCE H. MEYER
OFFICE OF BOARD MEMBERS
LYNN S. FOX, Assistant to the Board
DIVISION OF INTERNATIONAL FINANCE
DONALD J. WINN, Assistant to the Board
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
LEWIS S. ALEXANDER, Deputy Director
PETER HOOPER III, Deputy Director
DALE W. HENDERSON, Associate Director
DAVID H. HOWARD, Senior Adviser
EDWIN M. TRUMAN, Senior Adviser
DONALD B. ADAMS, Assistant Director
THOMAS A. CONNORS, Assistant Director
LEGAL DIVISION
DIVISION OF RESEARCH AND STATISTICS
KAREN H. JOHNSON, Director
J. VIRGIL MATTINGLY, JR., General Counsel
MICHAEL J. PRELL, Director
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
EDWARD C. ETTIN, Deputy Director
DAVID J. STOCKTON, Deputy Director
WILLIAM R. JONES, Associate Director
MYRON L. KWAST, Associate Director
PATRICK M. PARKINSON, Associate Director
THOMAS D. SIMPSON, Associate Director
LAWRENCE SLIFMAN, Associate Director
OFFICE OF THE SECRETARY
JENNIFER J. JOHNSON, Secretary
ROBERT DEV. FRIERSON, Associate Secretary
BARBARA R. LOWREY, Associate Secretary and Ombudsman
DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN, Director
STEPHEN C. SCHEMERING, Deputy Director
HERBERT A. BIERN, Associate Director
ROGER T. COLE, Associate Director
WILLIAM A. RYBACK, Associate Director
GERALD A. EDWARDS, JR., Deputy Associate Director
STEPHEN M. HOFFMAN, JR., Deputy Associate Director
JAMES V. HOUPT, Deputy Associate Director
JACK P. JENNINGS, Deputy Associate Director
MICHAEL G. MARTINSON, Deputy Associate Director
SIDNEY M. SUSSAN, Deputy Associate Director
MOLLY S. WASSOM, Deputy Associate Director
HOWARD A. AMER, Assistant Director
NORAH M. BARGER, Assistant Director
BETSY CROSS, Assistant Director
RICHARD A. SMALL, Assistant Director
WILLIAM SCHNEIDER, Project Director,
National Information Center
MARTHA S. SCANLON, Deputy Associate Director
DAVID S. JONES, Assistant Director
STEPHEN D. OLINER, Assistant Director
STEPHEN A. RHOADES, Assistant Director
JANICE SHACK-MARQUEZ, Assistant Director
CHARLES S. STRUCKMEYER. Assistant Director
ALICE PATRICIA WHITE, Assistant
Director
JOYCE K. ZICKLER, Assistant Director
GLENN B. CANNER, Senior Adviser
JOHN J. MINGO, Senior Adviser
DIVISION OF MONETARY AFFAIRS
DONALD L. KOHN, Director
DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D. PORTER, Deputy Associate Director
VINCENT R. REINHART, Deputy Associate Director
WILLIAM C. WHITESELL, Assistant Director
NORMAND R.V. BERNARD, Special Assistant to the Board
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
DOLORES S. SMITH, Director
GLENN E. LONEY, Deputy Director
SANDRA F. BRAUNSTEIN, Assistant Director
MAUREEN P. ENGLISH, Assistant Director
ADRIENNE D. HURT, Assistant Director
IRENE SHAWN MCNULTY, Assistant Director
A69
ROGER W. FERGUSON, JR.
EDWARD M. GRAMLICH
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
S. DAVID FROST, Staff Director
CLYDE H. FARNSWORTH, JR., Director
JOHN R. WEIS, Adviser
DAVID L. ROBINSON, Deputy Director (Finance and Control)
MANAGEMENT DIVISION
S. DAVID FROST, Director
STEPHEN J. CLARK, Associate Director, Finance Function
DARRELL R. PAULEY, Associate Director, Human Resources
Function
SHEILA CLARK, EEO Programs Director
LOUISE L. ROSEMAN, Associate Director
PAUL W. BETTGE, Assistant Director
JACK DENNIS, JR., Assistant Director
EARL G. HAMILTON, Assistant Director
JOSEPH H. HAYES, JR., Assistant Director
JEFFREY C. MARQUARDT, Assistant Director
MARSHA REIDHILL, Assistant Director
DIVISION OF SUPPORT SERVICES
OFFICE OF THE INSPECTOR
ROBERT E. FRAZIER, Director
BARRY R. SNYDER, Inspector General
GEORGE M. LOPEZ, Assistant Director
DAVID L. WILLIAMS, Assistant Director
DIVISION OF INFORMATION RESOURCES
MANAGEMENT
STEPHEN R. MALPHRUS, Director
RICHARD C. STEVENS, Deputy Director
MARIANNE M. EMERSON, Assistant Director
MAUREEN HANNAN, Assistant Director
Po KYUNG KIM, Assistant Director
RAYMOND H. MASSEY, Assistant Director
EDWARD T. MULRENIN, Assistant Director
DAY W. RADEBAUGH, JR., Assistant Director
ELIZABETH B. RIGGS, Assistant Director
GENERAL
DONALD L. ROBINSON, Assistant Inspector General
A70
Federal Reserve Bulletin • January 1999
Federal Open Market Committee
and Advisoiy Councils
FEDERAL OPEN MARKET COMMITTEE
MEMBERS
WILLIAM J. MCDONOUGH, Vice Chairman
ALAN GREENSPAN, Chairman
EDWARD G. BOEHNE
ROGER W. FERGUSON, JR.
EDWARD M. GRAMLICH
EDWARD W. KELLEY, JR.
LAURENCE H. MEYER
ROBERT D. MCTEER, JR.
MICHAEL H. MOSKOW
GARY H. STERN
ALICE M. RIVLIN
ALTERNATE MEMBERS
J. ALFRED BROADDUS, JR.
JACK GUYNN
ROBERT T. PARRY
JERRY L. JORDAN
STAFF
DONALD L. KOHN, Secretary and Economist
NORMAND R.V. BERNARD, Deputy Secretary
LYNN S. FOX, Assistant Secretary
GARY P. GILLUM, Assistant Secretary
J. VIRGIL MATTINGLY, JR., General Counsel
THOMAS C. BAXTER, JR., Deputy General Counsel
MICHAEL J. PRELL, Economist
LYNN E. BROWNE, Associate Economist
STEPHEN G. CECCHETTI, Associate Economist
CRAIG S. HAKKIO, Associate Economist
DAVID E. LINDSEY. Associate Economist
MARK S. SNIDERMAN, Associate Economist
THOMAS D. SIMPSON, Associate Economist
DAVID J. STOCKTON, Associate Economist
PETER R. FISHER. Manager, System Open Market Account
FEDERAL ADVISORY COUNCIL
THOMAS H. JACOBSEN, President
CHARLES T. DOYLE, Vice President
WILLIAM M. CROZIER. JR.. First District
DOUGLAS A. WARNER III, Second District
WALTER E. DALLER. JR.. Third District
ROBERT W. GILLESPIE. Fourth District
KENNETH D. LEWIS. Fifth District
STEPHEN A. HANSEL, Sixth District
NORMAN R. BOBINS, Seventh District
THOMAS H. JACOBSEN, Eighth District
RICHARD A. ZONA, Ninth District
C. Q. CHANDLER, Tenth District
CHARLES T. DOYLE, Eleventh District
VACANCY, Twelfth District
JAMES ANNABLE, Co-Secretary
WILLIAM J. KORSVIK, Co-Secretary
A71
CONSUMER ADVISORY COUNCIL
WILLIAM N. LUND, Augusta, Maine, Chairman
YVONNE S. SPARKS, St. Louis, Missouri, Vice Chairman
RICHARD S. AMADOR, LOS Angeles, California
WALTER J. BOYER, Garland, Texas
WAYNE-KENT A. BRADSHAW, LOS Angeles, California
JEREMY EISLER, Biloxi, Mississippi
ROBERT F. ELLIOT, Prospect Heights, Illinois
HERIBERTO FLORES, Springfield, Massachusetts
DWIGHT GOLANN, Boston, Massachusetts
MARVA H. HARRIS, Pittsburgh, Pennsylvania
KARLA IRVINE, Cincinnati, Ohio
FRANCINE C. JUSTA, New York, New York
JANET C. KOEHLER, Jacksonville, Florida
GWENN KYZER, Allen, Texas
JOHN C. LAMB, Sacramento, California
ERROL T. LOUIS, Brooklyn, New York
MARTHA W. MILLER, Greensboro, North Carolina
DANIEL W. MORTON, Columbus, Ohio
CHARLOTTE NEWTON, Springfield, Virginia
CAROL PARRY, New York, New York
PHILIP PRICE, JR., Philadelphia, Pennsylvania
DAVID L. RAMP, Minneapolis, Minnesota
MARILYN ROSS, Omaha, Nebraska
MARGOT SAUNDERS, Washington, D.C.
ROBERT G. SCHWEMM, Lexington, Kentucky
DAVID J. SHIRK, Eugene, Oregon
GAIL SMALL. Lame Deer, Montana
GREGORY D. SQUIRES, Milwaukee, Wisconsin
GEORGE P. SURGEON, Chicago, Illinois
THEODORE J. WYSOCKI, JR., Chicago, Illinois
THRIFT INSTITUTIONS ADVISORY COUNCIL
CHARLES R. RINEHART, Santa Ana, California, President
WILLIAM A. FITZGERALD, Omaha, Nebraska, Vice President
GAROLD R. BASE, Piano, Texas
DAVID A. BOCHNOWSKI, Munster, Indiana
DAVID E. A. CARSON, Bridgeport, Connecticut
RICHARD P. COUGHLIN, Stoneham, Massachusetts
STEPHEN D. HAILER, Akron, Ohio
F. WELLER MEYER, Falls Church, Virginia
EDWARD J. MOLNAR, Harleysville, Pennsylvania
GUY C. PINKERTON, Seattle, Washington
TERRY R. WEST, Jacksonville, Florida
FREDERICK WILLETTS, III, Wilmington, North Carolina
A72
Federal Reserve Bulletin • January 1999
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
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Consumer Handbook on Adjustable Rate Mortgages
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A Consumer's Guide to Mortgage Lock-Ins
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Making Sense of Savings
SHOP: The Card You Pick Can Save You Money
Welcome to the Federal Reserve
When Your Home is on the Line: What You Should Know
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Keys to Vehicle Leasing
A73
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Donald Savage. February 1990. 12 pp.
160.
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PERFORMANCE" AND "EVENT S T U D Y " METHODOLOGIES,
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by Stephen A. Rhoades. July 1994. 37 pp.
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DENCE, by Gregory Elliehausen, April 1998. 35 pp.
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REPRINTS OF SELECTED Bulletin ARTICLES
Some Bulletin articles are reprinted. The articles listed below are
those for which reprints are available. Beginning with the January 1997 issue, articles are available on the Board's World Wide
Web site (http://www.federalreserve.gov) under Publications,
Federal Reserve Bulletin articles.
Limit of ten copies
T H E 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
FAMILY FINANCES IN THE U.S.: RECENT EVIDENCE FROM THE
SURVEY OF CONSUMER FINANCES. January 1997.
A74
Federal Reserve Bulletin • January 1999
Maps of the Federal Reserve System
!{".<•
-
MlNNKAlt'llS
EWYORK
DALLAS
HAWAII
LEGEND
Both pages
•
Federal Reserve Bank city
•
Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing page
• Federal Reserve Branch city
— Branch boundary
NOTE
The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by
letter (shown on the facing page).
In the 12th District, the Seattle Branch serves Alaska,
and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as
follows: the New York Bank serves the Commonwealth
of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of
Governors revised the branch boundaries of the System
most recently in February 1996.
A75
1-A
2-B
MB
3-C
4-D
5-E
Pittsburgh
Baltimore MD
NY
FA
\f
Vf ,
Buffalo
MA
Mi
s NJ
• Cincinnati
/ Jv
BOSTON
NEW YORK
6-F
KY
CLEVELAND
PHILADELPHIA
RICHMOND
8-H
7-G
• Nashvilk1
r-
TN-
• Charlotte
D E " " "
KY
Ml
Birminghairul
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Detroit!
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, ••
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Louisville
liis
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V \ \ OrkMUs
Little •
Rock
Ms
Miami
ATLANTA
ST. LOUIS
CHICAGO
9-1
MN
• Helena
Ml
MINNEAPOLIS
10-J
12-L
- » •
Omaha*
ALASKA
DL'IULT
Seattle
• •- l.ilkima ( i i
US
KANSAS CITY
11-K
fJS
Sak Lake City
VT.
l-.l Paso
•Lus Angeles
S.m Antonio
HAWAII
DALLAS
SAN FRANCISCO
A76
Federal Reserve Bulletin • January 1999
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
William C. Brainard
William O. Taylor
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
John C. Whitehead
Peter G. Peterson
14240 Bal Dixit
William J. McDonough
Vacancy
PHILADELPHIA
19105
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Buffalo
Joan Carter
Charisse R. Lillie
Carl W. Turnipseed'
G. Watts Humphrey, Jr.
David H. Hoag
45201 George C. Juilfs
15230 John T. Ryan, III
Jerry L. Jordan
Sandra Pianalto
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Walter A. Varvel
Baltimore
Charlotte
21203
28230
Claudine B. Malone
Jeremiah J. Sheehan
Daniel R. Baker
Joan H. Zimmerman
John F. Wieland
Paula Lovell
V. Larkin Martin
Marsha G. Rydberg
Mark T. Sodders
N. Whitney Johns
R. Glenn Pumpelly
Jack Guynn
Patrick K. Barron
Lester H. McKeever, Jr.
Arthur C. Martinez
Florine Mark
Michael H. Moskow
William C. Conrad
Susan S. Elliott
Charles W. Mueller
To be announced
To be announced
To be announced
William Poole
W. LeGrande Rives
David A. Koch
James J. Howard
To be announced
Gary H. Stern
Colleen K. Strand
Jo Marie Dancik
Terrence P. Dunn
Kathryn A. Paul
Larry W. Brummett
Gladys Styles Johnston
Thomas M. Hoenig
Richard K. Rasdall
Roger R. Hemminghaus
James A. Martin
To be announced
To be announced
To be announced
Robert D. McTeer, Jr.
Helen E. Holcomb
Gary G. Michael
Nelson C. Rising
Lonnie Kane
Nancy Wilgenbusch
Barbara L. Wilson
Richard R. Sonstelie
Robert T. Parry
John F. Moore
Cincinnati
Pittsburgh
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75201
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
SaltLakeCity
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino1
Robert B. Schaub
William J. Tignanelli1
DanM. Bechter1
James M. Mckee
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
David R. Allardice'
Robert A. Hopkins
Thomas A. Boone
Martha L. Perine
John D.Johnson
Carl M. Gambs >
Kelly J. Dubbert
Steven D. Evans
Sammie C. Clay
Robert Smith, III'
James L. Stall>
MarkL. Mullinix1
Raymond H. Laurence1
Andrea P. Wolcott
Gordon R. G. Werkema2
'Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424;
Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston. West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee,
Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Executive Vice President
@FedFRASER