Full text of Federal Reserve Bulletin : July 1985
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VOLUME 71 •
NUMBER 7 •
JULY
1985
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON,
D.C.
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost
• Griffith L. Garwood • James L. Kichline • Edwin M. Truman
N a o m i P. Salus, Coordinator
t
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson,
the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
487 A REVISION OF THE INDEX OF
INDUSTRIAL PRODUCTION
This article describes the first general revision of the Federal Reserve's monthly index of industrial production since 1976 and
reviews developments in the industrial sector during the past decade in light of the
revised data.
502 INDUSTRIAL
PRODUCTION
Output declined an estimated 0.2 percent in
April.
504 STATEMENTS TO CONGRESS
Marvin Duncan, Vice President, Federal
Reserve Bank of Kansas City, discusses
agricultural legislation being considered by
the Congress and says that appropriate national policy choices must be made if agricultural markets in the long term are to
brighten materially, before the Senate Committee on Agriculture, Nutrition, and Forestry, May 1, 1985.
508 Preston Martin, Vice Chairman, Board of
Governors, discusses the trend toward
greater internationalization of capital markets, the further growth of "securitized"
credit, and the continued development of
futures and options markets based on financial instruments, before the Subcommittee
on Telecommunications, Consumer Protection, and Finance of the House Committee
on Energy and Finance, May 2, 1985.
514 Vice Chairman Martin examines the impact
of recent merger and buyout activity on
domestic credit flows and the safety and
soundness of financial markets, before the
Subcommittee on Domestic Monetary Policy of the House Committee on Banking,
Finance and Urban Affairs, May 3, 1985.
517 Paul A. Volcker, Chairman, Board of Governors, reviews the banking bill, S. 2851,
and says that the basic framework for the
conduct of depository institution business
that would have been established by S. 2851
is sorely missed and is urgently needed,
before the Senate Committee on Banking,
Housing, and Urban Affairs, May 8, 1985.
520 E. Gerald Corrigan, President, Federal Reserve Bank of New York, offers his views
concerning recent problems in the U.S.
government securities market and says that
the market as a whole continues to function
effectively although the cumulative weight
of recent disturbances raises some important questions about the structure and functioning of the markets, before the Subcommittee on Securities of the Senate
Committee on Banking, Housing, and Urban Affairs, May 9, 1985.
524 President Corrigan discusses the impact of
recent developments in the government securities market and says that these events
have not materially affected the functioning
of the market as a whole, the conduct of
monetary policy, or Treasury financing activities, before the Subcommittee on Commerce, Consumer, and Monetary Affairs of
the House Committee on Government Operations, May 15, 1985.
528 William Taylor, Director of the Board's
Division of Banking Supervision and Regulation, reviews the Federal Reserve's supervisory oversight of certain transactions
between banks and government securities
dealers that involve the transfer of, or a
security interest in, U.S. government securities, before the Subcommittee on Commerce, Consumer, and Monetary Affairs of
the House Committee on Government Operations, May 15, 1985.
533 ANNOUNCEMENTS
Change in the discount rate.
Meeting of Consumer Advisory Council.
Policy statement on large-dollar wire transfer systems.
Policy on securities lending.
Proposed actions.
Admission of four state banks to membership in the Federal Reserve System.
intermeeting range for the federal funds
rate, which provides a mechanism for initiating consultation of the Committee when
its boundaries are persistently exceeded,
would be left unchanged at 6 to 10 percent.
543 LEGAL DEVELOPMENTS
Amendment to Rules Regarding Equal Opportunity; various bank holding company,
bank service corporation, and bank merger
orders; and pending cases.
Ai FINANCIAL AND BUSINESS STATISTICS
536 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE
At its meeting on March 26, 1985, the
Committee adopted a directive that called
for no change in reserve conditions. The
members anticipated that that action would
be consistent with growth of Ml, M2, and
M3 at annual rates of around 6, 7, and 8
percent respectively for the period from
March to June. The members agreed that
somewhat lesser restraint might be acceptable in the context of substantially slower
growth in the monetary aggregates, while
somewhat greater restraint might be acceptable if monetary growth were substantially
faster. In either event, the need for greater
or lesser restraint would also be appraised
against the background of developments
relating to the strength of the business expansion, progress against inflation, and
conditions in domestic credit and foreign
exchange markets. It was agreed that the
A3 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO TABULAR PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A70 BOARD OF GOVERNORS AND STAFF
A72 FEDERAL OPEN MARKET COMMITTEE
AND STAFF, ADVISORY COUNCILS
A74 FEDERAL RESERVE BOARD
PUBLICATIONS
All INDEX TO STATISTICAL TABLES
A79 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
A80 MAP OF FEDERAL RESERVE SYSTEM
(
A Revision of the Index
of Industrial Production
Joan D. Hosley and James E. Kennedy of the
Board's Division of Research and Statistics prepared this article. Laurence P. Greenberg and
Kathleen Van Twyver provided research assistance.
The Federal Reserve Board has completed a
general revision of its index of industrial production, the first since 1976 and the sixth since the
1920s. This article describes the revision and
reviews developments in the industrial sector
during the past decade in light of the revised
data.
The index of industrial production is of special
interest for several reasons. First, it measures a
large portion of the output of the national economy on a monthly basis. Second, that portion,
together with construction, accounts for the bulk
of the variation in output over the course of the
business cycle. Third, the index—with its substantial industrial detail—is helpful in illuminating structural developments in the economy.
The index of industrial production is constructed with data from a variety of sources.
Current monthly estimates of production in some
industries are based on measures of physical
output. For industries in which direct measurement is not possible, output is inferred from
production-worker hours and the use of electric
power. Periodic revisions benchmark the individual industrial production series to more comprehensive data sources. One of the major
sources for benchmark revisions is the Census of
Manufactures, which is undertaken every five
years. In the current general revision, revised
indexes of production were obtained from the
Census of Manufactures for 1972 and 1977 and
from Annual Surveys of Manufactures through
1981. These indexes are used to adjust the annual
levels of most of the Federal Reserve's 252 basic
series on industrial production. Other annual
data more comprehensive than those available
monthly—for instance, data in the Bureau of
Mines Yearbook—also are used in the revisions.
The latest revision moves the base year for the
index from 1967 to 1977, a year in which the
economy was reasonably well balanced and expanding. New value-added weights were assigned to each series for 1977.
The industrial production index uses different
value-added weights for different years in an
attempt to represent accurately the evolution of
relative prices. In the revised index, 1967
weights have been used for the 1967-72 period,
1972 weights for 1972-77, and 1977 weights from
1977 to the present. The individual series and the
weighted aggregates for each of these periods
have been linked to form a continuous index
expressed as a percentage of output in 1977.
Before this revision, value-added weights from
1967 were used in the current monthly industrial
production index.
Besides updating weights, the revision offers
an opportunity to change the way in which
industries are classified, to add series, and to
improve series when possible. In the present
revision, the number of basic series has been
increased from 235 to 252 to improve coverage
for several industries and to allow more meaningful groupings. The classification system now
matches the 1977 Standard Industrial Classification (SIC). In several cases new industry classifications and new data sources have permitted a
separation of production components that previously had to be lumped together even though
they serve different functions. For instance, additional data were used to separate automobiles
sold to households from those sold to business
and government. In the market groups of the
previously published index, trucks had already
been separated in this way.
The revised industrial production index will be
presented in detail in a manual now in prepara-
488 Federal Reserve Bulletin • July 1985
tion. The manual will describe the basic concepts, classifications, monthly series, benchmarking procedure, aggregation and weighting
technique, and method of seasonal adjustment,
as well as the uses, limitations, and history of the
index.
MAJOR
2. Growth in industrial production in six countries,
selected periods
Average annual increase in percent
1967-84
1967-77
1977-84
United Kingdom
3.0
2.6
2.8
2.6
5.9
1.3
3.1
3.8
4.2
3.8
6.6
2.1
2.9
.8
.8
.9
4.8
.3
SOURCE. International Financial
Statistics.
Country
1 United States
Federal Republic of Germany
irance
Italy
DEVELOPMENTS
The revised index of total industrial production
shows an average annual growth rate between
1967 and 1984 that is marginally higher than that
shown in the previously published index: 3.0
percent compared with 2.9 percent. To put these
trends in context, during the preceding two decades (1947-67) industrial production had advanced at an average annual rate of 4.8 percent
(table 1).
In the period from 1967 to 1984, among the six
major industrial countries listed in table 2, only
in Japan did the overall growth rate exceed that
of U.S. industry. In all six countries listed,
growth slowed after 1977 compared with the
previous decade. The deceleration in industrial
growth in the five foreign countries was, however, more pronounced than it was in the United
States, where the rate dropped from an annual
average of 3.1 percent in the years 1967-77 to 2.9
percent in the years 1977-84.
Despite the moderate rate of growth in U.S.
1. Growth rate in industrial production,
by major group, selected periods
Average annual increase in percent, except as noted
Group
propor-
1947-67
1967-77
1977-84
(percent)
Total industrial
production
jJ-.t
Major market groups
Products
Consumer g o o d s . . .
Business
equipment
Construction
supplies
Materials
Major industry groups
Durables
Nondurables
ilities
,
4.7
5.0
4.5
8.4
3.2
2.6
3.9
4.4
(vmm
11.5
industrial production in recent years, the productivity of labor in the manufacturing sector continued to improve. In this setting, job opportunities
in the manufacturing sector were diminished;
employment in this sector reached a peak of 21
million in 1979, and by 1984 was 7 percent lower.
Timing of Peaks and
Troughs
As chart 1 shows, the revised index of total
industrial production displays much the same
cyclical variation as did the previously published
index. Only for 1973-74 does the current revision
result in a noticeable difference in the timing of
a peak or trough in industrial activity. Both indexes reveal a rapid fall in output in the closing
months of 1974 and a bottoming out in March
1975. But the revised index reveals a peak in
output in the autumn of 1973 and then a fall of
almost 2 percent by the third quarter of 1974,
while the previously published index fluctuated
in a narrow range between November 1973 and
September 1974. The revised figures conform
more closely to the cyclical timing reported by
the National Bureau of Economic Research,
which put the peak in November 1973.
In the most recent cycle, July 1981 remains the
high point, after which total output fell more than
11 percent over the following 15 months. According to the revised index, production at the
cyclical low was virtually flat during the last
three months of 1982, at a level scarcely above
the 1977 average, while the previously published
index pointed to a distinct trough, in November
1982. Both indexes show the strong rebound in
overall industrial output during 1983 and the first
half of 1984, as well as the leveling out since the
summer of 1984.
A Revision of the Index of Industrial Production
2. T o t a l industrial p r o d u c t i o n a n d
1. R e v i s e d a n d e a r l i e r i n d u s t r i a l p r o d u c t i o n i n d e x e s
Ratio
489
1977=100
high-technology
industries
Ratio scale, 1977=100
120
Monthly data, seasonally adjusted.
Sectoral
Developments
The U.S. economy in recent years has benefited
from rapid growth of some new industries, while
many of its older industries have matured and
slowed in their rate of growth. Some of the
fastest-growing industries have been those that
embody sophisticated technology in both their
production processes and their final products.
Chart 2 plots production for a group of such
"high technology" industries—office and computing machines, copiers and related equipment,
electronic communications, electronic components, and medical instruments—against total
industrial production. Because these industries
have grown at a much faster rate than total
industrial production since 1977, their combined
proportion in the overall index has increased
from 6.1 percent in 1977 to 12.9 percent by the
end of 1984. These and other fast-growing industries have on balance accounted for most of the
growth in total industrial production since the
late 1970s.
A major revision in the industrial production
index generally results in an upward adjustment
to the output of "growth industries." One reason
is that available current monthly data are likely
to fail to capture the full contribution of firms and
products that enter the market in the years
between major revisions. The real extent of this
contribution becomes known only in the light of
more comprehensive data. The latest revision
confirms this tendency: the average annual rate
of growth in high-technology industries as measured by the revised index was 14 percent during
the 1977-84 period, compared with 9 percent in
the earlier index. In contrast, downward revi
Monthly data, seasonally adjusted.
The high-technology category includes office and computing machines, electronic communications, electronic components, medical
instruments, and copiers and related equipment. The combined 1977
weight of these high-technology industries in total industrial production is 6.1 percent.
sions were evident in slower-growing or declining industries such as metal mining, primary
metals, fabricated metals, leather and leather
products, and gas utilities (table 3).
Among the durable goods industries, the revision underscores the weakness in manufacturing
of equipment for agriculture, construction and
mining, and railroads; in commercial shipbuilding; and in primary metals. For this set of industries, output peaked in 1979 and has since
declined about 40 percent (chart 3). The contribution of these industries to total industrial production has shrunk from 8.0 percent in 1977 to
4.7 percent at the end of 1984.
3. T o t a l i n d u s t r i a l p r o d u c t i o n a n d l o w - p e r f o r m i n g
durable goods industries
1978
1980
1982
1984
Monthly data, seasonally adjusted.
Low-performing durables include farm equipment, construction and
mining equipment, railroad equipment, commercial shipbuilding, and
primary metals. The 1977 weight of low-performing durables in total
industrial production is 8.0 percent.
490 Federal Reserve Bulletin • July 1985
The rate of growth in the output of many
nondurable manufacturing industries also has
slowed in the past decade despite strength in
such areas as paper, printing and publishing, and
rubber and plastics products. Besides the leather
and products industry, which has been in actual
decline since the late 1960s, the most pronounced loss has occurred in refining of petroleum products, which dropped after each of the
'major rounds of price increases for crude oil and
has recovered only partially since 1982. At the
end of 1984, output of petroleum refineries was
about one-fifth below the 1978-79 high. The need
for domestic refining of crude oil has diminished
because domestic production of crude oil has
changed little since the development of the Alaska North Slope field in the late 1970s and because the volume of imported crude oil has
fallen. Moreover, imports of refined petroleum
products have increased as refining capacity
abroad has expanded.
Among other nondurable goods industries,
output of textile mill products and apparel has
stagnated in recent years as imports have satisfied the increases in domestic demand. Growth
in the chemical industry—the largest industry
3. Comparison of rates of growth in industrial production
Average annual rate of growth,
revised index (percent)
Growth rate calculated with
revised index minus growth rate
calculated with earlier index
1967-84
1967—77
1977-84
1967-84
Total
3.0
3.1
2.9
.1
-.2
.5
Major market groups
Products, total
Consumer goods
Business and defense equipment.
Business
Defense and space
Intermediate products
Construction supplies
Materials
Durable
Nondurable
Energy
3.2
3.1
3.0
4.1
.4
3.3
2.3
2.7
3.0
3.4
1.4
3.0
3.6
1.8
3.9
-3.8
3.4
2.6
3.3
3.0
4.7
1.9
3.5
2.4
4.9
4.4
6.7
3.2
1.9
2.0
2.9
1.5
.6
.2
.2
0
.6
-1.4
0
-.5
-.1
.1
-.3
-.2
-.3
-.2
-.3
-.1
-1.8
-.4
-.9
0
-.1
.2
-.2
.9
.9
.7
1.5
-.9
.7
.1
-.2
.4
-.9
-.3
1.3
-1.5
2.7
1.1
2.0
3.2
2.9
1.9
3.7
2.5
-.6
1.3
4.3
6.0
1.8
5.9
1.8
3.5
3.1
.6
2.3
1.4
3.4
3.7
5.0
1.2
6.6
-3.1
3.2
4.4
.4
1.1
0
2.0
.9
1.8
3.2
2.6
2.3
3.1
3.1
.9
1.9
3.8
4.5
1.9
6.9
3.2
3.9
2.9
.9
3.5
2.1
3.3
2.4
6.6
3.5
7.5
-2.7
4.4
5.9
1.0
1.5
-3.7
3.5
1.3
2.2
3.1
3.2
1.3
4.6
1.7
-2.7
.4
5.1
8.1
1.8
4.6
-.3
2.9
3.5
.1
.5
.4
3.5
5.8
2.8
-1.9
5.3
-3.7
1.5
2.2
-.4
-.1
-1.0
.1
-.1
-.2
.2
.3
-.5
-.2
-.3
-.3
-.6
.7
1.3
-.1
2.6
-.6
0
.2
-.2
.4
-.2
.1
.5
0
-.1
-.7
-.1
-.4
.1
-1.2
-.6
-.5
0
-.8
-.4
-.1
-.1
-.4
-.7
-.7
-.2
-.8
.1
.7
-.1
2.3
-.9
-.3
-.4
-.3
.5
-.9
.1
-.1
.2
-.1
-1.3
.3
-.2
0
-.2
.6
-1.7
-.1
.9
.1
.6
.7
-.5
.6
.4
-.5
-.3
1.7
2.2
.1
3.0
-.3
.4
1.2
-.2
.1
.8
0
1.6
-.2
0
.1
-.8
-.6
0
-2.4
Series
Major industry groups
Mining
Metal mining
Coal
Oil and gas extraction
Stone and earth minerals
Manufacturing
Durables
Lumber and products
Furniture and fixtures
Clay, glass, stone products
Primary metals
Fabricated metal products
Nonelectrical machinery
Electrical machineiy
Transportation equipment
Instruments
Miscellaneous manufactures..
Nondurables
Food and products
Tobacco
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products.
Leather and products
Utilities
Electric
Gas
1967-77
1977-84
A Revision of the Index of Industrial Production
included in nondurable manufacturing—has
slowed appreciably, despite continued strength
in plastics materials and in drugs and other
consumer chemical products. Weakness was
concentrated among agricultural chemicals; their
output was lower in late 1984 than it had been
five years earlier.
Weakness since the 1970s in many of the
industries mentioned above was due to a number
of factors. In particular, the two rounds of energy
price increases in the 1970s were detrimental to
the growth of real income in the United States
and thus restrained the demand for industrial
goods. Later, the recessions of 1980 and 1981-82
curtailed aggregate demand again. Although the
influence of these factors has receded, the
strength of the dollar in recent years has caused
U.S. exports to stagnate and imports of manufactured goods and materials to surge. Foreign
supplies of goods such as chemicals, textiles,
metals, and some other major industrial materials have become increasingly available at attrac-
491
tive prices. Even imports of materials that are
relatively costly to transport, such as gypsum
board, have increased in recent years. In addition, imports of capital equipment and finished
consumer goods have gained ground while exports of such goods have leveled off.
STATISTICAL
CHANGES
As noted earlier, the changes in this revision of
industrial production, as in previous revisions,
arise from a variety of sources. Individual series
have been affected most by the benchmarking
procedure, in which most series are brought into
conformity with Census production indexes or
with other data that are more comprehensive
than those from which the monthly indexes are
constructed. In some cases, series were revised
very little; in others, revisions were substantial.
In general, aggregates showed less revision than
their component parts because of offsetting
4. Additions to basic series in the industrial production index
New series
SIC
Market classification
Reason for addition1
Gold and silver ores
Ferroalloy ores
Miscellaneous metal ores
Chemicals and fertilizer materials . .
104
106
105, 8, 9
147
Durable materials, n.e.c.
Durable materials, n.e.c.
Durable materials, n.e.c.
Chemical materials
New data source
New data source
Disaggregation
New data source
Poultry
Corn oil
Corn syrup and starch
Pet foods
Roasted coffee
Narrow fabrics
Flooring.
Inorganic pigments
2012
20462
20462
2047
2095
224
2426
2816
Consumer staples
Consumer staples
Nondurable materials, n.e.c.
Consumer staples
Consumer staples
Textile materials
Construction supplies
Chemical materials
Disaggregation
New data source
New data source
Disaggregation
Disaggregation
Disaggregation
New data source
Disaggregation; SIC change
Replacement tires, business
Original equipment business tires ..
Clay sewer pipe
Clay tile
Miscellaneous nonferrous metals...
Ordnance
Computer parts
Electronic communications
Nondefense
Parts
Automobiles, consumer
Automobiles, business
Military aircraft equipment, n.e.c...
Aircraft parts
Guided missiles and space vehicles.
Missile and space vehicle parts
Travel trailers and campers
Tanks
Transportation equipment, n.e.c
Watches and eyeglasses
Copiers and related equipment
3012
3012
3259
3253, 5
3332, 3, 9
3482
3572
Business supplies
Equipment parts
Construction supplies
Construction supplies
Durable materials, n.e.c.
Defense and space equipment
Equipment parts
Disaggregation
Disaggregation
New data source
New data source
New data source
Disaggregation; SIC change
Disaggregation
36622
36622
3712
3712
3724, 82
3724, 82
3761
3764, 9
3792
3795
3799
385, 7
386
Commercial equipment
Equipment parts
Automotive products
Transit equipment
Defense and space equipment
Equipment parts
Defense and space equipment
Equipment parts
Automotive products
Defense and space equipment
Automotive products
Home goods
Commercial equipment
Disaggregation
Disaggregation
Disaggregation
Disaggregation
SIC change
SIC change
SIC change
SIC change
Disaggregation
Disaggregation
Disaggregation
SIC change
Disaggregation
1. Modifications of existing series arising from changes in source,
scope, or aggregation are not shown.
2. Only a portion of this SIC industry is included in the associated
market classification.
492 Federal Reserve Bulletin • July 1985
changes in the individual series. In addition to
level corrections made as a result of the benchmarking procedure, changes have been made to
individual series with the incorporation of data
from new sources. Further changes result from
the alignment of industrial production series with
the 1977 Standard Industrial Classification; the
1967 version was used in the last major revision.
Finally, some series were added as new sources
of data became available (table 4).
Special
Problems
Several individual industries pose special measurement problems—for example, office and
computing machines (SIC 357). This industry
includes computers, accounting and calculating
machines, and typewriters. The adjustment to
new benchmark data and to more comprehensive
interim data has yielded an upward revision in
the average annual rate of growth of this industry
from 12 percent to 22 percent for the 1977-84
period. Technological advances in computing
equipment have spurred tremendous leaps in the
ability to store, retrieve, and manipulate data. At
the same time, both the size and the price of
computer components have fallen. Equipment of
essentially the same size and price as a piece
several years older often offers a marked improvement in capability; this increase in "quality" (broadly defined) implies a reduction in the
price per operation of a magnitude that is difficult
to assess. For the 1977-84 period, estimates of
price reduction in computers after adjustment for
quality change range widely, from 10 percent to
more than 80 percent. For the purpose of forming
the annual production indexes for the industry, a
conservative estimate of a decline in prices of
about 20 percent from 1977 to 1984 was used to
deflate dollar-value data for the office and computing machines industry. During this same period, the producer price index for manufacturing
capital goods increased about 63 percent, thus
implying a difference of more than 80 percentage
points in the movements of the prices of office
and computing machines and those for capital
goods generally.
Revisions in the apparel series typify the need
for adaptation to the loss of a data source. To
make up for the elimination of monthly Census
surveys of this industry, production indexes for
it are now based on data on production-worker
hours from the monthly establishment survey
conducted by the Bureau of Labor Statistics.
New industry classifications called for revisions to many individual series in both the durable and nondurable manufacturing industries.
For instance, ordnance and accessories (formerly SIC 19) was split between two existing durable
manufacturing industries in the 1972 version of
the SIC. The portion of this industry covering
small arms and ammunition was placed in the
fabricated metal products industry (SIC 34),
while guided missiles and tanks—included in
defense equipment in the market classification of
the index—were placed in the transportation
equipment industry (SIC 37). Three separate
industrial production series were developed for
these components: one for small arms and ammunition, one for guided missiles, and one for
tanks. All three are estimated on a monthly basis
from data on production-worker hours.
Among the nondurable manufacturing industries, changes to series necessitated by modifications in the Standard Industrial Classification
were especially extensive in the chemicals and
products industry. This industry now covers
eighteen series (one more than previously), of
which four are new in coverage, source, or
composition.
Improvement
of Market
Classifications
The industrial production index is organized both
by industry groups defined by the SIC codes and
by market groups developed by the Federal
Reserve. During the most recent revision, several series have been developed to augment the
market classification. All automobiles, for example, were formerly classified as consumer goods,
when in fact a sizable portion was acquired by
government or businesses for their own use or to
lease or rent. The revision has split the auto
production series to create a new series on
business autos, based on fleet acquisition data,
which was made a part of the series on business
equipment. The classification of autos by two
sizes was discontinued because the progressive
A Revision of the Index of Industrial Production
reduction in the size of autos since the 1970s
made the distinction between sizes less useful
than it had been. More meaningful market groups
became possible in tire production; the portion of
tires sold for new trucks was placed in equipment
parts rather than in intermediate products.
A newly created market group comprises mobile homes and oil and gas well drilling. Mobile
homes are difficult to classify because they are
usually transported to permanent locations after
construction and are therefore not truly mobile.
They are made from many different materials and
serve a variety of uses, some as residences and
493
some as shelters for workers and construction
supervisors. In the market grouping of the index,
manufactured homes, along with oil and gas well
drilling, fall in a new category called "rigs and
prefabs." This category is included as a separate
component of total equipment, along with business and defense and space equipment.
Effect of New
Weights
Levels and movements of the revised market and
industry aggregates are influenced not only by
5. Proportions of value added in industrial production, by major market group and industry1
Series
Major market
1972
(percent)
1977
(percent)
1984
(percent)
100.00
100.00
100.00
100.00
61.30
27.65
20.23
13.27
6.96
13.42
6.51
38.70
20.29
10.10
8.31
61.91
27.90
19.77
14.08
4.80
14.24
6.80
38.09
19.81
9.80
8.48
57.72
25.52
19.25
14.34
3.67
12.94
5.96
42.28
20.50
10.10
11.69
60.23
24.77
22.21
15.88
4.75
13.27
5.57
39.78
20.59
9.22
9.98
100.00
100.00
100.00
100.00
6.36
.51
.69
4.40
.75
87.95
51.98
1.64
1.37
2.74
6.57
5.93
9.15
8.05
9.27
2.11
1.51
35.97
8.75
.67
2.68
3.31
3.21
4.72
7.74
1.79
2.24
.86
5.69
3.88
1.81
6.59
.58
.91
4.44
.66
87.33
51.08
2.50
1.48
3.05
5.63
6.51
9.09
7.40
9.63
2.56
1.64
36.26
8.62
.64
2.84
3.27
3.16
4.89
7.85
1.47
2.82
.71
6.08
4.13
1.96
9.83
.50
1.60
7.07
.66
84.22
49.10
2.30
1.27
2.72
5.33
6.46
9.54
7.15
9.13
2.66
1.46
35.11
7.96
.62
2.29
2.79
3.15
4.54
8.05
2.40
2.80
.53
5.%
4.17
1.78
8.95
.31
1.68
6.33
.63
85.67
50.31
2.06
1.42
2.50
3.61
5.45
11.12
10.12
8.51
2.99
1.18
35.31
8.30
.51
1.95
2.36
3.29
5.51
8.04
1.72
3.29
.33
5.42
4.00
1.42
groups
Total
Products, total
Consumer goods
Total equipment2
Business
Defense and space
Intermediate products
Construction supplies
Materials
Durable
Nondurable
Energy
Major industry
1967
(percent)
groups
Total
Mining
Metals
Coal
Oil and gas extraction
Stone and earth minerals
Manufacturing
Durables
Lumber and products
Furniture and fixtures
Clay, glass, stone products
Primary metals
Fabricated metal products
Nonelectrical machinery
Electrical machinery
Transportation equipment
Instruments
Miscellaneous manufactures
Nondurables
Food and products
Tobacco
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Utilities
Electric
1. Components may not add to aggregate totals because of rounding
and the omission of some series.
2. The new category, "rigs and prefabs," referred to above is not
shown separately because of its small proportion in the total index.
494 Federal Reserve Bulletin • July 1985
revisions to basic series but also by the application of new weights. The industrial production
weights, based on value-added data from the
Census, are used in combining individual series
or subgroups into various totals. A comparison
of proportions for major industries—the relative
importance of the groups for that year—can be
seen in table 5. Preliminary 1984 contributions to
the total index, calculated on the basis of the
1977 value-added weights and 1984 production
levels, are also shown. The 1984 proportions
may be indicative of the way weights will change
in the future. However, the differences between
the 1977 weights and the 1984 proportions reflect
movements in output between those years but
not changes in relative prices. In many instances,
output movements reflect estimated changes in the
quality of goods, which often have a significant
effect on the shares of industries undergoing rapid
innovation. When new value-added weights for
1982 and 1987 are introduced, however, the shares
of fast-growing industries in the total index are
likely to shrink because prices in such industries
tend to increase less than the average.
Two examples stand out. While the output of
computers has surged since the last major revision, rapid innovation has allowed declines in
price and increases in demand. As a consequence, the total value added for the office and
computing machines industry (SIC 357) through
the mid-1970s has increased only moderately
relative to that for total industry, and the valueadded weight increased from a 1967 figure of 1.1
percent to a 1977 figure of 1.4 percent. By
contrast, with oil prices much higher in 1977 than
in 1967, prices of energy-related goods climbed
sharply. Thus the 1977 valued-added weight for
the oil and gas extraction industry (SIC 13) is 7.1
percent, up from the 1967 figure of 4.4 percent;
for coal, a competitive product, the weight is 1.6
percent, up from its 1967 value of 0.7 percent.
In the monthly index, the current proportion of
an individual industry in the total index should
increase only when production in that industry
picks up more than production in the remainder
of the index. For instance, from 1977 to 1984 the
office and computing machines industry grew at
an average annual rate of 22 percent, compared
with average annual growth of 2.9 percent in
total industrial production; accordingly, the pro-
portion of this industry in the total index increased from 1.4 percent in 1977 to 4.6 percent in
1984. In contrast, the average annual rate of
growth of the oil and gas extraction industry
from 1977 to 1984 was 1.3 percent, less than that
for the total index, and its proportion fell from
7.1 percent in 1977 to 6.3 percent in 1984.
Results of the
Revision
For the 1967-84 period as a whole, the revision
caused the measure of growth in total industrial
production to move slightly upward. During the
first part of this period (1967-77), the revised
index displays slightly less growth in most major
market categories than did the earlier index
(table 3). Revisions in the 1977-84 period, however, were generally upward. Sizable changes in
the indexes for business equipment resulted
largely from upward revisions to computers,
instruments, and electronic equipment. In the
consumer goods market group, the upward revision for the 1977-84 period was due partly to
upward revisions in the home goods and food
products series. Defense and space equipment,
on the other hand, was revised sharply downward mainly because of a reclassification of
nondefense portions of the electronic communications industry (SIC 366) out of defense equipment and into business equipment and equipment materials. In addition, newly available data
occasioned a downward shift in the military
aircraft series.
The growth since 1977 of some of the major
market aggregates is shown in chart 4. Boosted
4. Market aggregates in the industrial production index
1978
1980
Monthly data, seasonally adjusted.
1982
1984
A Revision of the Index of Industrial Production
5. I n d u s t r i a l p r o d u c t i o n i n d e x e s of m i n i n g a n d utilities
Ratio scale, 1977=100
1970
1975
1980
1984
Monthly data, seasonally adjusted.
by strong demand for computing equipment,
growth of business equipment production has
exceeded that for consumer goods. In addition,
the output of defense and space equipment has
been growing vigorously since 1979.
Viewing production by industrial groups, the
growth in the manufacturing sector, which accounted for about 84 percent of total industrial
production in 1977, was revised downward only
slightly for the 1967-77 period. The downward
revision in the rubber and plastics products and
apparel industries was the most significant
among those in the nondurable goods industries.
Smaller downward revisions were made in the
food, tobacco, printing, and petroleum industries; and upward revisions were significant in
textile mill products and in chemicals (table 3).
Revisions for the durable manufacturing industries in the 1967-77 period were nearly offsetting,
and thus the durables index reflects growth at
nearly the same rate as shown previously. This
overall stability conceals substantial revisions in
some industries. Growth in furniture and fixtures, in clay, glass, and stone, in fabricated
metals, and in miscellaneous manufactures was
revised appreciably downward; growth in instruments and electrical machinery was substantially
greater than previously indicated.
During the 1977-84 period, annual growth in
the nondurable manufacturing industries was 0.4
percentage point greater than shown in the earlier index, with the largest upward revisions in the
food products and printing and publishing industries. Growth in the durable manufacturing industries was revised upward by 0.7 percentage
point during this same period. Nonelectrical ma
495
chinery (including computers), electrical machinery, and instruments all show substantially more
growth in the revised index than previously
indicated.
Growth in the industrial production index for
mining was revised downward for the 1967-77
period because the rates of growth of metal
mining, oil and gas extraction, and stone and
earth minerals were all revised downward. In the
1977-84 period, the revised index for mining
shows faster growth than did the previously
published index because of an upward revision to
growth in the oil and gas extraction industry.
The utility component of the index was revised
downward in both the periods. Very slight upward revisions in electric utilities were more than
offset by sizable downward revisions in the gas
utility series. These results reinforce the downward shift in the trend rate of growth in utilities
that occurred after the surge in energy prices in
the mid-1970s. From an average of about 7
percent per year before 1973, the trend rate of
increase in utility output subsequently receded to
about 2 percent per year (chart 5).
Shift in the Relationship
and Materials
between
Products
For about three decades after the Second World
War, products and materials in the aggregate had
similar trend rates of growth, though materials
output varied more than products output (chart
6). In recent years, the trends have diverged, and
by the end of 1984, the level of materials output
6. I n d u s t r i a l p r o d u c t i o n i n d e x e s of
products and materials
,
M
Ratio scale, 1977=100
Products
/
120
100
Monthly data, seasonally adjusted.
496 Federal Reserve Bulletin • July 1985
was about 12 percent below that of products.
Several factors may account for the recent
change in this relationship. Domestic producers
of raw materials have faced stiff competition
from foreign producers. Moreover, domestic industries import many parts for their products,
such as semiconductors, auto engines, and specialty steel; these parts are classified as materials. In addition, in some production processes,
materials usage has been reduced outright. In the
case of motor vehicle production, for example,
both materials substitution and reductions in the
size of vehicles have contributed to a lowering in
demand for steel in each vehicle produced. Further, in the 1980-84 period, users of materials
had both the incentive—the high interest cost of
carrying stock—and the means—computerized
inventory control—to hold stocks of materials to
the minimum necessary for a given level of
production. Finally, as mentioned earlier, the
value-added weights for many energy-related industries increased markedly from 1967 to 1977.
These industries, the products of which are
mostly included in the materials group, have
grown relatively little in recent years, and have
therefore contributed to the divergence in growth
between products and materials.
SEASONAL
ADJUSTMENT
The separation of seasonal movements from cyclical and irregular fluctuations and from trend is
of crucial importance in the compilation of the
industrial production index and greatly affects
the reliability of the monthly estimates. Adjustments for seasonality are attempts to remove
variations in output that are due to regularly
recurring events such as the seasons, holidays,
and vacations. The ratio-to-moving-average
technique, which was introduced before the Second World War, is used to accomplish seasonal
adjustment. Studies have indicated, however,
that this technique tends to attribute more to
seasonal fluctuation than is appropriate in certain
instances. In particular, the standard method
erroneously includes some of the effects of
lengthy strikes and sharp cyclical movements in
the calculation of the seasonal factors. To remedy this problem, a supplementary method of
6. Seasonal factors used to adjust data on
automobile production, 1967-84
Quarter
Year
First
Second
Third
Fourth
1967
1968
1969
1970
1971
1972
1973
1974
1975
105.9
106.9
108.5
109.2
109.6
101.7
101.9
102.3
102.5
115.2
113.0
112.6
112.9
111.2
112.3
113.1
112.7
113.2
70.6
66.1
71.8
73.4
78.0
84.3
83.8
83.8
84.9
107.9
113.8
107.2
103.4
100.8
101.6
101.2
101.0
99.1
1976
1977
1978
1979
1980
1981
1982
1983
1984
102.9
105.2
106.3
105.3
104.0
102.4
102.5
103.0
104.2
113.5
113.7
112.1
112.1
112.8
112.3
111.2
110.7
106.4
82.8
81.1
80.1
82.1
82.0
82.8
83.7
84.6
87.5
100.6
100.1
101.4
100.7
101.6
102.7
102.8
102.0
102.3
adjustment, known as intervention analysis, is
used to exclude data for such periods from the
calculation of seasonal factors. 1
The seasonal patterns displayed in the individual industrial production series vary widely.
Some industries exhibit seasonal fluctuations of
40 percent or more within the calendar year. The
closedown of automobile assembly plants to permit retooling for new models poses a special
challenge. The closedowns usually occur annually, although not necessarily at exactly the same
time each year. The approach used in constructing the industrial production index is to shift the
seasonal factor to coincide with the closedown
chosen by the industry (similar to the shift of the
Easter seasonal factor for department store sales
as the date of Easter shifts). The shifting of
seasonal factors between the second and the
third quarters can be seen in table 6. For instance, in 1984 the seasonal factor for the second
quarter is lower than that for 1983, whereas the
third-quarter seasonal factor is higher. The seasonal factors were changed because most closedowns for model changeover occurred in the
third quarter in 1983, but in 1984 some were
shifted to the second quarter.
1. A formal theoretical statement of this technique appears
in G.E.P. Box and G.C. Tiao, "Intervention Analysis with
Applications to Economic and Environmental Problems,"
Journal of the American Statistical Association, vol. 70
(March 1975), pp. 70-79.
A Revision of the Index of Industrial Production
CONCLUSION
The revised industrial production index shows
essentially the same historical movements as the
previously published index. In particular, the
deceleration of growth in the industrial sector
during the past 10 to 15 years is confirmed in the
revised index, and the cyclical patterns in the
revised index are much the same as those in the
earlier one. In general, growth rates for vibrant
new industries have been revised upward,
whereas growth in some long-established industries has been revised downward. On balance,
however, revisions were on the upside.
497
Whether growth in the industrial sector will
return to more robust rates depends on a number
of factors. From a short-term perspective, the
strong dollar and the associated extraordinary
U.S. trade deficits have inhibited growth in the
industrial sector. Sometimes overshadowed by
these developments is the longer-term challenge
to U.S. manufacturing in both domestic and
world markets posed by the rise of competitive
industries in Europe and Asia. To meet this
challenge, U.S. firms will need to become more
efficient and to develop and market products in
industries in which the United States holds a
comparative advantage over other countries.
•
The appendix tables follow.
498
Federal Reserve Bulletin • July 1985
A.l
Revised indexes of industrial p r o d u c t i o n , seasonally a d j u s t e d , 1977 = 100
Month
Quarter
Annual
average
Year
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
101.8
109.2
111.0
108.5
110.4
100.5
114.4
122.7
102.1
109.9
111.0
110.7
109.0
100.6
114.8
123.4
102.1
110.8
111.0
111.0
107.4
100.5
115.5
123.3
97.3
102.1
110.8
111.4
111.2
106.1
103.3
119.3
99.7
106.1
110.6
106.8
111.3
103.7
106.8
121.5
101.0
107.9
110.4
106.3
112.5
102.0
111.7
123.4
102.0
110.0
111.0
110.1
108.9
100.6
114.9
123.1
100.0
106.5
110.7
108.6
111.0
103.1
109.2
121.8
101.8
109.8
111.4
113.1
111.7
106.1
119.1
129.9
103.0
110.6
111.5
113.0
110.9
106.2
120.0
129.8
97.3
103.1
111.1
112.1
113.3
109.8
108.1
123.7
99.4
106.5
110.7
109.0
114.1
108.3
111.6
126.4
101.1
108.1
110.6
110.3
114.3
106.9
116.4
128.8
102.1
109.8
111.5
112.7
111.8
106.0
119.3
129.5
100.0
106.9
111.0
111.0
113.4
107.8
113.9
127.1
101.7
109.9
111.5
114.5
114.0
107.4
119.7
130.7
102.8
110.5
111.4
114.1
113.2
107.9
120.8
130.6
97.7
102.8
111.1
112.5
114.7
111.8
109.1
124.2
99.3
106.5
110.6
110.5
115.8
110.2
112.5
127.1
101.1
108.3
110.6
111.7
116.2
108.4
117.2
129.5
101.9
109.9
111.5
114.0
114.1
107.4
120.0
130.4
100.0
106.9
111.0
112.2
115.2
109.5
114.7
127.8
101.7
105.4
103.1
104.3
102.7
101.3
113.6
119.6
102.4
106.1
103.2
104.1
101.6
101.1
114.4
119.7
98.3
101.6
105.3
103.6
104.5
101.4
103.7
116.8
99.3
104.6
104.1
100.9
104.8
101.4
107.6
118.2
100.7
105.4
102.9
102.2
104.4
101.5
112.0
118.6
101.8
105.7
103.1
104.1
102.5
101.1
113.9
119.3
100.0
104.3
103.9
102.7
104.1
101.4
109.3
118.2
102.0
105.2
95.6
93.8
84.4
81.2
106.7
113.3
103.8
105.7
96.0
92.3
79.8
81.4
109.7
113.1
96.1
99.6
104.7
92.7
91.4
80.6
89.1
112.9
98.9
104.7
100.4
83.8
92.4
84.5
95.5
112.2
102.3
105.5
97.8
84.8
90.6
85.1
102.2
112.9
103.0
105.3
95.9
92.3
84.0
81.2
107.6
112.6
100.0
103.7
99.9
88.4
89.7
82.9
98.5
112.6
101.5
105.5
106.0
108.3
109.4
108.7
116.1
121.8
101.8
106.3
105.9
108.4
109.6
108.4
116.1
122.1
99.2
102.3
105.5
107.8
109.3
109.1
109.1
118.2
99.4
104.5
105.5
107.4
109.3
107.8
112.1
120.4
100.1
105.4
104.7
108.8
109.4
107.7
115.6
120.6
101.3
105.8
105.8
108.5
109.3
108.5
116.1
121.6
100.0
104.5
105.4
108.1
109.3
108.3
113.3
120.2
103.2
119.0
125.5
127.8
123.8
108.9
121.7
139.8
104.4
119.5
124.6
127.4
122.8
109.9
123.0
138.4
96.4
105.6
123.4
126.1
127.6
119.0
109.5
128.7
98.7
110.5
124.5
123.4
129.1
115.0
112.5
133.3
101.3
114.1
125.3
123.9
129.2
111.2
117.7
138.4
103.5
118.4
125.5
127.1
124.3
109.1
121.8
139.1
100.0
112.2
124.7
125.1
127.6
113.6
115.4
134.9
95.0
102.5
110.5
117.5
125.0
137.4
145.2
163.3
98.1
103.6
111.2
117.9
126.9
136.9
145.5
165.3
99.0
98.1
104.0
113.1
117.1
127.4
139.1
150.6
102.1
101.2
102.9
115.7
116.6
133.0
142.6
156.3
102.7
102.6
105.0
115.4
120.3
134.6
145.4
160.8
96.3
102.9
110.3
117.3
125.2
136.9
145.4
164.1
100.0
101.2
105.6
115.4
119.8
133.0
143.1
157.9
Total index
1977
1978
1979
1980
1981
1982
1983
1984
96.5
101.6
110.3
111.3
111.0
105.4
102.5
118.4
97.2
101.6
110.9
111.4
111.2
107.0
103.3
119.3
98.0
103.0
111.2
111.4
111.6
105.8
104.2
120.1
99.0
105.5
109.9
109.1
110.6
104.5
105.6
120.7
99.6
105.8
110.9
106.2
111.2
103.6
106.9
121.3
100.4
106.9
110.9
105.0
112.0
103.0
107.8
122.3
100.7
107.5
110.5
104.8
113.4
102.5
109.8
123.2
101.0
107.7
110.2
106.3
112.8
102.0
111.6
123.5
101.4
108.3
110.4
107.7
111.5
101.3
113.7
123.3
Products, total
1977
1978
1979
1980
1981
1982
1983
1984
97.0
102.1
110.7
111.5
113.1
109.0
107.5
122.8
97.4
102.7
111.1
112.4
113.2
110.6
108.0
123.7
97.7
104.5
111.4
112.4
113.6
109.9
108.8
124.5
98.8
105.9
109.8
110.4
113.5
108.7
110.4
125.4
99.3
106.0
111.3
108.5
114.4
108.3
111.6
126.2
100.1
107.5
111.1
108.1
114.4
107.8
112.8
127.5
100.6
107.7
110.6
108.8
115.2
107.6
114.4
128.6
101.3
108.0
110.2
110.4
114.5
106.9
116.5
129.0
101.5
108.7
110.9
111.5
113.3
106.4
118.4
128.8
101.6
109.1
111.5
112.1
112.7
105.7
118.9
129.0
Final products
1977
1978
1979
1980
1981
1982
1983
1984
97.3
101.6
110.8
111.8
114.2
111.0
108.6
123.4
97.8
102.5
111.0
112.9
114.7
112.5
109.0
124.2
97.8
104.4
111.5
112.9
115.1
112.0
109.7
125.0
98.9
106.0
109.4
111.9
115.2
110.8
111.3
126.1
99.2
106.1
111.4
110.1
116.0
110.2
112.5
126.8
99.9
107.5
111.1
109.6
116.2
109.6
113.6
128.2
100.6
107.8
110.6
110.7
116.9
109.3
115.1
129.2
101.2
108.3
110.2
111.7
116.3
108.3
117.3
129.7
101.4
108.9
111.1
112.8
115.3
107.7
119.2
129.8
101.4
109.2
111.5
113.5
115.1
107.0
119.3
129.9
Consumer goods
1977
1978
1979
1980
1981
1982
1983
1984
98.0
100.1
105.4
103.2
104.4
100.7
103.0
116.2
98.5
101.6
105.0
103.6
104.3
101.9
103.7
116.9
99.0
104.2
103.1
102.5
104.4
101.2
106.2
118.3
99.1
104.1
105.0
100.2
105.4
101.3
107.8
117.7
99.7
105.4
104.3
99.9
104.7
101.8
108.8
118.5
100.3
105.4
103.2
101.0
105.1
101.7
110.3
119.1
101.3
105.3
102.6
102.1
104.9
102.0
112.2
118.4
1977
1978
1979
1980
1981
1982
1983
1984
95.5
96.7
104.9
91.9
91.3
78.4
86.3
113.0
95.5
99.9
104.7
93.0
91.5
81.4
89.4
113.0
97.2
102.4
104.5
93.2
91.3
82.0
91.6
112.8
97.6
105.3
96.5
87.6
91.4
83.5
93.2
113.0
98.4
103.6
102.3
82.6
93.2
84.0
95.6
111.8
100.5
105.3
102.3
81.3
92.6
85.9
97.5
111.7
101.8
106.2
100.7
82.0
92.4
86.2
99.7
113.8
102.6
105.6
95.7
84.3
91.2
86.2
102.6
113.3
1977
1978
1979
1980
1981
1982
1983
1984
99.0
101.4
105.6
107.5
109.2
108.9
109.2
117.3
99.6
102.2
105.1
107.6
109.0
109.5
109.0
118.3
98.9
103.1
105.8
108.2
109.6
109.0
109.2
118.9
99.4
103.7
105.5
108.1
109.1
107.8
120.3
99.4
104.3
106.1
106.9
109.7
107.8
112.3
119.9
99.4
105.4
105.0
107.0
109.0
107.8
112.9
120.9
99.7
105.1
104.2
108.1
109.6
107.5
114.3
120.9
100.7
105.1
105.1
108.8
109.8
107.9
115.7
120.2
1977
1978
1979
1980
1981
1982
1983
1984
96.2
104.4
122.1
125.2
127.0
118.3
109.2
127.1
96.6
105.1
123.6
127.1
128.0
119.8
109.4
128.5
96.5
107.4
124.5
126.0
127.9
118.8
110.0
130.4
98.3
109.8
122.7
125.3
128.3
116.8
111.5
131.2
98.4
109.8
125.2
123.0
128.9
115.0
112.4
133.3
99.5
111.8
125.4
121.8
130.3
113.3
113.4
135.5
100.8
112.6
125.2
123.2
131.1
113.2
114.6
137.0
100.7
114.3
124.4
123.9
128.7
110.1
117.7
139.1
98.4
102.9
105.5
104.1
104.7
101.7
104.5
117.3
100.6
105.5
102.8
103.5
103.3
101.0
113.4
118.3
101.3
105.4
102.9
103.8
103.3
100.9
113.6
118.5
Durable consumer goods
102.5
104.6
97.1
88.0
88.0
83.0
104.3
111.5
103.0
105.1
96.2
90.8
87.8
81.0
106.5
111.4
Nondurable consumer goods
111.0
99.8
105.9
104.9
109.3
108.8
107.7
116.7
120.7
100.6
105.5
105.5
108.7
108.9
108.3
116.2
121.0
Business equipment
102.5
115.5
126.4
124.5
127.9
110.3
120.8
139.2
102.7
116.8
126.3
126.0
126.3
108.6
120.7
139.1
Defense and space equipment
1977.
1978.
1979.
1980.
1981.
1982.
1983.
1984.
98.8
98.4
103.9
112.1
117.5
124.3
137.8
148.8
99.5
95.4
104.5
113.6
116.9
128.5
139.2
151.3
98.8
100.4
103.6
113.6
117.1
129.5
140.4
151.9
101.6
100.9
102.6
115.3
116.1
131.6
141.6
155.6
102.1
101.0
103.1
115.6
116.6
133.5
142.7
156.0
102.6
101.9
103.0
116.2
117.1
133.9
143.6
157.2
102.6
102.1
103.8
114.4
118.6
134.3
144.9
158.5
102.3
102.5
105.0
115.6
120.5
134.2
145.0
160.7
103.1
103.3
106.3
116.3
121.8
135.2
146.3
163.4
95.9
102.5
109.3
116.7
123.7
136.4
145.4
163.5
A Revision of the Index of Industrial Production
A.l
499
Continued
Quarter
Month
Annual
average
Year
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Nov.
Dec.
102.2
109.2
111.2
108.5
104.1
101.2
117.2
127.2
103.6
110.9
111.7
109.0
102.8
100.6
117.6
127.3
96.3
104.0
110.8
110.6
108.8
102.8
104.5
121.9
99.6
106.3
110.7
103.6
108.5
101.4
108.6
124.2
101.2
107.5
110.3
105.3
108.1
101.5
113.9
126.5
102.8
109.7
111.3
108.2
103.9
101.0
117.4
126.9
100.0
106.9
110.8
106.9
107.3
101.7
111.2
124.9
102.7
108.6
108.5
100.7
94.0
87.1
107.1
114.6
102.5
109.6
108.5
102.8
91.7
87.9
107.2
115.7
104.9
111.8
109.4
103.3
89.3
86.3
106.7
114.7
95.2
104.1
110.2
107.7
103.6
89.5
93.6
112.5
99.5
106.0
107.9
95.5
101.0
87.9
97.7
113.7
101.7
107.4
108.0
97.3
98.3
88.7
103.7
114.8
103.4
110.0
108.8
102.3
91.7
87.1
107.0
115.0
100.0
106.9
108.7
100.6
98.6
88.3
100.6
114.0
102.1
109.2
110.4
103.6
107.3
93.5
108.4
114.2
102.4
110.1
110.3
107.3
105.2
93.2
108.9
114.6
101.0
110.3
108.4
102.7
92.6
109.4
114.6
97.1
100.6
110.4
110.4
108.4
100.9
96.9
113.3
100.1
105.5
110.4
103.7
107.4
97.4
100.2
114.8
100.9
107.4
110.1
100.8
110.1
95.2
105.3
116.0
101.8
110.2
110.3
106.4
105.1
93.1
108.9
114.5
100.0
105.9
110.3
105.3
107.7
96.7
102.8
114.6
110.2
107.6
100.1
116.2
126.0
103.0
111.7
111.2
110.4
105.8
100.0
116.8
125.8
96.9
102.7
111.6
111.3
110.8
104.3
103.6
120.9
99.6
106.4
111.5
106.1
111.6
102.6
107.7
123.4
101.2
108.6
111.4
105.8
112.0
101.8
113.2
125.6
102.3
110.7
111.3
109.7
107.6
100.1
116.3
125.8
100.0
107.1
111.5
108.2
110.5
102.2
110.2
123.9
102.2
113.0
113.0
112.0
107.5
96.2
114.9
127.5
103.9
114.4
113.3
111.8
105.6
96.5
116.3
127.4
96.2
102.8
114.7
113.0
111.6
102.9
100.2
120.9
99.4
107.0
113.8
106.8
112.3
101.0
104.6
123.9
101.7
110.0
113.6
105.7
112.8
99.3
110.9
127.1
102.8
113.1
113.3
107.7
96.3
115.2
127.3
100.0
108.2
113.9
109.1
111.1
99.9
107.7
124.8
101.0
107.0
108.9
107.3
108.6
105.5
117.9
123.3
101.9
107.3
108.6
107.7
107.9
105.7
117.9
123.8
101.8
107.9
108.4
108.4
106.3
105.0
117.5
123.4
97.9
102.5
107.4
109.1
109.7
106.3
108.4
120.7
99.9
105.5
108.3
105.2
110.6
104.9
112.1
122.4
100.7
106.5
108.4
105.9
110.8
105.3
116.3
123.4
101.5
107.4
108.7
107.8
107.6
105.4
117.7
123.5
100.0
105.5
108.2
107.0
109.7
105.5
113.7
122.5
102.1
106.9
108.6
110.0
121.3
102.5
106.2
107.2
102.6
107.3
109.8
113.9
120.1
101.8
107.0
108.8
94.1
105.9
109.1
115.2
119.1
101.4
105.4
108.9
98.5
94.7
103.7
112.9
116.7
118.8
101.4
109.9
101.1
106.5
105.7
U2-.8
111.8
100.4
111.7
111.1
100.6
106.5
106.8
110.9
122.2
104.7
103.4
113.8
99.6
106.7
109.2
113.1
120.2
101.9
106.2
108.3
100.0
103.6
106.4
112.4
117.5
109.3
102.9
110.9
101.2
104.0
105.1
106.7
107.4
102.0
107.4
109.4
100.3
103.3
106.5
108.7
106.9
102.8
106.8
112.1
101.2
104.4
105.9
108.4
106.6
101.2
112.2
111.6
99.4
103.4
107.7
106.9
106.7
108.8
101.2
111.2
98.7
101.9
106.2
105.9
107.4
105.2
103.2
111.4
101.0
103.1
104.1
108.5
107.6
103.1
107.4
109.8
100.9
103.9
105.8
107.9
107.0
102.0
108.8
111.1
100.0
103.1
105.9
107.3
107.1
104.8
105.2
110.9
Oct.
Intermediate products
1977
1978
1979
1980
1981
1982
1983
1984
95.8
103.8
110.2
110.6
109.3
102.0
103.6
120.9
96.0
103.7
111.2
110.5
108.3
104.0
104.3
121.9
97.2
104.6
111.0
110.7
108.7
102.5
105.6
122.8
98.4
105.6
110.7
105.1
107.9
101.4
107.3
123.0
99.6
105.9
110.8
102.9
109.0
101.6
108.4
124.2
100.7
107.4
110.7
102.8
108.5
101.1
110.0
125.4
100.7
107.4
110.5
102.5
109.4
101.2
112.2
127.0
101.6
107.0
110.2
106.0
108.5
101.7
113.7
126.9
101.4
108.1
110.3
107.3
106.3
101.7
115.9
125.6
102.4
108.9
111.2
107.2
104.8
101.1
117.3
126.2
Construction supplies
1977
1978
1979
1980
1981
1982
1983
1984
94.4
104.2
110.7
108.1
104.7
88.5
92.7
111.2
94.6
103.9
110.1
108.2
103.0
91.2
93.5
112.4
96.5
104.1
109.7
106.8
103.2
88.7
94.5
113.9
98.1
105.4
107.7
98.1
101.7
87.3
96.1
113.7
99.7
105.6
107.9
94.6
101.5
88.1
97.7
113.1
100.6
107.1
107.9
93.8
99.7
88.2
99.3
114.3
101.1
106.9
108.4
92.8
99.1
88.1
102.2
114.3
102.0
107.0
107.5
98.6
99.5
89.4
103.6
115.3
102.1
108.2
108.2
100.6
96.3
88.5
105.4
114.7
Materials
1977
1978
1979
1980
1981
1982
1983
1984
95.9
100.9
109.6
111.0
108.0
100.4
95.8
112.4
97.0
100.0
110.6
110.2
108.4
102.0
96.8
113.3
98.5
101.0
111.0
110.0
108.8
100.3
98.0
114.1
99.4
104.9
110.1
107.3
106.6
98.7
99.2
114.4
100.1
105.5
110.4
103.1
106.9
97.1
100.5
114.7
100.7
106.1
110.8
100.7
108.5
96.4
101.0
115.2
100.9
107.2
110.4
99.2
110.8
95.7
103.5
115.8
100.5
107.3
110.1
100.6
110.4
95.5
105.0
116.1
101.4
107.7
109.7
102.5
109.0
94.4
107.3
115.9
111.1
Manufacturing
1977
1978
1979
1980
1981
1982
1983
1984
96.0
102.4
111.1
111.4
110.6
103.4
102.4
119.6
97.0
102.3
111.7
111.5
110.7
105.1
103.5
121.0
97.7
103.4
112.1
111.1
111.1
104.3
104.9
122.0
98.8
105.8
110.3
108.6
111.2
103.0
106.3
122.8
99.6
106.1
112.1
105.6
111.7
102.5
107.9
123.2
100.2
107.3
112.0
104.0
111.7
102.2
109.0
124.1
100.6
108.0
111.8
104.1
112.9
102.2
111.2
125.4
101.6
108.6
111.2
105.8
112.3
101.8
113.1
125.9
101.5
109.3
111.2
107.5
110.8
101.2
115.2
125.6
101.8
109.8
111.7
108.4
109.4
100.1
115.9
125.5
102.1
110.6
111.1
Durable manufacturing
1977
1978
1979
1980
1981
1982.
1983.
1984.
95.3
102.4
114.0
112.7
111.4
101.9
98.7
119.6
96.1
102.3
114.8
113.3
111.3
103.8
100.1
121.0
97.1
103.7
115.2
113.1
112.0
103.0
101.8
122.2
98.5
106.4
112.1
109.9
111.8
101.7
103.3
123.3
99.4
106.7
114.5
106.2
112.5
100.9
104.7
123.8
100.3
107.9
114.8
104.2
112.4
100.5
105.9
124.7
101.0
109.2
114.2
103.9
113.7
100.5
108.6
126.4
1977
1978
1979
1980
1981
1982
1983
1984
97.1
102.4
107.1
109.6
109.4
105.5
107.5
119.5
98.1
102.4
107.2
109.2
109.8
107.0
108.2
121.0
98.6
102.8
107.9
108.4
109.9
106.3
109.4
121.6
99.4
104.9
107.9
107.0
110.3
105.0
110.6
121.9
100.0
105.3
108.8
104.9
110.7
104.8
112.4
122.3
100.2
106.4
108.2
103.8
110.7
104.7
113.4
123.2
100.1
106.3
108.6
104.3
111.8
104.7
114.9
123.9
101.8
110.1
113.1
105.9
113.5
99.3
110.9
127.7
102.1
110.9
113.5
107.4
111.3
98.1
113.1
127.2
102.3
111.9
113.7
109.2
109.9
96.3
114.4
127.0
111.0
Nondurable manufacturing
101.2
106.4
108.7
105.6
110.8
105.5
116.2
123.2
100.6
106.9
108.0
107.6
110.0
105.7
118.0
123.1
Mining
1977
1978
1979
1980
1981
1982
1983
1984
95.7
92.5
103.1
113.0
115.0
119.7
103.8
110.9
99.1
93.6
104.0
112.3
117.2
119.7
100.6
109.4
100.6
97.9
104.0
113.4
117.9
116.9
99.7
109.6
100.8
106.2
105.8
112.2
107.8
114.5
100.4
109.8
100.8
106.2
105.3
113.3
109.3
112.1
100.3
111.7
101.6
107.0
106.1
113.0
116.1
108.7
100.7
113.5
101.7
108.6
105.1
111.2
122.2
106.5
101.7
114.8
98.1
106.0
107.3
110.0
122.7
105.0
103.2
113.0
102.1
104.9
108.1
111.3
121.9
102.6
105.3
113.6
Utilities
1977
1978
1979
1980
1981
1982
1983
1984
102.2
102.8
106.3
104.8
107.1
109.7
100.6
112.7
98.8
103.9
109.1
106.3
106.2
109.0
101.6
109.4
97.3
103.6
107.6
109.8
106.8
107.8
101.4
111.6
97.6
101.3
107.9
107.1
105.3
107.1
103.5
111.4
98.9
102.0
106.3
105.1
107.6
104.8
103.3
111.6
99.5
102.3
104.3
105.6
109.3
103.8
103.0
111.4
101.4
102.0
103.7
107.4
109.5
103.7
105.5
109.8
100.5
103.0
104.0
109.1
106.7
103.4
107.6
110.0
101.0
104.2
104.6
108.9
106.5
102.2
109.0
109.7
500 Federal Reserve Bulletin • July 1985
A.2
Revised indexes of industrial production, not seasonally adjusted, 1977 = 100
1977 . . . .
1978 . . . .
1979....
1980....
1981 . . . .
1982 . . . .
1983....
1984 . . . .
93.5
98.4
106.8
107.9
107.7
102.6
100.2
115.1
97.2
101.7
111.0
111.5
111.3
107.1
102.9
119.1
98.3
103.1
111.7
111.9
112.0
106.0
104.1
120.1
98.8
105.7
109.5
108.4
109.8
103.5
104.6
119.6
99.8
105.7
110.8
105.7
110.7
102.8
106.1
120.4
103.1
109.7
113.8
107.3
114.3
105.1
110.0
124.8
98.0
102.4
103.6
98.3
103.5
99.4
105.9
115.6
103.3
108.7
107.5
102.6
107.4
104.7
111.9
121.8
101.4
108.3
110.9
107.2
113.5
103.1
113.1
124.8
98.5
105.1
108.2
102.9
111.6
101.1
108.3
121.6
104.9
109.3
107.1
107.7
107.4
104.9
118.6
123.8
101.6
109.6
110.7
109.7
108.6
100.2
114.5
122.7
•
100.0
106.5
110.7
108.6
111.0
103.1
109.2
121.8
.. •
101.0
104.7
102.3
103.4
101.6
100.4
112.5
118.6
97.0
100.9
98.3
99.0
96.7
96.0
108.2
113.1
96.4
99.7
103.5
101.5
102.3
99.3
101.3
114.3
99.6
104.9
104.1
100.4
104.3
100.9
107.1
117.7
103.0
107.7
105.4
105.5
107.8
105.0
115.6
122.3
101.0
105.0
102.6
103.4
101.9
100.4
113.1
118.5
100.0
104.311
103.9
102.7
104.1
101.4
109.3
118.2
102.6
106.0
96.6
94.9
85.1
82.2
107.3
114.1
95.5
97.9
89.1
85.2
74.0
74.8
99.9
96.5
100.1
105.2
92.5
91.0
80.4
98.0
100.6
94.0
82.7
88.1
102.8
105.7
96.5
92.7
84.7
102.8
88.8
112.8
102.7
108.4
103.8
85.7
95.1
86.9
98.2
115.0
99.3
109.8
107.7
112.8
100.0
103.7
99.9
88.4
89.7
82.9
98.5
112.6
100.4
104.2
104.5
106.7
107.7
107.2
114.4
120.2
97.6
102.0
101.8
104.1
105.1
103.8
111.2
116.8
96.5
99.5
102.9
105.0
106.5
106.3
106.0
114.8
98.5
103.5
104.3
105.9
107.5
106.2
110.5
118.6
104.8
110.3
109.6
114.1
115.0
113.3
121.7
126.9
100.3
104.7
104.9
107.4
108.2
107.5
115.1
120.5
100.0
104.5
105.4
108.1
109.3
108.3
113.3
120.2
103.3
118.9
125.1
127.2
123.0
108.2
120.9
138.7
102.7
117.4
122.4
125.1
120.5
107.8
120.6
135.6
95.8
104.9
122.6
125.2
126.5
117.7
108.1
127.1
99.4
111.2
125.1
123.8
129.5
115.0
112.4
133.1
101.4
114.2
125.6
124.5
130.3
112.7
119.5
140.7
103.5
118.4
125.4
126.9
124.1
109.0
121.5
138.7
100.0
112.2
124.7
125.1
127.6
113.6
115.4
134.9
95.2
102.9
111.2
118.3
125.7
138.0
145.5
163.3
99.3
105.3
113.6
120.6
129.8
140.0
148.5
168.4
99.6
98.9
105.0
114.2
118.3
102.2
101.2
102.6
101.5
101.4
103.7
113.9
118.8
133.2
144.0
159.41
96.6
103.4
111.1
118.3
126.1
137.8
146.0
164.4
100.0
101.2
105.6
115.4
119.8
133.0
143.1
157.9
Durable consumer goods
1977
1978
1979
1980
1981
1982
1983
1984
91.1
92.3
100.0
87.5
86.9
75.0
82.5
109.3
97.2
102.2
106.9
94.1
92.2
82.0
90.2
113.8
101.2
105.8
108.8
96.0
93.9
84.1
93.7
115.3
101.1
109.8
99.4
89.2
93.4
85.2
95.0
115.8
101.1
105.8
105.2
83.8
95.3
85.9
97.9
113.8
105.9
109.6
106.9
84.2
96.5
89.5
101.7
115.5
93.1
95.5
91.3
75.0
84.7
78.9
90.9
103.9
95.7
98.2
89.4
80.9
88.3
83.7
98.7
110.3
108.1 M
101.5
92.1
91.3 M
85.6
108.2
115.2 S
Nondurable
1977.
1978.
1979,
1980,
1981
1982,
1983,
1984
95.3
97.6
101.7
103.3
105.2
105.0
105.3
113.3
97.9
100.7
103.8
106.1
107.4
107.8
106.6
115.9
96.2
100.2
103.1
105.5
106.8
106.0
106.0
115.4
96.2
101.1
102.0
104.3
105.0
103.7
106.9
115.5
96.9
101.1
103.0
103.8
106.4
104.5
108.8
116.2
102.3
108.3
107.8
109.6
111.2
110.4
115.7
124.1
101.1
106.6
105.6
110.0
112.3
109.9
117.0
124.3
106.7
111.4
111.5
115.7
116.6
114.9
123.2
127.4
110.3
113.2
103.8
97.9
94.9
87.7
115.9
121.5
82.8
81.6
goods
106.4
112J
111.6
116.6
116.0
115.1
124.9
128.9
102.9
107.8
108.3
111.5
111.9
111.4
119.6
124.5
Business equipment
1977....
1978....
1979....
1980....
1981....
1982....
1983....
1984....
93.4
101.3
118.4
121.2
122.9
114.5
106.1
122.9
96.7
105.4
123.7
127.2
127.7
119.5
108.0
127.9
97.2
108.0
125.7
127.1
128.8
119.3
110.2
130.6
97.5
109.5
121.5
123.8
126.5
114.8
109.5
128.5
98.2
109.4
124.8
122.2
128.1
113.8
111.2
131.7
102.4
114.9
129.0
125.4
134.0
116.4
116.6
139.2
99.1
110.8
123.5
121.9
130.2
113.0
114.6
137.0
99.0
113.1
123.6
123.6
129.3
111.1
119.1
142.0
106.0 i 104.6
118.8
119.1
129.8
128.8
128.1
128.4
131.3
128.9
114.0
110.9
124.9
123.1
143.0
141.7
Defense and space equipment
—
1977....
1978....
1979....
1980....
1981 . . . .
1982....
1983 . . . .
1984....
99.5
99.1
104.7
113.1
118.7
125.7
139.7
150.3
.
99.8
96.0
105.5
114.7
118.0
129.6
139.5
152.1
99.6
101.4
104.8
114.8
118.2
130.5
141.1
152.6
100.8
100.2
102.0
114.6
115.5
131.1
141.2
155.4
102.4
100.9
102.8
115.0
115.9
132.8
142.2
155.7
103.5
102.4
103.0
116.0
116.7
133.6
143.4
157.1
101.1
100.8
102.5
113.1
117.2
132.9
143.3
156.8
BHr •• -
101.2
101.1
103.4
113.7
118.6
132.4
143.3
158.5
~
102.3
102.2
105.1
115.0
120.6
134.2
145.5
163.0
* -I
95.2
101.8
108.6
115.9
122.7
135.2
143.9
161.6
128.6
140.1
151.7
115.2
116.0
132.5
142.3
156.0
A Revision of the Index of Industrial Production
A.2
501
Continued
—a
sag
Quarter
Month
Year
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Annual
average
Nov.
Dec.
1
2
3
4
102.4
109.5
111.5
108.8
104.3
101.4
117.3
127.9
99.7
106.9
107.7
105.2
99.0
96.8
113.2
122.4
92.8
100.4
107.1
107.0
105.1
99.4
100.8
117.5
100.5
107.1
111.2
103.8
108.5
101.3
108.5
124.2
104.2
110.6
113.6
108.6
111.6
105.1
118.1
131.1
102.5
109.5
111.3
108.2
103.9
101.0
117.4
126.8
100.0
106.9
110.8
106.9
107.3
101.7
111.2
124.9
106.0
112.2
112.3
104.4
97.5
90.4
111.1
118.9
103.1
110.4
109.3
103.6
92.3
88.5
107.8
116.3
100.7
107.5
105.4
99.7
86.1
83.2
102.9
110.5
91.3
99.7
105.7
103.3
99.4
85.8
89.6
107.7
101.8
108.6
110.1
97.3
102.9
89.6
99.6
115.9
103.6
109.3
110.0
99.2
100.2
90.5
105.9
117.2
103.3
110.0
109.0
102.5
92.0
87.4
107.3
115.2
100.0
106.9
108.7
100.6
98.6
88.3
100.6
114.0
103.1
110.4
111.5
104.6
108.3
94.5
109.6
115.4
102.5
110.1
110.3
107.2
1W.9
93.1
108.5
114.1
98.8
108.7
107.8
105.7
100.1
90.4
106.5
111.6
97.4
100.8
110.6
110.8
108.9
101.6
97.5
113.8
101.5
107.1
111.9
104.8
108.5
98.2
100.9
115.7
99.6
106.0
108.8
99.8
109.0
94.4
104.6
115.2
101.5
109.7
109.9
105.9
104.4
92.6
108.2
113.7
100.0
105.9
110.3
105.3
107.7
96.7
102.8
114.6
102.2
110.7
111.3
110.2
107.5
100.1
115.9
125.6
99.4
108.0
107.8
106.9
102.5
96.7
112.6
121.3
95.6
101.3
110.3
110.0
109.4
102.9
102.1
119.2
100.9
107.8
112.7
106.9
112.4
103.2
108.4
124.1
101.5
108.8
111.7
106.5
112.8
102.8
114.4
127.1
102.0
110.5
111.3
109.5
107.4
100.0
115.9
125.3
100.0
107.1
111.5
108.2
110.5
102.2
110.2
123.9
102.2
113.0
113.1
112.0
107.3
96.2
114.6
127.0
100.7
111.2
110.4
108.9
102.9
94.0
112.8
123.5
95.6
102.2
114.1
112.4
110.9
102.3
99.6
120.2
101.2
108.8
115.5
107.9
113.6
102.0
105.7
125.1
100.7
108.9
112.7
105.3
112.4
99.1
110.7
127.1
102.5
112.9
113.3
110.8
107.5
96.2
114.8
126.8
100.0
108.2
113.9
109.1
99.9
107.7
124.8
102.2
107.6
108.9
107.8
107.8
105.7
117.7
123.3
97.7
103.7
104.2
104.2
101.9
100.5
112.3
117.9
95.6
100.1
105.1
106.6
107.3
103.8
105.7
117.6
100.5
106.2
108.8
105.5
110.7
105.0
112.2
122.6
102.6
108.5
110.5
108.2
113.4
108.0
119.4
126.8
101.3
107.2
108.5
107.7
107.4
105.3
117.5
123.0
100.0
105.5
108.2
107.0
109.7
105.5
113.7
122.5
Oct.
Intermediate products
1978..
1979..
1980..
1981..
1982..
1983..
1984..
90.3
97.9
104.1
104.5
103.3
96.5
97.8
114.3
93.2
101.1
108.4
107.6
105.6
101.4
101.5
118.3
95.0
102.3
108.9
108.8
106.5
100.3
103.2
120.0
97.8
105.2
109.8
104.1
106.8
100.1
105.9
121.6
99.6
105.6
110.2
102.1
107.9
100.5
107.1
122.8
104.0
110.4
113.6
105.2
111.0
103.3
112.4
128.1
101.2
107.8
110.7
102.6
109.7
101.7
112.9
128.0
105.0
110.6
114.1
110.0
112.9
106.1
118.7
132.2
106.4
113.4
115.9
113.1
112.3
107.6
122.7
132.9
105.4
112.2
114.7
110.7
108.4
104.6
121.6
130.3
Construction supplies
1977....
1978....
1979....
1980....
1981 . . . .
1982....
1983....
1984....
87.7
97.0
103.3
100.9
97.6
82.4
86.1
103.2
91.0
100.0
105.9
104.0
99.0
87.6
89.7
107.8
95.0
102.0
108.0
105.1
101.5
87.3
93.1
112.2
99.0
106.8
108.5
98.7
102.3
87.9
96.8
114.5
101.5
107.3
109.4
95.8
102.7
89.2
98.9
114.4
105.0
111.6
112.3
97.5
103.6
91.5
103.2
118.7
100.8
106.6
108.0
92.5
98.9
88.1
102.2
114.3
104.2
109.1
109.5
100.5
101.6
91.4
106.0
118.0
105.9
112.3
112.4
104.5
100.1
92.0
109.6
119.2
Materials
1977 . . . .
1978 . . . .
1979....
1980....
1981 . . . .
1982....
1983....
1984....
93.9
98.7
107.2
108.8
105.9
98.8
94.9
110.3
98.3
101.2
111.8
111.6
110.0
103.7
98.1
115.1
100.1
102.4
112.9
111.9
110.8
102.1
99.5
116.1
100.3
106.1
111.0
108.0
107.3
99.1
99.6
114.9
101.3
106.5
111.4
103.7
107.5
97.3
100.6
115.0
103.0
108.5
113.4
102.7
110.7
98.1
102.6
117.2
97.0
103.2
106.5
95.8
107.2
92.6
100.2
112.2
99.8
106.6
109.4
100.3
110.0
95.5
105.2
116.4
101.9
108.4
110.4
103.2
109.8
95.2
108.3
116.9
Manufacturing
1977....
1978....
1979....
1980....
1981....
1982....
1983....
1984....
92.3
98.4
106.9
107.2
106.4
99.5
98.9
115.1
96.3
101.8
111.2
111.0
110.2
104.7
102.5
120.3
98.2
103.8
112.9
111.7
111.6
104.5
105.0
122.1
99.0
106.3
110.4
108.4
110.8
102.4
105.6
121.9
100.2
106.4
112.3
105.4
111.8
102.3
107.7
123.0
103.5
110.6
115.3
106.8
114.6
104.9
111.9
127.4
98.2
105.2
109.1
101.8
110.7
100.4
109.3
123.5
101.7
108.8
111.6
106.8
113.4
103.2
114.6
128.0
104.5
112.4
114.5
110.8
114.2
104.7
119.2
129.7
104.4
112.7
114.7
111.3
112.3
103.1
119.3
129.1
Durable manufacturing
1977....
1978 . . . .
1979....
1980....
1981 . . . .
1982 . . . .
1983 . . . .
1984....
92.2
99.0
110.3
109.1
107.9
98.9
96.3
116.1
96.2
102.5
115.1
113.5
111.5
104.1
99.8
121.2
98.4
105.0
117.0
114.6
113.4
104.0
102.7
123.4
99.3
107.7
112.8
110.1
112.0
101.6
103.3
123.2
100.6
107.6
115.4
106.5
113.2
101.2
105.1
124.1
103.7
111.2
118.4
107.0
115.6
103.1
108.7
127.9
98.2
105.8
111.0
101.3
111.0
98.2
106.2
123.5
99.7
108.0
111.2
105.0
112.6
98.8
110.3
127.9
104.2
113.0
115.9
109.7
113.5
100.2
115.7
129.9
104.6
114.5
116.3
111.6
112.2
98.4
117.0
129.8
111.1
Nondurable manufacturing
1978..
1979..
1980..
1981 . .
1982..
1983..
1984..
92.6
97.5
102.1
104.5
104.3
100.5
102.6
113.7
96.5
100.8
105.7
107.6
108.3
105.5
106.2
119.0
97.8
101.9
107.3
107.7
109.2
105.3
108.2
120.1
98.6
104.4
107.1
106.0
109.0
103.6
109.0
120.1
99.6
104.8
108.1
104.0
109.8
103.9
111.4
121.2
103.3
109.5
111.1
106.5
113.4
107.4
116.3
126.4
98.2
104.3
106.6
102.6
110.4
103.5
113.6
123.2
104.5
109.8
112.2
109.4
114.6
109.5
120.7
127.9
105.0
111.5
112.6
112.5
115.2
111.0
123.9
129.3
104.0
110.2
112.4
111.0
112.5
109.6
122.4
127.9
Mining
1977 . . . .
1978....
1979....
1980....
1981....
1982....
1983....
1984....
94.0
91.3
101.6
111.5
113.9
119.1
106.0
110.3
99.2
93.7
104.2
112.8
118.2
121.2
102.0
111.0
101.2
98.4
104.9
114.5
118.9
118.0
99.5
110.4
101.3
106.7
106.1
112.3
107.4
113.9
98.8
108.7
101.5
106.7
105.4
113.0
108.6
110.9
98.6
110.1
102.5
107.8
106.7
113.1
115.6
107.6
98.8
112.1
97.7
104.2
100.9
106.8
117.2
102.3
98.1
110.5
97.8
105.8
107.2
110.0
122.8
105.2
103.5
113.5
102.8
105.4
108.4
111.4
121.9
102.7
105.5
113.9
&~&JjBSM
103.8
108.7
110.4
111.7
123.4
104.4
108.4
109.2
103.8
108.6
111.3
115.6
121.9
103.5
108.8
110.7
94.4
106.0
109.5
116.0
120.3
102.8
106.8
110.4
98.1
94.5
103.6
112.9
117.0
119.4
102.5
110.6
101.8
107.1
106.1
112.8
110.6
110.8
98.7
110.3
99.4
105.1
105.5
109.4
120.6
103.4
102.4
112.6
100.7
107.8
110.4
114.5
121.8
103.6
108.0
110.1
100.0
103.6
106.4
112.4
117.5
109.3
102.9
110.9
95.8
98.1
99.0
100.4
100.7
95.5
100.5
102.3
96.1
98.8
102.0
104.0
102.2
97.9
101.7
107.8
102.2
105.4
106.4
108.7
106.8
101.2
112.2
111.4
103.9
108.5
113.2
112.1
111.9
114.2
105.7
116.4
94.1
97.1
101.0
100.7
102.1
100.0
98.0
106.2
104.0
106.0
106.9
112.1
111.2
106.8
112.2
113.8
98.0
100.8
102.5
104.4
103.2
98.2
104.8
107.1
100.0
103.1
105.9
107.3
107.1
104.8
105.2
110.9
Utilities
1977....
1978....
1979....
1980....
1981....
1982....
1983....
1984....
110.0
110.6
114.5
112.3
115.6
118.7
108.2
123.5
107.0
113.1
119.1
114.8
115.2
118.2
109.7
116.4
94.7
101.9
105.9
109.0
104.8
105.8
99.3
109.3
92.5
96.3
102.4
101.6
99.7
101.4
98.3
105.8
91.5
94.3
97.7
96.3
98.5
95.8
94.6
102.2
98.3
100.9
102.8
104.2
108.0
102.7
101.2
110.6
104.8
105.1
106.4
111.0
113.8
107.6
110.2
114.3
105.0
107.2
108.5
114.8
112.4
109.5
115.4
115.7
102.2
105.6
105.9
110.5
107.4
103.4
111.1
111.3
502
Industrial Production
Released for publication
May 15
Industrial production declined an estimated 0.2
percent in April following an increase of 0.3
percent in March and a gain of 0.1 percent in
February; the latter was revised upward from the
estimate published earlier. The small decline in
April continues a pattern of little change in the
level of industrial output since mid-1984. At
165.4 percent of the 1967 average, the index was
2.0 percent above a year earlier.
In market groupings, production of consumer
goods declined 0.4 percent in April. Durable
consumer goods fell 1 percent, as automotive
products declined 1.2 percent and output of
home goods decreased an estimated 0.8 percent.
Automobiles were assembled at an annual rate of
8.1 million units in April following a rate of 8.3
1967=100
1969-70=100
180 n
-
AUTOS
Stocks
/v_
—
MANUFACTURING
Nondurable
' "y-,
Sales
/—
170
150
\J
A A / V
-
130
1
1979
\ J Domestic assemblies
1
1 '
1
1981
1983
—
1
110
1985
All series are seasonally adjusted and are plotted on a ratio scale.
1979
1981
1983
1985
Auto sales and stocks include imports. Latest figures: April.
503
1967 = 100
1985
Grouping
Mar.
Percentage change from preceding month
1984
Apr.
Dec.
1985
Jan.
Feb.
Mar.
Apr.
Percentage
change,
Apr. 1984
to Apr.
1985
Major market groupings
Total industrial production
165.8
165.4
.0
.2
.1
.3
-.2
2.0
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment..
Defense and space...
Intermediate products..
Construction supplies
Materials
168.5
166.9
162.5
164.5
161.7
188.1
147.8
174.1
157.9
161.8
168.2
166.6
161.9
162.9
161.5
187.5
148.8
173.9
158.0
161.1
.2
.3
-.2
-.3
-.2
.6
1.8
.1
.4
-.4
-.1
.0
-.1
-.3
.1
-.2
.8
-.3
-.4
.4
.0
-.2
-.1
1.2
-.6
-.4
.1
.6
.4
.5
.3
.3
.3
1.3
-.1
-.2
1.3
.2
.2
.3
-.2
-.2
-.4
-1.0
-.1
-.3
.7
-.1
.1
-.4
3.5
4.0
.3
.4
.2
8.1
11.7
1.7
-1.0
-.2
Major industry groupings
Manufacturing.
Durable
Nondurable .
Mining
Utilities
167.1
159.0
178.9
126.1
187.7
166.7
158.4
178.8
124.2
.0
1.0
188.2
-.1
.0
-.1
.0
.3
-.4
-.6
2.5
.4
.6
.0
1.0
-.3
-.2
-.4
-.1
-1.5
.3
2.0
3.8
-.2
.7
3.0
NOTE. Indexes are seasonally adjusted.
million units in March. Nondurable consumer
goods edged down 0.1 percent. In April, production of business equipment declined 0.3 percent,
the fourth consecutive decrease since January.
Output of defense and space equipment continued to be strong, gaining 0.7 percent in April.
Production of construction supplies was little
changed in April. Production of materials fell 0.4
percent and was at about the same level as a year
earlier.
In industry groupings, manufacturing output
declined 0.2 percent in April, as durables fell 0.4
percent and nondurables 0.1 percent. In April,
the level of durable manufacturing output was
about 4 percent above a year earlier while nondurable manufacturing was little changed. Mining
production in April fell 1.5 percent while utilities
output, on balance, was not changed over the
past two months following its sharp increase of
2.5 percent in February.
504
Statements to Congress
Statement by Marvin Duncan, Vice President,
Federal Reserve Bank of Kansas City, Kansas
City, Missouri, before the Committee on Agriculture, Nutrition, and Forestry, U.S. Senate, May
1, 1985.
I am pleased for the opportunity to discuss
agricultural legislation being considered by the
Congress. The views and opinions expressed
herein are solely my own and do not necessarily
represent those of the Federal Reserve Bank of
Kansas City or of the Federal Reserve System.
THE POLICY
ENVIRONMENT
U.S. agriculture has reached a crossroads. It
faces a more competitive world marketplace,
with slower growth in demand for food and fiber
than had been expected. To succeed in this
environment, U.S. agriculture must price its
products competitively and compete aggressively for markets. Thus, in some respects, the
needed change in direction for U.S. agricultural
policy is quite clear.
In other respects, the appropriate change in
policy is far from clear, for the vision of the
future has been clouded by farm financial stress.
The rapidly deteriorating financial position of
heavily leveraged farmers has raised troubling
questions about their survival. Should not the
Congress reshape agricultural policy in a quite
different direction—back toward high price guarantees and rigid production controls in an effort
to save those financially troubled farmers? Proponents of that viewpoint seem willing to forgo
broader world market opportunities in exchange
for that public utility approach to agriculture.
Despite the appeal to some in the farm sector
of a highly regulated and subsidized domestic
agriculture, at least two difficult problems would
arise. First, American agriculture is a dynamic,
changing industry. It has enjoyed marked productivity growth of about 1.75 percent a year for
the past few decades. The promise of research in
biotechnology is that productivity will continue
to grow, perhaps more rapidly than in the past.
Currently, about two-thirds of U.S. farmers'
acres of cropland are needed to produce food and
fiber for domestic consumption. The combination of slower growth of population in the United
States and strong growth of productivity in U.S.
agriculture point toward a time by the end of the
century when only half of the current American
cropland will be required for domestic use. In
short, without growing export markets, U.S.
farmers can expect sharp increases in excess
capacity that will create escalating financial burdens for them and for the taxpayers that provide
income transfers to farmers and pay higher food
costs than might be available elsewhere.
Potentially higher food costs point to the second problem. If, as seems likely, continuing
pressures for higher and higher farm commodity
prices occurred in a regulated agriculture, U.S.
prices would outstrip world prices—possibly by
growing margins. On balance, a highly regulated
agriculture would seriously damage U.S. agriculture's export market. That eventuality is widely
recognized even by supporters of such a policy.
Even more sobering, however, is the strong
likelihood of growing competition from abroad in
the U.S. domestic market for food and fiber. The
United States would then face an increasing need
to protect its domestic markets against imported
food and fiber products. Already some foreign
producers match—and perhaps surpass—the efficiency of U.S. farm production. And, U.S.
imports of food and fiber products are currently
on the increase.
Some agricultural spokesmen call for regulation of production and high support prices as a
means of saving the most financially troubled
U.S. farmers. The probable loss of 90,000 to
100,000 farmers with debt-to-asset ratios of more
than 70 percent is decried. However, these farmers are rapidly losing equity in their businesses.
Between 40 and 50 percent of them are already
505
technically insolvent. Dramatically lower interest rates and sharply higher commodity prices, in
combination with rising land values, would likely
be required to save them. Given the magnitude of
the financial peril they face, it seems unlikely
that agricultural programs generous enough to
save them can—or should—be enacted.
Those that would turn back by legislation the
downward adjustment in commodity prices and
asset values in U.S. agriculture misunderstand
the role of the inflation of the 1970s in creating
excessive agricultural investment and commodity price escalation. They also ignore the inevitability of price and asset value adjustments to a
more competitive world marketplace and a more
price-stable economic environment. Policy,
however, can and should help moderate that
adjustment process and avoid sharp undershooting of both commodity and asset prices below
those prices supported by economic fundamentals.
The case seems clear from an economic perspective. U.S. agriculture will prosper in direct
relationship to its success in capturing its share
of growing world markets for food and fiber.
Static world markets, coupled with growing productivity in the sector, would mean continued
painful downsizing of American agriculture. Agribusinesses, on both the input and output side of
farmers, are also dependent on growing export
markets. With the agricultural sector, in its
broadest definition, accounting for about 20 percent of the nation's gross national product and
employing 20 percent of its labor force, an agricultural policy that promotes market growth is
also important to national economic performance.
NATIONAL
POLICY
Before agricultural policy and program options
are discussed, some comments on the role of
national policy are important. That is true since it
is probably not possible to offset the impact of
adverse national policies fully by sector-specific
agricultural policy. A number of issues come to
mind.
The very large federal budget deficits of recent
years add significantly to the inflation-adjusted
cost of carrying debt and to the value of the U.S.
dollar in international exchange markets. Moreover, high real U.S. interest rates hold interest
rates higher worldwide than would otherwise be
true and also slow world economic growth. The
unusually expansive U.S. fiscal policy in the
midst of an economic expansion has added to the
burden of the nation's monetary authority in
developing and implementing macroeconomic
policy. The result of high federal budget deficits
has been a large U.S. trade deficit and an uneven
economic expansion, with some sectors performing very well while more capital-intensive and
export-dependent sectors, such as agriculture,
lag behind.
U.S. tax policy has encouraged investment in
capacity for agricultural production earlier and to
a greater extent than market fundamentals would
have justified. Farmers' use of tax incentives,
such as cash accounting, investment tax credit,
and immediate expensing of certain development
costs, has distorted both agricultural product and
asset markets. But the tax sheltering of nonfarm
income by investment in agriculture has been a
much greater problem. Its effect can be seen
particularly in production of livestock and certain specialty crops, when in some instances the
impact of off-farm investment outweighs farmer
investment decisions in determining supply and
price. In the past decade, the conversion of
fragile range and grasslands—usually subsidized
by government farm programs—to irrigated and
dryland cropland has been evident also.
At a more macroeconomic level, many economists believe federal tax relief for business has
helped make this country a prime investment
opportunity for foreigners. If true, that relief has
added further to the strength of the U.S. dollar in
international exchange markets. Indeed, some
economists are now asking whether lower taxes
on business investment in other industrial countries might help to ease the value of the dollar.
Finally, as the United States becomes more
dependent on international trade to support its
economic growth, a particularly complex problem takes on added importance. From time to
time, the national security and foreign policy
objectives of the United States conflict with its
trade objectives. The Russian grain embargo of
the late 1970s, the Russian gas pipeline embargo
of the early 1980s, the allocation of Public Law
480 food assistance, and continuing discussion
506 Federal Reserve Bulletin • July 1985
over U.S. cargo preference legislation are all
cases in point. How those conflicts are resolved
when they arise will become more and more
important to U.S. trading sectors vying for world
markets in an increasingly competitive environment.
AGRICULTURAL
POLICY
As the Congress and the nation's agricultural
leaders have studied agricultural policy options,
some views have converged. First, there has
been growing appreciation that national policies
outside agriculture are unusually important to
the sector's improved well-being. That means
farm legislation cannot solve all of agriculture's
problems. Second, in a more competitive world
marketplace, market-clearing prices for farm
commodities are not only critically important
signals to foreign producers and buyers but also
an indication to U.S. producers of the challenge
ahead. Finally, new agricultural legislation must
spend public resources more effectively. Agricultural legislation will be expected to make a
contribution to a reduction in the federal budget
deficit.
The real issue in the agricultural policy debate
is not if, but rather when and how, policy will
become more market oriented. The current farm
financial stress, coupled with the likelihood that
economic recovery in the farm sector may be
two to four years away, poses the need for an
imaginative multiyear adjustment assistance program for farmers. Lacking such assistance, farmers will not accept the concept of market pricing.
But, that concept is critical both to a new direction for agricultural policy and to the longer-term
well-being of U.S. farmers.
In evaluating alternative legislative proposals
before the Congress, I will concentrate my remarks on agricultural credit, loan rates and target
prices, acreage reduction, and exports.
Agricultural producers that carry heavy debt—
in the current environment, debt-to-asset ratios
of more than 40 percent—are having varying
degrees of trouble in servicing their obligations.
About 90,000 to 100,000 commercial family farmers are so indebted with debt-to-asset ratios of
more than 70 percent that it is unlikely they can
survive beyond a couple of years. Another
130,000 to 140,000 farmers, with debt-to-asset
ratios of between 40 and 70 percent, are having
some problems, but most of them can be saved
with debt and asset restructuring, provided their
asset values do not plunge far below about half
the value of the market high in 1980-81. For
those farmers that can be saved, the Farmers
Home Administration (FmHA) debt adjustment
program can provide timely and valuable help.
Extending FmHA assistance to restructuring
real estate debt, in addition to non-real-estate
debt, is an important part of that adjustment
assistance. Programs that facilitate the transfer
of land from weaker to stronger hands and that
prevent undue amounts of farmland on the market that depress land values far below their
economic worth would provide needed stabilization to rural America. Farmers, lenders, and
rural communities would all benefit. The FmHA
debt adjustment program could, I believe, fulfill
a role in that process. If precipitous land-price
declines were to continue well into the future, it
might be useful to consider facilitating formation
of an entity—maybe with partial federal capitalization—to acquire troubled farm real estate and
hold it for a few years.
In a longer time frame, it seems reasonable to
shift FmHA lending increasingly to loan guarantees rather than direct lending. Such guarantees
should be of limited duration, perhaps with the
guaranteed proportion to decline over the guarantee period. Tighter focusing of FmHA credit
guarantees to beginning farmers for farm ownership and operating expenses and to limited availability for other family farmers on a lender-oflast-resort basis would help avoid mistakes of the
past and return the agency's lending activities to
the purposes originally intended. When crop
insurance is available, FmHA disaster loans are
probably not necessary. When disaster loans are
made, they should be in the form of loan guarantees and for limited periods. Interest rates on
guaranteed loans might start out no lower than
the cost of loan funds to the government and rise
during the term of the loan guarantee to commercial rates.
Many people think rural development lending
by the FmHA should be phased out, and they
may be correct. It appears that FmHA's authority became too broad during the 1960s and 1970s
for the agency to manage well with its limited
Statements to Congress
resources. Yet the pace of change in rural America is quickening, and the adjustments for many
rural residents will be traumatic. At some point,
greater public sector support for retraining and
rural development activities may be useful. For
example, retraining and relocation benefits for
displaced farmers could ease their adjustment
into a new vocation.
Commodity Credit Corporation (CCC) loans
represent another source of credit to farmers.
When collateral is turned over to the CCC in full
settlement of a nonrecourse loan, CCC loans
have the potential for substantial public subsidy.
To reduce this subsidy, a cap could be placed on
the amount of nonrecourse loans available to a
farmer in a given crop year, and interest could be
charged a farmer on defaulted loans. If farm
subsidies must be reduced, many crop farmers
would prefer the proposed annual limit of
$200,000 on nonrecourse loans with only recourse loans available above that limit, rather
than a very low cap on government payments.
Such a nonrecourse loan cap serves to direct
loan benefits to family farmers.
Proposals to set CCC loan rates for wheat,
feed grains, cotton, rice, and soybeans at a
proportion of the moving average of recent
years' market prices are fundamental in shifting
to a more market-oriented farm policy. That
change in CCC loan rates should be made
promptly. The language of either the administration or the Helms bill would accomplish that
shift. CCC loans at 75 to 85 percent of market
prices would send clear market signals to U.S.
producers and avoid building large stocks of
crops locked from the market by unrealistically
high prices. The policy shift would also send a
message to offshore producers that the United
Sates intends to compete aggressively in world
markets.
An immediate adjustment in CCC loan rates
should be made, but would likely result in lower
receipts for crop producers until world demand
growth picks up tempo. Thus, some combination
of target price payments and acreage diversion
payments—income transfer payments to farmers—to offset much of the lost cash receipts may
be required to satisfy farm groups, especially
early in the adjustment period. That also implies,
I believe, that the current limitation of $50,000 on
government payments be maintained for another
507
one to three years to induce participation in
programs by commercial farmers who account
for most of the U.S. crop production. After that
period, payment limitations could be reduced to
no more than median family income—both to
limit federal budget exposure and for equity
considerations. But moving too quickly in sharply reducing target price payments would likely
result in a stalemate on the legislative package
and jeopardize the critically important concept of
market pricing for U.S. commodities in international trade.
It seems wise to retain legislative authority for
acreage limitations, set asides, and paid diversion. These options could be exercised at the
discretion of the Secretary of Agriculture, but
with some limitations on the amount of commodity price improvement to be achieved in a given
year. U.S. capacity for agricultural production is
currently substantially larger than that which can
be marketed domestically or in export markets
without sharp reductions in market prices, at
least until growth of export demand improves.
A multiyear program of land retirement, aimed
first at fragile lands, seems prudent given the
prospective supply-demand balance of U.S.
crops for the next few years. About 25 million
acres could probably be removed on a bid basis.
To do so would somewhat reduce production
capacity, enhance soil conservation goals, and
cushion somewhat the downward adjustment in
farm real estate values.
The antisodbuster language in both the administration and in the Helms bills responds to a
popular theme among farmers. It also makes
sense to conservationists and economists. While
it may not be appropriate for government to
prevent landowners from converting fragile lands
to intensive cultivation when economic fundamentals justify more production capacity, it
seems clear that government subsidization of
crop production has spurred land conversion,
been costly to taxpayers and farmers, and damaged soil resources. Thus, withdrawal of government subsidies for a number of years after conversion seems a good approach. Linking
government crop subsidies to the use of appropriate conservation measures is also overdue.
Export development, along with market pricing, are the essential agricultural policy initiatives required to turn around the fortunes of the
508 Federal Reserve Bulletin • July 1985
financially troubled agricultural sector. Proposed
legislative changes recognize a legitimate role for
government credit and credit guarantees in meeting competition from other producers in the
world. Intermediate credit is appropriately singled out for increased emphasis. Efforts to reduce large CCC stocks also seem useful. Policymakers should proceed cautiously, however, in
the area of competitive subsidization of exports.
Bilateral and multilateral negotiations seem preferable, when possible.
Policies outside agriculture, as previously noted, are major factors in U.S. export competitiveness. Changes in those policies, coupled with
market pricing for U.S. agricultural exports, and
improved world economic growth will spur export demand. The future growth markets for
U.S. agriculture will be found increasingly
among low- and middle-income countries that
have high population growth and high income
elasticity of demand for food and fiber. Conversely, Japan and Western Europe represent
relatively mature markets in which growth in
demand will likely slow.
It is heartening to read proposed legislation
directed at using U.S. surplus commodities and
Public Law 480 fundings to enhance economic
growth in target countries. That is a good start.
In the past, the United States has had impressive
success in turning such concessional markets
into commerical markets. But the task is large. A
major long-range strategic development assistance effort to spur economic growth—and as a
result, demand for food and fiber—in low- and
middle-income countries is essential to the long-
term profitability of U.S. agriculture. Without
such a program it is quite unlikely that world
market growth during the rest of this century will
be rapid enough to provide acceptable growth in
agricultural export opportunities and in farm
income. In a world of static demand growth—or
even if growth were slow—U.S. domestic protectionist pressures would be difficult, if not
impossible, to contain. Conversely, such a development effort could add broadly to demand
growth for U.S. products while at the same time
making a very positive contribution to political
stability and living standards around the world.
Statement by Preston Martin, Vice Chairman,
Board of Governors of the Federal Reserve System, before the Subcommittee on Telecommunications, Consumer Protection, and Finance of
the Committee on Energy and Commerce, U.S.
House of Representatives, May 2, 1985.
markets, the further growth of "securitized" credit, and the continued development of futures and
options markets based on financial instruments.
Capital has been flowing across international
borders for centuries. The economic development of the United States from the colonial
period through the nineteenth century, for example, was financed in good part by capital provided by Great Britain and other European nations.
And throughout most of the twentieth century—
indeed, generally until the current decade—the
United States has been a major source of net
capital for many other countries.
I appreciate the opportunity to appear before this
committee to discuss the economic and bank
regulatory implications of three major developments in financial markets during the 1980s. As
requested, I will focus, in turn, on the trend
toward greater internationalization of capital
SUMMARY
In summary, agricultural policy is at a crossroads. Agriculture's interests will be served by
moving forward with market-oriented agricultural
legislation. But the fragile financial circumstances of many farmers and agribusinesses call
for more generous and longer-term government
assistance to ease the transition than had earlier
been thought necessary. Appropriate national
policy choices also must be made if agricultural
markets in the long term are to brighten materially. Finally, the best growth markets for U.S.
agricultural products will be in what are now the
low- and the middle-income countries of the
world. A carefully conceived, strategic policy of
development assistance for these countries could
return substantial dividends in economic growth
for U.S. farmers and agribusinesses.
•
Statements to Congress
However, during the past 20 years financial
markets in major countries have become increasingly more international in character and increasingly more integrated. Initially this process occured primarily in the more traditional types of
banking activities. Until the mid-1960s U.S. and
foreign banks conducted the great bulk of their
international banking transactions from offices in
their home countries. At that time, under the
impetus provided by the U.S. program to control
capital outflows, banking transactions in dollars
outside the United States expanded rapidly. U.S.
banks developed foreign branch networks to
accept deposits from and extend credits to foreign customers. Initially, the growth of this business occurred principally in offices in Europe—
hence, the name Eurodollar market. But soon
such international banking activity developed in
a wide range of other financial centers, such as
Singapore and Hong Kong, and also in newly
established offshore banking centers in the Caribbean and elsewhere. And the number of participants grew to include major banks from all
countries.
The volume of deposits placed in offshore
offices increased greatly in those days because
they were not subject to the interest rate constraints or the reserve requirements that applied
to deposits in national markets. In addition,
growth in the 1970s was particularly stimulated
by the emergence of oil-producing countries as
major creditors, who preferred that their assets
be intermediated. Over the same time, the rapid
development of communications technology
helped to enlarge the competitive environment
for international financial services to a worldwide basis. In this environment, banks began to
shave margins between rates paid on deposits
and rates charged on loans, to develop new types
of banking instruments, and (later, when banking
supervisors began to require banks to improve
their capital positions) to seek income from providing services outside the traditional banking
role of intermediation.
Banks have expanded their provision of financial services internationally by playing an important role in the establishment and development of
the Eurobond market and by helping to link that
market with domestic securities markets. The
Eurobond market developed in parallel with the
Eurobanking market, although, until recently, at
509
a more moderate pace. Before the development
of this market, international security issues took
the form of bonds issued by nonresidents in
national markets and were subject to the regulations that applied in that market. By the mid1960s, however, the "offshore" Eurobond market had begun a period of concerted growth, as
offerings by U.S. and European corporations and
sovereign borrowers became more or less continuous, supplementing the funds raised and loaned
in the Eurobanking markets.
Although the Eurobond market, whose market
makers are located in a number of financial
centers, is not subject to national regulations, its
investors, issuers, and underwriters are frequently subject to regulation by their national
authorities. Examples of such U.S. regulations
include the restriction that Eurobond offerings
that are not registered with the Securities and
Exchange Commission at issuance cannot be
sold in the United States until after they have
been seasoned for a 90-day period. Furthermore,
U.S. tax regulations discourage the sale of Eurobonds to U.S. investors, particularly through
U.S. banking organizations.
Other governments also regulate access to the
Eurobond market. Nevertheless, the trend in
recent years has clearly been to open up national
securities markets and thus to allow greater
integration of these markets with other national
and international markets. Recent examples include the removal by Germany and Japan of
important restrictions on the use of their currencies in certain international financial transactions.
The securities issued in the Eurobond market
have continued to be those of European governments, the most creditworthy of U.S. and foreign
corporations, and international organizations
such as the World Bank. One reason why U.S.
corporate borrowers have continued to be attracted to this market is that in recent years they
have been able to issue dollar-denominated securities at cheaper rates than in the United States.
In part, this is possible because securities are
offered in bearer form, giving a guarantee of
anonymity to the investor. Most investors in this
market have been, and continue to be, foreign
financial institutions and foreign residents.
Thus, the Eurobond market in its maturity is
an effective alternative to national debt markets.
510 Federal Reserve Bulletin • July 1985
As such, it provides an important means by
which capital can flow between countries internationally, helping to promote its efficient allocation on a worldwide basis. During the 1980s, for
example, the market has served as an important
source of net capital inflow into the United
States, a development that is a counterpart of the
large trade deficit this country has been running
over this period.
In the wake of the surge of U.S. corporate
issues, a few U.S. commercial banking firms
have become important lead arrangers and underwriters in international (and foreign) securities markets. U.S. banks have been able to
participate in the development and operations of
international capital markets through foreign
subsidiaries by reason of the broad statutory
authority contained in the Edge Act (section
25(a) of the Federal Reserve Act). A principal
purpose of that act, which was enacted in 1919,
was to facilitate the international and foreign
banking and financial operations of U.S. banks
and to promote, thereby, the foreign trade and
commerce of the United States. Through the
creation of subsidiary corporations endowed
with greater banking and financing powers than
those possessed by domestic banks, it was intended by the Congress that U.S. banks should
be able to compete more effectively with foreign
banking institutions in U.S. trade financing and
in international and foreign banking.
It was recognized by the Congress that if Edge
corporations were bound by domestic banking
rules in their operations abroad, they could be
placed at a severe competitive disadvantage with
foreign banks, and the foreign trade and commerce of the United States would not be promoted. Accordingly, the Congress gave to each Edge
corporation the right " . . . generally to exercise
such powers. . . as may be usual, in the determination of the Board, in connection with the
transaction of the business of banking or other
financial operations in the countries. . . in which
it shall transact business. . . . " The Board has
determined, through its regulations and orders in
individual cases which activities abroad are appropriate for U.S. banking organizations in the
light of the purposes of the Edge Act and related
statutes.
In the mid-1960s, as U.S. companies sought
ways to raise medium- and long-term funds off
shore to finance their direct investments and
operations overseas, U.S. banks asked for authority to underwrite and deal in securities
abroad through merchant banking subsidiaries.
In this context, the Board gave that permission
to a number of subsidiaries, at first mainly in
London but subsequently in other banking centers. Although the primary interest at that time
was in underwriting and dealing in debt securities, authorizations were extended to equity securities and other securities containing equity
elements. Subsequently, in the 1979 revision of
its regulations regarding international banking,
the Board placed underwriting, distributing, and
dealing in debt and equity securities outside the
United States on the list of permissible activities.
There are no specific regulatory limitations on
the underwriting of debt securities overseas.
However, the underwriting commitment by the
Edge corporation or its subsidiary to an issuer of
debt securities is considered a liability of that
entity and, as such, would be considered an
extension of credit to the issuer. Accordingly,
these commitments would be aggregated with
other extensions of the parent bank to that issuer
for the purposes of the bank's lending limit.
The underwriting of equity securities abroad
by a banking organization is more limited. No
equity underwriting commitment by an Edge
corporation subsidiary may exceed $2 million, or
represent 20 percent or more of the capital and
surplus or voting stock of an issuer, unless the
underwriter is covered by binding commitments
from subunderwriters or other purchasers.
More generally, the Board's regulation admonishes U.S. banking organizations that their underwriting and other activities abroad are to be
carried out at all times with high standards of
banking or financial prudence, having due regard
for diversification of risks, suitable liquidity, and
adequacy of capital. The Board monitors these
activities through regular reporting requirements
and the examination process.
U.S. commercial banks, as well as U.S. investment banks, have only become important
underwriters in the Eurobond market in the
1980s. In significant part this prominence is
attributable to the development of various innovative financial arrangements, most importantly
currency and interest rate swaps. In its simple
form, an interest rate swap, for example, in-
Statements to Congress
volves two parties, one with a fixed interest
payment debt, the other with a floating-rate debt.
These parties agree to swap their interest payment obligation. One or both parties enter these
agreements to obtain a preferred interest payment stream or to lower borrowing costs. Because of the rapid growth of financial swaps and
other innovative financial arrangements and the
major involvement of international banks in their
employment, the Federal Reserve is cooperating
with other central banks in assembling information on these arrangements and in analyzing their
market implications and policy significance.
A second broad area of financial market developments in which banks are increasingly involved is the securitizing of loans. This is a
process that packages relatively illiquid twoparty borrowing agreements and transforms
them into negotiable securities. Experience with
such securities comes almost entirely from the
mortgage markets. The Congress provided the
essential impetus to the securitizing of credit
when it created the Government National Mortgage Association in 1968 to guarantee privately
issued securities backed by pools of mortgages.
These instruments were called pass-throughs,
because interest and principal payments on the
mortgages were passed through to the security
holders. The Federal Home Loan Mortgage Corporation was started two years later and extended the acceptable limits of loan pools to include
conventional as well as federally insured mortgages. Since then, the Federal National Mortgage Association and a wide range of private
firms have also issued pass-throughs. The outstanding volume of residential mortgage passthrough securities has grown exponentially. At
present, securities guaranteed by the three agencies total $290 billion; counting mortgage-backed
securities with a private guarantee, the total is
more than $300 billion. More than one-fifth of all
existing home mortgages have now been placed
in pass-through pools, representing about 5 percent of all credit market debt.
By and large, the experience with these securities has been quite good. The original intent of
federal government participation was to augment
the flow of capital to the housing industry to
make mortgage credit cheaper and more consistently available over the course of the cycle. The
secondary mortgage market, which pass
511
throughs have been largely responsible for widening and deepening, has helped insulate the
housing industry, to some extent, when deposit
flows to thrift institutions have been weak. By
making it easier to invest in mortgages without
having the resources or the expertise needed to
originate and service such loans, the pool of
lenders and investors has been greatly increased.
Mortgage interest rates have been more uniform
geographically and have moved more in line with
market rates.
The ability to sell loans has clear benefits for
banks. It makes the asset side of their balance
sheets more liquid; it allows banks to manage
their assets. They can spread individual-borrower risks better and control the proportions of
different borrower and maturity categories. The
securitizing of loans broadens the range of investment opportunities for many investors, offering yet another alternative for increasing the
liquidity of a portfolio and diversifying risk. This
procedure helps some borrowers compete on
more even terms for funds. The extent to which
additional funds acquired by households to purchase houses or autos crowd out business borrowing is still a matter for continued research.
There are, however, some increased risks accompanying the packaging and sale of loans. In
some private loan packages, the origination is
separated from the actual lending for funds, with
third parties insuring the loans, still others doing
the loan packaging, and even different firms
holding the loans in escrow or as trustee. This
procedure, as the recent experience of California
banks suggests, may tend to encourage sloppy
procedures and inadequate loan evaluation as
each party relies on others to investigate the
loans thoroughly. Furthermore, ultimate purchasers of the securities, who sometimes bear
the most risk, may lack the expertise and the
information to make proper investigations.
As regulators, we also have some concern
about how banks account fof loan sale transactions. Although outright sales to nonaffiliated
parties without residual guarantees cause no
problem, loan pools are often sold with some
recourse to the originating bank in case of defaults. For example, the bank may commit to
replace all loan losses up to 10 percent of the
loans sold. With the exception of certain mortgage pool transactions, the Federal Reserve's
512 Federal Reserve Bulletin • July 1985
position and that of other bank regulators has
been that loans sold with recourse to the originator or its affiliate should be classified as collateralized borrowings, not as asset sales. Otherwise,
such loan sales could be too easily used to keep
risk off balance sheets and thus distort capital
ratios. Federal Reserve examiners have detailed
instructions to take all off-balance-sheet risks
into account when evaluating the capital adequacy of an institution.
Rapid growth and dynamic innovation have
been characteristics of financial futures and options markets since their inception in the early
1970s. The first such contracts that began trading
on organized exchanges—futures based on foreign currencies and options based on individual
stocks—met with immediate success, and they
have grown substantially in trading volume. With
this initial experience, the futures and options
exchanges were encouraged to introduce other
such instruments. Over the latter half of the
1970s and the early 1980s, a number of interest
rate futures and options contracts, based on U.S.
Treasury and federal agency securities and on
private debt instruments, were introduced. Trading in many, although not all, of these markets
rose sharply from the outset, and it has continued to flourish. Finally, in the early 1980s, the
exchanges introduced futures and options contracts based on various stock indexes. Again,
these markets attracted wide interest, as reflected by spectacular growth in several of them and
broad participation by a wide range of financial
service organizations and individuals.
Like their counterparts in traditional commodities futures markets and in the over-the-counter
markets for foreign currencies and individual
stock options, those participating in the new
exchange traded futures and options markets do
so to achieve one of two basic purposes. Some
seek gains by guessing right on the way that
stock prices, interest rates, or exchange rates are
likely to move. Besides these speculators who
add liquidity to the market and efficiency to the
pricing process, a wide range of other participants are in the market to hedge risks that they
are exposed to in the course of their ordinary
business affairs—that is, to shift their risk exposure to speculators in the market. It is this risk
transfer process that provides the fundamental
economic justification for these markets.
The Congress, in the Futures Trading Act of
1982, directed the Commodity Futures Trading
Commission (CFTC), the Securities and Exchange Commission (SEC), and the Federal
Reserve Board, with the assistance of the U.S.
Treasury to conduct a study of futures and
options markets. Since that study was submitted
to the Congress in December of last year, I will
confine my remarks to a brief summary of its
conclusions. Thereafter, I will address in greater
detail the regulatory framework the Federal
Reserve and other banking agencies have in
place to assure that banks participate in these
markets in a safe and sound manner.
The main conclusions of the joint agency study
are the following:
1. The new financial futures and options markets serve a useful economic purpose, primarily
in providing a means by which risks inherent in
economic activity can be shifted from firms and
individuals less willing to beat them to those
more willing to do so.
2. These new markets appear to have no
significant negative implications for the formation of capital.
3. Financial futures and options contracts differ in important characteristics, but have many
common elements, and hence, there is a need for
close harmonization of federal regulation of these
markets.
4. Trading in functionally similar instruments
under the jurisdiction of the SEC or the CFTC
does not appear to have resulted in significant
harm to public customers of these derivative or
related cash markets.
5. With respect to the various issues examined
in the study, no additional legislation appears to
be needed at this time to establish an appropriate
regulatory framework.
At year-end 1984, only 268 of the nation's
14,500 insured commercial banks reported any
futures or forward positions outstanding; 93
banks reported options positions outstanding.
Banks with assets in excess of $5 billion accounted for roughly 90 percent of domestic bank
volume in futures and options contracts. Depository institutions have been able to use derivative
instruments in hedging and arbitrage activities
related to holding securities in bond trading
accounts with both activities contributing to the
Statements to Congress
liquidity of the U.S. government securities markets. In addition, banks have utilized these derivative instruments in managing various segments
of their asset-liability positions.
The involvement of banks in these derivative
markets is subject to guidelines first adopted by
all the regulatory agencies in 1979. The basic
objective in these actions was to ensure that the
institutions choosing to use these instruments
only do so in a way that will reduce their
exposure to interest rate or foreign exchange
risk. Before engaging in such activities, management is directed to obtain specific authorization
from the institution's board of directors. Also,
management is required to develop appropriate
internal controls, including position limits and
management reports and to establish procedures
for market value accounting with respect to open
contract positions. State-chartered institutions
also first must verify that applicable state law permits them to take positions in these instruments.
The essential trading strategy directed by the
guidelines is that institutions should establish
positions that hedge their overall exposure to
interest rate risk. This concept, while straightforward in intent, is difficult to follow in practice.
Hedging as engaged in traditionally in, for example, commodity futures markets has been a rather clear-cut process. For example, a hedger
simply took a "short" position in the futures
market to offset a "long" inventory position he
had in the cash market. Since future and cash
prices tend to be highly correlated, any loss
suffered in the long cash position from a decline
in market price would be offset by the profit
obtained from the short futures position. This
simple concept of pairing a short (or long) position in futures against a long (or short) cash
position does not necessarily assure that a hedge
is established when it comes to financial institutions, however. Due to the complexity of bank
balance sheets, the agencies have held that to
determine whether a futures or options position
increases or reduces risk exposure, it is necessary to consider the interest rate exposure of the
entire balance sheet position.
It is important to note that the theory and the
means for measuring bank interest rate risk continue to be debated and refined. The Board has
adopted an extensive examination manual to aid
examiners in assessing and in evaluating bank
513
and bank holding company use of these instruments. It is our intent to balance prudential
concerns against the industry's need for flexibility and innovation. However, in the final analysis, the policy guidelines require that bank management be able to describe and document in
detail how the bank's derivative contract activities contribute to the bank's attaining its objectives of reduction of interest rate risk.
An additional complication associated with
derivative products is the fact that trading strategies linking cash positions and derivative instruments can be quite complex—especially in the
fast-moving bond trading environment of dealer
banks in which inventory can turn over in a
matter of hours or minutes. Rather than analyze
the use of derivative products in detail, for
example, attempting to distinguish bona fide
arbitrage from riskier forms of arbitrage, System
examiners have been instructed to consider derivative products as part of the overall evaluation
of trading activities in the relatively few dealer
banks we supervise. This pragmatic approach
relies on the fact that all cash and derivative
positions in a bond trading area are subject to
market value accounting, and hence, vital discipline is imposed to prevent excessive risk-taking.
The Board also adopted, in 1980, a general
policy regarding the appropriate use of financial
futures, forward and options contracts by bank
holding companies and their nonbank subsidiaries. This policy, basically the same as that applicable to banks, limits the position that can be
taken in these derivative products to those that
reduce exposure to risk and requires the establishment, by written policy, of appropriate internal controls and audit programs to ensure adherence to this limitation. The Federal Reserve has
also permitted 13 bank holding companies to
establish subsidiaries to conduct business as a
futures commission merchant (FCM)—that is, as
a broker of futures or options on futures contracts. In addition, permission has been given to
one state member bank to establish a subsidiary
to function as an FCM (the Comptroller of the
Currency has also given similar permission to a
number of national banks). Consistent with the
Federal Reserve's general policy, these units of
the holding company are prohibited from taking a
position in the market for their own account
except for hedging a cash position.
•
514 Federal Reserve Bulletin • July 1985
Statement by Preston Martin, Vice Chairman,
Board of Governors of the Federal Reserve System, before the Subcommittee on Domestic
Monetary Policy of the Committee on Banking,
Finance and Urban Affairs, U.S. House of Representatives, May 3, 1985.
I am pleased to appear before this subcommittee
to discuss recent merger and buyout activity and
the impact of this activity on domestic credit
flows and the safety and the soundness of financial markets.
The dollar volume of completed merger transactions totaled more than $120 billion last year,
more than double the experience of any previous
year (attachment l). 1 A substantial portion of this
volume—more than $50 billion—was attributable
to very large combinations, each involving more
than $1 billion. So far this year we have continued to witness a substantial volume of acquisitions and proposed combinations. Although it is
unlikely that all of the proposed mergers will
reach fruition, the current volume is certainly
large enough to warrant continued monitoring of
market impacts.
As I have noted in recent testimony before
other congressional committees, I believe that
there is a legitimate place in our economy for
mergers and takeovers. They can be important
mechanisms for redeploying corporate assets to
their most profitable—and socially beneficial—
uses, and for bringing about better management.
Thus, we must be careful about attempting to
impose the judgment of government authorities
about which private transactions will be economically productive and which will not. Nonetheless, government is obliged to do what it can to
ensure that certain kinds of risk-taking not jeopardize the stability of our financial system. From
the perspective of the Federal Reserve, our
concerns have focused on the effect that merger
and takeover activity is likely to have on aggregate credit flows and on the risk exposure of
financial institutions and markets.
Many of these merger transactions have been
financed, at least initially, with debt. More than
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
$15 billion of the 1984 volume represented leveraged buyout transactions, which typically rely on
debt financing for as much as 80 to 90 percent of
the purchase price, often using the assets of the
company as collateral for the loans. Bank credit
that was used to finance large mergers or defensive actions to avoid takeovers totaled an estimated $35 billion last year. About two-thirds of
these loans were from U.S. banks, but foreign
bank participation also was sizable. In the first
quarter of 1985, large merger-related bank loans
have totaled about $7 billion, with most of these
loans supplied by U.S. banks.
Such credit is small relative to total credit
outstanding at banks. Moreover, many mergerrelated bank loans are paid down fairly quickly
with funds raised by sales of assets, or with
proceeds from the sale of commercial paper or
long-term securities. Thus, for example, approximately two-thirds of the large-merger bank loans
extended in 1984 have been repaid. Nonetheless,
the heavy reliance on debt, from whatever
source, to effect the substantial number of mergers, takeovers, and leveraged buyouts raises
questions about the potential impact that the
transactions may have on aggregate credit flows
and on the exposure, owing to heavy leveraging,
of the firms involved.
The Board is aware of the influence of merger
activity on aggregate credit flows, and takes it
into consideration when evaluating the behavior
of the money and debt aggregates. Growth in the
domestic nonfinancial debt aggregate, which we
monitor in the course of our monetary policy
deliberations, is estimated to have been boosted
about 1 to IV2 percentage points in 1984 as a
result of merger-related credit extensions. But
mergers and buyouts appear to have had a much
more limited impact on the three monetary aggregates for which we establish target ranges.
The narrow money aggregate, Ml, may be increased temporarily as a result of a large merger,
but proceeds from merger sales generally are
reinvested in other assets, and the effect of Ml
tends to be small over periods of time relevant
for monetary policy considerations. The broader
aggregates, M2 and M3, may be boosted somewhat more than Ml, as some proceeds from
stock sales flow into time deposits, money market mutual funds, and other assets included in
these aggregates. But relative to the size of M2
Statements to Congress
and M3, this effect also would be relatively
minor. Given our ability to evaluate the size and
the timing of large transactions, we can anticipate possible distortions to the aggregates in a
particular period and thus avoid inadvertently
reacting to these factors rather than to more
fundamental determinants of credit demand in
our policy deliberations. As a result, I do not
believe that mergers present an operational problem for us that could cause appreciable unintended variations in reserve market pressures.
Assessing the implications of merger activity is
quite complex, however, and even though we do
not believe that debt-financed merger activity
has had a significant effect on aggregate credit
flows, we are concerned about the potential risk
exposure that may result as firms retire existing
equity with funds raised through increased use of
debt.
Last year, nonfinancial corporations retired
more than $85 billion of equity through mergers,
takeovers, and share repurchases. Equity retirements were bolstered also by firms that elected
to repurchase their own shares rather than to
undertake new investment or to acquire other
firms. Some share repurchases clearly were
prompted as defensive measures taken to lessen
the possibility of outsiders buying significant
amounts of stocks; other repurchases were made
because corporations find them to be a more
profitable way to invest funds. When a company
believes that the value of its assets is higher than
the market's valuation of its stock, such buybacks may appear to be more attractive than
alternative investments.
The unprecedented level of stock retirements
associated with mergers, takeovers, and share
repurchases has given rise to concerns about the
potential erosion of the equity base of American
business. There have been offsets, however, to
this erosion. Aided by the new depreciation
rules, after-tax earnings of nonfinancial corporations have rebounded strongly in the current
expansion. With dividend growth remaining restrained, retained earnings have been a relatively
substantial source of new corporate equity in
recent quarters. A less important source of equity is new stock issues. Retained earnings of all
nonfinancial firms offset the net retirement of
stock, and net additions to equity in the aggregate remained positive last year though quite low
515
by historical standards, especially during a business expansion.
Another source of equity growth has come
from the appreciation of existing corporate assets. Reflecting the improvement in corporate
profits in this expansion and a more favorable
environment for future earnings, the market's
evaluation of corporate assets has risen. Moreover, even though a large portion of recent stock
retirements has been financed with debt, aggregate debt-to-equity ratios for nonfinancial business as a whole—based on market values of
equity—have remained well below the peaks
reached in the 1970s. Nonetheless, while these
aggregate measures have not changed dramatically, it is clear that some firms are retiring huge
amounts of their equity and are taking on appreciable amounts of debt to finance merger-related
activity.
The Federal Reserve, in its roles as supervisor
of banks and bank holding companies and as
lender of last resort, has the responsibility in
conjunction with other regulatory agencies for
maintaining the safety and the soundness of
financial institutions and markets. To date, we
have seen no evidence indicating that the credit
extended to finance mergers and leveraged
buyouts has resulted in significant problems for
the surviving firms or the financial institutions
that have extended credit to them. Of course, our
economy has been undergoing an expansion that
has provided a favorable economic and financial
environment for growth, and thus the companies
created by recent mergers, as yet, have not been
tested by adverse economic conditions. Currently, there are indications that economic growth
may be slowing. Should the earnings prospects
of these firms deteriorate unexpectedly or interest rates rise sharply, some firms may be strained
to service heavy debt burdens. In this event, the
institutions that provided the credit could in turn
be exposed to possible losses.
Leveraged buyouts may be of particular concern because these purchases typically are executed with particularly heavy reliance on debt
financing. Because buyout loans often involve
floating-rate debt, the purchasing companies will
be especially vulnerable if interest rates rise
substantially and cash flows are not adequate to
service the heavy debt burdens.
The Federal Reserve has actively urged banks
516 Federal Reserve Bulletin • July 1985
to evaluate carefully all loans, but particularly
those loans used to finance buyouts and other
types of takeover transactions, and to apply
prudent standards in making credit decisions.
We regularly include specific instruction with
respect to the review of bank lending activity and
loans associated with leveraged buyouts in our
training courses for bank examiners. In June
1984, we offered additional training for dealing
with leveraged buyouts for senior bank examiners. At about the same time, we issued specific
guidelines for examiners at each of the 12 District
Federal Reserve Banks to follow in evaluating
loans for financing leveraged buyouts and for
assessing the total exposure of a bank to such
lending.
A recent review of the results of bank examinations indicated that only a small number of
state member banks appeared to actively lend for
purposes of effecting leveraged buyouts to the
extent that they might be exposed to adverse
changes in market conditions. No banks have
experienced serious problems to date as a result
of such lending. While these survey results suggest that there is little reason for alarm at this
time, we will continue to evaluate this activity
and to adjust our policies as needed. We encourage all lenders to apply prudent lending standards, particularly purchasers of low-rated or
unrated bonds, which appear to have become
popular vehicles for financing takeover attempts.
Most of the purchasers of these so-called "junk
bonds" that are used to finance merger activity
reportedly are large, sophisticated investors who
should be aware of the risks involved in holding
such instruments. The higher rates paid on these
bonds suggest that they are perceived to involve
greater risks, but the question of whether the risk
premiums will prove to be adequate to compensate investors for the exposure that they undertake remains unanswered inasmuch as the market has not been tested by significant negative
events.
I do not wish to imply that lower-quality bonds
are undesirable financial instruments. These securities provide an important source of financing
for many small, unknown companies. A new firm
may have good growth potential, but because it
is untested as yet, its debt issues likely will be
rated below investment grade; some new companies opt not to obtain a rating owing to the cost
involved and to the likelihood of being granted a
speculative grade. It is important that less wellknown companies be able to raise funds in securities markets and also that investors seek a
thorough understanding of the investment merits
and risks associated with lower-grade securities.
Federally chartered banks may make loans to
finance mergers; they are prohibited from acquiring below-investment-grade bonds in their investment portfolios. However, some state-chartered institutions currently may not be subject to
such restrictions. Indeed, some state-chartered
thrift institutions have purchased these securities. Given the sensitivity of financial markets to
the fortunes of individual institutions, we continue to encourage supervisors at both state and
federal levels to evaluate carefully developments
in this area and to take adequate steps to prevent
undue exposure of individual institutions to unexpected events.
The Federal Reserve Board does not believe
that arbitrary controls on the use of credit can be
desirable or effective. Attempts to regulate flows
of credit for particular purposes run the risk of
creating unintended distortions in credit flows
and impeding the efficient allocation of capital.
Since mergers can be important mechanisms for
redeploying corporate assets to more profitable
uses, promoting better management, economies
of scale or scope, or reinforcing market incentives, we must be careful about imposing the
judgment of government authorities concerning
which private transactions will be desirable from
a social and economic standpoint. When government controls on the use of credit are in existence for any length of time, they become increasingly inequitable as market participants find
ways to circumvent them. And such controls are
usually extremely difficult to enforce; since credit is fungible, most financing can be achieved
through alternative channels, such as borrowing
through unregulated intermediaries, from foreign
lenders, or the like.
In this regard, I also would like to comment on
the role of margin regulations as they may affect
merger financing. Margin regulations apply to
lenders making loans for the purpose of purchasing securities when those loans are collateralized
with securities. Thus, investors that wish to
purchase stocks on credit may, under current
margin requirements, borrow 50 percent of the
Statements to Congress
517
purchase price, and pledge the acquired stocks
as collateral. The recent tendency for stock
prices of target companies to rise when a takeover or merger is anticipated suggests that some
investors may be purchasing shares of these
companies in anticipation of realizing gains as
the merger transactions are negotiated. Although
we have no data on such individual stock trades,
it may be that some involve margin credit extensions. The 50 percent margin requirement, we
believe, is more than adequate to ensure the
integrity of the marketplace in the event of
unexpected price movements in these and other
stocks.
Margin credit likely has played a quite limited
role in the actual financing of mergers and takeovers. The margin regulations do not apply to
unsecured loans or to loans secured by assets
other than securities. Well-capitalized companies may borrow to purchase shares in another
company by pledging other types of assets as
collateral or by using unsecured loans, in which
case the lenders would not be subject to margin
requirements. Given the current high margin
requirements, there is a strong incentive for
firms to use other means of financing acquisitions
when possible. Unfortunately, there are areas in
which the application of margin regulations is
cloudy; in particular, questions have arisen concerning credit extended to purchase securities
that may be "indirectly" secured by stock.
These cases require a regulatory review to determine whether or not the extension of credit
would be subject to margin requirements. As you
may be aware, Federal Reserve staff currently
are reviewing a petition to this effect by Unocal.
Up to this time, the Board has not believed that
efforts to curb takeover activity by expanding the
scope of margin regulations to cover selected
types of transactions has been a desirable option.
Such a course runs all the risks of distorting
capital flows and impeding the efficient allocation of resources like other selective credit controls.
I would like to reiterate that I do not wish to
imply that we should be complacent about the
implications of lending to effect mergers and
buyouts. The Federal Reserve will continue to
monitor this activity and its effects on financial
markets and to review our examination standards in light of developments in this area.
•
Statement by Paul A. Volcker, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on Banking, Housing, and
Urban Affairs, U.S. Senate, May 8, 1985.
In previous statements before this committee,
I have stressed the unique and complex role
played by depository institutions in our financial
system and our economy. For the convenience
of the committee, I have attached to this statement a copy of my statement before this committee on March 27, 1984, which sets out in detail
the conceptual framework from which we at the
Board approach the present legislative effort to
revise the banking structure in the light of
changed market conditions, (attachment l)1
The legislation adopted by the Senate last year
took some basic steps necessary to adapt the
financial system to changed circumstances. It
provided for the following: (1) a new definition of
banks and thrift institutions; (2) a streamlining of
the procedural provisions of the bank and thrift
holding company acts; (3) a broadening, within
an appropriate regulatory framework, of the
I am pleased to appear before this committee
today to review the banking bill, S. 2851, that
was adopted by the Senate last year in September and to assess the continuing need for this
legislation. On several occasions in the past I
have advised this committee of the need to move
with a sense of urgency to reform the existing
statutory framework governing "banking" organizations, prompted by my concern that there
are real dangers in permitting the financial system to evolve, as it is now, in a haphazard and a
potentially dangerous way. Nothing has happened in the seven months since September 1984
that would cause me to change this assessment.
Quite the contrary, the basic framework for the
conduct of depository institution business that
would have been established by S. 2851 is sorely
missed and is still urgently needed.
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
518 Federal Reserve Bulletin • July 1985
powers of depository institution holding companies; (4) a better delineation of the scope of state
authority in the area of banking organization
powers; and (5) a start on developing rules
governing interstate expansion of depository institutions.
The broad consensus on these and other provisions was reflected in the overwhelming support
by the Senate for S. 2851.
The need for new legislation to clarify and
reinforce certain continuing goals of public policy toward banking has only intensified in the past
year. There has been further proliferation of
nonbank banks; new state initiatives to greatly
expand the powers of state-chartered banks and
thrift institutions; and new applications by banks
and bank holding companies to engage in insurance, securities, and other activities that must be
decided with or without congressional guidance.
Since July 1, 1983, the grandfather date in
S. 2851, 22 applications for nonbank banks by
commercial companies, including major securities, insurance, and retail firms, have received
approval. Since September 1984, 276 applications by bank holding companies for nonbank
banks located in 40 different states have also
been approved. While a U.S. District Court in
Florida has enjoined the Comptroller from issuing any new final charters, and the Federal
Reserve has returned pending applications because of this injunction, there is a continuing and
an important need for legislative action on the
definition of bank.
I need only stress that in the appeal process,
the decisions of the lower court could be reversed, with a resultant flood of new nonbank
banks immediately being put into place. In any
event, the Court's ruling does not apply directly
to nonbank banks authorized under state law or
to existing national banks that could be converted to nonbank banks. I fully expect that commercial firms prepared to take advantage of loopholes will turn in this direction as a means of
evading the separation of banking and commerce
that is now required.
The accelerating trend in the states toward
authorization of new nonbanking powers for
banks and thrift institutions is another point of
serious concern. These laws appear to be part of
a kind of bidding process to attract and retain
depository institutions, to enhance revenues,
and to create new employment opportunities
rather than a reflection of a coherent philosophy
toward banking. These essentially competitive
efforts will offset one another in the end, but at
the cost of establishing banking practices that
could well be inconsistent with the requirements
of a safe and sound banking system. For instance, legislation was adopted last year in California and in New York to authorize real estate
development activities and in Ohio to authorize
investment in corporate equities as well as real
estate development, posing real risks for the
banks that engage in these activities. Of equal
concern is the legislation in some states that has
given carte blanche to state-chartered thrift institutions, allowing them to virtually make any type
of investment almost without restriction.
Faced with these laws, and their likely proliferation, the three federal regulators with responsibilities in these areas—the Board, the Federal
Home Loan Bank Board, and the Federal Deposit Insurance Corporation—have adopted, or have
under consideration, regulations to establish a
framework for the conduct of state-chartered
depository institution activities. The three depository institution regulators have in effect
reached the conclusion that if they are unrestrained these activities can seriously endanger
depository institutions themselves and the financial system in which they are such an important
part. Administrative authority to act in this delicate area of state-federal relations needs a clear
mandate of congressional support.
The unsatisfactory state of existing law is
manifest also in recent applications by bank
holding companies to engage directly or through
subsidiaries in a considerable range of insurance
and securities activities, taking advantage of
perceived new interpretations of federal law or
new state laws. Holding company applications
are now before the Board to engage in nationwide insurance brokerage and underwriting
through state banks and to participate in underwriting and distribution of commercial paper,
revenue bonds, and mortgage-backed obligations. These applications raise serious questions
of policy in areas that have been of important
congressional concern. We are required, nevertheless, by law to act on them. It would be far
preferable to act in these areas on the basis of a
fresh statutory mandate, rather than attempt to
Statements to Congress
apply existing rules to circumstances that were
unforeseen 10, 20, and 50 years ago.
All these developments have created a continuing large volume of complex litigation—and
more can be expected. Almost every important
banking policy is now the subject of judicial
review, and the courts, or we the regulators, are
faced with the unhappy dilemma of attempting to
apply old laws adopted in very different circumstances to new facts and new arrangements that
the Congress did not envision when the laws
were originally adopted. In these circumstances,
inconsistent rulings should be no surprise. The
banking system is simply too important to leave
to haphazard development.
The legislation adopted by the Senate last year
would have made a major contribution toward
establishing a new and a more stable framework
in which depository institutions and other financial firms can operate, while protecting the basic
foundations of a safe and sound financial system.
However, I believe changes are needed in at
least three important areas to strengthen the
Senate bill to assure that these objectives are
fully met.
STRENGTHENING
THE THRIFT TEST
First, the so-called thrift test should be strengthened substantially. Conceptually, S. 2851 seems
to accept the importance of assuring that thrift
institutions extensively engaged in commercial
activities, like commercial banks, be subject to
national policy requiring a separation of banking
and commerce. However, the thrift test set out
seems to me too weak, and would permit
"nonthrift thrifts" the bank-like powers to develop, undercutting the prohibition on nonbank
banks.
To achieve the necessary strengthening, the
thrift test should, at a minimum, require that at
least 65 percent of a thrift institution's own
assets be devoted to home lending. It should
exclude a pass-through of loans originated and
sold to other investors, an activity freely engaged
in by a wide variety of institutions that have no
special protection under federal law as well as by
many commercial banks. If liquid assets are to
qualify, they should do so only in amounts
required by law. In addition, a thrift institution
519
should not be used to market the products of a
nonthrift or bank parent and vice versa.
CLARIFICATION
POWERS
OF STATE
BANKING
Second, the provisions on limiting state powers
to authorize new banking activities should be
extended and clarified. The bill now prevents
states from authorizing new powers for banks
that are not permitted under section 4 of the
Bank Holding Company Act unless these activities are confined to the authorizing state. On the
basis of recent developments it seems clear that
this limitation should be extended to include
activities authorized by states that are inconsistent with safe and sound banking. The Congress
has extensively reviewed the powers that should
be permitted to banks and their holding companies and has carefully balanced considerations
involving both fair competition and risk. We
believe that it is both unwise and dangerous to
the stability of the system to permit the expansion of powers that raise serious safety and
soundness considerations, particularly when the
primary motivation for the adoption of these
powers is parochial considerations of jobs and
revenues.
TRANSITION TO INTERSTATE
BANKING
Third, legislation adopted this year should also
go beyond approving regional arrangements, as
provided for in title IX of S. 2851, and address
the rules for interstate expansion. The present
situation of loophole exploitation and discriminatory regional arrangements is inherently unsatisfactory. Title IX only goes so far as to legitimize
regional arrangements for a period of five years.
These arrangements are satisfactory only as a
transition to a less discriminatory system of
interstate banking. New arrangements for interstate banking should also include provisions to
assure fair competition and should avoid undue
concentration of resources, elements that would
well be lost to the extent that interstate expansion was confined for an indefinite period to
regional arrangements.
520 Federal Reserve Bulletin • July 1985
DEFINITION OF BANK
Finally, I would like to emphasize one area in
which I believe a change should not be made. I
understand that proposals have been made by
others to undermine the definition of bank contained in S. 2851 by permitting nondepository
institutions—industrial firms, retail firms, securities and insurance firms—to enter the banking
business without being subject to the Bank Holding Company Act, provided that they have no
more than a limited portion of their assets in
commercial loans. This concept, now beguilingly
called the consumer or family bank, would clearly undercut the basic public policies sought by
closing the nonbank bank loophole.
Moreover, I believe that there is an important
defect in the bill's definition of "bank." S. 2851
now exempts from the definition of bank institutions that take demand deposits and are not
federally insured, so long as they hold no more
than 10 percent of their assets in commercial
loans. I have urged, and recent experience seems
to me to confirm my concerns, that all institu-
Statement by E. Gerald Corrigan, President,
Federal Reserve Bank of New York, before the
Subcommittee on Securities of the Committee on
Banking, Housing, and Urban Affairs, U.S. Senate, May 9, 1985.
I appreciate this opportunity to appear before
this subcommittee to offer my views and to
respond to your questions concerning recent
problems in the U.S. government securities market. While the circumstances and frequency of
these problems—some involving specific allegations of fraudulent activities that I consider to be
outrageous—are clearly disturbing, the market
as a whole continues to function effectively. Yet,
the cumulative weight of recent disturbances
raises some important questions about the structure and the functioning of the market. My
prepared statement consists of four sections: the
first outlines the structure of the government
securities market; the second reviews the role of
the Federal Reserve Bank of New York as it
relates to the market; the third seeks to identify
some common elements or traits in recent prob
tions that take transaction accounts (not just
demand deposits narrowly defined) and make
commercial loans and that are not covered by the
Savings and Loan Holding Company Act should
be covered by the Bank Holding Company Act.
For just these same reasons, I would urge that
the provisions of S. 2851, which allow bank
holding companies to own nonfederally insured
banks, be deleted from the bill.
I would also urge that the nonbank bank
grandfather provisions of S. 2851 be modified to
assure that grandfather status is not abused by
expansion of commercial lending or by geographic expansion.
Last year the Senate took a significant step
forward toward adopting the urgently needed
new framework of public policies for the conduct
of the banking and thrift businesses. Recent
events have demonstrated the continuing need
for final congressional action and I believe have
created the atmosphere in which this action can
be taken. I believe S. 2851 needs to be strengthened in the areas I have indicated and strongly
urge your early action.
•
lem situations in the market; and the fourth
contains some thoughts regarding the future operation of the market.
THE STRUCTURE OF THE
SECURITIES MARKET
GOVERNMENT
The fact that the market for U.S. government
securities is the largest, most efficient, and most
important securities market in the country and
the world is well documented and need not be
developed for this subcommittee. The market
consists of several broad categories of participants, starting, of course, with the U.S. government itself as the issuer of the securities through
its fiscal agents—the 12 Federal Reserve Banks.
In addition, and as detailed in the following
section, the Federal Reserve Bank of New
York—acting on behalf of the Federal Open
Market Committee—uses the day-to-day purchases and sales of government securities as the
primary instrument for the conduct of monetary
policy.
Statements to Congress
Private participants in the government securities market start with the so-called primary dealers in U.S. government securities. Firms are
designated as primary dealers by the Federal
Reserve Bank of New York based on a number
of criteria. These criteria are detailed in the
appendix to this statement. 1 Ten years ago there
were 25 primary dealers. This number has grown
to the present level of 36—15 of which are banks
or bank subsidiaries, 11 are broker-dealers subject to regulation by the Securities and Exchange
Commission (SEC), and 10 are otherwise "unregulated" at the federal level. The primary
dealers are the core group of market makers for
government debt in that they maintain two-way
markets for government securities and participate directly and actively in auctions of new
government debt. They serve as the essential
bridge between the Treasury and the vast domestic and international network of institutions and
individuals who are the ultimate holders of government debt.
Besides the primary dealers, there are a large
number of bank and nonbank "secondary" dealers in government securities. While the exact
number of secondary dealers is not known—in
part because there is no consensus definition of a
dealer and in part because a number of these
dealers are not registered with a federal agency—
published and other sources would suggest that
there may be as many as 400 to 500 firms. We
believe that the majority of these secondary
dealers are "regulated" in the sense that their
government securities dealer operations probably take place within an otherwise regulated
banking organization or within a broker-dealer
registered with the SEC. However, even with
some of these "regulated" firms, the government securities activities may, in fact, take place
in an affiliate or subsidiary that is not subject to
federal regulation. In addition, perhaps 100 or
more government securities dealers are wholly
unregulated—at least at the federal level.
These estimates of the number of secondary
dealers are based largely on published and other
reports of firms that label themselves dealers.
They, in turn, may have multiple subsidiaries or
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
521
affiliates. There also are many other major market participants such as pension funds and large
nonfinancial corporations that, by some definitions, could qualify as government securities
dealers. Thus, the number of firms active in the
government securities market is large and would
be still larger if the population were defined to
include the firms—and their affiliates—that specialize in dealing in government-backed or agency securities. Indeed, because the "agency"
security market includes a wide range of instruments and issuers—some of which are backed by
the full faith and credit of the U.S. government
and some of which are not—additional questions
and issues may arise in this area.
THE ROLE OF THE FEDERAL RESERVE
OF NEW YORK
BANK
The Federal Reserve Bank of New York's direct
interest in the operation of the government securities market grows out of the fact that day-today purchases and sales of government securities
are the primary vehicle used by the Federal
Reserve in seeking to influence the growth of
money and credit. During 1984, for example, the
aggregate value of such transactions conducted
by the Federal Reserve with the primary dealers
was $209 billion. The Federal Reserve also acts
on behalf of approximately 150 foreign central
banks and other foreign official institutions in the
market. Transactions conducted by the Federal
Reserve on behalf of these institutions in 1984
amounted to $211 billion. All Federal Reserve
transactions in government securities—whether
for its own account or for the account of foreign
official institutions—are conducted only with the
primary dealers.
The origins of the Federal Reserve Bank of
New York's role in providing a form of surveillance over the primary dealers were, in part, a
straightforward business proposition. Given the
enormous volume of public funds associated
with the Federal Reserve's transactions in the
marketplace, it was quite natural that in conducting these transactions the New York Federal
Reserve would be guided by one of the oldest
precepts in trading—"know your counterparty."
Of course, our interest in the workings of the
market goes beyond our strict business relation-
522 Federal Reserve Bulletin • July 1985
ships with the primary dealers. Indeed, our concern stems from the fact that the government
securities market is the market that we use for
monetary policy implementation and which the
Treasury uses for financing the federal government. Over time, and in recognition of the larger
public interest considerations associated with the
operation of the government market, the New
York Federal Reserve's role in the market
evolved into an informal watchdog function that
loosely incorporated some elements of traditional regulatory functions.
This evolution of the Federal Reserve's interest in the government securities market took
place, however, in a framework in which the
Federal Reserve had and continues to have no
express statutory authority. At the same time,
the sheer growth of the debt, as well as advances
in communications and technology, have made it
possible for hundreds of new firms to enter the
government securities business and operate nationwide from virtually any location in the
country.
To summarize, the Federal Reserve's initial
interest in the safe functioning of the government
securities market was one that grew out of the
time-honored tradition of knowing those with
whom you do business. Over time, that interest
gradually assumed some of the trappings of a
more generalized but essentially voluntary system of oversight aimed at the primary dealers.
That system of general surveillance over the
primary dealers has, in my judgment, served the
Treasury, the Federal Reserve, and the public
well for a long period of time.
More recently, and reflecting in part changes
in market structure, the Federal Reserve stepped
up its efforts to learn more about the activities of
some of the larger secondary dealers in government securities. This effort, also entirely voluntary in nature, entailed a very limited form of
voluntary monthly reporting and efforts aimed at
establishing voluntary capital adequacy standards.
The current arrangements, especially as extended to the secondary dealers, may not be
adequate for the future. For example, by having
an informal monitoring role, we may create an
appearance of providing much greater protection
from abuse than is justified. Moreover, given our
present role, we have to be careful in dealing
with suspected problems—indeed there may be
circumstances in which efforts to move in on a
situation could create difficulty where none had
existed, or could make a large problem out of a
small one. Some danger of this type probably
exists with any regulatory function, but it may be
especially acute in the case of the government
securities market, given the intricate interdependence of that market with so many other parts of
the financial structure. Since there can never be
a fail-safe system of surveillance or even of
regulation, I believe that recognition of these
problems must be central to our thinking as we
seek ways to guard against abuses while at the
same time seek to preserve the strength and
dynamism of the market.
RECENT PROBLEM
SITUATIONS
In considering the appropriate public policy response to the recent problem situations involving
government securities dealers, it is useful to seek
to identify some common characteristics associated with various episodes—recognizing, of
course, that each situation has had its own
distinct traits. Indeed, because of the unique
traits of each case, it is risky to attempt generalization since each generalization will have its
exceptions. Yet, with this qualification firmly in
mind, a close inspection of recent problem situations does suggest several areas of commonality.
Among these areas are the following.
Misleading Financial Statements. In a number
of episodes, the firm in question has issued
apparently false or misleading financial statements, some of which were "audited" and some
of which were not. More specifically, it would
appear that some individual cases entail allegations of outright fraud of a nature that can only
be described as outrageous.
Multiple Affiliated Companies. In several instances, problems in one company were masked
by relationships, and at times complex transactions, with affiliated companies. Indeed, in some
instances it would appear that some investors
may not have fully understood which entity was
the counterparty to transactions.
The Use of Working Capital Generated by
Matched-Book Operations. In the jargon of the
Statements to Congress
trade, a matched book is the holding by a dealer
of an equal and offsetting—or "matched"—
amount of reverse repurchase agreements and
repurchase agreements (RPs). Matched-book operations are central to the workings of the market
because they provide a convenient vehicle for
dealers to serve as efficient intermediaries between those seeking to invest in government
securities and those seeking to use holdings of
government securities to gain liquidity. In theory, a matched-book operation—even one of
considerable size—should be a very low-risk
activity to the dealer and to its customers. In
practice, however, theory may not always apply.
For example, if the amount of the book is
"matched," but not the maturities, the overall
position can include somewhat greater risk.
Moreover, and more importantly for these purposes, a matched book, by its very nature, can
produce working capital for the dealer through
the excess margin that can be produced during
the term of certain RP transactions. In a number
of the problem situations it appears that the
dealers in question used working capital generated by matched-book operations to engage in
trading for their own account and in the process
incurred losses or attempted to use such working
capital to make up losses.
Improper Control Arrangements. In a number
of instances, customers of problem dealers incurred losses because the customers failed both
to know their counterparty and to secure control
of the securities underlying the RP transaction
with the problem dealer. The failure to know the
counterparty—its financial status and its management—or to secure control of the securities—
whether caused by carelessness or misrepresentation or both—not only ultimately resulted in
the loss to the customer but also had the effect of
providing funds to the problem dealer, thereby
permitting the dealer to continue operations in a
way that may have disguised its true financial
condition.
The Drive for Earnings. In looking at the list of
harmed customers of problem dealers it is easy
to conclude that some, if not many, incurred
losses because they were naive about the nature
of the transactions. In a proximate sense, the
conclusion may be warranted. But, in a more
523
fundamental sense, some of these customers
may have been easy targets because they—out of
pressures to generate interest income—were all
too willing to be seduced by the prospect of a
"special deal." Unfortunately, for a struggling
thrift institution or a cash-pressed municipality,
these temptations can be great, especially when
the transaction in question involves a "risk free"
Treasury security. The point, of course, is that
the security may be risk-free while the transaction can be quite risky.
As mentioned earlier, these factors are not
common to all problem situations that we have
seen in the government securities market nor do
they exhaust the possible list of causes or probable causes of the difficulties that have occurred.
For example, they do not include the accrued
interest problem that was a key factor in one
case, nor do they include any possible connections among individuals associated with one or
more of the problem dealers, nor the possible
role that "money brokers" may have played in
one or more cases. What they do suggest, however, is that the problems we have seen are
multifaceted and entail factors ranging from investor attitudes and motivations on the one hand
to gross misrepresentation and alleged wholesale
fraud on the other, none of which is necessarily
easy to eliminate by regulation.
LOOKING TO THE FUTURE
Recent events have brought into even sharper
focus the question of whether part or all of the
government securities market should be subject
to some form of formal regulation backed up by
explicit statutory authority. Indeed, several bills
have been introduced in the Senate or the House
to that end. Moreover, many market participants
and the Public Securities Association are now on
record as favoring some form of regulation. All
of this is understandable since the cumulative
effect of the recent string of failures of government securities dealers has been, to put it mildly,
unsettling.
Yet, as we seek a higher level of assurance that
the problems of the past will not be repeated, we
must proceed with caution. In the case of the
government securities market, the costs of poorly conceived or poorly executed regulation could
524 Federal Reserve Bulletin • July 1985
be enormous. For example, if regulation unnecessarily affected the liquidity and the efficiency
of the market in an adverse way to the extent of
raising the average yield on Treasury securities
outstanding only 10 basis points, the cost to the
Treasury and ultimately to the taxpayer would
mount to a staggering $1.7 billion per year at
current levels of Treasury debt. On the other
hand it is, of course, possible that uncertainties
and instabilities growing out of further problems
could have an even greater impact on the market.
Reflecting these considerations the Federal
Reserve, the Treasury, and the SEC are working
diligently to arrive at a position on whether
legislation is needed and, if so, what form such
legislation should take. The interagency position
is expected to be communicated to the Congress
no later than mid-June. Those interagency deliberations are, in the first instance, aimed at further fact-finding and, in the second, at a review
of various alternative approaches to regulation of
the government securities market. A key date in
that process will be May 20, the deadline for the
submission of responses to the SEC's request for
public comment on the oversight of the government securities market.
In tandem with the interagency review, we at
the Federal Reserve Bank of New York are
moving ahead on several fronts including the
following: (1) the implementation of the system
of voluntary capital guidelines that are aimed
largely at the "unregulated" secondary dealer
community ; (2) an expanded public education
program targeted at certain classes of investors
in RP-type transactions; (3) stepped-up bank
supervisory efforts regarding the involvement in
RP-type transactions by depository institutions;
and (4) the expansion of the scope and intensity
of our on-site inspection program for primary
dealers. In this regard, I had also hoped that
there might be some operational enhancements
to the book-entry system for government securities that might prove useful in improving controls
surrounding RP-type transactions. However,
based on our preliminary analysis, it is clear that
any such major enhancements will not come
quickly or cheaply, if at all.
In closing, allow me to stress four points.
First, I share the deep concerns expressed in the
Congress and elsewhere about the recent problems in the government securities markets. Second, despite these problems, the market as a
whole continues to function effectively in fair
weather or foul. Third, the issues involved in the
question of whether the government securities
market should be regulated, and if so the appropriate form of such regulation, are exceedingly
complex. Finally, if it appears that regulation is.
required, we are challenged to do it in a way that
introduces minimal inefficiencies and costs into a
market that is so vital to our overall financial and
economic well-being. We look forward to working closely with the Congress in seeking solutions to these difficult issues.
•
Statement by E. Gerald Corrigan, President,
Federal Reserve Bank of New York, before the
Subcommittee on Commerce, Consumer, and
Monetary Affairs of the Committee on Government Operations, U.S. House of Representatives, May 15, 1985.
ing, they have not had any materially adverse
effects on the functioning of the market as a
whole, the conduct of monetary policy, or Treasury financing activities. However, we have
seen, and are seeing, a fair amount of repositioning in the market as market participants reevaluate their positions and their relationships in the
wake of these problems.
The Federal Reserve Bank of New York's
direct interest in the operation of the government
securities market grows out of the fact that dayto-day purchases and sales of government securities are the primary vehicle used by the Federal
Reserve in seeking to influence the growth of
money and credit. During 1984, for example, the
aggregate value of such transactions conducted
I appreciate the opportunity to appear before this
subcommittee to offer my views and to respond
to your questions concerning recent problems in
the U.S. government securities market. Within
the past few months six government securities
firms have failed and in the process have inflicted
losses on a number of market participants including banks, thrift institutions, and municipalities.
While these events are, to put it mildly, disturb
Statements to Congress
by the Federal Reserve with the primary dealers
was $209 billion. The Federal Reserve also acts
on behalf of approximately 150 foreign central
banks and other foreign official institutions in the
market. Transactions conducted by the Federal
Reserve on behalf of these institutions amounted
to $211 billion in 1984. All Federal Reserve
transactions in government securities—whether
for its own account or for the account of foreign
official institutions—are conducted only with the
primary dealers.
The origins of the Federal Reserve Bank of
New York's role in providing a form of surveillance over the primary dealers were, in part, a
straightforward business proposition. Given the
enormous volume of public funds associated
with the Federal Reserve's transactions in the
marketplace, it was quite natural that in conducting these transactions the New York Federal
Reserve would be guided by one of the oldest
precepts in trading—"know your counterparty."
Of course, our interest in the workings of the
market goes beyond our strict business relationships with the primary dealers. Indeed, our concern stems from the fact that the government
securities market is the market that we use for
monetary policy implementation and which the
Treasury uses for financing the federal government. Over time, and in recognition of the larger
public interest considerations associated with the
operation of the government market, the New
York Federal Reserve's role in the market has
evolved into an informal watchdog function that
loosely incorporated some elements of traditional regulatory functions.
This evolution of the Federal Reserve's interest in the government securities market took
place, however, in a framework in which the
Federal Reserve had and continues to have, no
express statutory authority. At the same time,
the sheer growth of the debt as well as advances
in communications and technology have made it
possible for hundreds of new firms to enter the
government securities business and to operate
nationwide from virtually any location in the
country.
To summarize, the Federal Reserve's initial
interest in the safe functioning of the government
securities market was one that grew out of the
time-honored tradition of knowing those with
whom you do business. Over time, that interest
525
gradually took on some of the trappings of a
more generalized, but essentially voluntary, system of oversight aimed at the primary dealers.
That system of general surveillance over the
primary dealers has, in my judgment, served the
Treasury, the Federal Reserve, and the public
well for a long period of time.
More recently, and reflecting in part changes
in market structure, the Federal Reserve has
stepped up its efforts to learn more about the
activities of some of the larger secondary dealers
in government securities. This effort—also entirely voluntary in nature—has entailed a very
limited form of voluntary monthly reporting and
efforts aimed at establishing voluntary capital
adequacy standards.
At the time of its demise, E.S.M. Government
Securities, Inc. (ESM) was one of the approximately 30 firms filing monthly reports with the
Federal Reserve Bank of New York and would
have been one of the "unregulated" firms to
which the capital guidelines are targeted. Bevill,
Bresler and Schulman, Inc. (BBS), a brokerdealer registered with the Securities and Exchange Commission (SEC), was also a monthly
reporting dealer. However, the reports for BBS
did not reflect the activities of two or more
related firms when the losses that ultimately gave
rise to the demise of BBS occurred. While information supplied by ESM was false and information supplied by BBS may have been false or
misleading, the information as reported for the
entities that it covered suggested that both firms
would have met the capital standards.
The current arrangements, especially as extended to the secondary dealers, may not be
adequate for the future. For example, by having
an informal monitoring role, we may create an
appearance of providing much greater protection
from abuse than is justified. Moreover, given our
present role, we have to be careful in dealing
with suspected problems—indeed there may be
circumstances in which efforts to move in on a
situation could create difficulty where none had
existed, or could make a large problem out of a
small one. Some danger of this type probably
exists with any regulatory function, but it may be
especially acute in the case of the government
securities market, given the intricate interdependence of that market with so many other parts of
the financial structure. Since there can never be
526 Federal Reserve Bulletin • July 1985
a fail-safe system of surveillance or even of
regulation, I believe that recognition of these
problems must be central to our thinking as we
seek ways to guard against abuses while at the
same time seek to preserve the strength and
dynamism of the market.
RECENT PROBLEM
SITUATIONS
In considering the appropriate public policy response to the recent problem situations involving
government securities dealers, it is useful to seek
to identify some common characteristics associated with various episodes—recognizing, of
course, that each situation has had its own
distinct traits. Indeed, because of the unique
traits of each case, it is risky to attempt generalization since each generalization will have its
exceptions. Yet, with this qualification firmly in
mind, a close inspection of recent problem situations does suggest several areas of commonality.
Among these areas are the following.
Misleading Financial Statements. In a number
of episodes, the firm in question has issued
apparently false or misleading financial statements, some of which were "audited" and some
of which were not. More specifically, it would
appear that some individual cases entail allegations of outright fraud of a nature that can only
be described as outrageous.
Multiple Affiliated Companies. In several instances, problems in one company were masked
by relationships, and at times complex transactions, with affiliated companies. Indeed, in some
instances it would appear that some investors
may not have fully understood which entity was
the counterparty to transactions.
The Use of Working Capital Generated by
Matched-Book Operations. In the jargon of the
trade, a matched book is the holding by a dealer
of an equal and offsetting—or "matched"—
amount of reverse repurchase agreements and
repurchase agreements (RPs). Matched-book operations are central to the workings of the market
because they provide a convenient vehicle for
dealers to serve as efficient intermediaries between those seeking to invest in government
securities and those seeking to use holdings of
government securities to gain liquidity. In theory, a matched-book operation—even one of
considerable size—should be a very low-risk
activity to the dealer and to its customers. In
practice, however, theory may not always apply.
For example, if the amount of the book is
"matched," but not the maturities, the overall
position can include somewhat greater risk.
Moreover, and more importantly for these purposes, a matched book, by its very nature, can
produce working capital for the dealer through
the excess margin that can be produced during
the term of certain RP transactions. In a number
of the problem situations it appears that the
dealers in question used working capital generated by matched-book operations to engage in
trading for their own account and in the process
incurred losses or attempted to use such working
capital to make up losses.
Improper Control Arrangements. In a number
of instances, customers of problem dealers incurred losses because the customers failed both
to know their counterparty and to secure control
of the securities underlying the RP transaction
with the problem dealer. The failure to know the
counterparty—its financial status and its management—or to secure control of the securities—
whether caused by carelessness or misrepresentation or both—not only ultimately resulted in
the loss to the customer but also had the effect of
providing funds to the problem dealer, thereby
permitting the dealer to continue operations in a
way that may have disguised its true financial
condition.
The Drive for Earnings. In looking at the list of
harmed customers of problem dealers it is easy
to conclude that some, if not many, incurred
losses because they were naive about the nature
of the transactions. In a proximate sense, the
conclusion may be warranted. But, in a more
fundamental sense, some of these customers
may have been easy targets because they—out of
pressures to generate interest income—were all
too willing to be seduced by the prospect of a
"special deal." Unfortunately, for a struggling
thrift institution or a cash-pressed municipality,
these temptations can be great, especially when
the transaction in question involves a "risk free"
Treasury security. The point, of course, is that
Statements to Congress
the security may be risk-free while the transaction can be quite risky.
As mentioned earlier, these factors are not
common to all problem situations that we have
seen in the government securities market nor do
they exhaust the possible list of causes or probable causes of the difficulties that have occurred.
For example, they do not include the accrued
interest problem that was a key factor in one
case, nor do they include any possible connections among individuals associated with one or
more of the problem dealers, nor the possible
role that "money brokers" may have played in
one or more cases. What they do suggest, however, is that the problems we have seen are
multifaceted and entail factors ranging from investor attitudes and motivations on the one hand
to gross misrepresentation and alleged wholesale
fraud on the other, none of which is necessarily
easy to eliminate by regulation.
In considering the harm that was inflicted on
depository institutions by the failure of the government securities dealers, two sets of circumstances stand out. First, there have been a few
instances in which depository institutions provided clearly excessive margins to dealers and in
the process became large, unsecured creditors.
While the circumstances surrounding these particular cases appear to be extraordinary, a case
can be made that margin that is associated with
RP-type transactions—indeed all forms of unsecured credit exposure arising from RP-type
transactions—should be made subject to lending
limits.
The second, and more generalized, phenomenon that stands out has been the failure of
depository institutions to secure control of the
collateral associated with RP-type transactions.
Remedies to this problem do not come easily
because market practices vary appreciably, depending on the specific parties to a particular
transaction and on the type of transaction itself.
Reflecting these considerations, as well as the
presumption of prudence on the part of depository institutions, the federal bank regulatory
agencies have relied on guidelines rather than on
formal regulations insofar as these types of transactions are concerned. In general, that approach
still seems apt to me although a case can be made
that all federally insured depository institutions
should have a written agreement governing all of
527
its RP transactions that would include appropriate provision for securing control of collateral. It
may be particularly appropriate for smaller institutions to insist that such an agreement provide
that collateral be held by a third party or by the
institution itself.
Given appropriate attention to margin and to
securing control of collateral, transactions in
government securities—no matter what their
specific nature—are low-risk and safe and sound.
But, like any transaction, they require adequate
controls and they presume that the institution in
question is knowledgeable about the management and the financial condition of each of its
counterparties to such transactions. The case for
that essential discipline is no less compelling
because the instrument in question happens to be
a U.S. government security.
Aside from these specific issues, the recent
problems in the government securities markets
have forcefully raised the question of whether
the market should be subject to some formal
regulatory apparatus backed up by explicit statutory authority. As the subcommittee knows, the
Federal Reserve, the Treasury, and the SEC are
working diligently to arrive at a position on
whether legislation is needed and, if so, what
form such legislation should take. The interagency position is expected to be communicated to
the Congress no later than mid-June. Those
interagency deliberations are, in the first instance, aimed at further fact-finding and, in the
second, at a review of various alternative approaches to regulation of the government securities market. A key date in that process will be
May 20, the deadline for the submission of
responses to the SEC's request for public comment on the oversight of the government securities market.
In tandem with the interagency review, we at
the Federal Reserve Bank of New York are
moving ahead on several fronts including the
following: (1) the implementation of the system
of voluntary capital guidelines that are aimed
largely at the "unregulated" secondary dealer
community; (2) an expanded public education
program targeted at certain classes of investors
in RP-type transactions; (3) stepped-up bank
supervisory efforts regarding the involvement in
RP-type transactions by depository institutions;
and (4) the expansion of the scope and intensity
528 Federal Reserve Bulletin • July 1985
of our on-site inspection program for primary
dealers.
In closing, allow me to stress four points.
First, I share the deep concerns expressed in the
Congress and elsewhere about the recent problems in the government securities markets. Second, despite these problems, the market as a
whole continues to function effectively in fair
weather or foul. Third, the issues involved in the
question of whether the government securities
market should be regulated, and if so the appropriate form of such regulation, are exceedingly
complex. Finally, if it appears that regulation is
required, we are challenged to do it in a way that
introduces minimal inefficiencies and costs into a
market that is so vital to our overall financial and
economic well-being. We look forward to working closely with the Congress in seeking solutions to these difficult issues.
•
Statement by William Taylor, Director, Division
of Banking Supervision and Regulation, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Commerce, Consumer, and Monetary Affairs of the Committee
on Government Operations, U.S. House of Representatives, May 15, 1985.
tions. Excerpts from Federal Reserve documents
and manuals containing the System's detailed
guidelines for evaluating the activities of interest
to the committee have been provided to your
committee's staff; and, for your convenience, the
most relevant portions of this information have
also been attached to my statement. 1 Other information requested in your letter to Chairman
Volcker dated April 29, 1985, has also been
forwarded to your staff, or is contained in the
appendixes to this statement.
At the outset, it may be helpful to clarify the
Federal Reserve's supervisory responsibilities
and activities with respect to commercial banking organizations. The Federal Reserve has primary responsibility at the federal level for supervising and for examining state-chartered banks
that are members of the Federal Reserve System
and for examining all bank holding companies.
The System is charged by the Congress to ensure
that these institutions are operated in a safe and
sound manner and to determine their compliance
with U.S. banking laws and regulations. The
Federal Reserve, together with the other banking
agencies, discharges its safety and soundness
and compliance responsibilities largely through
the conduct of on-site supervisory examinations.
While national banks are by law members of the
Federal Reserve System, these institutions are
examined by the Office of the Comptroller of the
Currency. In carrying out its oversight responsibilities for bank holding companies and their
subsidiary banks, the Federal Reserve, as directed by the Congress in the Bank Holding Company Act, relies upon examinations of national
I appreciate the opportunity to appear before this
committee to discuss the Federal Reserve's supervisory oversight of certain transactions between banks and government securities dealers
that involve the transfer of, or a security interest
in, U.S. government securities. Commercial
banking organizations are active participants in
our government securities market—both as investors and as traders and dealers. Therefore,
the integrity, the efficiency, and the smooth
functioning of the government securities market
are important factors bearing on the safety and
the stability of our banking and financial system.
The fact that the full faith and credit of the U.S.
government stands behind each Treasury security means, of course, that direct investments in
such securities are free of credit risk. However,
recent events underscore the fact that loans and
other transactions collateralized by or based
upon government securities can entail risks, especially if the parties involved do not follow
prudent practices in evaluating the financial condition of the counterparty, in avoiding undue
concentration of exposure, in monitoring collateral values, and, most importantly, in requiring
tight control over underlying collateral.
My remarks will address prudent banking
practices regarding transactions collateralized by
securities, as well as the Federal Reserve's
guidelines and procedures for examining and
supervising bank involvement in such transac
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
Statements to Congress
banks conducted by the Office of the Comptroller of the Currency and examinations of state
nonmember banks conducted by the Federal
Deposit Insurance Corporation. For these reasons, my remarks will address the bank supervisory activities of the Federal Reserve and the
involvement of state member banks in repurchase transactions and in related securities activities.
The on-site examination of a banking organization conducted by the Federal Reserve generally
involves the following: (1) an appraisal of the
soundness of the institution's loans and investments; (2) an evaluation of internal operations,
policies, and management; (3) an analysis of key
financial factors such as capital, earnings, and
liquidity; (4) a review for compliance with banking laws and regulations; (5) an evaluation of the
oversight provided by the bank's board of directors; and (6) an overall determination of the
institution's solvency. As this brief summary
suggests, examiners endeavor to evaluate both
the financial condition of the banking organization at the time of the examination, as well as the
organization's internal systems for monitoring
and controlling, on an ongoing basis, the type
and the level of risk to which it may become
exposed in the course of its operations. Consequently, examination procedures are designed to
encourage banking organizations to recognize all
forms of potential risk and to establish effective
credit review and approval procedures. Prudent
banking practice also requires the adoption of
policies that preclude undue concentrations of
exposure to any one or related borrowers, the
establishment of procedures to monitor the value
and assure the availability of collateral, and the
implementation of reliable reporting systems and
controls aimed at safeguarding assets and at
ensuring adherence to internal policies and procedures. Besides evaluating a bank's loan and
investment portfolios and the policies and procedures for managing these portfolios, examiners
also review the operations of those banks that
are dealing in securities or that are engaged in
securities-clearing activities.
Much attention has been drawn in recent
weeks to the involvement of depository institutions in repurchase transactions and reverse repurchase transactions. In these transactions,
money market instruments or securities, usually
529
U.S. government or federal agency securities,
are purchased by a bank under an agreement to
resell (an asset) or sold by a bank under an
agreement to repurchase (a liability). The purchase of securities under agreement to resell is
equivalent, for supervisory purposes, to a shortterm loan or an investment secured by the underlying collateral. Banks engage in such money
market transactions in the process of managing
their own investment portfolios or in connection
with their dealer activities. Often, the counterparty to this type of transaction is a security
dealer who is seeking funds to finance his securities portfolio. The sale of securities under agreement to repurchase, on the other hand, constitutes, for supervisory purposes, a form of shortterm secured borrowing that can be used as an
alternate source of funds to finance the bank's
securities holdings or other money market investments. Normally, in a repurchase transaction, the party receiving funds sells (that is,
provides as collateral) securities with a market
value that marginally exceeds the amount of cash
received. This transaction provides a measure of
protection against price variation for the lender
of funds. Control of the securities underlying
repurchase transactions is, therefore, critical to
protect the party that has supplied cash in the
event that the counterparty is not able to repay
the cash under the terms of the repurchase
agreement.
There are potential risks to banking organizations on "both sides" of a repurchase transaction. The purchase of securities under agreement
to resell in many respects entails risks analogous
to those risks associated with any loan or extension of credit. Generally, in these transactions,
banks advance cash to the counterparty in return
for securities, subject to an agreement that the
counterparty will repurchase the securities from
the bank for cash at a specified date. In such
transactions, the bank is subject to a number of
potential risks. First, the bank faces credit risk in
the event that the counterparty's financial condition deteriorates and the counterparty is unable
to repurchase the securities. If this development
should occur, the bank must look to the underlying collateral to protect its position. A second
risk, therefore, relates to the market value of the
underlying security. If the market value declines
significantly, the bank could be exposed to loss
530 Federal Reserve Bulletin • July 1985
in an amount approximately equal to the difference between the book value of the repurchase
transaction and the value of the collateral. A final
risk derives from the possibility that the bank has
not obtained control over the underlying securities. If a party has not taken physical possession
of the underlying collateral or has not taken steps
to ensure that the securities purchased are delivered to a third-party agent for the lender, it may
find that its entire investment is exposed to loss if
control of the collateral cannot be reestablished
because of fraud or mismanagement of the counterparty.
Prudent banking practices and the Federal
Reserve's examination procedures address each
of the potential risks outlined above. In reviewing the bank's investment portfolio as well as its
dealer activities, the Federal Reserve urges
banks to develop written policies that require
adequate credit review of counterparties in repurchase transactions; that encourage risk diversification by establishing limits on certain types
of transactions and exposures to individual or
related counterparties; and that encourage the
proper monitoring and control of the underlying
collateral. Banks are expected to perform full
and complete financial analyses of counterparties, and Federal Reserve examination guidelines
state that funds generally should not be advanced
until specified types of collateral are delivered
into the bank's custody or to an independent
safekeeping agent. In considering the adequacy
of collateral arrangements, some flexibility must
be maintained that takes into account the
strength and creditworthiness of the counterparty, the type of instrument involved in the
transaction, and the terms of the transaction.
Generally, as a matter of sound practice, confirmation of the transfer of the securities to an
independent safekeeping agent should be received from the agent or the clearing bank, rather
than from the counterparty to the transaction.
Moreover, counterparties should be required to
maintain sufficient collateral over the life of the
transaction, and agreements with counterparties
should permit the bank to make margin calls and
to improve its collateral position if the market
value of collateral begins to erode. Federal Reserve examiners attempt to determine that banks
have appropriate policies and procedures in
place to address these concerns, that internal
reporting and control mechanisms have been
established to assure compliance with the policies, and that an adequate degree of supervision
is provided by senior management and by the
board of directors.
While an on-site examination is not an audit
and examiners cannot and do not review every
bank transaction, Federal Reserve examination
procedures do provide audit guidelines for test
checking, under appropriate circumstances, a
bank's securities safekeeping practices. For example, if internal operating policies and procedures are found to be inadequate, examiners may
verify physical possession of securities or, if
securities are not held by the bank, compare the
bank's records to safekeeping receipts provided
by the independent, third-party trustee. In general, however, the main emphasis is on determining the adequacy of a bank's internal policies and
procedures for administering its collateral position and its adherence to these policies and
procedures.
Besides investing funds through the purchase
of securities under agreement to resell, banks
may also, as I have noted previously, raise funds
by engaging in the sale of securities under agreement to repurchase. Through this type of transaction, banks can obtain the use of relatively
low-cost, short-term funds to finance their holdings of securities or other money market instruments. In return for the funds received, banks
provide collateral, generally in the form of securities, to the counterparty who in this instance is,
in effect, the lender of funds to the bank.
Despite the fact that this transaction is the
functional equivalent, for supervisory purposes,
of a short-term borrowing, a bank may nevertheless be exposed to some credit risk. The seller of
the securities (that is, the borrower of cash)
normally provides, for collateral purposes, securities with a market value that exceeds the
amount of cash received. This margin provides
protection to the party that is advancing cash.
Banks or other institutions that sell securities
under agreement to repurchase could, therefore,
be exposed to the risk of loss to the extent that
the value of the underlying securities that they
have provided to the seller exceeds the amount
of their repurchase obligation and the seller is
unable to return the securities as agreed. The
excess margin in this instance is equivalent in
Statements to Congress
terms of risk to an unsecured loan by the party
putting up the collateral (that is, the borrower of
cash) to the party providing the funds (that is, the
party taking possession of the collateral). In light
of these concerns, the Federal Reserve sent a
letter to all state member banks in 1982, that,
among other things, underscored the potential
risks associated with the sale of securities under
agreement to repurchase and urged banks to
analyze carefully the financial condition of those
institutions and brokers with whom they engage
in repurchase transactions.
Besides credit risks, repurchase transactions,
because they constitute short-term investments
or sources of funds, also entail potential liquidity and funding risks. For this reason, Federal
Reserve examiners encourage banks to evaluate
the interest rate exposure at various maturity
levels resulting from the use of short-term funds,
to formulate funding policies that take into account the institutions' entire asset-liability mix,
and to control the excessive mismatches or
"gaps" between the maturities of assets and
liabilities.
Within recent weeks, the Federal Reserve,
together with the other federal depository institution regulatory agencies and under the auspices
of the Examination Council, adopted a formal
supervisory policy pertaining to the lending of
securities. While this policy was principally directed to the lending of securities from the financial institution's own account or the lending by
financial institutions of their customers' securities held in custody, such lending is to some
extent analogous to repurchase transactions, and
the policy reiterates prudential concerns and
guidelines that are also applicable in some respects to repurchase agreements. These guidelines will be used in the examination of all banks
and holding companies that are engaged in securities lending. In general, the guidelines require
formal credit analyses and approvals of prospective borrowers; full collateralization and daily
mark-to-market collateral valuation procedures;
establishment of credit concentration limits;
proper recordkeeping procedures; and appropriate collateral management practices. The guidelines state that securities should not be loaned
unless collateral has been received simultaneously with the loan and that delivery of collateral to
the lender or to an independent third-party trust
531
ee would constitute a minimum step toward
adequately securing the lender's position.
Besides investment and dealer activities involving government securities, some banks engage in government securities clearance activities. These activities involve some of the same
risks outlined above and, therefore, are reviewed
by Federal Reserve examiners during on-site
examinations. Examiners evaluate the bank's
policies and procedures for administering this
activity and test check the systems and controls
to ensure compliance with the policies and procedures. In general, banks are expected to have
written policies that require reconciliation of the
bank's securities position with the Federal Reserve Bank and the close scrutiny by senior
officials of the failure of any party to deliver
securities to the bank as planned. Since clearance activities involve the lending against securities as collateral, clearing banks are also expected to screen new accounts for the purpose of
credit evaluation and to assure the receipt and
the review on an ongoing basis of current financial statements. Prudent banking practice requires that lending limits be established for each
customer and that a daily review of collateral be
conducted to assure the maintenance of proper
margins and the acquisition of additional margin,
if necessary, to protect the bank in the event of a
customer default.
Based upon the information that is available to
us at present, only four state member banks had
open positions with the recently failed government securities dealers referred to in your letter
of April 29, 1985. Two of these institutions had
sufficient collateral to cover their exposure, and,
therefore, did not experience any losses as a
result of these transactions. The two other institutions experienced some losses—in one case
amounting to less than one-tenth of 1 percent of
capital; in the other case amounting to less than 5
percent of capital.
While Federal Reserve enforcement actions
often address weaknesses in, or the absence of,
adequate loan or investment policies, none of the
formal enforcement actions that have been undertaken by the Federal Reserve since 1980 have
been based upon an institution's U.S. government securities dealer activities; although one
action was directed toward municipal securities
dealer activities. Three supervisory actions tak-
532 Federal Reserve Bulletin • July 1985
en since 1980 addressed directly or indirectly the
securities clearance activities of institutions supervised by the Federal Reserve. In general,
these actions have addressed systems and controls for recordkeeping and internal accounting,
the development of expanded internal audit programs, the preparation of internal operating and
procedures manuals, violations of certain banking laws and regulations, and capital adequacy.
While I believe that our examination and supervisory procedures are generally satisfactory,
it is, of course, impossible to guarantee that
financial institutions will not experience losses as
a result of their participation in repurchase transactions or securities lending and trading activities. Examinations are only conducted periodically, and examiners cannot evaluate each
individual securities transaction. Consequently,
this underscores the importance to financial institutions of having in place effective internal
policies and operating controls for monitoring
and controlling risk and protecting collateral
positions, as well as the importance of effective
internal and external audits designed to detect
operational deficiencies, weak controls, and departures from sound banking practices.
Ultimately, no system of supervision can prevent fraud or deceptive practices on the part of
market participants, nor can the supervisory
process, by its very nature, fully prevent unwise
management decisions or conscious decisions to
assume excessive risks. Nonetheless, the events
of the past several months serve to emphasize
the importance of sound operational controls and
policies designed to monitor and control risktaking by financial institutions. In light of these
events, the Federal Reserve intends to review its
supervisory policies and procedures with respect
to repurchase transactions and dealer and clearing activities. We believe that it is the responsibility of both the supervisors and the managers of
financial institutions to ensure that proper systems are in place to control exposure and to
minimize the risk of loss.
•
533
Announcements
CHANGE IN THE DISCOUNT
RATE
The Federal Reserve Board approved a reduction in the discount rate from 8 percent to IVi
percent, effective May 20, 1985. The discount
rate is the interest rate that is charged depository
institutions when they borrow from their District
Federal Reserve Banks.
The action was taken against the background
of relatively unchanged output for some time in
the industrial sector of the economy stemming
heavily from rising imports and a strong dollar.
Price pressures, while clearly a continuing concern in some areas, appear to remain relatively
well contained in goods-producing sectors of the
economy, and sensitive commodity prices are
generally at the lowest levels in about two years.
Growth of the monetary aggregates has slowed
appreciably, although Ml has remained somewhat above the path implied by the annual target.
In this setting, a reduction in the discount rate
consistent with the declining trend in market
interest rates over recent weeks appears appropriate.
In making the change, the Board voted on
requests submitted by the Federal Reserve
Banks of Boston, New York, Richmond, Atlanta, Chicago, Minneapolis, Kansas City, and Dallas.
(Subsequently the Board approved similar actions by the directors of the Federal Reserve
Banks of Cleveland, St. Louis, and San Francisco, effective May 21, and of Philadelphia, effective May 24.)
MEETING OF CONSUMER
COUNCIL
ADVISORY
The Federal Reserve Board announced that its
Consumer Advisory Council met on June 20 and
21 in sessions open to the public.
The council's function is to advise the Board
on the exercise of the Board's responsibilities
under the Consumer Credit Protection Act and
on other matters on which the Board seeks its
advice.
POLICY ON LARGE-DOLLAR
WIRE TRANSFER SYSTEMS
The Federal Reserve Board has issued a statement of its policy to control and reduce the risks
to depository institutions participating in largedollar wire transfer systems. The policy will
become effective March 27, 1986.
The policy calls on private networks and depository institutions to reduce their own credit
risks. It also depends, in part, on the role of the
Federal Reserve and other financial institution
regulators in examining, monitoring, and counseling institutions.
Large-dollar networks are an integral part of
the payment and clearing mechanism. Current
data indicate that total daylight overdrafts average $110 billion to $120 billion per day. A daylight overdraft occurs when an institution has
sent funds over Fedwire (the Federal Reserve
wire transfer system) in excess of the balance in
its reserve or clearing account, or it has sent
more funds over a private wire network than it
has received.
Because a failure of a participant to settle its
net position on a private large-dollar network
could cause substantial disruption in financial
markets, one of the Board's major objectives in
establishing its policy is to reduce the possibility
of a settlement failure. This objective would be
accomplished primarily through a reduction in
the volume of overdrafts and through encouraging institutions to exercise better control over
exposures that remain.
In establishing its policy, the Board made it
clear that it is not condoning the use of this
534 Federal Reserve Bulletin • July 1985
practice by depository institutions. While some
degree of intra-day credit may be necessary to
keep the payment mechanism operating smoothly, the Board expects to see, over time, a reduction in both the total volume of daylight overdrafts and the number of institutions with a
pattern of substantial reliance on such credit.
After reviewing the initial impact of the new
policy, the Board may adopt additional guidelines to reduce further the volume and incidence
of daylight overdrafts and other use of intra-day
credit.
The Board encourages each depository institution that incurs daylight overdrafts on Fedwire or
participates in private large-dollar wire networks
voluntarily to adopt by December 31, 1985, a
cross-system sender net debit cap (a sender net
debit cap that applies across all wire transfer
systems) following the guidelines that the Board
has established. 1
The Board's policy also states that no largedollar payment network will be eligible for Federal Reserve net settlement services unless it
satisfies the following conditions: (1) requires
each participant to establish a maximum net
amount it is willing to receive from any sender
(bilateral net credit limit); (2) establishes a maximum ceiling on the amount of intra-day credit a
sender may incur (sender net debit cap) that is
reasonably designed to reduce the risks to participants in that network; (3) develops and implements a system that will reject or hold any
payment that would exceed either bilateral net
credit limits or the network's sender net debit
cap; and (4) agrees to provide transaction data to
its Reserve Bank on request.
In addition to its policy action, the Board also
requested comment by August 15, 1985, regarding the following: (1) the treatment of Fedwire
overdrafts resulting from transfer of book-entry
securities; (2) automated clearinghouse issues;
and (3) net settlement issues. [The deadline for
1. The cross-system cap selected should have two components: a ceiling on the net debit position that an institution
could incur on any single day, and a limit that the institution
could incur on average over a two-week period. For example,
if an institution rated itself as "average" under the Board's
guidelines, it would not allow its net debit position to exceed
1.5 times its capital on any single day or 1.0 times its capital
on average over a two-week period.
comments on automated clearinghouse issues
and net settlement issues was later extended to
September 30.]
The Board also requested comment by June
17, 1985, on a proposed data collection for ex
post monitoring of automated clearinghouse
transactions.
POLICY ON SECURITIES
LENDING
The Federal Reserve Board has announced the
adoption of a supervisory policy on securities
lending. The Federal Financial Institutions Examination Council had recommended that each
of the federal financial regulatory agencies adopt
the policy statement.
The policy statement is intended to provide
prudential standards of safety and soundness for
financial institutions that may engage in securities lending activities. The statement covers the
securities lending of a bank or trust company for
its own account, as well as the lending of customers' securities held in custody or trust accounts.
Matters addressed include the need for full collateralization and daily mark-to-market procedures, formal approvals and credit analyses in
selecting borrowers, written agreements with
borrowers and lending customers, and adoption
of written internal safeguards and review procedures. Guidelines for recordkeeping and regulatory reporting are also provided.
PROPOSED
ACTIONS
The Federal Reserve Board has issued for public
comment proposed amendments to its Regulation Z (Truth in Lending) to require lenders to
provide more information about adjustable-rate
mortgages (ARMs). Comment is requested by
July 12, 1985.
The Board has also requested public comment
on an application by Citicorp to engage through a
wholly owned subsidiary in underwriting and
dealing in, to a limited extent, municipal revenue
bonds (including certain industrial development
bonds), mortgage-related securities, and con-
Announcements
sumer-receivable-related securities. The Board
requested comment by July 22, 1985.
SYSTEM MEMBERSHIP:
ADMISSION OF STATE BANKS
The following banks were admitted to membership in the Federal Reserve System during the
period May 1 through May 31, 1985:
California
Concord
Florida
Miami Lakes
Georgia
Atlanta
Virginia
Abdington
535
Concord Commercial Bank
Enterprise Bank of Florida
Metro Savings Bank
Highland Union Bank
536
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON MARCH 26, 1985
1. Domestic Policy
Directive
The information reviewed at this meeting suggested that real GNP, which had grown at an
annual rate of about AVA percent in the fourth
quarter, was expanding at a slower pace in the
current quarter. Growth in domestic spending
appeared to be relatively strong in early 1985, but
an increased share of the demand for goods
apparently was being met by imports rather than
domestic production. Broad measures of prices
and wages generally were continuing to rise at
rates close to those recorded in 1984.
Total retail sales rose considerably over the
first two months of 1985; outlays in February
were more than 2 percent above the average in
the fourth quarter. Sales of new domestic automobiles were at an annual rate of 8V2 million
units in January and February, about 1 million
units higher than the average in the fourth quarter of 1984. Auto sales during the first 20 days of
March remained strong, at a rate a little below
the January-February pace.
Nonfarm payroll employment rose 120,000 in
February after average increases of about
300,000 in the preceding four months. Retail
trade and service establishments reported further
strong job gains in February, but employment in
the manufacturing sector fell 75,000. The average
length of the workweek in manufacturing also
declined, partly because of adverse weather during the survey week. The civilian unemployment
rate was 7.3 percent, little changed from its level
at year-end, and within the range of 7.2 to 7.5
percent that has generally prevailed since mid1984.
Industrial production declined 0.5 percent in
February, and data for the three preceding
months were revised to show smaller increases
than previously had been estimated. The recent
sluggishness in production apparently reflected
the continuing substitution of imports for domestically produced goods and ongoing corrections
of inventory imbalances in some industries.
The U.S. merchandise trade deficit increased
sharply in January, as non-oil imports rose by 16
percent from the reduced fourth-quarter rate.
The trade balance had deteriorated markedly last
year and was the principal contributor to a
current account deficit in the balance of payments of $102 billion in 1984, as compared with
$42 billion in the previous year.
Total private housing starts declined in February after a sharp rise in January. Nevertheless,
the average for the two months, at an annual rate
of nearly PA million units, was somewhat higher
than the rate in the fourth quarter. Issuance of
residential building permits during the JanuaryFebruary period was also above the fourth-quarter pace. Sales of new homes picked up slightly
in January, according to preliminary data, but
sales of existing homes edged down in February
after posting four consecutive monthly gains.
Information on business capital spending suggested less rapid expansion in early 1985. Shipments by domestic producers of nondefense capital goods dropped sharply in January and
recovered only a little in February; imports of
business equipment, however, were especially
strong in January. Spending on nonresidential
construction continued at a relatively brisk pace
in both months. New orders for nondefense
capital goods fluctuated widely in January and
February, but on balance were little changed
from the average level in the second half of 1984.
With respect to broader indicators of future
business spending plans, recent surveys of anticipated plant and equipment expenditures pointed
to continued, though moderating, gains in 1985.
Overall investment in business inventories has
537
remained moderate thus far in 1985 though recent inventory developments have varied considerably across industries. In the manufacturing
sector stocks fell in January for the third month
in a row, largely in response to earlier weakness
in orders and sales. On the other hand, retail
trade inventories rose substantially, primarily
reflecting increased stocks at automobile dealers
to alleviate short supplies of some popular models.
The producer price index for finished goods,
which was unchanged in January, edged down
0.1 percent in February. Petroleum prices fell
sharply in both months, and food prices also
declined as reductions for meats and most livestock offset weather-related increases for fresh
fruits and vegetables. The consumer price index
rose 0.3 percent in February, about the same as
its monthly average over the past year; substantial declines in prices of energy-related items
tempered the increases in prices of food and
other commodities. Over the first two months of
the year, the average hourly earnings index was
rising at a rate close to that recorded in 1984.
Since the Committee's meeting in mid-February, the trade-weighted value of the dollar in
foreign exchange markets had fluctuated widely
under often volatile market conditions. During
the early part of the intermeeting period, the
dollar rose by about 5 percent. At that time,
especially during the last few days of February
and the beginning of March, monetary authorities sold dollars on a large scale. More recently,
the dollar dropped sharply on exchange markets,
more than offsetting the earlier rise. The reversal
was attributed in part to indications of slower
growth in U.S. economic activity than many in
the market had anticipated and to concerns
abroad about the implications of problems with
non-federally insured thrift institutions in Ohio.
At its meeting on February 12-13, 1985, the
Committee had adopted a directive that called
for maintaining the degree of reserve pressures
that had characterized the weeks preceding the
meeting. The members agreed that modest increases in reserve restraint would be sought if
growth in Ml appeared to be exceeding an annual rate of about 8 percent and growth in M2 and
M3 was running above 10 to 11 percent during
the period from December to March. Lesser
restraint on reserve positions would be acceptable in the event of substantially slower growth
in the monetary aggregates. Such adjustments in
the degree of pressure on reserves would be
considered in the context of developments in the
U.S. economy and conditions in foreign exchange markets. The intermeeting range for the
federal funds rate was set at 6 to 10 percent.
Growth in Ml accelerated to an annual rate of
about 14 percent in February from 9 percent in
January, but partial data available for March
indicated a considerable slowing. Growth in M2
and M3 moderated somewhat in February and
averaged about 12 percent and 9 percent respectively over the January-February period. As
with Ml, growth in the broader aggregates appeared to be slowing considerably in March.
Expansion in total domestic nonfinancial debt
remained relatively rapid over the first two
months of the year, though somewhat below the
pace of previous months.
The average level of adjustment plus seasonal
borrowing by depository institutions at the discount window rose somewhat over the intermeeting interval, averaging around $600 million
in the two complete maintenance periods after
the February meeting and $428 million in the first
half of the current statement period. The higher
level of borrowing for the most part reflected
unexpectedly large demands for excess reserves,
but for a time was also influenced to an extent by
more cautious provision of reserves through
open market operations, given the strength of the
monetary aggregates, especially Ml.
Federal funds traded mainly between 83/s and
3
8 /4 percent during the intermeeting interval, averaging a little above 8V2 percent, about the same
as in the first half of February. Other short-term
rates rose about lA to Vi percentage point while
long-term yields generally increased by V2 percentage point or more. Several measures of
interest rates on new commitments for home
mortgage loans also showed increases of about Vi
percentage point from their levels in mid-February.
The staff projections presented at this meeting
continued to suggest that real GNP would grow
at a moderate pace in 1985. Business fixed investment, though slowing from the exceptionally
rapid rates of increase in the past two years, was
538 Federal Reserve Bulletin • July 1985
likely to expand further in 1985. Consumer
spending was expected to remain relatively brisk
during the year, supported by gains in real disposable income and in employment. Growth of
real output, however, was expected to fall short
of the rise in aggregate demand. The unemployment rate was projected to edge down over the
period and the rate of increase in prices was
expected to remain close to, or slightly below,
that experienced in 1984.
During the Committee's review of current economic and financial conditions and the outlook
for economic activity, most of the members
agreed that continuing expansion at a moderate
pace remained a reasonable expectation for 1985.
However, considerable concern was expressed
about the sensitive conditions in domestic financial and foreign exchange markets, especially
against the background of the distortions and
uncertainties stemming from massive and persisting deficits in the federal budget and the
record and still widening gap in the nation's
balance of trade. The members referred to the
quite different trends in various sectors of the
economy; in general, the service industries were
doing well while industries related to agriculture,
mining, energy, and a number of manufacturing
activities were experiencing a variety of problems and were subject to varying degrees of
financial strain. With a number of lending institutions, especially those associated with relatively
depressed industries and with housing finance,
also experiencing financial pressures, the overall
economy was vulnerable to adverse developments. In this difficult set of circumstances several members commented that the risks of any
deviation in the economy from their current
expectations were in the direction of slower
growth; a few members referred to the possibility
of little or no expansion later in the year.
A good deal of concern was expressed during
the meeting about the adverse effects on domestic economic activity stemming particularly from
the rising tide of imports but also from difficulties
in export markets. With a large amount of domestic demand continuing to be met through
imports rather than domestic production, adjustments were beginning to be made in production
and distribution facilities that would not easily be
reversed later. It was also noted that the growing
trade deficit appeared to be damping incentives
to invest domestically in a wide range of manufacturing industries. More generally, the point
was made that, to a considerable extent, foreign
trade developments were tending to offset the
stimulus provided by an expansive fiscal policy
and the still considerable upward momentum of
private final demands.
The prospective performance of business fixed
investment was cited as a key element in the
outlook for economic activity. While the members generally anticipated further expansion in
investment spending, developments over the
course of recent months together with the results
of surveys of business intentions suggested a
pronounced deceleration from the unusually rapid growth experienced during the first two years
of the current expansion. Moreover, the demand
for domestically produced business equipment
was being inhibited to an unusual extent by the
level of the dollar internationally and the competitiveness of foreign substitutes. In addition, the
exceptional demand for technically advanced,
computer-related, equipment might not be sustained at the earlier rate of increase, according to
reports from various contacts around the country. Commercial construction, including office
structures, was still showing considerable
strength, but some members questioned the sustainability of such investment over time in the
face of relatively high vacancy rates and other
factors. While lower interest rates since last
summer were a supporting factor in housing,
reference was also made to the possible vulnerability of multifamily housing construction, given
the apparent overbuilding in some parts of the
country. Construction of single-family housing
appeared to be rising, but this sector was not
thought likely to be the source of substantial
further economic stimulus in the view of at least
some members. One member expressed a relatively pessimistic view about the outlook for
housing, partly because many mortgage lenders
and private insurers were imposing stricter credit
standards after experiencing losses, and incentives for investment in housing clearly had
dimmed in many parts of the country.
A number of members observed that consumer
expenditures would probably remain a source of
strength in the economic expansion, although
Record of Policy Actions of the FOMC
some commented that consumer sentiment—
while still favorable—may have been negatively
affected by the news about the problems of some
financial institutions. Members also took note of
the rapid growth of consumer debt and its potentially adverse implications for future retail sales.
It was observed that automobile sales had remained strong, but the prospects for added economic thrust from this sector appeared limited,
in part because any further expansion in the
demand for automobiles might well be met largely through imports.
With regard to the outlook for inflation, it was
noted that prices of services were still tending to
rise with some momentum, while prices of most
goods were basically flat. Given the members'
expectations for economic activity and assuming
no major changes in the value of the dollar or
developments abroad, the members saw little
basis for expecting significant deviations from
recent price trends.
At its meeting in February the Committee had
agreed on policy objectives that called for monetary growth ranges for the period from the fourth
quarter of 1984 to the fourth quarter of 1985 of 4
to 7 percent for Ml, 6 to 9 percent for M2, and 6
to 9Vi percent for M3. The associated range for
total domestic nonfinancial debt was set at 9 to
12 percent for 1985. In keeping with the Committee's usual procedures under the HumphreyHawkins Act, these ranges would be reviewed at
the July meeting or sooner if warranted by unanticipated economic and financial developments.
In the Committee's discussion of policy implementation for the intermeeting period, the members did not differ greatly in their views regarding
the appropriate operational approach, and all
indicated that they could support an approach
directed, at least initially, toward maintaining
about the current degree of restraint on reserve
positions. The members recognized that current
uncertainties about the economic outlook and
the sensitive conditions in domestic credit and
foreign exchange markets weighed against a significant increase in the degree of reserve restraint. At the same time, several placed considerable emphasis on the desirability of fostering
slower monetary expansion over the period
ahead to help assure growth within the Committee's target ranges for the year. While growth in
539
Ml and M2 appeared to be decelerating appreciably in March and a staff analysis suggested that
current reserve conditions might be associated
with considerably slower growth in the second
quarter than over the first three months of the
year, a number of members expressed concern
that such growth might remain more rapid than
was desirable. A rate of growth in coming
months higher than seemed reasonably consistent with the growth targets for the year might
raise questions about the Committee's commitment to an anti-inflationary policy, with adverse
effects on inflationary expectations and possibly
also on financial markets. Conversely, if monetary growth over the next few months were held
within the Committee's ranges for the year, it
was observed that the Committee would have
more flexibility later in fostering monetary
growth consistent with continuing economic expansion and progress toward containing inflation. In any event, the members generally felt
that under prevailing circumstances monetary
growth might appropriately remain relatively
high within the ranges for the year, a prospect
that the Committee also had contemplated at the
previous meeting.
The members gave considerable attention to
the question of possible intermeeting adjustments in the degree of reserve restraint. In
keeping with past practice, the members agreed
that such adjustments should not be made automatically in response to the behavior of the
monetary aggregates alone, but needed to take
account of emerging evidence on the business
situation, domestic credit conditions, and the
foreign exchange value of the dollar. Nonetheless, there was some difference of views among
the members with regard to their willingness to
tolerate relatively rapid growth in the monetary
aggregates, should it occur, over the period
ahead. While no member contemplated the need
for a substantial move toward greater reserve
restraint, some commented that a small but timely move might well avert the necessity for a more
vigorous, and potentially more disruptive, adjustment later. On the other hand, a number of
members felt that the current economic uncertainties and related volatility that appeared to
pervade domestic credit and foreign exchange
markets would argue for more tolerance toward
540 Federal Reserve Bulletin • July 1985
growth in the aggregates, particularly to the
extent that such growth might signify an increase
in demands for liquidity.
At the conclusion of the Committee's discussion, a majority of the members favored and all
could accept a directive that called for no change
in reserve conditions, though a few members
indicated some preference for a directive that
specified a slight increase in the degree of reserve restraint. The members anticipated that the
approach to policy implementation adopted by
the Committee would be consistent with growth
of Ml, M2, and M3 at annual rates of around 6,7,
and 8 percent respectively for the period from
March to June. The members agreed that somewhat lesser restraint might be acceptable in the
context of substantially slower growth in the
monetary aggregates, while somewhat greater
restraint might be acceptable if monetary growth
were substantially faster. In either event, the
need for greater or lesser restraint would also be
appraised against the background of developments relating to the strength of the business
expansion, progress against inflation, and conditions in domestic credit and foreign exchange
markets. It was agreed that the intermeeting
range for the federal funds rate, which provides a
mechanism for initiating consultation of the
Committee when its boundaries are persistently
exceeded, would be left unchanged at 6 to 10
percent.
At the conclusion of the meeting, the following
domestic policy directive was issued to the Federal Reserve Bank of New York:
The information reviewed at this meeting suggests
that real GNP is currently expanding at a slower pace
than in the fourth quarter, with an increased share of
domestic spending apparently being met out of imports. Total retail sales rose considerably for January
and February combined and housing starts, though
declining in February, were above their fourth-quarter
pace. However, information on business capital
spending suggests less rapid expansion in early 1985.
Business inventory investment continues at a moderate rate. Industrial production declined on balance in
January and February and, with employment falling in
the manufacturing sector, total nonfarm payroll employment increased at a somewhat reduced pace. The
civilian unemployment rate, at 7.3 percent in February, was little changed from its level at year-end.
Broad measures of prices and the index of average
hourly earnings appear to be continuing to rise at rates
close to those recorded in 1984.
Since the Committee's meeting in mid-February, the
foreign exchange value of the dollar has fluctuated
widely in often volatile market conditions. Most recently, the trade-weighted value of the dollar against
major foreign currencies has dropped sharply, more
than offsetting its rise earlier in the intermeeting interval. Monetary authorities sold dollars on a large scale
during the period, especially in late February and early
March. The merchandise trade deficit increased sharply in January from relatively low December and
fourth-quarter rates. The current account deficit for
the full year 1984 was more than double that recorded
in 1983.
Growth in Ml accelerated in February, following
relatively rapid expansion in other recent months, but
information available through mid-March indicates a
considerable slowing. Growth in the broader aggregates moderated in February and appears to be slowing further in March. In January and February expansion in total domestic nonfinancial debt remained
relatively rapid, though somewhat below the pace of
previous months. Most interest rates have risen somewhat since the February meeting of the Committee.
The Federal Open Market Committee seeks to foster monetary and financial conditions that will help to
reduce inflation further, promote growth in output on a
sustainable basis, and contribute to an improved pattern of international transactions. In furtherance of
these objectives the Committee agreed at its meeting
in February to establish ranges for monetary growth of
4 to 7 percent for M l , 6 to 9 percent for M2, and 6 to
9V2 percent for M3 for the period from the fourth
quarter of 1984 to the fourth quarter of 1985. The
associated range for total domestic nonfinancial debt
was set at 9 to 12 percent for the year 1985. The
Committee agreed that growth in the monetary aggregates in the upper part of their ranges for 1985 may be
appropriate, depending on developments with respect
to velocity and provided that inflationary pressures
remain subdued.
The Committee understood that policy implementation would require continuing appraisal of the relationships not only among the various measures of money
and credit but also between those aggregates and
nominal GNP, including evaluation of conditions in
domestic credit and foreign exchange markets.
In the implementation of policy for the immediate
future, taking account of the progress against inflation,
uncertainties in the business outlook, and the exchange value of the dollar, the Committee seeks to
maintain the existing degree of pressure on reserve
positions. This action is expected to be consistent with
growth in M l , M2, and M3 at annual rates of around 6,
7, and 8 percent respectively during the period from
March to June. Somewhat lesser reserve restraint
might be acceptable in the event of substantially
slower growth of the monetary aggregates while somewhat greater restraint might be acceptable in the event
Record of Policy Actions of the FOMC
of substantially higher growth. In either case such a
change would be considered in the context of appraisals of the strength of the business expansion, progress
against inflation, and conditions in domestic credit and
foreign exchange markets. The Chairman may call for
Committee consultation if it appears to the Manager
for Domestic Operations that pursuit of the monetary
objectives and related reserve paths during the period
before the next meeting is likely to be associated with
a federal funds rate persistently outside a range of 6 to
10 percent.
Votes for this action: Messrs. Volcker, Corrigan,
Balles, Black, Forrestal, Gramley, Keehn, Martin,
Partee, Rice, Ms. Seger, and Mr. Wallich. Votes
against this action: None.
2. Review of Continuing Authorizations
The Committee followed its customary practice
of reviewing all of its continuing authorizations
and directives at this first regular meeting of the
Federal Open Market Committee following the
election of new members from the Federal Reserve Banks to serve for the year beginning
March 1, 1985. The Committee reaffirmed the
authorization for foreign currency operations,
the foreign currency directive, and the procedural instructions with respect to foreign currency
operations in the forms in which they were
currently outstanding. 1
Votes for these actions: Messrs. Volcker, Corrigan,
Balles, Black, Forrestal, Gramley, Keehn, Martin,
Partee, Rice, Ms. Seger, and Mr. Wallich. Votes
against these actions: None.
3. Authorization for
Domestic Open Market Operations
On the recommendation of the Manager for
Domestic Operations, System Open Market Account, the Committee amended paragraph 1(a) of
1. Prior to this meeting, on March 6, 1985, certain other
routine authorizations of the Committee, including various
resolutions, rules, and procedures, and the agreement with
the U.S. Treasury to warehouse foreign currencies, were
distributed to the Committee members and Reserve Bank
Presidents for their review. It was agreed that these authorizations would continue to stand as previously adopted and
would not be placed on the agenda for consideration at this
meeting unless any member so requested, and no such
requests were received.
541
the authorization for domestic open market operations to raise from $4 billion to $6 billion the
limit on intermeeting changes in System account
holdings of U.S. government and federal agency
securities. The Manager noted that the Committee had found it necessary to authorize temporary increases in the limit with greater frequency,
primarily because of the increased size of the net
variation, especially from seasonal influences, in
market factors such as the Treasury balance that
affect reserves. In 1984 such temporary increases
had been authorized on six occasions, more than
in any other recent year. A permanent increase
in the limit to $6 billion would reduce the number
of occasions requiring special Committee action,
while still calling needs for particularly large
changes to the Committee's attention. The Committee concurred in the Manager's view that
such an increase would be appropriate.
Accordingly, effective immediately, paragraph
1(a) of the authorization for domestic open market operations was amended to read as follows:
1. The Federal Open Market Committee authorizes
and directs the Federal Reserve Bank of New York, to
the extent necessary to carry out the most recent
domestic policy directive adopted at a meeting of the
Committee:
(a) To buy or sell U.S. Government securities,
including securities of the Federal Financing Bank,
and securities that are direct obligations of, or fully
guaranteed as to principal and interest by, any agency
of the United States in the open market, from or to
securities dealers and foreign and international accounts maintained at the Federal Reserve Bank of
New York, on a cash, regular, or deferred delivery
basis, for the System Open Market Account at market
prices, and, for such Account, to exchange maturing
U.S. Government and Federal agency securities with
the Treasury or the individual agencies or to allow
them to mature without replacement; provided that the
aggregate amount of U.S. Government and Federal
agency securities held in such Account (including
forward commitments) at the close of business on the
day of a meeting of the Committee at which action is
taken with respect to a domestic policy directive shall
not be increased or decreased by more than $6.0
billion during the period commencing with the opening
of business on the day following such meeting and
ending with the close of business on the day of the next
such meeting;
Votes for this action: Messrs. Volcker, Corrigan,
Balles, Black, Forrestal, Gramley, Keehn, Martin,
Partee, Rice, Ms. Seger, and Mr. Wallich. Votes
against this action: None.
542 Federal Reserve Bulletin • July 1985
Subsequently, on April 15, 1985, the Manager
advised that projections indicated very large
needs for reserves during the current intermeeting period, mainly because of sharply increasing
Treasury balances in April. Accordingly, effective April 16, 1985, the Committee approved the
recommendation of the Manager that the limit in
paragraph 1(a) be raised from $6 billion to $9
billion for the intermeeting period ending May
21, 1985.
Votes for this action: Messrs. Volcker, Balles,
Black, Forrestal, Gramley, Keehn, Martin, Ms.
Seger and Mr. Timlen. Votes against this action:
None. (Absent and not voting: Messrs. Corrigan,
Partee, Rice, and Wallich. Mr. Timlen voted as
alternate for Mr. Corrigan.)
543
Legal Developments
REVISION OF RULES REGARDING
OPPORTUNITY
EQUAL
The Board of Governors of the Federal Reserve System has revised and expanded its Equal Opportunity
Regulation principally for the following purposes:
1. To designate clear responsibility for equal opportunity functions in light of changes in the Board's
organizational structure;
2. to prohibit discrimination against handicapped persons in programs and activities conducted by the
Board; and
3. to provide for review by the Equal Employment
Opportunity Commission ("EEOC") of Board decisions on individual and class complaints of discrimination in employment.
Effective June 1, 1985, the Board revises 12 C.F.R
Part 268, Rules Regarding Equal Opportunity as set
forth below:
Part 268—Rules Regarding Equal Opportunity
Section 268.303—Right to Representation
Section 268.304—Presentation of the Complaint
Section 268.305—Rejection or Cancellation of the
Complaint
Section 268.306—Investigation
Section 268.307—Adjustment of Complaint and Offer
of Hearing
Section 268.308—Hearing on the Complaint
Section 268.309—Relationship to Other Agency Appellate Procedure
Section 268.310—Avoidance of Delay
Section 268.311—Decision on the Complaint
Section 268.312—Complaint File
Section 268.313—Joint Processing and Consolidation
of Complaints
Section 268.314—Freedom from Reprisal or Interference
Section 268.315—Remedial Actions
Section 268.316—Right to File A Civil Action
Section 268.317—Notice of Right
Section 268.318—Effect on Administrative Procedure
Index
Subpart D—Class Complaints
Part 268—Rules Regarding
Subpart A—General
Equal
Provisions
Section 268.101—Authority, Purpose, and Scope
Section 268.102—Board Program
Section 268.103—Definitions
Subpart
Section
Section
Section
Section
Section
Section
Section
B—Administration
268.201—Equal Employment Designations
268.202—The Administrative Governor
268.203—The Staff Director For Management
268.204—The EEO Programs Officer
268.205—Federal Women's Program Manager
268.206—Hispanic Program Coordinator
268.207—Handicapped Program Coordinator
Subpart C—Complaints of Discrimination on
Grounds of Race, Color, Religion, Sex, National
Origin, Age, or Physical or Mental Handicap
Section 268.301—Precomplaint Processing
Section 268.302—Filing of Complaint
of
Discrimination
Opportunity
Section 268.401—Definitions
Section 268.402—Precomplaint Processing
Section 268.403—Filing and Presentation of A Class
Complaint
Section 268.404—Acceptance, Rejection or Cancellation
Section 268.405—Notification and Opting Out
Section 268.406—Avoidance of Delay
Section 268.407—Freedom From Restraint, Interference, Correction, and Reprisal
Section 268.408—Obtaining Evidence Concerning the
Complaint
Section 268.409—Opportunities For Resolution of the
Complaint
Section 268.410—Hearing
Section 268.411—Report of Findings and Recommendations
Section 268.412—Board Decision
Section 268.413—Notification to Class Members of
Decision
Section 268.414—Corrective Action
Section 268.415—Right to File A Civil Action for
Judicial Review
544 Federal Reserve Bulletin • July 1985
Section 268.416—Notice of Right
Section 268.417—Effect on Administrative Processing
Subpart E—Nondiscrimination
on Account of Age
Section
Section
Section
Section
Section
268.501—Policy Statement
268.502—Processing of Complaints
268.503—Coverage
268.504—Exceptions
268.505—Right to File Civil Action for Judicial Review
Section 268.506—Effect on Administrative Procedure
Subpart I—Equal Pay
Section 268.901—General Prohibition of Discrimination
Section 268.902—Record Keeping
Section 268.903—Procedure
Section 268.904—Right to File Civil Action for Judicial Review
Authority: Sections 10(4) and 11(1) of the Federal
Reserve Act (partially codified in 12 U.S.C. §§ 244 and
248(1))
Part 268—Equal Opportunity
Subpart F—Prohibition Against Discrimination in
Employment Because of a Physical or Mental
Handicap
Section
Section
Section
Section
Section
Section
Section
268.601—Definitions
268.602—General Policy
268.603—Reasonable Accommodation
268.604—Employment Criteria
268.605—Preemployment Inquiries
268.606—Physical Access to Buildings
268.607—Processing Complaints
Subpart G—Prohibition Against Discrimination in
Board Programs and Activities because of a Physical
or Mental Handicap
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Purpose and Application
Definitions
•Self Evaluation
•Notice
•Prohibition Against Discrimination
•Employment
-Program Accessibility: Discrimination Prohibited
268.708—Program Accessibility: Existing Faicilities
268.709—:Program Accessibility: New Construction and Alterations
268.710- Communications
268.711- Compliance Procedures
268.701268.702268.703268.704268.705268.706268.707-
Subpart H—Review by the Equal
Opportunity
Commission
Section
Section
Section
Section
Section
Employment
268.801—Entitlement
268.802—Filing of the Request for Review
268.803—Time Limits
268.804—Procedures
268.805—Review & Consideration
Subpart A—General Provisions
Section 268.101—Authority, Purpose, and
Scope
(a) Authority. This regulation (Code of Federal Regulations, Title 12, Part 268) is issued by the Board of
Governors of the Federal Reserve System ("Board")
under the authority of sections 10(4) and 11(1) of the
Federal Reserve Act (partially codified in 12 U.S.C. §§
244 and 248(1)).
(b) Purpose and scope. This regulation sets forth the
Board's policy, program, and procedures for providing
equal opportunity to Board employees and applicants
for employment without regard to race, color, religion,
sex, national origin, age, or physical or mental handicap. It also sets forth the Board's policy, program, and
procedures for prohibiting discrimination on the basis
of physical or mental handicap in programs and activities conducted by the Board.
Section 268.102—Board Program
The Board has established, maintains, and carries out
a continuing affirmative program designed to promote
equal opportunity in every aspect of the Board's
personnel policies and practices in the employment,
development, advancement, and treatment of employees and applicants for employment. Under the terms
of its program, the Board:
(a) Provides sufficient resources to administer its equal
opportunity program in a positive and effective manner and assure that the principal and operating officials
responsible for carrying out the equal opportunity
program meet established qualifications requirements;
(b) seeks to eradicate every form of prejudice or
discrimination based upon race, color, religion, sex,
national origin, age, or physical or mental handicap,
from the Board's personnel policies and practices and
working conditions;
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(c) provides the maximum feasible opportunity to
employees to enhance their skills through on-the-job
training, work study programs, and other training
programs so that they may perform at their highest
potential and advance in accordance with their abilities;
(d) communicates the Board's equal opportunity policy and program and its employment needs to all
sources of job candidates without regard to race,
color, religion, sex, national origin, age, or physical or
mental handicap, and solicits their recruitment assistance on a continuing basis;
(e) participates at the community level with other
employers, schools, universities, and other public and
private groups in cooperative action to improve employment opportunities;
(f) reviews, evaluates, and controls managerial and
supervisory performance in such a manner as to insure
a continuing affirmative application and vigorous enforcement of the policy of equal opportunity, and
provides orientation, training, and advice to managers
and supervisors to assure their understanding and
implementation of the equal opportunity policy and
program;
(g) provides recognition to employees, supervisors,
managers, and units demonstrating superior accomplishment in equal opportunity;
(h) informs its employees and applicants for employment of the Board's affirmative equal opportunity
policy and program and enlists their cooperation;
(i) provides counseling for employees and applicants
for employment who believe they have been discriminated against because of race, color, religion, sex,
national origin, age, or physical or mental handicap,
and for resolving informally the matters raised by
them;
(j) provides for the prompt, fair, and impartial consideration and disposition of complaints involving issues
of discrimination on grounds of race, color, religion,
sex, national origin, age, or physical or mental handicap;
(k) has established a system for periodically evaluating
the effectiveness of the Board's overall equal opportunity effort;
(1) makes reasonable accommodations to the religious
needs of employees and applicants for employment,
including the needs of those who observe the Sabbath
on other than Sunday, when those accommodations
can be made (by substitution of another qualified
employee, by a grant of leave, a change of a tour of
duty, or other means) without undue hardship on the
business of the Board;
(m) utilizes to the fullest extent the present skills of
employees by all means, including the redesigning of
jobs where feasible so that tasks not requiring the full
545
utilization of skills of incumbents are concentrated in
jobs with lower skill requirements; and
(n) prepares annually equal opportunity plans of action
which include, but are not limited to:
(1) Provision for the establishment of training and
education programs designed to provide maximum
opportunity for employees to advance so as to
perform at their highest potential;
(2) describes the qualifications, in terms of training
and experience relating to equal opportunity, of the
principal and operating officials concerned with administration of the Board's equal opportunity program; and
(3) describes the allocation of personnel and resources proposed by the Board to carry out its equal
opportunity program.
Section 268.103—Definitions
(a) "Age" is an inclusive term which means the age of
at least forty years.
(b) "Complainant" means any party who files a claim,
complaint, or request for counseling under this Regulation.
(c) "Complaint of discrimination" means any claim or
complaint filed under this regulation or the Board's
grievance procedure alleging discrimination in employment because of race, color, national origin, religion, sex, age, or physical or mental handicap.
(d) "Grievance procedures" means the Board's Adjusting Work-related Problems Policy.
Subpart
B—Administration
Section 268.201—Equal Employment
Designations
(a) The Board designates an EEO Programs Officer, an
EEO Officer, a Federal Women's Program Manager, a
Hispanic Program Coordinator, a Handicapped Program Coordinator, and such EEO Counselors and
other persons as may be necessary to assist the Board
in carrying out the functions described in this Regulation.
Section 268.202—The Administrative Governor
(a) The Administrative Governor is a member of the
Board of Governors. He or she is designated by the
Chairman of the Board of Governors, charged with
overseeing the internal affairs of the Board and empowered to make decisions and determinations on
behalf of the Board of Governors when authority to do
so is delegated to him or her.
546 Federal Reserve Bulletin • July 1985
(b) The Administrative Governor is hereby delegated
the authority to make determinations adjudicating
complaints of discrimination pursuant to sections
268.311, 268.412, and 268.71 l(k) of this Regulation.
The Administrative Governor is further delegated the
authority to order such corrective measures, including
such remedial actions as may be required by sections
268.315, 268.412(c), 268.414(a), and 268.711(k) of this
Regulation, as he or she may consider necessary,
including such disciplinary action as is warranted by
the circumstances when an employee has been found
to have engaged in a discriminatory practice.
(c) The Administrative Governor may delegate to any
officer or employee of the Board any of his or her
duties or functions under this Regulation.
(d) The Administrative Governor may refer to the
Board of Governors for determination or decision any
complaint of discrimination that the Administrative
Governor would otherwise decide pursuant to sections
268.311, 268.412, and 268.711(k) of this Regulation,
and may make any recommendations for any changes
in programs and procedures designed to eliminate
discriminatory practices or to improve the Board's
programs under this Regulation, and may make any
recommendations for remedial or disciplinary action
with respect to managerial or supervisory employees
who have failed in their responsibilities, or employees
who have been found to have engaged in discriminatory practices, or with regard to any other matter
which the Administrative Governor believes merits
the attention of the Board of Governors.
Section 268.203—The Staff Director For
Management
(a) When so authorized by the Administrative Governor, the Staff Director For Management shall make
any determinations on complaints of discrimination
that would otherwise be made by the Administrative
Governor under sections 268.311 and 268.412. The
Staff Director For Management shall issue letters of
findings under section 268.711(g). The Staff Director
For Management shall order such corrective measures, including such remedial actions as may be
required by sections 268.315, 268.412(c), 268.414(a),
and 268.711(h) as he or she may consider necessary,
and including the recommendation for such disciplinary action as is warranted by the circumstances when
an employee is found to have engaged in a discriminatory practice.
(b) The Staff Director For Management shall review
the record on any complaint under this Regulation
before a determination is made by the Board of
Governors or the Administrative Governor on the
complaint and make such recommendations as to the
determination as he or she considers desirable, including any recommendation for such disciplinary action
as is warranted by the circumstances when an employee is found to have engaged in a discriminatory practice.
(c) The Staff Director For Management may make
changes in programs and procedures designed to eliminate discriminatory practices and improve the Board's
program for equal opportunity.
Section 268.204—The EEO Programs Officer
The EEO Programs Officer shall perform the following
functions:
(a) Advise the Board, the Administrative Governor,
and the Staff Director For Management with respect to
the preparation of plans, goals, objectives, procedures, regulations, reports, and other matters pertaining to the Board's program established under section
268.102, and administer the Board's equal opportunity
program;
(b) evaluate from time to time the sufficiency of the
Board's program for equal opportunity and report
thereon to the Board, the Administrative Governor,
and the Staff Director For Management, with recommendations as to any improvement or correction needed, and may make recommendations regarding remedial or disciplinary action with respect to managerial
or supervisory employees who have failed in their
responsibilities;
(c) recommend changes in programs and procedures
designed to eliminate discriminatory practices and
improve the Board's program for equal opportunity;
(d) provide for counseling by an EEO Counselor, of
any aggrieved employee or applicant for employment
who believes that he or she has been discriminated
against because of race, color, religion, sex, national
origin, age, or physical or mental handicap, and for
attempting to resolve on an informal basis the matter
raised by the employee or applicant before a complaint
of discrimination may be filed under sections 268.302
and 268.403 of this Regulation;
(e) publicize to Board employees and applicants for
employment and post permanently on official bulletin
boards:
(1) The names and office addresses and the EEO
responsibilities of the Staff Director For Management, the EEO Programs Officer, the Federal Women's Program Manager, the EEO Officer, the Hispanic Program Coordinator, and the Handicapped
Program Coordinator;
(2) the names and office addresses of EEO Counselors, the segments of the Board for which they are
responsible, the availability of EEO Counselors to
counsel an employee or applicant for employment
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who believes that he or she has been discriminated
against because of race, color, religion, sex, national
origin, age, or physical or mental handicap; and the
requirement that an employee or applicant for employment must consult the EEO Counselor as provided by sections 268.301 and 268.402; and
(3) time limits for contacting EEO Counselors;
(f) provide to each employee annually (and the Division of Personnel shall provide to each applicant for
employment) a copy of a notice summarizing the
general purposes of this Regulation and specifying
where copies of this Regulation can be obtained. The
EEO Programs Officer shall ensure that copies of this
Regulation are posted in permanent locations in all
Board facilities. The EEO Programs Officer shall, on
the request of any employee or applicant for employment provide that employee or applicant with a copy
of this Regulation;
(g) appoint any investigative officers or complaints
examiners as necessary to administer this Regulation.
The EEO Programs Officer is authorized to request the
loan of any investigative officers or complaints examiners from any other agency as necessary to administer
this Regulation. The EEO Programs Officer, with the
concurrence of the Staff Director For Management,
may authorize appropriate reimbursement to such
agencies for the services of such investigative officers
and complaints examiners;
(h) provide for the receipt and investigation of individual complaints of discrimination, subject to sections
268.301 through 268.312; and
(i) provide for the acceptance and processing and/or
rejection of class action complaints in accordance with
Subpart D of this Regulation.
Section 268.205—Federal Women's Program
Manager
The Federal Women's Program Manager shall perform
the following functions: Advise the Board of Governors, the Administrative Governor, the Staff Director
For Management, and the EEO Programs Officer on
matters affecting, and administer the Board's program
with respect to, the employment and advancement of
women.
Section 268.206—Hispanic Program
Coordinator
The Hispanic Program Coordinator shall perform the
following functions: Advise the Board of Governors,
the Administrative Governor, the Staff Director For
Management, and the EEO Programs Officer on matters affecting, and administer the Board's program
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with respect to, the employment and advancement of
Hispanics.
Section 268.207—Handicapped Program
Coordinator
The Handicapped Program Coordinator shall perform
the following functions: Advise the Board of Governors, the Administrative Governor, the Staff Director
For Management, and the EEO Programs Officer on
matters affecting, and administer the Board's program
with respect to, the employment and advancement of
handicapped persons.
Subpart C—Complaints of Discrimination on
Grounds of Race, Color, Religion, Sex,
National Origin, Age, or Physical or Mental
Handicap
Section 268.301—Precomplaint Processing
(a) An aggrieved person who believes he or she has
been discriminated against on the basis of race, color,
religion, sex, national original, age, or physical or
mental handicap, shall consult with an EEO Counselor
to try and resolve the matter. The EEO Counselor
shall make whatever inquiry he or she believes is
necessary into the matter and seek a solution to the
matter on an informal basis. The EEO Counselor shall
advise the aggrieved person of the complaint procedure under this subpart, counsel him or her concerning
the issues in the matter, keep a record of the counseling activities so as to brief the EEO Officer on those
activities, and when advised that a formal complaint of
discrimination has been filed by an aggrieved person,
shall submit a written report to the EEO Officer with a
copy to the aggrieved person summarizing the EEO
Counselor's actions and advice to the aggrieved person concerning the issues in the matter. The EEO
Counselor shall, insofar as is practicable, conduct the
final interview of the aggrieved person not later than
21 calendar days after the date on which the matter
was called to the EEO Counselor's attention by the
aggrieved person. If, within 21 calendar days, the
matter has not been resolved to the satisfaction of the
aggrieved person, that person shall be immediately
informed in writing, at the time of the final interview,
of his or her right to file a complaint of discrimination
and of his or her right to representation, including legal
counsel. The notice shall inform the aggrieved person
of his or her right to file a discrimination complaint at
any time up to 15 calendar days after receipt of the said
notice, identify to the aggrieved person the officials
with whom such complaint may be filed, and advise
the aggrieved person that he or she must inform the
548 Federal Reserve Bulletin • July 1985
Board immediately if he or she retains counsel or any
other representative in connection with the complaint.
(b) The EEO Counselor shall not attempt in any way to
restrain the aggrieved person from filing a complaint.
(c) The EEO Counselor shall not reveal the identity of
any aggrieved person who consults with the EEO
Counselor, except when authorized to do so by the
aggrieved person, or until the Board has accepted a
complaint of discrimination from the aggrieved person.
(d) The EEO Counselor shall have the full cooperation
of all employees in the performance of his or her duties
under this section.
(e) The EEO Counselor shall be free from restraint,
interference, coercion, discrimination or reprisal, in
connection with the performance of his or her duties
under this section.
Section 268.302—Filing of Complaint
(a) Time Limits.
(1) The Board shall accept a complaint for processing under this subpart only if:
(i) The complainant brought to the attention of an
EEO Counselor the matter causing him or her to
believe he or she had been discriminated against
within 30 calendar days of the date of the matter
or, if a personnel action, within 30 calendar days
of its effective date; and
(ii) The complainant, or his or her authorized
representative, submitted his or her written complaint to an appropriate official within 15 calendar
days of the date of his or her final interview with
the EEO Counselor.
(2) A complaint shall be deemed to have been filed
on the date it was received, if delivered to an
appropriate official, or on the date postmarked if
addressed to an appropriate official designated to
receive complaints under subparagraph (b)(3) of this
section.
(b) Filing Requirements.
(1) A complaint of discrimination must be submitted
in writing by the complainant, or his or her authorized representative, and must be signed by the
complainant.
(2) A complaint of discrimination may be submitted
in person or by mail. If a complainant, or his or her
authorized representative, submits the complaint by
mail, use of registered mail is advised.
(3) The complaint shall be submitted to either the
Administrative Governor, the Staff Director For
Management, the EEO Programs Officer, the EEO
Officer, the Federal Women's Program Manager,
the Hispanic Program Coordinator, or the Handicapped Program Coordinator. All complaints re
ceived by the Administrative Governor, the Staff
Director For Management, the EEO Programs Officer, the Federal Women's Program Manager, the
Hispanic Program Coordinator, or the Handicapped
Program Coordinator shall be transmitted to the
EEO Officer for acknowledgment of receipt in accordance with section 268.302(c)(1).
(c) Acknowledgment of Receipt of Complaint.
(1) The EEO Officer shall acknowledge receipt of
the complaint to the complainant, or his or her
authorized representative, in writing.
(2) The EEO Officer shall advise the complainant, or
his or her authorized representative, of all administrative rights of the complainant and of complainant's right to file a civil action as set forth in section
268.316, including the time limits imposed on the
exercise of those rights.
(d) Extensions of Time.
(1) The EEO Programs Officer shall extend the time
limits set forth in this section:
(i) On written request of the complainant, or his or
her authorized representative, when the complainant shows that he or she was not notified of
the time limits and was not otherwise aware of
them, or that he or she was prevented by circumstances beyond his or her control from submitting
the matter within the time limits; or
(ii) For other reasons considered sufficient by the
EEO Programs Officer.
(2) Written requests for extension of time under this
section shall be filed with the EEO Programs Officer.
Section 268.303—Right to Representation
At any stage in the presentation of a complaint under
this subpart, including the counseling stage under
section 268.301, the complainant shall have the right to
be accompanied, represented, and advised by a representative, including legal counsel, of his or her choice.
Complainant shall be advised of this right in writing by
the EEO Counselor or other appropriate person responsible for matters under this regulation at the
commencement of processing of any matter subject to
this Regulation.
Section 268.304—Presentation of the Complaint
(a) If the complainant is an employee of the Board, he
or she shall have a reasonable amount of official time
to present his or her complaint, if he or she is
otherwise in an active duty status.
(b) If the complainant is an employee of the Board and
the complainant designates another employee of the
Board as his or her representative, the representative
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shall have a reasonable amount of official time, if he or
she is otherwise in an active duty status, to present the
complaint.
Section 268.305—Rejection or Cancellation of
the Complaint
(a) The EEO Programs Officer shall reject a complaint
which was not timely filed under section 268.302(a),
unless the time for filing has been extended pursuant
to section 268.302(d), and shall reject those allegations
in a complaint which are not within the purview of this
regulation or which set forth identical matters as
contained in a previous complaint filed by the same
complainant which is pending at the Board or has been
decided by the Board. The EEO Programs Officer may
cancel a complaint for failure of the complainant to
prosecute the complaint. Such action cancelling a
complaint may be taken only after the EEO Programs
Officer has provided the complainant, or his or her
authorized representative, a written request, including
notice of proposed cancellation, that the complainant
provide certain information or otherwise proceed with
the complaint, and the complainant has failed to
satisfy this request within 15 calendar days of his or
her receipt of the request.
(b) The EEO Programs Officer shall transmit any
decision to reject or cancel by letter to the complainant, or his or her authorized representative. The
decision letter shall inform the complainant of his or
her right to have the decision of the EEO Programs
Officer submitted to the Equal Employment Opportunity Commission for review as described in subpart H
and of his or her right to file a civil action as described
in section 218.316 of this subpart, and of the time limits
applicable thereto.
Section 268.306—Investigation
(a) The EEO Officer shall advise the EEO Programs
Officer of the receipt of a complaint. The EEO Programs Officer shall provide for the prompt investigation of the complaint. The EEO Programs Officer shall
appoint an investigative officer to investigate the complaint. The investigative officer, if an employee of the
Board, shall occupy a position which is not, directly or
indirectly, under the jurisdiction of the Director of the
Division or Office of the Board in which the complaint
arose. The investigation shall include a thorough review of the circumstances under which the alleged
discrimination occurred, the treatment of members of
the complainant's group identified by his or her complaint as compared with the treatment of other employees or applicants for employment in the Board
Division or Office in which the alleged discrimination
549
occurred, and any policies and practices related to the
work situation which may constitute or appear to
constitute discrimination, even though they have not
been expressly cited by the complainant. Information
needed for an appraisal of the utilization of members
of the complainant's group as compared to the utilization of persons outside the complainant's group shall
be recorded in statistical form in the investigative file,
but specific information as to a person's membership
or nonmembership in the complainant's group needed
to facilitate an adjustment of the complaint or to make
an informed decision on the complaint shall, if available, be recorded by name in the investigative file. (As
used in this subpart, the term "investigative file" shall
mean the various documents and information acquired
during the investigation under this section—including
affidavits of the complainant, of the alleged discriminating official, and of witnesses, and copies of or
extracts from records, policy statements, or regulations of the Board—organized to show their relevance
to the complaint or the general environment out of
which the complaint arose.) If necessary, the investigative officer may obtain information regarding the
membership or nonmembership of a person in the
complainant's group by asking each person concerned
to provide the information voluntarily; he or she shall
not require or coerce an employee to provide this
information.
(b) The investigative officer shall be authorized:
(1) To investigate all aspects of complaints of discrimination;
(2) to request all employees of the Board to cooperate with him or her in the conduct of the investigation; and
(3) to require that statements of witnesses be under
oath or affirmation without a pledge of confidence.
Section 268.307—Adjustment of Complaint and
Offer of Hearing
(a) The Board shall provide an opportunity for adjustment of the complaint on an informal basis after the
complainant has reviewed the investigative file. For
this purpose, the EEO Officer shall furnish complainant, or his or her authorized representative, with a
copy of the investigative file promptly after receiving it
from the investigative officer, and shall provide an
opportunity for the complainant, or his or her authorized representative, to discuss the investigative file
with appropriate officials.
(b) If an adjustment of the complaint is arrived at and
approved, the terms of the adjustment shall be reduced
to writing and made a part of the complaint file, with a
copy of the terms of the adjustment provided to the
complainant. An informal adjustment of a complaint
550 Federal Reserve Bulletin • July 1985
may include an award of back pay, attorney's fees and/
or costs, if appropriate, or other appropriate relief.
Where the parties agree on an adjustment of the
complaint, but cannot agree on whether attorney's
fees and/or costs should be awarded or on the amount
of attorney's fees and/or costs to be awarded, the issue
of the award of attorney's fees and/or costs or the
amount which should be awarded may be severed and
shall be the subject of a final decision pursuant to
section 268.311. The decision of whether to award
attorney's fees and/or costs or of the amount to be
awarded may be submitted for review by the Equal
Employment Opportunity Commission, pursuant to
subpart H of this Regulation.
(c) If the Board does not carry out, or rescinds any
action specified by the terms of the adjustment for any
reason not attributable to the actions or conduct of the
complainant, the EEO Officer shall, upon the complainant's written request, reinstate the complaint for
further processing at the point that processing ceased
because of the adjustment.
(d) If an adjustment of the complaint is not arrived at,
the complainant shall be notified in writing by the EEO
Officer:
(1) Of the proposed disposition of the complaint;
(2) of the complainant's right to a hearing and
decision by the Board of Governors or the Administrative Governor under section 268.311, or the Staff
Director For Management if he or she is delegated
the authority under section 268.202(c), if the complainant notifies the EEO Officer in writing within 15
calendar days of receipt of the notice that he or she
desires a hearing; and
(3) of the complainant's right to a decision by the
Board of Governors or the Administrative Governor
under section 368.311, or the Staff Director For
Management if he or she is delegated the authority
under section 268.202(c), without a hearing.
(e) If the complainant fails to notify the EEO Officer of
his or her wishes within 15 calendar days of receipt of
the notice set forth in section 268.307(d), the EEO
Officer shall transmit the complaint file to the Board of
Governors or the Administrative Governor, or to the
Staff Director For Management if he or she has been
authorized to act for the Administrative Governor
pursuant to section 268.202(c), for decision under
section 268.311.
Section 268.308—Hearing on the Complaint
A hearing, held pursuant to an election by the complainant as provided in section 268.307(d)(2), shall be
conducted in the following manner:
(a) Complaints Examiner. The hearing shall be held by
a complaints examiner, who must be an employee of
another agency, except in a case where the Board
might be prevented by reason of law from divulging
information concerning the matter complained of to a
person who has not received a required security
clearance. In that event, the EEO Programs Officer, in
consultation with the Equal Employment Opportunity
Commission, shall select an impartial employee of the
Board to serve as a complaints examiner. In selecting
a complaints examiner, the Board shall request the
Equal Employment Opportunity Commission to supply the name of a complaints examiner who has been
certified by the Commission as qualified to conduct a
hearing under this section.
(b) Arrangements for hearing. The EEO Officer shall
transmit to the complaints examiner the complaint file
containing all the documents described in section
268.312 that have been acquired up to that point in the
processing of the complaint and including the original
copy of the investigative file (which shall be considered by the complaints examiner in making his or her
recommended decision on the complaint). The complaints examiner shall review the entire complaint file
to determine whether further investigation is needed
before scheduling the hearing. When the complaints
examiner determines that further investigation is needed, he or she shall remand the complaint to the
Board's EEO Officer for further investigation or arrange for the appearance of witnesses necessary to
supply the needed additional information at the hearing. The requirements of section 268.306 shall apply to
any further investigation of the complaint. The complaints examiner shall schedule the hearing at a convenient time and place.
(c) Conduct of hearing.
(1) Attendance at the hearing shall be limited to
persons determined by the complaints examiner to
have direct connection with the complaint.
(2) The complaints examiner shall conduct the hearing so as to bring out pertinent facts, including the
production of pertinent documents. Rules of evidence shall not be applied strictly, but the complaints examiner shall exclude irrelevant or unduly
repetitious evidence. Information having a bearing
on the complaint or employment policy or practices
relevant to the complaint shall be received in evidence. The complaints examiner, the complainant,
his or her authorized representative, and representatives of the Board at the hearing shall be given the
opportunity to cross-examine witnesses who appear
and testify. Testimony shall be under oath or affirmation.
(d) Powers of Complaints Examiner. In addition to the
other powers vested in the complaints examiner by the
Board in this Regulation, the complaints examiner
shall be authorized to:
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(1) Administer oaths or affirmations;
(2) regulate the course of the hearing;
(3) rule on offers of proof;
(4) limit the number of witnesses whose testimony
would be unduly repetitious; and
(5) exclude any person from the hearing for contumacious conduct or misbehavior that obstructs the
hearing.
(e) Witnesses at hearing. The complaints examiner
shall request the Board or any agency that is subject to
the authority of an Equal Employment Opportunity
Commission complaints examiner to make available as
a witness at the hearing any employee(s) requested by
the complainant when the complaints examiner determines that the testimony of such employee(s) is necessary. He or she may also request the appearance of
any other person whose testimony he or she determines is necessary to furnish information pertinent to
the complaint under consideration. The complaints
examiner shall give the complainant his or her reasons
for the denial of a request for the appearance of
employees or other persons as witnesses and shall
insert those reasons in the record of the hearing. The
Board or any agency that is subject to the authority of
an Equal Employment Opportunity Commission complaints examiner may make its employees available as
witnesses at a hearing on a complaint when requested
to do so by the complaints examiner and it is not
administratively impracticable to comply with the request for a witness. When it is administratively impracticable to comply with the request for a witness,
the Board or other agency shall provide an explanation
to the complaints examiner. If the complaints examiner determines that the explanation is inadequate, he or
she shall so advise the Board or other agency and
request it to make the employee available as a witness
at the hearing. If the complaints examiner determines
that the explanation is adequate, he or she shall insert
it in the record of the hearing, provide a copy of the
explanation to the complainant, and make arrangements to secure testimony from the employee through
a written interrogatory. Employees of the Board shall
be on duty status during the time they are made
available as witnesses.
(f) Record of hearing. The hearing shall be recorded
and transcribed verbatim. All documents submitted to,
and accepted by, the complaints examiner at the
hearing shall be made part of the record of the hearing.
If the Board submits a document that is accepted, the
Board shall promptly furnish a copy to the complainant. If the complainant submits a document that is
accepted, he or she shall promptly make the document
available to the Board's representative for reproduction.
(g) Findings, analysis, and recommendations.
The
551
complaints examiner shall transmit to the EEO Programs Officer:
(1) the complaint file (including the record of the
hearing);
(2) the findings and analysis of the complaints examiner with regard to the matter that gave rise to the
complaint and the general environment out of which
the complaint arose;
(3) the recommended decision of the complaints
examiner on the merits of the complaint, including
recommended remedial action, where appropriate,
with regard to the matter that gave rise to the
complaint and the general environment out of which
the complaint arose.
The complaints examiner shall notify the complainant of the date on which this was done. In addition, the
complaints examiner shall transmit, by separate letter
to the EEO Programs Officer, any findings and recommendations he or she considers appropriate with respect to conditions at the Board which do not bear
directly on the matter which gave rise to the complaint
or which bear on the general environment out of which
the complaint arose.
Section 268.309—Relationship to Other Agency
Appellate Procedure
When an employee or applicant for employment
makes a written allegation of discrimination on
grounds of race, color, religion, sex, national origin,
age, or physical or mental handicap, in connection
with an action that would otherwise be processed
under a grievance procedure or other system of the
Board, the allegation of discrimination shall be processed under this Regulation.
Section 268.310—Avoidance of Delay
(a) The complaint shall be resolved promptly. To this
end, both the complainant and the Board shall proceed
with the complaint as specified in this Regulation
without undue delay so that the complaint is resolved
within 180 calendar days after it was filed, including
time spent in the processing of the complaint by the
complaints examiner under section 268.308. When the
complaint has not been resolved within such time, the
complainant may petition the Staff Director For Management for a review of the reasons for the delay.
(b) The EEO Programs Officer may cancel a complaint
if the complainant fails to prosecute the complaint
without undue delay. Such action may be taken only
after the EEO Programs Officer has provided the
complainant, or his or her authorized representative,
with a written request, including notice of the proposed cancellation, that the complainant provide cer-
552 Federal Reserve Bulletin • July 1985
tain information or otherwise proceed with the complaint, and the complainant has failed to satisfy this
request within 15 calendar days of receipt by the
complainant, or his or her authorized representative,
of this request. However, instead of cancelling for
failure to prosecute, the complaint may be adjudicated
if sufficient information for that purpose is available,
(c) When the complaints examiner has submitted a
recommended decision finding discrimination and a
final decision has not been issued by the Board of
Governors or the Administrative Governor under section 268.311, or by the Staff Director For Management
if he or she is delegated the authority to act for the
Administrative Governor pursuant to
section
268.202(c), within 180 calendar days after the date the
complaint was filed, the complaints examiner's recommended decision shall become a final decision binding
on the Board 30 calendar days after its submission to
the EEO Programs Officer. In such event, the complainant shall be notified of the decision and furnished
a copy of the findings, analysis, recommended decision of the complaints examiner under section
268.308(g), and a copy of the hearing record and shall
be advised that at the complaint's request the decision
may be reviewed by the Equal Employment Opportunity Commission pursuant to subpart H of this Part, of
his or her right to file a civil action as described in
section 268.316 of this regulation, and of the time
limits applicable thereto.
Section 268.311—Decision on the Complaint
(a) The EEO Programs Officer shall notify the Board
of Governors when the complaint is ripe for decision
under this section. At the request of any member of
the Board of Governors made within 7 calendar days
of such notice, the Board of Governors shall make the
decision on the complaint. If no such request is made,
the Administrative Governor, or the Staff Director For
Management if he or she is delegated the authority to
do so under section 268.202(c), shall make the decision
on the complaint. The decision on the complaint shall
be made based on information in the complaint file and
shall be made in a fair, impartial, and objective manner.
(b)(1) The decision on the complaint shall be in writing, shall reflect the date of issuance, and shall be
transmitted to the complainant, or his or her authorized representative, either by certified mail, return
receipt requested, or by any other method which
establishes the date of receipt by the complainant,
or his or her authorized representative.
(2) When there has been a hearing on the complaint,
the decision letter shall transmit a copy of the
findings, analysis, and recommended decision of the
complaints examiner under section 268.308(g) of this
subpart and a copy of the hearing record. The
decision shall adopt, reject, or modify the recommended decision of the complaints examiner under
section 268.308(g). If the decision is to reject or
modify the recommended decision, the decision
letter shall set forth the specific reasons in detail for
rejection or modification.
(3) When there has been no hearing under section
268.308 and no adjustment under section 268.307,
the decision letter shall set forth the findings, analysis, and decision of the Board of Governors or the
Administrative Governor under paragraph (a) of this
section, or of the Staff Director For Management if
he or she has been delegated the authority to make
the decision under section 268.202(c).
(c) The decision shall require any remedial action
authorized by law and determined to be necessary or
desirable to resolve the issue of discrimination and to
promote the policy of equal opportunity, whether or
not there is a finding of discrimination. When discrimination is found, the decision maker shall:
(1) Advise the complainant, or his or her authorized
representative, that any request for attorney's fees
and/or costs must be documented and submitted
within 20 calendar days of receipt;
(2) require remedial action to be taken in accordance
with section 268.315;
(3) review the matter giving rise to the complaint to
determine whether disciplinary action against any
alleged discriminatory officials is appropriate; and
(4) record the basis for his or her decision to take, or
not to take, disciplinary action, but this decision
shall not be recorded in the complaint file.
(d) When the final decision provides for an award of
attorney's fees and/or costs, the amount of those
awards shall be determined under section 268.315(c).
In the unusual situation in which the Board determines
not to award attorney's fees and/or costs to a prevailing complainant, the decision shall set forth the specific reasons for denying the award.
(e) The decision letter shall inform the complainant
that at his or her request the decision may be reviewed
by the Equal Employment Opportunity Commission
under subpart H, of his or her right to file a civil action
in accordance with section 268.316 of this subpart, and
of the time limits applicable thereto.
Section 268.312—Complaint File
(a) The EEO Officer shall maintain a complaint file
containing all documents pertinent to the complaint,
except as provided in section 268.311(c)(4).
(1) The complaint file shall include copies of:
(i) The notice of the EEO Counselor to the
Legal Developments
complainant, or his or her authorized representative, pursuant to section 268.301(a);
(ii) the written report of the EEO Counselor under
section 268.301(a) to the EEO Officer on whatever
precomplaint counseling efforts were made with
regard to the complainant's case;
(iii) the complaint;
(iv) the investigative file;
(v) if the complaint is withdrawn by the complainant, a written statement of the complainant, or his
or her authorized representative, to that effect;
(vi) if adjustment of the complaint is arrived at
under section 268.307, the written record of the
terms of the adjustment;
(vii) if no adjustment of the complaint is arrived at
under section 268.307, a copy of the letter under
section 268.307(d) notifying the complainant, or
his or her authorized representative, of the proposed disposition of the complaint and of complainant's right to a hearing;
(viii) if the decision is made under section
268.307(e), a copy of the letter to the complainant
transmitting that decision;
(ix) if a hearing was held, the record of the
hearing, together with the complaints examiner's
findings, analysis, and recommended decision on
the merits of the complaint;
(x) the recommendations of the Staff Director For
Management or the EEO Programs Officer, if any,
to the Board of Governors, the Administrative
Governor, or the Staff Director For Management;
and
(xi) if the decision is made under section 268.311,
a copy of the letter transmitting the decision.
(b) The complaint file shall contain no document that
has not been made available to the complainant, or his
or her authorized representative, including a physician
designated in writing by the complainant.
553
Section 268.314—Freedom from Reprisal or
Interference
(a) Freedom from reprisal. Complainants, their authorized representatives, and witnesses shall be free from
restraint, interference, coercion, discrimination, or
reprisal at any stage in the presentation and processing
of a complaint, including the counseling stage under
section 268.301, or any time thereafter.
(b) Review of allegations of reprisal. A complainant,
his or her authorized representative, or a witness who
alleges restraint, interference, coercion, discrimination, or reprisal for having filed a complaint or for
having participated in the processing of a complaint
under this subpart, may, if an employee or applicant
for employment, have the allegation reviewed as an
individual complaint of discrimination subject to the
provisions of this subpart.
(c) Consolidation of complaints. When a complainant
alleges that he or she has been subjected to restraint,
interference, coercion, discrimination, or reprisal in
connection with the filing of a prior complaint of
discrimination and that prior complaint from which the
allegation derives is in process at the Board at the time
the allegation is made, the complainant may request
the EEO Programs Officer to consolidate the allegation with the prior complaint. If the prior complaint is
at the hearing stage of the complaint process under
section 268.308, the complainant may request the
complaints examiner to consolidate the allegation with
the complaint at the hearing. The EEO Programs
Officer or the complaints examiner may grant the
request, provided, that the request is made within 30
calendar days of occurrence of the act which forms the
basis of the allegation, or within 30 calendar days of its
effective date, if a personnel action. The EEO Programs Officer or the complaints examiner may also
deny the request, at his or her discretion, and require
that the allegation be processed in accordance with
section 268.314(b).
Section 268.313—Joint Processing and
Consolidation of Complaints
Section 268.315—Remedial Actions
(a) Two or more complaints of discrimination filed by
employees or applicants for employment with the
Board consisting of substantially similar allegations of
discrimination may, with the written permission of the
complainants, be consolidated by the EEO Programs
Officer.
(b) Two or more individual complaints of discrimination from the same employee or applicant for employment may, at the discretion of the EEO Programs
Officer, be joined for processing after notifying the
complainant that the complaints will be processed
jointly.
(a) Remedial Action Involving an Applicant.
(1) When it is determined that an applicant for
employment has been discriminated against, the
Board shall offer the applicant employment of the
type and grade denied him or her, unless the record
contains clear and convincing evidence that the
applicant would not have been hired even absent
discrimination. The offer shall be made in writing.
The applicant shall have 15 calendar days from
receipt of the offer within which to accept or decline
the offer. Failure to notify the Board of his or her
decision within the 15-day period will be considered
554
Federal Reserve Bulletin • July 1985
a declination of the offer, unless the applicant can
show that circumstances beyond his or her control
prevented the applicant from responding within the
time limit. If the offer is accepted, appointment shall
be retroactive to the date the applicant should have
been hired, subject to the limitation in paragraph
(a)(3) of this section. Back pay, computed in the
manner set forth in paragraph (d) of this section,
shall be awarded from the beginning of the retroactive period, subject to the same limitation, until the
date the individual actually enters on duty. The
applicant shall be deemed to have performed services for the Board during this period of retroactivity for all purposes except for meeting service requirements for completion of a probationary or trial
period that is required. If the offer is declined, the
applicant shall be awarded a sum equal to the back
pay he or she would have received, computed in the
manner set forth in paragraph (d) of this section,
from the date he or she would have been appointed
until the date the offer was made subject to paragraph (a)(3) of this section. The applicant shall be
informed in the offer of his or her right to this award
in the event he declines the offer.
(2) When it is determined that discrimination existed
at the time the applicant was considered for employment but that there is clear and convincing evidence
that the applicant would not have been hired even
absent the discrimination, the Board shall consider
the applicant for any existing vacancy of the type
and grade for which he or she was considered
initially and for which he or she is qualified before
consideration is given to other candidates. If the
applicant is not selected, the Board shall record the
reasons for nonselection. If no vacancy exists, the
Board shall give the applicant priority consideration
for the next vacancy for which he or she is qualified.
This priority shall take precedence over all other
Board employment priorities.
(3) A period of retroactivity or a period for which
back pay is awarded under this paragraph may not
extend from a date earlier than two years prior to the
date on which the complaint was initially filed. If a
finding of discrimination .was not based on a complaint, the period of retroactivity or period for which
back pay is awarded under this paragraph may not
extend earlier than two years prior to the date the
finding of discrimination was recorded.
(b) Remedial Action Involving an Employee. When it
is determined that a Board employee has been discriminated against, the Board shall take remedial
actions which may include, but need not be limited to,
one or more of the following:
(1) Retroactive promotion, with back pay computed
in the manner set forth in paragraph (d) of this
section, unless the record contains clear and convincing evidence that the employee would not have
been promoted or employed at a higher grade, even
absent discrimination. The back pay liability may
not accrue from a date earlier than two years prior to
the date the discrimination complaint was filed, but,
in any event shall not exceed the date the employee
would have been promoted. If a finding of discrimination was not based on a complaint, the back pay
liability may not accrue from a date earlier than two
years prior to the date the finding of discrimination
was recorded, but, in any event, shall not exceed the
date he or she would have been promoted;
(2) consideration for promotion to a position for
which the employee is qualified before consideration is given to other candidates, if the record
contains clear and convincing evidence that, although discrimination existed at the time selection
for promotion was made, the employee would not
have been promoted even absent discrimination. If
the employee is not selected, the Board shall record
the reasons for nonselection. This priority consideration shall take precedence over all other Board
employment priorities;
(3) cancellation of an unwarranted personnel action
and restoration of the employee;
(4) expunction from the Board's records of any
reference to or any record of an unwarranted disciplinary action;
(5) full opportunity to participate in the employee
benefit denied him or her (e.g., training, preferential
work assignments, overtime scheduling).
(c) Attorney's Fees or Costs.
(1) Awards of Attorney's Fees or Costs. The Board
may award the complainant reasonable attorney's
fees and/or costs incurred in the processing of
complaints of discrimination or retaliation under this
subpart. In a decision made under sections 268.307,
268.310, 268.311, 268.314, or under subpart D of this
regulation, or in connection with any review by the
Equal Employment Opportunity Commission pursuant to subpart H, the Board may award reasonable
attorney's fees or costs incurred in the processing of
the matter.
(i) A finding of discrimination shall raise a presumption of entitlement to an award of attorney's
fees.
(ii) Attorney's fees may be allowed only for the
services of members of the Bar and law clerks,
paralegals, or law students under supervision of
members of the Bar, except that no award is
allowable for the services of any employee of the
Federal Government.
(iii) Attorney's fees shall be paid only for services
performed after the filing of the complaint under
Legal Developments
section 268.302 and after the complainant has
notified the Board that he or she is represented by
an attorney, except that fees are allowable for a
reasonable period of time prior to the notification
of representation for any services performed in
reaching a determination to represent the complainant. Written submissions to the Board which
are signed by the attorney shall be deemed to
constitute notice of representation.
(2) Amount of Award. When it is determined to
award attorney's fees and/or costs, the complainant's attorney shall submit a verified statement of
costs and attorney's fees, as appropriate, to the
Board within 20 calendar days of receipt of the
decision. A statement of attorney's fees shall be
accompanied by an affidavit executed by the attorney of record itemizing the attorney's charges for
legal services, and both the verified statement and
the accompanying affidavit shall be made a part of
the complaint file. The amount of attorney's fees
and/or costs to be awarded the complainant shall be
determined by agreement between the complainant,
the complainant's representative, and a representative of the Board. Such agreement shall immediately be reduced to writing. If the complainant, the
complainant's representative, and the Board's representative cannot reach an agreement on the
amount of attorney's fees and costs within 20 calendar days of receipt of the verified statement and
accompanying affidavit, the amount of attorney's
fees and/or costs to be awarded shall be decided
under section 268.311 within 30 calendar days of
receipt of the statement and affidavit. Such decision
shall include the specific reasons for determining the
amount of the award.
(i) The amount of the attorney's fees and costs
awarded shall be determined in accordance with
the following standards: the time and labor required; the novelty and difficulty of the questions
presented by the complaint; the skill requisite to
perform the legal services properly; the preclusion of other employment by the attorney due to
acceptance of the case; the customary fee; whether the fee is fixed or contingent; time limitations
imposed by the client or the circumstances; the
amount involved and the results obtained; the
experience, reputation, and ability of the attorney; the undesirability of the case; the nature and
length of the professional relationship between
the complainant and the attorney; and awards in
similar cases.
(ii) The costs which may be awarded include:
(A) Fees of the reporter for all or any of the
stenographic transcript necessarily obtained for
use in the case unless provided by the Board;
555
(B) fees and disbursements for printing and
witnesses except to the extent already paid for
by the Board;
(C) fees for exemplification and copies of papers necessarily obtained for use in the case
except to the extent already paid for by the
Board; and
(D) any other costs determined to be reasonable
by the Board of Governors or the Administrative Governor under section 268.311, or the
Staff Director For Management if he or she is
authorized to make the decision under section
268.202(c). Witness fees shall be awarded in
accordance with the provisions of 28 U.S.C.
§ 1821. However, no award may be made for a
Board or Federal government employee who is
in a duty status when made available as a
witness.
(d) Computation of Back Pay.
(1) The Board will compute for the period covered
by the corrective action the pay, allowances, and
differentials the complainant would have received if
discrimination had not occurred.
(2) N o complainant shall be granted more pay,
allowances, or differentials under this paragraph
than he or she would have received if discrimination
had not occurred.
(3) Except as provided in paragraph (d)(4) of this
section, in computing back pay under this paragraph, the Board shall not include:
(i) Any period during which the complainant was
not ready, willing, and able to perform his or her
duties because of an incapacitating illness or
injury; or
(ii) any period during which the complainant was
unavailable for the performance of his or her
duties for reasons other than those related to, or
caused by, the discriminatory actions against the
complainant.
(4) In computing the amount of back pay under this
paragraph, the Board shall grant, upon written request of a complainant, any sick or annual leave
available to the complainant for a period of incapacitation if the complainant can establish that the
period of the incapacitation was the result of illness
or injury.
(5) In computing the amount of back pay under this
paragraph, the Board shall deduct:
(i) Any amounts earned by a complainant from
other employment during the period covered by
the corrective action. The Board will include as
other employment only employment engaged in
by the complainant to take the place of employment from which the complainant had been separated from or did not receive because of discrimi-
556 Federal Reserve Bulletin • July 1985
nation against the complainant; and
(ii) any erroneous payments received from the
Board or other Federal government agencies as a
result of the discriminatory actions against complainant, which, in the case of erroneous payments received from the Board's or other Federal
government retirement systems, shall be returned
to the appropriate system.
Section 268.316—Right to File a Civil Action
(a) Except as provided in paragraph (c) of this section,
a complainant is authorized to file a civil action against
the Board in an appropriate United States District
Court:
(1) Within 30 calendar days of receipt of notice of
final action on the complaint under sections
268.305(b), 268.307(b), 268.310(b) and (c), and
268.311;
(2) after 180 calendar days from a date of filing a
complaint with the Board if there has been no
decision;
(3) within 30 calendar days following receipt of
notice of the final findings of the Equal Employment
Opportunity Commission on a request to review the
final action by the Board pursuant to subpart H of
this Regulation; or
(4) after 180 calendar days from the date of filing of a
request for review of a final decision of the Board by
the Equal Employment Opportunity Commission if
there has been no findings by the Equal Employment Opportunity Commission pursuant to subpart
H of this Regulation.
(b) For the purposes of this part, the decision of the
Board shall be final only when the Board makes a
determination on all of the issues in the complaint,
including whether or not to award attorney's fees and/
or costs. If a determination to award attorney's fees
and/or costs is made, the decision is not final until the
procedures are followed for determining the amount of
the award as set forth in section 268.315(c) of this
subpart.
(c) A complainant who filed a complaint of discrimination because of age or because of denial of equal pay
shall file civil actions within the time limits set forth in
section 268.505 of subpart E of this Regulation for
complaints of age discrimination and in section
268.904 of subpart I of this Regulation for complaints
of denial of equal pay.
Section 268.317—Notice of Right
The Board shall notify a complainant in writing of his
or her right to file a civil action, and of the 30-day time
limit to file civil suit specified in section 268.316, or of
the 6 year time limit to file civil action specified in
section 268.505 in the case of discrimination because
of age and in section 268.904 in the case of denial of
equal pay, in any final action on a complaint under this
subpart.
Section 268.318—Effect on Administrative
Procedure
The filing of a civil action does not terminate Board
processing of a complaint or Equal Employment Opportunity Commission review of any Board action
under this subpart.
Subpart D—Class Complaints of Discrimination
Section 268.401—Definitions
(a) A "class" is a group of Board employees or
applicants for employment, on whose behalf it is
alleged that they have been, are being, or may be
adversely affected, by a Board personnel management
policy or practice which the Board has authority to
rescind or modify, and which discriminates against the
group on the basis of their common race, color,
religion, sex, national origin, age, or mental or physical handicap.
(b) A "class complaint" is a written complaint of
discrimination filed on behalf of a class by the agent of
the class alleging that:
(1) The class is so numerous that a consolidated
complaint of the members of the class is impractical ;
(2) there are questions of fact common to the class;
(3) the claims of the agent of the class are typical of
the claims of the class; and
(4) the agent of the class, or his or her authorized
representative, if any, will fairly and adequately
protect the interests of the class.
(c) An "agent of the class" is a class member who acts
for the class during the processing of the class complaint.
Section 268.402—Precomplaint Processing
(a) An employee or applicant for employment who
wishes to be an agent and who believes he or she has
been discriminated against shall consult with an EEO
Counselor within 90 calendar days of the matter giving
rise to the allegation of individual discrimination or
within 90 calendar days of its effective date if a
personnel action.
(b) The EEO Counselor shall:
(1) Advise the aggrieved person of the discrimination complaint procedures, of his or her right to
representation, including legal counsel, throughout
Legal Developments
the precomplaint and complaint process, and of the
right to anonymity only during the precomplaint
process;
(2) make whatever inquiry he or she believes is
necessary;
(3) make an attempt at informal resolution through
discussion with appropriate officials;
(4) counsel the aggrieved person concerning the
issues involved;
(5) inform the EEO Officer and other appropriate
officials when he or she believes corrective action is
necessary;
(6) keep a record of all counseling activities; and
(7) summarize actions and advice in writing both to
the EEO Officer and the aggrieved person concerning the issues arising from the personnel management policy or practice in question.
(c) The EEO Counselor shall conduct a final interview
and terminate counseling with the aggrieved person
not later than 30 calendar days after the date on which
the allegation of discrimination was called to the
attention of the EEO Counselor. During the final
interview, the EEO Counselor shall inform the aggrieved person in writing that counseling is terminated, that he or she has the right to file a class complaint
of discrimination with appropriate officials of the
Board, of the time limits for filing a class complaint, of
his or her right to representation, including legal
counsel, and of his or her duty to assure that the Board
is immediately informed if legal representation is obtained.
(d) The EEO Counselor shall not attempt in any way to
restrain the aggrieved person from filing a complaint or
to encourage the person to file a complaint.
(e) The EEO Counselor shall not reveal the identity of
an aggrieved person during the period of consultation,
except when authorized to do so in writing by the
aggrieved person.
(f) All Board employees and officers shall fully cooperate with EEO Counselors in the performance of their
duties under this section. EEO Counselors shall have
routine access to personnel records of the Board
without unwarranted invasion of privacy.
(g) Corrective action taken as a result of counseling
shall be consistent with law and the Board's regulations, rules, and instructions.
Section 268.403—Filing and Presentation of a
Class Complaint
(a) The complaint must be submitted in writing by the
agent, or his or her authorized representative, and be
signed by the agent.
(b) The complaint shall set forth specifically and in
detail:
557
(1) A description of the Board personnel management policy or practice giving rise to the complaint;
and
(2) a description of the resultant personnel action or
matter adversely affecting the agent.
(c) The complaint must be filed not later than 15
calendar days after the agent's receipt of the notice of
final interview with an EEO Counselor pursuant to
section 268.402(c).
(d) The complaint must be filed with either the Administrative Governor, the Staff Director For Management, the EEO Programs Officer, the EEO Officer, the
Federal Women's Program Manager, the Hispanic
Program Coordinator, or the Handicapped Program
Coordinator.
(e) A complaint shall be deemed filed on the date it is
postmarked, or, in the absence of a postmark, on the
date it is received by an official with whom complaints
may be filed.
(f) At all stages, including counseling, in the preparation and presentation of a complaint or claim, and
review by the Equal Employment Opportunity Commission of a Board decision on a complaint or claim
under subpart H, the agent or claimant shall have the
right to be accompanied, represented, and advised by
a representative of his or her own choosing, including
legal counsel, provided the choice of a representative
does not involve a conflict of interest or conflict of
position. The representative shall be designated in
writing and the designation made a part of the class
complaint file.
(g) If the agent is a Board employee in an active duty
status, he or she shall have a reasonable amount of
official time to prepare and present the complaint.
Board employees, including attorneys, who are representing employees of the Board in discrimination
complaint cases must be permitted to use a reasonable
amount of official time to carry out that responsibility
whenever it is consistent with the faithful performance
of their duties.
Section 268.404—Acceptance, Rejection or
Cancellation
(a) Within 10 calendar days of the Board's receipt of a
complaint, the EEO Officer shall forward the complaint, along with a copy of the EEO Counselor's
report and any other information pertaining to timeliness or other relevant circumstances related to the
complaint, to the Equal Employment Opportunity
Commission with a request for designation of a complaints examiner qualified to conduct the proceeding.
(b) The complaints examiner may recommend that the
Board reject the complaint, or a portion thereof, for
any of the following reasons:
558 Federal Reserve Bulletin • July 1985
(1) The complaint was not timely filed;
(2) the complaint consists of an allegation identical
to an allegation contained in a previous complaint
filed on behalf of the same class which is pending
before the Board or which has been resolved or
decided by the Board;
(3) the complaint is not within the purview of this
subpart;
(4) the agent failed to consult an EEO Counselor in a
timely manner;
(5) the complaint lacks specificity and detail;
(6) the complaint was not submitted in writing or
was not signed by the agent; or
(7) the complaint does not meet all of the prerequisites set forth in section 268.401(b) of this subpart.
(c) If an allegation is not included in the EEO Counselor's report, the complaints examiner shall afford the
agent 15 calendar days to explain whether the matter
was discussed with an EEO Counselor and if not, why
he or she did not discuss the allegation with an EEO
Counselor. If the explanation is not satisfactory, the
complaints examiner may recommend that the Board
reject the allegation. If the explanation is satisfactory,
the complaints examiner may refer the allegation to
the Board for further counseling of the agent.
(d) If an allegation lacks specificity and detail, the
complaints examiner shall afford the agent 15 calendar
days to provide specific and detailed information. The
complaints examiner may recommend that the Board
reject the complaint if the agent fails to provide such
information within the specified time period. If the
information provided contains new allegations outside
the scope of the complaint, the complaints examiner
must advise the agent how to proceed on an individual
or class basis concerning these allegations.
(e) The complaints examiner may recommend that the
Board extend the time limits for filing a complaint and
for consulting with an EEO Counselor when the agent,
or his or her authorized representative, shows that he
or she was not notified of the prescribed time limits
and was not otherwise aware of them or that he or she
was prevented by circumstances beyond his or her
control from acting within the time limits.
(f) When appropriate, the complaints examiner may
recommend to the Board that a class be divided into
subclasses and that each subclass be treated as a class,
and the provisions of this section then shall be construed and applied accordingly.
(g) The complaints examiner may recommend that the
Board cancel a complaint after it has been accepted
because of failure of the agent to prosecute the complaint. This action may be taken only after the complaints examiner has provided the agent, or his or her
authorized representative, a written request, including
notice of proposed cancellation, that the agent provide
certain information or otherwise proceed with the
complaint, and the agent has failed to satisfy this
request within 15 calendar days of his or her receipt of
the request.
(h) An agent, or his or her authorized representative,
must be informed by the complaints examiner in a
request under (c) or (d) of this section that his or her
complaint may be rejected if the information is not
provided.
(i) The complaints examiner's recommendation to the
Board on whether to accept, reject, or cancel a complaint shall be transmitted in writing to the Board and
the agent, or his or her authorized representative. The
complaints examiner's recommendation to accept, reject, or cancel shall become the Board's decision
unless the EEO Programs Officer rejects or modifies
the decision within 10 calendar days of its receipt. The
EEO Programs Officer shall notify the agent, or his or
her authorized representative, and the complaints examiner of his or her decision to accept, reject, or
cancel a complaint. The notice of a decision to reject
or cancel the class complaint shall inform the agent of
his or her right to proceed with an individual complaint
of discrimination under subpart C, that he or she may
request that the Board's decision on the complaint be
reviewed by the Equal Employment Opportunity
Commission pursuant to subpart H, and of his or her
right to file a civil action pursuant to section 268.415,
and of the time limits applicable thereto.
Section 268.405—Notification and Opting Out
(a) After acceptance of a class complaint, the Board,
within 15 calendar days, shall use reasonable means,
such as delivery, mailing, distribution, or posting, to
notify all class members of the existence of the class
complaint.
(b) A notice shall contain:
(1) The name of the Board or organizational segments) thereof involved, its location, and the date
of acceptance of the complaint;
(2) a description of the issues accepted as part of the
class complaint;
(3) an explanation that class members may remove
themselves from the class by notifying the EEO
Programs Officer within 30 calendar days after issuance of the notice; and
(4) an explanation of the binding nature of the final
decision on or resolution of the complaint.
Section 268.406—Avoidance of Delay
The complaint shall be processed promptly after it has
been accepted. To this end, the parties shall proceed
with the complaint without undue delay so that the
complaint is processed within 180 calendar days after
it was filed.
Legal Developments
Section 268.407—Freedom from Restraint,
Interference, Correction, and Reprisal
(a) Agents, claimants, their authorized representatives, witnesses, the Staff Director For Management,
the EEO Programs Officer, the EEO Officer, EEO
Investigators, EEO Counselors, and other Board officials having responsibility for the processing of discrimination complaints shall be free from restraint,
interference, coercion, and reprisal at all stages in the
presentation and processing of a complaint, including
the counseling stage under section 268.402 or any time
thereafter.
(b) A person identified in paragraph (a) of this section,
if a Board employee or applicant for employment, may
file a complaint of restraint, interference, coercion, or
reprisal in connection with the presentation and processing of a complaint of discrimination. The complaint
shall be filed and processed in accordance with the
provisions of subpart C of this Regulation.
Section 268.408—Obtaining Evidence
Concerning the Complaint
(a) General.
(1) Upon the acceptance of a complaint, the EEO
Programs Officer shall designate a Board representative. The Board representative shall not be an
alleged discriminating official or any individual designated under subpart B of this Regulation.
(2) In representing the Board, the Board representative shall consult with officials, if any, named
or identified as responsible for the alleged discrimination, and other officials or employees of the Board
as necessary. In such consultations, the Board representative shall be subject to the provisions of the
Board's regulations, rules, and instructions concerning privacy and access to individual personnel
records and reports.
(b) Development of evidence.
(1) The complaints examiner shall notify the agent,
or his or her authorized representative, and the
Board representative that a period of not more than
60 calendar days will be allowed for both parties to
prepare their cases. This time period may be extended by the complaints examiner upon the request of
either party. Both parties are entitled to reasonable
development of evidence on matters relevant to the
issues raised in the complaint. Evidence may be
developed through interrogatories, depositions, and
requests for production of documents. It shall be
grounds for objection to producing evidence that the
information sought by either party is irrelevant,
overburdensome, repetitious, or privileged.
(2) In the event that mutual cooperation fails, either
party may request the complaints examiner to rule
559
on a request to develop evidence. When the complaints examiner renders his or her report of findings
and recommendations on the merits of the complaint, a party's failure to comply with the complaints examiner's ruling on an evidentiary request
may be taken into account.
(3) During the time period for development of evidence, the complaints examiner may, at his or her
discretion, direct that an investigation of facts relevant to the complaint, or any portion thereof, be
conducted by an investigator trained and/or certified
by the Equal Employment Opportunity Commission.
(4) Both parties shall furnish the complaints examiner all materials that they wish the complaints examiner to examine and such other material as the
complaints examiner may request.
Section 268.409—Opportunities for Resolution
of the Complaint
(a) The complaints examiner shall furnish the agent, or
his or her authorized representative, and the Board
representative with a copy of all materials obtained
concerning the complaint and provide an opportunity
for the agent, or his or her authorized representative,
to discuss these materials with the Board representative and attempt resolution of the complaint.
(b) At any time after acceptance of a complaint, the
complaint may be resolved by agreement of the Board
and the agent to terms offered by either party.
(c) If resolution of the complaint is arrived at, the
terms of the resolution shall be reduced to writing, and
signed by the agent and the Staff Director For Management. A resolution may include a finding on the issue
of discrimination, and award of attorney's fees and/or
costs, and must include any corrective action agreed
upon. Corrective action in the resolution must be
consistent with law and the Board's regulations, rules,
and instructions. A copy of the resolution shall be
provided to the agent.
(d) Notice of the resolution shall be given to all class
members in the same manner as notification of the
acceptance of the class complaint and shall state the
terms of corrective action, if any, to be granted by the
Board. A resolution shall bind all members of the
class.
(e) If the Board does not carry out, or rescinds, any
action specified by the terms of the resolution for any
reason not attributable to acts or conduct of the agent,
his or her authorized representative, or class members, the Board upon the agent's written request shall
reinstate the complaint for further processing from the
point processing ceased under the terms of the resolution. Failure of the Board to reinstate the complaint
may be reviewed by the Equal Employment Opportu-
560 Federal Reserve Bulletin • July 1985
nity Commission pursuant to subpart H of this Regulation.
Section 268.410—Hearing
On the expiration of the period allowed for preparation
of the case, the complaints examiner shall set a date
for a hearing. The hearing shall be conducted in
accordance with section 268.308 of subpart C of this
Regulation.
Section 268.411—Report of Findings and
Recommendations
(a) The complaints examiner shall transmit to the EEO
Programs Officer:
(1) The record of the hearing;
(2) the complaints examiner's findings and analysis
with regard to the complaint; and
(3) the complaints examiner's report of findings and
recommended decision on the complaint, including
corrective action pertaining to systemic relief for the
class and any individual corrective action, where
appropriate, with regard to the personnel action or
matter which gave rise to the complaint.
(b) The complaints examiner shall notify the agent, or
his or her authorized representative, of the date on
which the report of findings and recommendations was
forwarded to the EEO Programs Officer.
Section 268.412—Board Decision
(a)(1) The EEO Programs Officer shall notify the
Board of Governors when the complaint is ripe for
decision under this section. At the request of any
member of the Board of Governors made within 7
calendar days of such notice, the Board of Governors shall make the decision on the complaint. If no
such request is made, the Administrative Governor,
or the Staff Director For Management if he or she is
delegated the authority to do so under section
268.202(c), shall make the decision on the complaint.
(2) Within 30 calendar days of receipt of the report
of findings and recommendations issued under section 268.411 of this subpart, the Board of Governors, the Administrative Governor, or the Staff
Director For Management if he or she is authorized
to make the decision under section 268.202(c), shall
issue a decision to accept, reject, or modify the
findings and recommendations of the complaints
examiner.
(3) The decision of the Board of Governors, the
Administrative Governor, or the Staff Director For
Management if he or she is delegated the authority
to make the decision under section 268.202(c), shall
be in writing and shall be transmitted to the agent, or
his or her authorized representative, along with a
copy of the record of the hearing and a copy of the
findings and recommendations of the complaints
examiner.
(4) When the decision of the Board of Governors,
the Administrative Governor, or the Staff Director
For Management if he or she is delegated the
authority to make the decision under section
268.202(c), is to reject or modify the findings and
recommendations of the complaints examiner, the
decision shall contain the specific reasons in detail
for the action.
(b) If the Board of Governors, the Administrative
Governor, or the Staff Director For Management if he
or she is authorized to make the decision under section
268.202(c), has not issued a decision within 30 calendar days of receipt by the Board of the complaints
examiner's report of findings and recommendations,
those findings and recommendations shall become the
final Board decision. The Board shall transmit the final
Board decision and the record of the hearing to the
agent, or his or her authorized representative, within 5
calendar days of the expiration of the 30-day period.
(c) The decision of the Board of Governors, the
Administrative Governor, or the Staff Director For
Management if he or she is authorized to make the
decision under section 268.202(c) of subpart C of this
Regulation, shall require any remedial action authorized by law and determined to be necessary or
desirable to resolve the issue of discrimination and to
promote the policy of equal opportunity, whether or
not there is a finding of discrimination. When discrimination is found, the Board shall:
(1) Advise the agent, or his or her authorized
representative, that any request for attorney's fees
and/or costs must be documented and submitted
within 20 calendar days of receipt of the decision;
(2) review the matter giving rise to the complaint to
determine whether disciplinary action against alleged discriminatory officials is appropriate; and
(3) record the basis for its decision to take or not to
take disciplinary action, but this decision shall not
be recorded in the complaint file.
(d) When the final decision provides for the award of
attorney's fees and/or costs, the amount of these
awards shall be determined under section 268.315(c) of
subpart C of this Regulation. When it is determined
not to award attorney's fees and/or costs, the decision
shall set forth the specific reasons for denying the
award.
Legal Developments
(e) The decision shall inform the agent, or his or her
authorized representative, that on request of the agent
the decision under this section may be reviewed by the
Equal Employment Opportunity Commission pursuant to subpart H of this Regulation, of his or her right
to file a civil action in accordance with section 268.415
of this subpart, and of the time limits applicable
thereto.
(f) A final decision on a class complaint shall be
binding on all members of the class and the Board.
Section 268.413—Notification to Class
Members of Decision
Class members shall be notified by the Board, through
the same media employed to give notice of the existence of the class complaint, of the Board decision and
corrective action, if any. The notice, where appropriate, shall include information concerning the rights of
class members to seek individual relief, and of the
procedures to be followed. Notice shall be given by
the Board within 10 calendar days of the transmittal of
its decision to the agent.
Section 268.414—Corrective Action
(a) When discrimination is found, the Board shall
eliminate or modify the personnel policy or practice
out of which the complaint arose, and provide individual corrective action, including an award of attorney's
fees and/or costs to the agent, in accordance with
section 268.315 of subpart C of this Regulation. Corrective action in all cases must be consistent with law
and Board regulations, rules, and instructions.
(b) When discrimination is found and a class member
believes that but for that discrimination, he or she
would have received employment or an employment
benefit, the class member may file a written claim with
the EEO Programs Officer within 30 calendar days of
notification by the Board of its decision.
(c) The claim must include a specific, detailed showing
that the claimant is a class member who was affected
by a personnel action or matter resulting from the
discriminatory policy or practice within not more than
135 calendar days preceding the filing of the class
complaint.
(d) The EEO Programs Officer shall attempt to resolve
the claim for relief within 60 calendar days after the
date the claim was postmarked, or in the absence of a
postmark, within 60 calendar days after the date it was
received by the EEO Programs Officer, with whom
claims may be filed. If the EEO Programs Officer and
claimant do not agree that the claimant is a member of
561
the class or upon the relief to which the claimant is
entitled, the EEO Programs Officer shall refer the
claim, with recommendations concerning it, to the
complaints examiner.
(e) The complaints examiner shall notify the claimant
of his or her right to a hearing on the claim and shall
allow the parties to the claim an opportunity to submit
evidence and representations concerning the claim. If
a hearing is requested, it shall be conducted in accordance with section 268.308 of subpart C of this Regulation. If no hearing is requested, the complaints examiner, in his or her discretion, may hold a hearing to
obtain necessary evidence concerning the claim.
(f) The complaints examiner shall issue a report of
findings and recommendations on the claim which
shall be treated the same as a report of findings and
recommendations under sections 268.411 and 268.412.
(g) If the complaints examiner determines that the
claimant is not a member of the class or that the claim
was not timely filed, the complaints examiner shall
recommend rejection of the claim and give notice of
his or her action to the Board, the claimant and the
claimant's authorized representative. Such notice
shall include advice that the claimant may request
review of the claim by the Equal Employment Opportunity Commission pursuant to subpart H and of
claimant's right to file a civil action in accordance with
the provisions of section 268.415.
Section 268.415—Right to File a Civil Action
for Judicial Review
(a) Except as provided in paragraph (c) of this section,
an agent who has filed a complaint or a claimant who
has filed a claim for relief based on race, color,
religion, sex, national origin, or physical or mental
handicap, is authorized to file a civil action against the
Board in an appropriate United States District Court:
(1) Within 30 calendar days of his or her receipt of
notice of final action taken by the Board;
(2) after 180 calendar days from the date he or she
filed a complaint or claim with the Board if there has
been no final decision on the complaint or claim.
(3) within 30 calendar days following receipt of
notice of the final findings of the Equal Employment
Opportunity Commission on a request to review the
final decision of the Board pursuant to subpart H of
this Regulation; or
(4) after 180 calendar days from the date of filing of a
request for review of a final decision of the Board by
the Equal Employment Opportunity Commission if
there has been no finding by the Equal Employment
Opportunity Commission pursuant to subpart H of
this Regulation.
562 Federal Reserve Bulletin • July 1985
(b) For the purposes of this Part, the decision of the
Board shall be final only when the Board makes a
determination on all issues in the complaint, including
whether or not to award attorney's fees and/or costs.
If a determination to award attorney's fees and/or
costs is made, the decision will not be final until the
procedure is followed for determining the amount of
the award as set forth in section 268.315(c) of subpart C.
(c) An agent who filed a class complaint of discrimination because of age shall file a civil suit within the time
limits set forth in section 268.505 of subpart E of this
regulation. An agent who filed a class complaint of
denial of equal pay shall file a civil suit within the time
limits set forth in section 268.904 of subpart I of this
Regulation.
comply with this policy.
(b) The Board shall not discriminate against any employee or applicant for employment because such
employee or applicant has opposed any practice forbidden under this subpart or because such employee
or applicant has made a charge, testified, assisted, or
participated in any manner in any investigation, proceeding, or litigation under this subpart.
(c) The Board shall not print or publish, or cause to be
printed or published, any notice or advertisement
relating to employment by the Board indicating any
preference, limitation, specification, or discrimination, based on age, except as permitted by section
268.504.
Section 268.416—Notice of Right
All individual and class complaints of discrimination
on the basis of age shall be filed and processed
pursuant to subparts C and D, respectively, except
that civil actions shall be filed pursuant to section
268.505 of this subpart and except that section
268.315(c) providing for award of attorney's fees and/
or costs shall not apply to complaints of discrimination
under this subpart. A complaint may also be filed by
an organization for a complainant with his or her
consent.
When the agent alleges that the Board discriminated
against a class on the basis of race, color, religion, sex,
national origin, age, or physical or mental handicap, or
a claimant files for relief, the Board shall notify the
agent or claimant in writing of his or her right to file a
civil action following any final action on a complaint or
claim under this subpart.
Section 268.417—Effect on Administrative
Processing
The filing of a civil action by an agent or claimant does
not terminate Board processing of a complaint or claim
or Equal Employment Opportunity Commission review of any Board action under this subpart.
Section 268.502—Processing of Complaints
Section 268.503—Coverage
A person filing a complaint of discrimination on the
basis of age must have been at least 40 years of age at
the time the alleged discrimination occurred.
Section 268.504—Exceptions
Subpart E—Nondiscrimination
Age
on Account of
Section 268.501—Policy Statement
(a) The Board shall not:
(1) Fail or refuse to hire or discharge any individual
or otherwise discriminate against any individual
with respect to his or her compensation, terms,
conditions, or privileges or employment, because of
such individual's age, except as permitted by section 268.504;
(2) limit, segregate, or classify Board employees or
applicants for employment in any way which would
deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his
or her status as an employee or applicant because of
such individual's age, except as permitted by section 268.504; or
(3) reduce the wage rate of any employee in order to
The Board may adopt such reasonable exemptions to
the provisions of this subpart as have been established
by the Equal Employment Opportunity Commission
pursuant to 29 C.F.R. § 1613.501(c).
Section 268.505—Right to File Civil Action for
Judicial Review
A complainant, agent, or claimant, under this subpart
is authorized to file a civil action against the Board in
an appropriate United States District Court within six
years of the matter causing the complainant, agent, or
claimant to believe he or she has been discriminated
against because of age.
Section 268.506—Effect on Administrative
Procedure
The filing of a civil action by an employee does not
terminate Board processing of a complaint under this
Legal Developments
subpart or Equal Employment Opportunity Commission review of any such complaint pursuant to subpart H.
Subpart F—Prohibition Against Discrimination
in Employment Because of a Physical or
Mental Handicap
Section 268.601—Definitions
(a) "Handicapped person" is defined for the purposes
of this subpart as one who has:
(1) A physical or mental impairment which substantially limits one or more of such person's major life
activities;
(2) has a record of such an impairment; or
(3) is regarded as having such an impairment.
(b) "Physical or mental impairment" means:
(1) any physiological disorder or condition, cosmetic
disfigurement, or anatomical loss affecting one or
more of the following body systems: Neurological;
musculoskeletal; special sense organs; respiratory,
including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic;
skin; and endocrine; or
(2) any mental or psychological disorder, such as
mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
(c) "Major life activities" means functions, such as
caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and
working.
(d) "Has a record of such an impairment" means has a
history of, or has been classified (or misclassified) as
having a mental or physical impairment that substantially limits one or more major life activities.
(e) "Is regarded as having such an impairment"
means:
(1) Has a physical or mental impairment that does
not substantially limit major life activities but is
treated by an employer as constituting such a limitation;
(2) has a physical or mental impairment that substantially limits major life activities only as a result
of the attitude of an employer toward such impairment; or
(3) has none of the impairments defined in paragraph
(b) of this section but is treated by an employer as
having such an impairment.
(f) "Qualified handicapped person" is defined for the
purposes of this subpart to mean, with respect to
employment, a handicapped person who, with or
without reasonable accommodation, can perform the
563
essential functions of the position in question without
endangering the health and safety of the handicapped
person or others, and who, depending upon the type of
appointing authority being used:
(1) Meets the experience and/or education requirements (which may include passing a written test) of
the position in question; or
(2) meets the criteria for appointment under one of
the special appointing authorities for handicapped
persons.
(g) "Facility" is defined for the purposes of this
subpart to mean all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling
stock or other conveyances, or other real or personal
property.
Section 268.602—General Policy
The Board gives full consideration to hiring, placement, and advancement of qualified physically or
mentally handicapped persons. The Board shall be a
model employer of handicapped individuals. The
Board shall not discriminate against qualified physically or mentally handicapped persons.
Section 268.603—Reasonable Accommodation
(a) The Board shall make reasonable accommodation
to the known physical or mental limitations of a
qualified handicapped employee or applicant for employment unless it can demonstrate that the accommodation would impose an undue hardship on the operation of its programs.
(b) Reasonable accommodation may include, but shall
not be limited to:
(1) Making facilities readily accessible to and usable
by handicapped persons;
(2) job restructuring, part-time or modified work
schedules, acquisition or modification of equipment
or devices, appropriate adjustment or modification
of examinations, the provision of readers and interpreters, and other similar actions; and
(3) reassignment to another job position, if practicable.
(c) In determining pursuant to paragraph (a) of this
section whether an accommodation would impose an
undue hardship on the operations of the Board, factors
to be considered include:
(1) The overall size of the Board's program with
respect to the number of employees, number and
type of facilities, and size of budget;
(2) the type of Board operation including the composition and structure of the Board's work force; and
(3) the nature and the cost of the accommodation.
564 Federal Reserve Bulletin • July 1985
Section 268.604—Employment Criteria
(a) The Board shall not make use of any employment
test or other selection criterion that screens out or
tends to screen out qualified handicapped persons or
any class of handicapped persons unless:
(1) The test score or other selection criterion, as
used by the Board, is job-related for the position in
question; and
(2) there are not available alternative job-related
tests or criteria that do not screen out or tend to
screen out as many handicapped persons.
(b) The Board shall select and administer tests concerning employment so as to insure that, when administered to an employee or applicant for employment
who has a handicap that impairs sensory, manual, or
speaking skills, the test results accurately reflect the
employee's or applicant's ability to perform the position or type of position in question, rather than reflecting the employee's or applicant's impaired sensory,
manual, or speaking skills (except where those skills
are the factors that the test purports to measure).
Section 268.605—Preemployment Inquiries
(a) Except as provided in paragraphs (b) and (c) of this
section, the Board shall not conduct any preemployment medical examination and shall not make preemployment inquiry of an applicant for employment as to
whether the applicant is a handicapped person or as to
the nature or severity of a handicap. The Board may,
however, make preemployment inquiry into an applicant's ability to meet the medical qualification requirements, with or without reasonable accommodation, of
the position in question (i.e., the minimum abilities
necessary for safe and efficient performance of the
duties of the position in question).
(b) Nothing in this section shall prohibit the Board
from conditioning an offer of employment on the
results of a medical examination conducted coincident
to the employee's entrance on duty, provided, that:
(1) All entering employees are subjected to such an
examination regardless of handicap or when the
preemployment medical questionnaire used for positions which do not routinely require medical examination indicates a condition for which further examination is required because of the job-related nature
of the condition; and
(2) the results of such an examination are used only
in accordance with the requirements of this subpart.
(c) To enable and evaluate affirmative action to hire,
place, or advance handicapped individuals, the Board
may invite employees and applicants for employment
to indicate whether and to what extent they are
handicapped, provided that:
(1) Any written questionnaire used for this purpose,
and any employee requesting such information,
shall state clearly that the information requested is
intended for use solely in conjunction with affirmative action; and
(2) any such written questionnaire or employee
requesting such information shall state clearly that
the information is being requested on a voluntary
basis, that refusal to provide it will not subject the
employee or applicant for employment to any adverse treatment, and that it will be used only in
accordance with this subpart,
(d) Information obtained in accordance with this section as to the medical condition or history of the
employee or applicant for employment shall be kept
confidential except that:
(1) Managers, selecting officials, and others involved in the selection process or responsible for
affirmative action may be informed that the employee or applicant for employment is a handicapped
individual eligible for affirmative action;
(2) supervisors and managers may be informed
regarding necessary accommodations;
(3) first aid and safety personnel may be informed,
where appropriate, if the condition might require
emergency treatment;
(4) government officials investigating compliance
with laws, regulations, and instructions relevant to
equal opportunity and affirmative action for handicapped individuals shall be provided information
upon request; and
(5) statistics generated from information obtained
may be used to manage, evaluate, and report on
equal opportunity and affirmative action programs.
Section 268.606—Physical Access to Buildings
The Board shall not discriminate against qualified
handicapped employees or applicants for employment
due to the inaccessibility of its facilities.
Section 268.607—Processing Complaints
All individual complaints of discrimination on the
basis of handicap shall be processed under subpart C.
All class complaints of discrimination on the basis of
handicap shall be processed under subpart D.
Subpart G—Prohibition Against Discrimination
in Board Programs and Activities because of a
Physical or Mental Handicap
Section 268.701—Purpose and Application
(a) Purpose. The purpose of this subpart is to prohibit
discrimination on the basis of handicap in programs or
activities conducted by the Board.
Legal Developments
(b) Application. This subpart applies to all programs
and activities conducted by the Board. Such programs
and activities include:
(1) Holding open meetings of the Board or other
meetings or public hearings at the Board's office in
Washington, D.C.;
(2) responding to inquiries, filing complaints, or
applying for employment at the Board's office;
(3) making available the Board's library facilities;
and
(4) any other lawful interaction with the Board or its
staff in any official matter with people who are not
employees of the Board.
This subpart does not apply to Federal Reserve
banks or to financial institutions or other companies
supervised or regulated by the Board.
Section 268.702—Definitions
(a) "Auxiliary aids" means services or devices that
enable persons with impaired sensory, manual, or
speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the Board. For example, auxiliary
aids useful for persons with impaired vision include
readers, Brailled materials, audio recordings, telecommunication devices and other similar services and
devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers,
telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD's), interpreters, note takers, written materials, and other similar
services and devices.
(b) "Complete complaint" means a written statement
that contains the complainant's name and address and
describes the Board's alleged discriminatory actions in
sufficient detail to inform the Board of the nature and
date of the alleged violation. It shall be signed by the
complainant or by someone authorized to do so on his
or her behalf. Complaints filed on behalf of classes or
third parties shall describe or identify (by name, if
possible) the alleged victims of discrimination.
(c) "Facility" means all or any portion of buildings,
structures, equipment, roads, walks, parking lots,
rolling stock or other conveyances, or other real or
personal property.
(d) "Handicapped person" means any person who
has:
(1) A physical or mental impairment which substantially limits one or more of such person's major life
activities;
(2) has a record of such an impairment; or
(3) is regarded as having such an impairment.
(e) "Physical or mental impairment" means:
(1) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or
565
more of the following body systems: Neurological;
musculoskeletal; special sense organs; respiratory,
including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic;
skin; and endocrine; or
(2) any mental or psychological disorder, such as
mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
The term "physical or mental impairment" includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy,
muscular
dystrophy, multiple sclerosis, cancer, heart disease,
diabetes, mental retardation, emotional illness, and
drug addiction and alcoholism.
(f) "Major life activities" means functions such as
caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and
working.
(g) "Has a record of such an impairment" means has a
history of, or has been misclassified as having, a
mental or physical impairment that substantially limits
one or more major life activities.
(h) "Is regarded as having an impairment" means:
(1) Has a physical or mental impairment that does
not substantially limit major life activities but is
treated by the Board as constituting such a limitation;
(2) has a physical or mental impairment that substantially limits major life activities only as a result
of the attitudes of others toward such impairment;
or
(3) has none of the impairments defined in subparagraph (1) of this definition but is treated by the
Board as having such an impairment.
(i) "Qualified handicapped person" means:
(1) With respect to a Board program or activity
under which a person is required to perform services
or to achieve a level of accomplishment, a handicapped person who meets the essential eligibility
requirements and who can achieve the purpose of
the program or activity without modifications in the
program or activity that the Board can determine on
the basis of a written record would result in a
fundamental alteration in its nature; or
(2) with respect to any other program or activity, a
handicapped person who meets the essential eligibility requirements for participation in, or receipt of
benefits from, that program or activity.
Section 268.703—Self Evaluation
(a) The Board shall, within one year of the effective
date of this section, evaluate its current policies and
practices, and the effects thereof, that do not or may
566 Federal Reserve Bulletin • July 1985
not meet the requirements of this subpart, and, to the
extent modifications of any such policies and practices
is required, the Board shall proceed to make the
necessary modifications.
(b) The Board shall provide an opportunity to interested persons, including handicapped persons or organizations representing handicapped persons, to participate in the self-evaluation process by submitting
comments (both oral and written).
(c) The Board shall, for three years from the effective
date of this section, maintain on file and make available for public inspection:
(1) A description of areas examined and any problems identified; and
(2) a description of any modifications made.
Section 268.704—Notice
The Board shall make available to employees, applicants for employment, participants, beneficiaries, and
other interested persons such information regarding
the provisions of this subpart and its applicability to
the programs and activities conducted by the Board,
and make such information available to them in such
manner as the Board finds necessary to appraise such
persons of the protections against discrimination assured them by this subpart.
Section 268.705—Prohibition Against
Discrimination
(a) N o qualified handicapped person shall, on the basis
of handicap, be excluded from participation in, be
denied the benefits of, or otherwise be subjected to
discrimination in any program or activity conducted
by the Board.
(b)(1) The Board, in providing any aid, benefit, or
service, may not, directly or through contractual,
licensing, or other arrangements, on the basis of
handicap:
(i) Deny a qualified handicapped person the opportunity to participate in or benefit from the aid,
benefit, or service;
(ii) afford a qualified handicapped person an opportunity to participate in or benefit from the aid,
benefit, or service that is not equal to that afforded others;
(iii) provide a qualified handicapped person with
an aid, benefit, or service that is not as effective in
affording equal opportunity to obtain the same
result, to gain the same benefit, or to reach the
same level of achievement as that provided to
others;
(iv) provide different or separate aid, benefits, or
services to handicapped persons or to any class of
handicapped persons than is provided to others
unless such action is necessary to provide qualified handicapped persons with aid, benefits, or
services that are as effective as those provided to
others;
(v) deny a qualified handicapped person the opportunity to participate as a member of planning
or advisory boards; or
(vi) otherwise limit a qualified handicapped person in the enjoyment of any right, privilege,
advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The Board may not deny a qualified handicapped
person the opportunity to participate in programs or
activities that are not separate or different, despite
the existence of permissibly separate or different
programs or activities.
(3) The Board may not, directly or through contractual or other arrangements, utilize criteria or methods of administration, the purpose or effect of which
would:
(i) Subject qualified handicapped persons to discrimination on the basis of handicap; or
(ii) defeat or substantially impair accomplishment
of the objectives of a program or activity with
respect to handicapped persons.
(4) The Board may not, in determining the site or
location of a facility, make selections the purpose or
effect of which would:
(i) Exclude handicapped persons from, deny them
the benefits of, or otherwise subject them to
discrimination under any program or activity
conducted by the Board; or
(ii) defeat or substantially impair the accomplishment of the objectives or a program or activity
with respect to handicapped persons.
(5) The Board, in the selection of procurement
contractors, may not use criteria that subject qualified handicapped persons to discrimination on the
basis of handicap.
(6) The Board may not administer a licensing or
certification program in a manner that subjects
qualified handicapped persons to discrimination on
the basis of handicap, nor may the Board establish
requirements for the programs and activities of
licensees or certified entities that subject qualified
handicapped persons to discrimination on the basis
of handicap. However, the programs and activities
of entities that are licensed or certified by the Board
are not, themselves, covered by this subpart.
(c) The exclusion of nonhandicapped persons from the
benefits of a program limited by Federal statute or
Board Order to handicapped persons or the exclusion
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of a specific class of handicapped persons from a
program limited by Federal statute or Board Order to a
different class of handicapped persons is not prohibited by this subpart.
(d) The Board shall administer programs activities in
the most integrated setting appropriate to the needs of
qualified handicapped persons.
Section 268.706—Employment
N o qualified handicapped person shall, on the basis of
handicap, be subjected to discrimination in employment under any program or activity conducted by the
Board. The definitions, requirements and procedures
of subpart F of this regulation shall apply to discrimination in employment under this subpart.
Section 268.707—Program Accessibility:
Discrimination Prohibited
Except as otherwise provided in section 268.708, no
qualified handicapped person shall, because the
Board's facilities are inaccessible to or unusable by
handicapped persons, be denied the benefits of, be
excluded from participation in, or otherwise be subjected to discrimination under any program or activity
conducted by the Board.
Section 268.708—Program Accessibility:
Existing Facilities
(a) General. The Board shall operate each program or
activity so that the program or activity, when viewed
in its entirety, is readily accessible to and usable by
handicapped persons. This paragraph does not:
(1) Necessarily require the Board to make each of its
existing facilities accessible to and usable by handicapped persons; or
(2) require the Board to take any action that it can
determine, based on a written record, would result
in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where the
Board believes that the proposed action would fundamentally alter the program or activity or would
result in undue financial and administrative burdens,
the Board shall establish a written record showing
that compliance with paragraph (a) of this section
would result in such alterations or burdens. The
decision that compliance would result in such alterations or burdens shall be made by the Board of
Governors or their designee after considering all
567
Board resources available for use in the funding and
operation of the conducted program or activity, and
must be accompanied by a written statement of the
reasons for reaching that conclusion. If an action
would result in such an alteration or such burdens,
the Board shall take any other action that would not
result in such an alteration or such burdens but
would nevertheless ensure that handicapped persons receive the benefits and services of the program or activity.
(b) Methods. The Board may comply with the requirements of this section through such means as redesign
of equipment, reassignment of services to accessible
buildings, assignment of aides to handicapped persons, home visits, delivery of service at alternate
accessible sites, alteration of existing facilities and
construction of new facilities, use of accessible rolling
stock, or any other methods that result in making its
programs or activities readily accessible to and usable
by handicapped persons. The Board is not required to
make structural changes in existing facilities where
other methods are effective in achieving compliance
with this section. In choosing among available methods for meeting the requirements of this section, the
Board gives priority to those methods that offer programs and activities to qualified handicapped persons
in the most integrated setting appropriate.
(c) Time period for compliance.
The Board shall
comply with any obligations established under this
section with which it is not presently complying within
sixty days of the effective date of this section except
that where structural changes in facilities are undertaken, such changes shall be made within three years
of the effective date of this section, but in any event, as
expeditiously as possible.
(d) Transition plan. In the event that structural
changes to facilities will be undertaken to achieve
program accessibility, the Board shall develop, within
six months of the effective date of this section, a
transition plan setting forth the steps necessary to
complete such changes. The Board shall provide an
opportunity to interested persons, including handicapped persons or organizations representing handicapped persons, to participate in the development of
the transition by submitting comments (both oral and
written). A copy of the transition plan shall be made
available for public inspection. The plan shall, at a
minimum:
(1) Identify physical obstacles in the Board's facilities that limit the accessibility of its programs or
activities to handicapped persons;
(2) describe in detail the modifications that will
make the facilities accessible;
(3) specify the schedule for taking the steps necessary to achieve compliance with this section and, if
568 Federal Reserve Bulletin • July 1985
the time period of the transition plan is longer than
one year, identify steps that will be taken during
each year of the transition period; and
(4) indicate the official responsible for implementation of the plan.
Section 268.709—Program Accessibility: New
Construction and Alterations
Each building or part of a building that is constructed
or altered by, on behalf of, or for the use of the Board,
shall be designed, constructed, or altered so as to be
readily accessible to and usable by handicapped persons.
tive burdens, the Board shall establish a written record
showing compliance with this section would result in
such alterations or burdens. The determination that
compliance would result in such alterations or burdens
shall be made by the Board of Governors or their
designee after considering all Board resources available for use in the funding and operation of the
conducted program or activity, and must be accompanied by a written statement of the reasons for reaching
that conclusion. If an action required to comply with
this section would result in such an alteration or such
burdens, the Board shall take any other action that
would not result in such an alteration or such burdens
but would nevertheless ensure that, to the maximum
extent possible, handicapped persons receive the
benefits and services of the program or activity.
Section 268.710—Communications
Section 268.711—Compliance Procedures
(a) The Board shall take appropriate steps to ensure
effective communication with applicants, participants,
personnel of other Federal entities, and members of
the public.
(1) The Board shall furnish appropriate auxiliary
aids where necessary to afford a handicapped person an equal opportunity to participate in, and enjoy
the benefits of, a program or activity conducted by
the Board.
(i) In determining what type of auxiliary aid is
necessary, the Board shall give primary consideration to the requests of the handicapped person.
(ii) The Board need not provide individually prescribed devices, readers for personal use or study,
or other devices of a personal nature.
(2) Where the Board communicates with employees
and others by telephone, telecommunications devices for deaf persons (TDD's) or equally effective
telecommunication systems shall be used.
(b) The Board shall ensure that interested persons,
including persons with impaired vision or hearing, can
obtain information as to the existence and location of
accessible services, activities, and facilities.
(c) The Board shall provide signs at a primary entrance
to any inaccessible facility, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an
accessible facility.
(d) This section does not require the Board to take any
action that would result in a fundamental alteration in
the nature of a program or activity or in undue
financial and administrative burdens. In those circumstances where the Board believes that the proposed
action would fundamentally alter the program or activity or would result in undue financial and administra
(a) Applicability. Not withstanding any other provision
of this Regulation, this section, except as provided in
paragraph (b) of this section, rather than subparts C
and D of this Regulation shall apply to all allegations of
discrimination on the basis of handicap in programs or
activities conducted by the Board.
(b) Employment Complaints. The Board shall process
complaints alleging discrimination in employment on
the basis of handicap in accordance with section
268.607.
(c) Responsible Official. The EEO Programs Officer
shall be responsible for coordinating implementation
of this section.
(d) Filing the Complaint
(1) Who may file. Any person who believes that he
or she has been subjected to discrimination prohibited by this subpart may, personally or by his or her
authorized representative, file a complaint of discrimination with the EEO Programs Officer.
(2) Confidentiality. The EEO Programs Officer shall
not reveal the identity of any person submitting a
complaint, except when authorized to do so in
writing by the complainant, and except to the extent
necessary to carry out the purposes of this subpart,
including the conduct of any investigation, hearing,
or proceeding under this subpart.
(3) When to File. Complaints shall be filed within
180 days of the alleged act of discrimination. The
EEO Programs Officer may extend this time limit for
good cause shown. For the purpose of determining
when a complaint is timely filed under this subparagraph, a complaint mailed to the Board shall be
deemed filed on the date it is postmarked. Any other
complaint shall be deemed filed on the date it is
received by the Board.
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(4) How to File. Complaints may be delivered or
mailed to the Administrative Governor, the Staff
Director For Management, the EEO Programs Officer, or the EEO Officer, the Federal Women's
Program Manager, the Hispanic Program Coordinator, or the Handicapped Program Coordinator.
Complaints should be sent to the EEO Programs
Officer, Board of Governors of the Federal Reserve
System, 20th and Constitution Avenue, N.W.,
Washington, D.C. 20551. If any Board official other
than the EEO Programs Officer receives a complaint, he or she shall forward the complaint to the
EEO Programs Officer.
(e) Acceptance of Complaint.
(1) The EEO Programs Officer shall accept a complete complaint that is filed in accordance with
paragraph (d) of this section and over which the
Board has jurisdiction. The EEO Programs Officer
shall notify the complainant of receipt and acceptance of the complaint.
(2) If the EEO Programs Officer receives a complaint that is not complete, he or she shall notify the
complainant, within 30 calendar days of receipt of
the incomplete complaint, that additional information is needed. If the complainant fails to complete
the complaint within 30 days of receipt of this
notice, the EEO Programs Officer shall dismiss the
complaint without prejudice.
(3) If the EEO Programs Officer receives a complaint over which the Board does not have jurisdiction, the EEO Programs Officer shall notify the
complainant and shall make reasonable efforts to
refer the complaint to the appropriate government
entity.
(f)
Investigation/Conciliation.
(1) Within 180 calendar days of the receipt of a
complete complaint, the EEO Programs Officer
shall complete the investigation of the complaint,
attempt informal resolution of the complaint, and if
no informal resolution is achieved, the EEO Programs Officer shall forward the investigative report
to the Staff Director For Management.
(2) The EEO Programs Officer may request Board
employees to cooperate in the investigation and
attempted resolution of complaints. Employees who
are requested by the EEO Programs Officer to
participate in any investigation under this section
shall do so as part of their official duties and during
the course of regular duty hours.
(3) The EEO Programs Officer shall furnish the
complainant with a copy of the investigative report
promptly after receiving it from the investigator and
provide the complainant with an opportunity for
informal resolution of the complaint.
(4) If a complaint is resolved informally, the terms of
569
the agreement shall be reduced to writing and made
a part of the complaint file, with a copy of the
agreement provided to the complainant. The written
agreement may include a finding on the issue of
discrimination and shall describe any corrective
action to which the complainant has agreed.
(g) Letter of findings. If an informal resolution of the
complaint is not reached, the EEO Programs Officer
shall transmit the complaint file to the Staff Director
For Management. The Staff Director For Management
shall, within 180 days of the receipt of the complete
complaint by the EEO Programs Officer, notify the
complainant of the results of the investigation in a
letter sent by certified mail, return receipt requested,
containing:
(1) Findings of fact and conclusions of law;
(2) a description of a remedy for each violation
found;
(3) a notice of right of the complainant to appeal the
Letter of Findings to the Board of Governors or the
Administrative Governor for a decision under paragraph (k) of this section; and
(4) a notice of right of the complainant to request a
hearing.
(h) Filing an Appeal.
(1) Notice of appeal, with or without a request for
hearing, shall be filed by the complainant with the
EEO Programs Officer within 30 days of receipt
from the Staff Director For Management of the
Letter of Findings required by paragraph (g) of this
section.
(2) If the complainant does not request a hearing, the
EEO Programs Officer shall transmit the notice of
appeal and investigative record to the Board of
Governors or the Administrative Governor, whichever is the decision maker under paragraph (k) of
this section.
(3) If the complainant does not file a notice of appeal
within the time prescribed in paragraph (h)(1) of this
section, the EEO Programs Officer shall certify that
the Letter of Findings is the final Board decision on
the complaint at the expiration of that time.
(i) Acceptance of Appeal. The EEO Programs Officer
shall accept and process any timely appeal. A complainant may appeal to the Administrative Governor
from a decision by the EEO Programs Officer that an
appeal is untimely. This appeal shall be filed within 15
days of receipt of the decision from the EEO Programs
Officer.
(j) Hearing.
(1) Upon a timely request for a hearing, the EEO
Programs Officer shall request that the Board of
Governors appoint an administrative law judge to
conduct the hearing. The administrative law judge
shall issue a notice to all parties specifying the date,
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Federal Reserve Bulletin • July 1985
time, and place of the scheduled hearing. The hearing shall be commenced no earlier than 15 calendar
days after the notice is issued and no later than 60
calendar days after the request for a hearing is filed,
unless all parties agree to a different date.
(2) The hearing, decision, and any administrative
review thereof shall be conducted in conformity
with 5 U.S.C. §§ 554-557 (sections 5 - 8 of the Administrative Procedures Act). The administrative
law judge shall have the duty to conduct a fair
hearing, to take all necessary actions to avoid delay,
and to maintain order. He or she shall have all
powers necessary to these ends, including (but not
limited to) the power to:
(i) Arrange and change the dates, times, and
places of hearings and prehearing conferences and
to issue notices thereof;
(ii) hold conferences to settle, simplify, or determine the issues in a hearing, or to consider other
matters that may aid in the expeditious disposition
of the hearing;
(iii) require parties to state their positions in
writing with respect to the various issues in the
hearing and to exchange such statements with all
other parties;
(iv) examine witnesses and direct witnesses to
testify;
(v) receive, rule on, exclude, or limit evidence;
(vi) rule on procedural items pending before him
or her, and
(vii) take any action permitted to the administrative law judge as authorized by this subpart or by
the provisions of the Administrative Procedure
Act (5 U.S.C. §§ 554-557).
(3) Technical rules of evidence shall not apply to
hearings conducted pursuant to this paragraph, but
rules or principles designed to assure production of
credible evidence and to subject testimony to crossexamination shall be applied by the administrative
law judge wherever reasonably necessary. The administrative law judge may exclude irrelevant, immaterial, or unduly repetitious evidence. All documents and other evidence offered or taken for the
record shall be open to examination by the parties,
and opportunity shall be given to refute facts and
arguments advanced on either side of the issues. A
transcript shall be made of the oral evidence except
to the extent the substance thereof is stipulated for
the record. All decisions shall be based upon the
hearing record.
(4) The costs and expenses for the conduct of a
hearing shall be allocated as follows:
(i) Employees of the Board shall, upon the request
of the administrative law judge, be made available
to participate in the hearing and shall be on official
duty status for this purpose. They shall not re
ceive witness fees.
(ii) Employees of other Federal agencies called to
testify at a hearing, at the request of the administrative law judge and with the approval of the
employing agency, shall be on official duty status
during any absence from normal duties caused by
their testimony, and shall not receive witness
fees.
(iii) The fees and expenses of other persons called
to testify at a hearing shall be paid by the party
requesting their appearance.
(iv) The administrative law judge may require the
Board to pay travel expenses necessary for the
complainant to attend the hearing.
(v) The Board shall pay the required expenses and
changes for the administrative law judge and court
reporter.
(vi) All other expenses shall be paid by the parties
incurring them.
(5) The administrative law judge shall submit in
writing recommended findings of fact, conclusions
of law, and remedies to all parties and the EEO
Programs Officer within 30 calendar days, after the
receipt of the hearing transcripts, or within 30
calendar days after the conclusion of the hearing if
no transcripts are made. This time limit may be
extended with the permission of the EEO Programs
Officer.
(6) Within 15 calendar days after receipt of the
recommended decision of the administrative law
judge, any party may file exceptions to the recommended decision with the EEO Programs Officer.
Thereafter, each party will have ten calendar days to
file reply exceptions with the EEO Programs Officer.
(k) Decision.
(1) The EEO Programs Officer shall notify the Board
of Governors when the complaint is ripe for decision
under this paragraph. At the request of any member
of the Board of Governors made within 7 calendar
days of such notice, the Board of Governors shall
make the decision on the complaint. If no such
request is made, the Administrative Governor shall
make the decision on the complaint. The decision
shall be made based on information in the investigative record and, if a hearing is held, on the hearing
record. The decision shall be made within 60 calendar days of the receipt by the EEO Programs Officer
of the notice of appeal and investigative record
pursuant to paragraph (h)(2) of this section or 60
calendar days following the end of the period for
filing reply exceptions set forth in paragraph (j)(7) of
this section, whichever is applicable. If the decision
maker under this paragraph determines that additional information is needed from any party, the
decision maker shall request the information and
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provide the other party or parties an opportunity to
respond to that information. The decision maker
shall have 60 calendar days from receipt of the
additional information to render the decision on the
appeal. The decision maker shall transmit the decision by letter to all parties. The decision shall set
forth the findings, any remedial actions required,
and the reasons for the decision. If the decision is
based on a hearing record, the decision maker shall
consider the recommended decision of the administrative law judge and render a final decision based
on the entire record. The decision maker may also
remand the hearing record to the administrative law
judge for a fuller development of the record.
(2) The Board shall take any action required under
the terms of the decision promptly. The decision
maker Governor may require periodic compliance
reports specifying:
(i) The manner in which compliance with the
provisions of the decision has been achieved;
(ii) the reasons any action required by the final
Board decision has not been taken; and
(iii) the steps being taken to ensure full compliance.
(3) The decision maker may retain responsibility for
resolving disputes that arise between parties over
interpretation of the final Board decision, or for
specific adjudicatory decisions arising out of implementation.
Subpart H—Review by the Equal Employment
Opportunity Commission
Section 268.801—Entitlement
(a) A complainant, agent, or claimant may request the
Equal Employment Opportunity Commission to review any final decision of the Board under sections
268.305(b), 268.307(b), 268.310, 268.311, 268.404,
268.409(e), 268.412, and 268.414.
(b) A complainant, agent, or claimant may not request
review by the Equal Opportunity Commission under
paragraph (a) of this section when the issue of discrimination giving rise to the complaint is being considered, or has been considered, in connection with
any other request for review by the Equal Employment Opportunity Commission filed by the same complainant, agent, or claimant.
Section 268.802—Filing of the Request for
Review
The complainant, agent, or claimant shall file his or
her request for review in writing, either personally or
by mail, simultaneously with the Director, Office or
571
Review and Appeals, Equal Employment Opportunity
Commission, 2401 E Street, N.W., Washington, D.C.
20506, and with the Board's EEO Programs Officer.
Section 268.803—Time Limits
(a) Except as provided in paragraph (b) of this section,
a complainant, agent, or claimant may file a request
for review at any time up to 20 calendar days after
receipt of the Board's notice of final decision on the
complaint or claim, except that the deadline shall be 15
calendar days in connection with any class complaint
or claim. A request for review shall be deemed filed on
the date it is postmarked, or in the absence of a
postmark, on the date it is received by the Equal
Employment Opportunity Commission. Any statement or brief in support of the request for review must
be submitted to the Equal Employment Opportunity
Commission and to the Board within 30 calendar days
of filing the request for review. For the purposes of
this part, the decision of the Board shall be final only
when the Board makes a determination on all of the
issues in the complaint or claim, including whether or
not to award attorney's fees and/or costs. If a decision
to award attorney's fees and/or costs is made, the
decision shall not be final until the procedure is
followed for determining the amount of such award as
set forth in section 268.315(c) of subpart C.
(b) The time limits within which a request for review
must be filed will not be extended unless, based upon a
written statement by the complainant, agent, or claimant showing that he or she was not notified of the
prescribed time limit and was not otherwise aware of it
or that circumstances beyond his or her control prevented the filing of a request for review within the
prescribed time limits, the Equal Employment Opportunity Commission determines that the time limit
should be extended.
Section 268.804—Procedures
(a) The Office of Review and Appeals of the Equal
Employment Opportunity Commission shall review
the complaint or claim file and all relevant written
representations made to the Commission. The Office
may return a complaint to the Board with a request for
further investigation or a hearing if it considers such
action necessary. There is no right to a hearing before
the Office of Review and Appeals. The Office of a
Review and Appeals shall issue a written finding
setting forth its reasons for its findings and shall
transmit such findings for consideration by the Board.
The Office of Review and Appeals shall also issue
copies of its findings to the complainant, agent or
claimant.
572 Federal Reserve Bulletin • July 1985
Section 268.805—Review & Consideration
(a) The Commissioners may, in their discretion, reopen and reconsider any findings of the Office of
Review and Appeals when the Board or the complainant, agent, or claimant requesting reopening or reconsideration submits written argument or evidence
which tend to establish that:
(1) New and material evidence is available that was
not readily available when the previous finding was
issued;
(2) the previous finding involves an erroneous interpretation of law or regulation or misapplication of
established policy; or
(3) the previous finding is of a precedential nature
involving a new or unreviewed policy consideration
that may have effects beyond the actual case at
hand, or is otherwise of such an exceptional nature
as to merit the personal attention of the Commissioners.
(b) If the Commissioners, in their discretion, reopen
and reconsider any previous findings of the Office of
Review and Appeals, the Commissioners shall transmit their findings for consideration by the Board. The
Commissioners shall also issue copies of their findings
to the complainant, agent or claimant.
Subpart I—Equal Pay
Section 268.901—General Prohibition of
Discrimination
The Board shall not discriminate among employees on
the basis of sex by paying wages to employees at a rate
less than the rate at which it pays wages to employees
of the opposite sex for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working
conditions, except where such payment is made pursuant to:
(a) A seniority system;
(b) a merit system;
(c) a system which measures earnings by quantity or
quality of production; or
(d) a differential based on any factor other than sex or
otherwise not prohibited by this regulation.
Section 268.902—Record Keeping
(a) The Board shall preserve any records which are
made in the regular course of business which relate to
the payment of wages, wage rates, job evaluations, job
descriptions, merits systems, seniority systems, descriptions of practices, or other matters which described or explain the basis for payment of any wage
differential to employees of the opposite sex, and
which may be pertinent to determination of whether
such differential is based on a factor other than sex.
(b) Such records are to be kept for at least six years.
Section 268.903—Procedure
(a) Wages withheld in violation of this subpart have the
status of unpaid minimum wage or unpaid overtime
compensation.
(b) Any employee who believes he or she has received
unequal pay due to discrimination based on sex may
seek recovery of withheld wages by filing a complaint
of discrimination under subpart C of this regulation, if
a complaint of individual discrimination, or subpart D
of this regulation, if a class action, except that civil
actions shall be filed pursuant to section 268.904 of this
subpart.
Section 268.904—Right to File Civil Action for
Judicial Review
A complainant, agent, or claimant, under this subpart
is authorized to file a civil action against the Board in
an appropriate United States District Court within six
years of matter causing the complainant, agent, or
claimant to believe he or she has been denied equal
pay.
Legal Developments
ORDERS ISSUED UNDER BANK HOLDING
COMPANY ACT, BANK MERGER ACT, BANK
SERVICE CORPORATION ACT, AND FEDERAL
RESERVE ACT
Orders Issued Under Section 3 of Bank Holding
Company Act
Associated Banc-Corp
Green Bay, Wisconsin
Order Approving
Acquisition
of a Bank
Associated Banc-Corp, Green Bay, Wisconsin, a bank
holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (12 U.S.C.
§ 1841 et seq.) ("Act"), has applied for the Board's
approval pursuant to section 3(a)(3) of the Act
(12 U.S.C. § 1842 (a)(3)) to acquire all of the voting
shares of State Bank of De Pere, De Pere, Wisconsin
("Bank").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the Act (12 U.S.C. § 1842(c)).
Applicant, the fifth largest banking organization in
Wisconsin, controls seven subsidiary banks with total
deposits of $761.2 million, representing approximately
2.8 percent of the total deposits of commercial banks
in the state. 1 Bank is the 74th largest commercial
banking organization in the state, with total deposits of
$70.6 million, representing approximately 0.26 percent
of the total deposits of commercial banks in the state.
Upon acquisition of Bank, Applicant would remain
Wisconsin's fifth largest banking organization and
would control approximately 3.1 percent of the total
deposits of commercial banks in the state. Consummation of this proposal would not result in a significant
increase in the concentration of banking resources in
Wisconsin.
Applicant and Bank both operate in the Green Bay
banking market. 2 Applicant's subsidiary is the largest
of the market's 12 commercial banks, holding deposits
of $291.5 million, which represent 26.2 percent of total
deposits of commercial banks in the market. Bank is
the fifth largest commercial banking organization in
the market, with 6.3 percent of deposits of commercial
banks there. Upon consummation of this transaction,
1. All banking data are as of June 30, 1984.
2. The Green Bay market is approximated by Brown County,
Wisconsin.
573
Applicant would control 32.5 percent of the deposits of
commercial banks in the market.
The Green Bay market is considered to be moderately concentrated, with the four largest commercial
banking organizations controlling 70.7 percent of the
total deposits of commercial banks in the market. The
Herfindahl-Hirschman Index ("HHI") is 1536. Upon
consummation of the proposal, the four-firm ratio
would increase to 77.0 percent and the HHI would
increase 330 points to 1866.3
While this acquisition would eliminate some existing
competition, the Board believes that the anticompetitive effects of this proposal are mitigated by the
presence of thrift institutions in the market. 4 Seven
savings and loan associations compete in the market,
and control total deposits of $401 million, representing
approximately 26.5 percent of the total deposits of
commercial banks and thrifts in the market. These
thrifts offer NOW accounts and consumer loans. Four
of the seven thrifts also make commercial loans. Based
on these facts and other evidence of record, the Board
has concluded that the competition offered by thrift
institutions in the Green Bay market mitigates the
anticompetitive effects of this proposal. In addition, a
total of ten other commercial banks would remain in
the market after consummation. Thus, the Board has
determined that consummation of this proposal would
not have a significant adverse effect on existing competition in the market. 5
The financial and managerial resources and future
prospects of Applicant and Bank are generally satisfactory and consistent with approval of this application. Although Bank will not significantly alter the
services it provides after consummation of the proposal, considerations relating to the convenience and
needs of the communities to be served are consistent
with approval. Based on these and other facts of
record, it is the Board's judgment that consummation
of the proposed transaction would be in the public
interest and that the application should be approved.
3. Under the Department of Justice's revised Merger Guidelines
(49 Federal Register 26,823 (1984)), a market with a post-merger HHI
above 1800 is considered highly concentrated. Where the resulting
increase in the HHI is more than 100 points, the Department is likely
to challenge a merger unless other facts indicate that the merger is not
likely to substantially lessen competition. The Department has voiced
no objection to this proposal.
4. The Board has previously determined that thrift institutions have
become, or at least have the potential to become, major competitors of
banks. NCNB
Corporation,
70 FEDERAL RESERVE BULLETIN 225
(1984); Sun Banks Inc., 69 FEDERAL RESERVE BULLETIN 934 (1983);
Merchants
Bancorp,
Inc.,
69
FEDERAL
RESERVE
BULLETIN
865
(1983); Monmouth Financial Services, Inc., 69 FEDERAL RESERVE
BULLETIN 867 (1983).
5. If 50 percent of the deposits held by thrift institutions were
included in the calculation of market concentration, Applicant's postmerger market share would be 27.6 percent, and the post-acquisition
HHI would increase by 240 points, from 1174 to 1414.
574 Federal Reserve Bulletin • July 1985
On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be consummated before the thirtieth
calendar day following the effective date of this Order
or later than three months after the effective date of
this Order unless such period is extended for good
cause by the Board, or by the Federal Reserve Bank of
Chicago pursuant to delegated authority.
By order of the Board of Governors, effective
May 21, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, Gramley, and Seger.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
BanPonce Corporation
Hato Rey, Puerto Rico
Order Approving Formation of a Bank Holding
Company, Merger with an Interim Bank, and
Membership of Interim Bank in the Federal
Reserve
System
BanPonce Corporation, Hato Rey, Puerto Rico, has
applied for the Board's approval under section 3(a)(1)
of the Bank Holding Company Act ("BHC Act")
(12 U.S.C. § 1842(a)(1)) to become a bank holding
company through the acquisition of all of the outstanding voting shares of Banco de Ponce, Ponce, Puerto
Rico ("Bank"). Applicant has also applied for the
Board's approval under the Bank Merger Act
(12 U.S.C. § 1828(c)) to merge Bank with Ponce Interim Bank, Ponce, Puerto Rico ("Interim Bank"), which
was formed for the sole purpose of effecting Applicant's acquisition of Bank. Interim Bank has applied
under section 19(h) of the Federal Reserve Act for
membership in the Federal Reserve System. The resulting bank will operate under the charter and title of
Bank.
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act.
As required by the Bank Merger Act, reports of the
competitive effects of the merger were requested from
the United States Attorney General, the Comptroller
of the Currency and the Federal Deposit Insurance
Corporation. The time for filing comments has expired, and the Board has considered the applications
and all comments received in light of the factors set
forth in section 3(c) of the BHC Act (12 U . S . C .
§ 1842(c)) and the Bank Merger Act (12 U.S.C.
§ 1828(c)(5)).
Applicant, a nonoperating corporation, was organized for the purpose of becoming a bank holding
company by acquiring Bank. Bank was established in
1917 and conducts a full-service commercial banking
business through 37 offices in Puerto Rico and 12
offices in N e w York City. 1 Bank has been a member of
the Federal Reserve System since 1982. Upon acquisition of Bank, which has total assets of $1.9 billion and
total deposits of $1.65 billion, 2 Applicant would control the second largest commercial bank in Puerto
Rico. Interim Bank is being formed as a nonoperating
bank merely to facilitate the acquisition by Applicant
of Bank's outstanding common shares under Puerto
Rican law. 3 Consummation of the proposed transaction would not result in any adverse effects upon
competition or increase the concentration of banking
resources in any relevant area. Accordingly, competitive considerations are consistent with approval.
The financial and managerial resources of Applicant
and Bank are satisfactory and their future prospects
appear favorable. Accordingly, the Board concludes
that banking factors are consistent with approval of
the applications.
Although consummation of this proposal would result in no immediate changes in the banking services
offered by Bank, considerations relating to the convenience and needs of the community to be served are
consistent with approval of this proposal. Accordingly, the Board has determined that consummation of
the proposed transaction would be in the public
interest.
Based on the foregoing and other facts of record, the
Board has determined that the applications under the
BHC Act and the Bank Merger Act should be and
hereby are approved. The Board has also determined
that the application by Interim Bank for membership
in the Federal Reserve System should be and hereby is
1. Because Puerto Rico is not deemed a "state" for purposes of the
McFadden Act, Bank is permitted to branch outside of Puerto Rico.
Bank is deemed a domestic bank for purposes of the BHC Act,
however, and its assets, revenues and income derived from its
operations in Puerto Rico are considered domestic assets, revenues
and income for purposes of section 221.23(b) of Regulation K.
(12 U.S.C. § 221.23(b)).
2. Banking data are as of December 31, 1984.
3. The statute laws of Puerto Rico provide for the merger of banks
but do not provide for the formation of a bank holding company
through the exchange of holding company shares for a bank's shares
or obligations. The Board has jurisdiction to act on mergers of insured
banks under section 18(c) of the Federal Deposit Insurance Act when
the resulting bank is to be a member bank. While Interim Bank will not
accept deposits and will thus not be an "insured bank," the Board has
previously exercised jurisdication over mergers of this type involving
interim banks formed solely to effect bank acquisitions by bank
holding companies. One Valley Bancorp,
BULLETIN 48 (1984); Comerica
Incorporated,
BULLETIN 797 (1983).
70 FEDERAL RESERVE
69 FEDERAL RESERVE
Legal Developments
approved. The transactions shall not be made before
the thirtieth calendar day following the effective date
of this Order or later than three months after the
effective date of this Order unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of N e w York pursuant to
delegated authority.
By order of the Board of Governors, effective
May 6, 1985.
Voting for this action: Chairman Volcker and Governors
Wallich, Partee, Rice, and Gramley. Absent and not voting:
Governors Martin and Seger.
WILLIAM W . W I L E S
[SEAL]
Secretary
of the Board
City Holding Company
Charleston, West Virginia
Order Approving Acquisition
Holding
Company
of Shares of a Bank
City Holding Company, Charleston, West Virginia, a
bank holding company within the meaning of the Bank
Holding Company Act, 12 U.S.C. § 1841 et seq.
("Act"), has applied for the Board's approval under
section 3(a)(3) of the Act, 12 U.S.C. 1841(a)(3), to
acquire up to 30 percent of the voting shares of Seneca
Bancshares, Inc., Fairlea, West Virginia ("Seneca"),
also a bank holding company.
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with section 3(b) of the Act,
12 U.S.C. § 1841(b). The time for filing comments has
expired, and the Board has considered the application
and all comments received in light of the factors set
forth in section 3(c) of the Act, 12 U.S.C. § 1841(c).
Applicant and Seneca each control one bank. Applicant controls City National Bank of Charleston,
Charleston, West Virginia, the thirty-sixth largest
banking organization in West Virginia, with deposits
of $82.4 million, representing 0.7 percent of all deposits in commercial banks in the state. 1 Seneca controls
Seneca National Bank, Fairlea, West Virginia ("Seneca Bank"), the seventy-second largest banking organization in the state, with deposits of $44.7 million,
representing 0.4 percent of all deposits in commercial
banks in the state. For purposes of the Act, the
proposed acquisition would make Applicant the nine-
1. All banking data are as of September 30, 1984.
575
teenth largest banking organization in West Virginia,
controlling total deposits of $127.1 million, which
would represent 1.1 percent of the total deposits in
commercial banks in the state. The acquisition would
have no significant effect on the concentration of
banking resources in West Virginia.
Seneca Bank operates in the Greenbrier County
banking market, 2 where it is the second largest of
seven banking organizations in the market. As Applicant does not operate in the Greenbrier County banking market, the proposed acquisition would have no
significant adverse effect on existing competition. The
Board has considered the effects of this proposal upon
probable future competition in the market in light of its
proposed market extension guidelines. 3 The Greenbrier County banking market is not highly concentrated,
nor would Applicant be considered a probable future
entrant into the market apart from the proposed acquisition. Accordingly, the Board has concluded that the
acquisition would have no significant adverse effect on
potential competition in the market.
Applicant has options to purchase 19.96 percent of
Seneca's single class of voting stock, and it intends to
purchase an additional 10.04 percent of such stock on
the over-the-counter market or through privately negotiated transactions.
Seneca objects to the proposed acquisition on the
following grounds:
(1) that Applicant, through its options for Seneca's
shares, acquired control of more than 5 percent of
those shares without the Board's prior approval in
violation of section 3(a)(3) of the Act and section
225.11(c) of the Board's Regulation Y, 12 C.F.R.
§ 225.11(c);
(2) that Applicant would not be a source of financial
and managerial strength to Seneca Bank, and that
the acquisition would impair the future prospects of
Seneca, Seneca Bank, and Applicant; and
(3) that the acquisition would adversely affect the
convenience and needs of the community served by
Seneca Bank.
Control of the Shares
Under
Option
Section 3(a)(3) of the Act and section 225.11(c) of
Regulation Y prohibit a bank holding company from
acquiring more than 5 percent of the outstanding
2. The Greenbrier County banking market is coextensive with
Greenbrier County.
3. 47 Federal Register 9017 (1982). Although the proposed policy
statement setting forth these guidelines has not been adopted by the
Board, the Board is using the guidelines in its analysis of the effects of
a proposal on probable future competition.
576 Federal Reserve Bulletin • July 1985
voting shares of another bank holding company without the Board's prior approval. Under section
225.3 l(d)(ii) of Regulation Y, "[a] company that enters
into an agreement or understanding under which the
rights of a holder of voting securities . . . are restricted
in any manner" is presumed to control the securities.
12 C.F.R. § 225.3l(d)(ii). This presumption does not
apply, however, if the agreement or understanding
"relates to restrictions on transferability and continues only for the time necessary to obtain approval
from the appropriate federal supervisory authority
with respect to acquisition by the company of the
securities." Id. § 225.3l(d)(ii)(C).
Seneca asserts that Applicant's options to purchase
shares of Seneca violate section 3(a)(3) of the Act and
section 225.11(c) of Regulation Y by impermissibly
restricting the rights of the holders of those shares (the
"optionors"), and thus give rise to a presumption that
Applicant controls the optionors' shares. Seneca cites
the provisions of the option agreements regarding
stock dividends and dissenting shareholders' rights as
well as the duration of the original options as evidence
that Applicant has impermissibly restricted the rights
of the holders of the shares.
The agreements do not give Applicant an unconditional right to stock dividends; they simply provide
that the stock received as a dividend "shall immediately be subject to the terms and conditions of this
Agreement." Applicant has no right to any stock
dividends unless it actually exercises the option. To
the extent that the agreements prevent an optionor
from encumbering or disposing of stock received as a
dividend, they merely restrict the transferability of
that stock. Such a restriction is permissible, however,
under section 225.31(d)(ii)(C) of Regulation Y, so long
as it continues only for the time necessary to obtain
regulatory approval.
The limits on the exercise of dissenting shareholders' rights are likewise consistent with section
225.3l(d)(ii)(C). Shareholders who exercise such
rights in effect transfer their shares to the issuing
corporation. See W. Va. Code § 31-1-122; H. Henn &
J. Alexander, Laws of Corporations and Other Business Enterprises § 349, at 998 (1983). Thus, in the
Board's view, the limits on those rights are permissible
restrictions on transferability, which raise no presumption of control.
Nor does the original option period of one year
commencing January 1985, for options covering 6.33
percent of Seneca's outstanding shares, raise a presumption of control. The Board believes that under the
circumstances of this case, an option period of one
year does not exceed the time reasonably necessary to
obtain regulatory approval, particularly in view of
Applicant's prompt application to the Board for per
mission to acquire the shares under option. 4 The
Board concludes that the options were permissible
under section 225.3l(d)(ii)(C) of Regulation Y and
raised no presumption of control. 5
Accordingly, the Board finds that Applicant has not
acquired control of more than 5 percent of Seneca's
outstanding shares, and thus has not violated section
3(a)(3) of the Act or section 225.11(c) of Regulation Y.
Financial and Managerial
Future Prospects
Considerations
and
Seneca asserts that financial and managerial factors
and the future prospects of Applicant and Seneca
weigh against approval of this application. Specifically, Seneca argues that Applicant will not acquire
effective control and thus could neither forestall a
costly tender offer battle that would impair the future
prospects of both companies, nor serve as a source of
financial and managerial strength. 6
In support of its position, Seneca cites NBC Co., 60
FEDERAL RESERVE BULLETIN 7 8 2 ( 1 9 7 4 ) , in w h i c h t h e
Board denied an application to acquire shares of a
bank because, under the circumstances of that case,
the acquisition "would only perpetuate or aggravate
dissension in Bank's management," without permitting the applicant to obtain control of the bank. Id. at
784. The facts of NBC differ from those presented here
in several key respects. NBC sought to acquire less
than 25 percent of the outstanding shares of a bank,
that is, less than a controlling interest under section
2(a)(2)(A) of the Act, 12 U.S.C. § 1841(a)(2)(A). Moreover, the presence of a hostile shareholder controlling
over 50 percent of the bank's shares ensured that NBC
could not have gained actual control of the bank.
Here, by contrast, Applicant has applied to acquire
control of Seneca and would become its largest share-
4. After learning of Seneca's objections to the proposed acquisition, Applicant shortened the option period so that it now expires on
the earlier of July 12, 1985, or the date of regulatory approval.
5. Even apart from the presumption created by section
225.31(d)(ii), Seneca contends that Applicant actually controls the
shares under option. In support of this contention, Seneca cites the
vote of holders of a "significant number" of the shares under option
against anti-takeover measures proposed by the management of
Seneca. In view of the optionors' interest in completing the sale of
their shares, the mere vote against anti-takeover measures is not a
basis for finding that Applicant controls the optionors' shares.
6. Seneca alleges that its own future prospects will be impaired
through (1) disruption of Seneca's plans for growth and expansion, (2)
the loss of customers, and (3) preemption of a more favorable offer.
Seneca also alleges that Applicant's future prospects will be impaired
by Seneca's low dividend policy which will mean a poor return on a
substantial investment. The Board has carefully considered these
claims and finds that they are not supported by the record.
Legal Developments
holder. 7 Seneca's position would preclude the Board
from approving any proposal to acquire less than an
absolute majority of the shares of a bank if the
management of the bank opposes the acquisition. The
Act recognizes, however, that control is possible
without ownership of an absolute majority of voting
shares.
After careful consideration of Seneca's comments,
the Board is unable to conclude that consummation of
this proposal would impair the future prospects of
either Applicant or Seneca. The financial condition
and managerial resources of Applicant, Seneca, and
their subsidiary banks are consistent with approval of
the application. Considerations related to the convenience and needs of the community to be served are
also consistent with approval of the application. 8
Request
For
Hearing
Seneca has also requested the Board to order a formal
hearing focusing on whether Applicant has control of
the shares under option. While section 3(b) of the Act
requires no formal hearing in this instance, the Board
would have discretion to order a formal or informal
hearing. The Board has reviewed the record of this
application, and has determined that there are no
material factual differences in the record that might
warrant a hearing. Rather, Seneca's arguments concern the interpretation or significance of documents or
undisputed facts of record. As all parties have had
ample opportunity to present their arguments in writing and to respond to one another's submissions, the
Board has determined that a hearing would serve no
useful purpose. Accordingly, Seneca's request for a
formal hearing is hereby denied.
Based on the foregoing and other facts of record, the
Board has determined that the application should be
and hereby is approved. The acquisition shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
that period is extended for good cause by the Federal
Reserve Bank of Richmond, acting pursuant to delegated authority, or by the Board.
7. For these same reasons Seneca errs in characterizing the acquisition as a mere "stake-out" to preclude another company from
acquiring Seneca on more favorable terms.
8. Seneca asserts that the proposed acquisition would adversely
affect the convenience and needs of the community served by Seneca
Bank because Applicant has no experience in providing banking
services in a rural area such as Greenbrier County. The Board does
not believe the record supports this allegation.
577
By order of the Board of Governors, effective
May 13, 1985.
Voting for this action: Vice Chairman Martin and Governors Rice, Gramley, and Seger. Absent and not voting:
Chairman Volcker and Governors Wallich and Partee.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
Equimark P u r c h a s i n g Partners
Philadelphia, P e n n s y l v a n i a
Order Approving
Company
Formation
of a Bank
Holding
Equimark Purchasing Partners, Philadelphia, Pennsylvania, has applied for the Board's approval under
section 3(a)(1) of the Bank Holding Company Act
("Act") (12 U.S.C. § 1842(a)(1)) to become a bank
holding company by acquiring at least 64 percent of
the voting shares of Equimark Corporation, Pittsburgh, Pennsylvania ("Equimark"), and thereby indirectly to acquire its wholly owned subsidiary bank,
Equibank, Latrobe, Pennsylvania ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the Act (12 U.S.C. § 1842(c)).
Applicant is a nonoperating de novo company with
no subsidiaries, formed for the purpose of acquiring
Equimark. Equimark is the seventh largest commercial banking organization in Pennsylvania, with total
deposits of $2.4 billion, representing approximately
2.9 percent of total deposits in commercial banking
organizations in the state. 1 Principals of Applicant are
also principals of Equimark and of Bank.
Bank operates in the Pittsburgh banking market, 2
where it is the third largest banking organization,
controlling 13.2 percent of total deposits in commercial banking organizations in the market. 3 One principal of Applicant holds a 7.5 percent limited partnership
interest in the Trustees' Private Bank ("Trustees'
1. Deposit data are as of September 30, 1984.
2. The Pittsburgh banking market is defined as Allegheny County
and portions of Butler, Armstrong, Westmoreland, Washington, and
Beaver counties, Pennsylvania.
3. Unless otherwise noted, banking data are as of June 30, 1983.
578 Federal Reserve Bulletin • July 1985
Bank"), a private bank in the Pittsburgh banking
market. As of June 30, 1983, Trustees' Bank's sole
office held total deposits of $1.2 million, or 0.01
percent of total market deposits. The principal does
not exercise control over the private bank. N o other
principal of Applicant is affiliated with any other
depository organization in the Pittsburgh market. On
the basis of these facts, the Board concludes that
consummation of this proposal would not result in any
adverse effects upon existing or potential competition
or any increase in the concentration of banking resources in any relevant area.
The proposed transaction is one of a series of
transactions designed to increase Bank's equity capital. Under the proposed transactions, Equimark would
redeem $25 million of its Series B Preferred Stock,
currently owned by Chase Manhattan Corporation,
N e w York, N e w York ("CMC"), and convert $25
million of Bank's Series A Preferred Stock, currently
owned by CMC, to Adjustable Rate Perpetual Preferred Stock. 4 In addition, Equimark proposes to
retire an option granted to CMC to purchase all of the
capital stock of Bank.
In view of Applicant's proposal to increase the
capital of Equimark and Bank, the financial and managerial resources and future prospects of Applicant, its
principals and partners, Equimark, and Bank are consistent with approval of this application. Applicant has
proposed no new services for Equimark or Bank upon
acquisition. However, there is no evidence that the
banking needs of the community to be served are not
being met, and Applicant's proposal to increase the
financial strength of Equimark and Bank would be of
benefit to the community. Accordingly, considerations
relating to the convenience and needs of the communities to be served are consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that approval of the application
would be consistent with the public interest and that
the application should be, and hereby is, approved.
The transaction shall not be consummated before the
thirtieth calendar day following the effective date of
this Order or later than three months after the effective
date of this Order, unless such period is extended for
good cause by the Board or the Federal Reserve Bank
of Cleveland, acting pursuant to delegated authority.
4. By letter dated June 21, 1982, the Board permitted CMC to
purchase Equibank's Series A and Equimark's Series B Preferred
Stock. The Board determined that it would not institute a control
proceeding against CMC, or any person to whom CMC might transfer
its option, on the basis that the transaction gave CMC or its transferee
control of Equimark or Bank within the meaning of the Act. The
proposed transaction appears to satisfy the provisions of the Board's
determination of June 21, 1982.
By order of the Board of Governors, effective
May 16, 1985.
Voting for this action: Vice Chairman Martin and Governors Partee, Gramley, and Seger. Absent and not voting:
Chairman Volcker and Governors Wallich and Rice.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
F.N.B. Corporation
Hermitage, Pennsylvania
Order Approving
Acquisition
of Bank
F . N . B . Corporation, Hermitage, Pennsylvania, a bank
holding company within the meaning of the Bank
Holding Company Act (12 U . S . C . § 1841, et seq.)
("Act"), has applied for the Board's approval under
section 3(a)(3) of the Act (12 U . S . C . § 1842(a)(3)), to
acquire all of the voting shares of Reeves Bank,
Beaver Falls, Pennsylvania ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act,
12 U.S.C. § 1841(b). The time for filing comments has
expired, and the Board has considered the application
and all comments received in light of the factors set
forth in section 3(c) of the Act (12 U . S . C . § 1842(c)).
Applicant is the 31st largest commercial banking
organization in Pennsylvania, with two bank subsidiaries holding $374.8 million in deposits. 1 Bank operates
in the Beaver Falls banking market, 2 where it is the 8th
largest of 11 commercial banking institutions, with
$26.5 million, representing 5 percent of the total deposits in commercial banks in the market. N o n e of
Applicant's banking subsidiaries operates in the Beaver Falls market. One of Applicant's nonbanking
subsidiaries, Consumer Discount Company, originates
consumer loans in the Beaver County market. However, the overlapping share of the consumer finance
market controlled by Applicant and Bank is insignificant in comparison with total market volume.
Based on all the facts on record, the Board concludes that consummation of the proposed transaction
would have no significant adverse effect on either
existing or potential competition in any relevant market.
1. Banking organization deposits are as of September 30, 1984, and
market deposits are as of June 30, 1983.
2. The Beaver Falls banking market consists of the townships of
Perry, Wayne, Big Beaver, and Little Beaver, all in southern Lawrence County, and all of Beaver County except the townships of
Hanover, Independence, Hopewell, Harmony, and Economy.
Legal Developments
In evaluating this application, the Board also has
considered the financial and managerial resources of
Applicant and the effect on these resources of the
proposed acquisition of Bank. The Board has stated
and continues to believe that capital adequacy is an
especially important factor in the analysis of bank
holding company proposals. 3
In this case, Applicant's existing primary and total
capital ratios are above the minimum levels specified
in the Board's Capital Adequacy Guidelines. 4 Under
these guidelines, the Board has stated that in reviewing acquisition proposals, the Board will take into
consideration the primary capital ratio and the primary
ratio after deducting intangibles. On the basis of
tangible assets alone, the Applicant's primary capital
ratio does not meet the minimum levels specified in the
guidelines. The guidelines also provide, however, for
the Board to take into account the nature and amount
of intangible assets on a case-by-case basis.
In assessing Applicant's capital adequacy, the
Board has considered that inclusion of a small percentage of intangibles, consisting of core deposit intangibles rather than goodwill, would permit Applicant to
meet the minimum primary capital guidelines. Furthermore, the Board has approved applications where, as
here, the Board is able to determine through projected
earnings that the applicant would achieve an acceptable primary capital ratio exclusive of intangibles
within a short period of time. 5 Projections indicate that
a satisfactory primary capital ratio exclusive of intangibles will be achieved by Applicant in approximately
six months. Moreover, Applicant has committed to a
definite plan to improve its capital position in the event
its projections are not met within six months of
consummation of this proposal.
Based on these facts, and in view of Applicant's and
Bank's satisfactory financial and managerial resources
and future prospects, the Board believes that banking
factors are consistent with approval. Considerations
relating to the convenience and needs of the communities to be served are also consistent with approval of
this application. Accordingly, the Board finds the
proposed acquisition would be in the public interest.
On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be consummated before the thirtieth
calendar day following the effective date of this Order,
or later than three months after the effective date of
3. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743
(1984).
4. Capital Adequacy Guidelines, 50 Federal Register 16,057 (1985).
5 . Midlantic
(1985);
Security
Banks,
Richland
Inc.
71
F E D E R A L RESERVE B U L L E T I N
Bancorporation,
BULLETIN 6 5 5 ( 1 9 8 4 ) .
7 0 FEDERAL
579
this Order, unless such period is extended for good
cause by the Board or the Federal Reserve Bank of
Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 28, 1985.
Voting for this action: Vice Chairman Martin and Governors Wallich, Gramley, and Seger. Absent and not voting:
Chairman Volcker and Governors Partee and Rice.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the
Board
Saver's Bancorp, Inc.
Littleton, New Hampshire
Order Denying
the Acquisition
of a Bank
Saver's Bancorp, Inc., Littleton, N e w Hampshire, a
bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (12 U . S . C .
§ 1841 et seq.) ("Act"), has applied for the Board's
approval under section 3(a)(3) of the Act (12 U . S . C .
§ 1842(a)(3)) to acquire all of the voting shares of
North Country Bank, Berlin, N e w Hampshire
("Bank").
Notice of this application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments received, including those of the Boston Regional Office
of the FDIC and the N e w Hampshire Department of
Banking in support of the application, and those of the
Antitrust Division of the U . S . Department of Justice in
opposition to the application, in light of the factors set
forth in section 3(c) of the Act (12 U . S . C . § 1842(c)).
Applicant, the seventh largest commercial banking
organization in N e w Hampshire, controls one bank
with total deposits of $275.8 million, representing 4.8
percent of the total deposits in commercial banks in
the state. 1 Bank, the 37th largest commercial banking
organization in the state, controls total deposits of
$25.4 million, representing 0.4 percent of the total
deposits in commercial banks in the state. Upon
consummation of this proposal, Applicant would remain the seventh largest commercial banking organization in N e w Hampshire and would control 5.2
percent of the total deposits in commercial banks in
the state. In the Board's view, consummation of this
458
RESERVE
1. State banking data are as of December 31, 1984, while market
and deposit data are as of June 30, 1984.
580
Federal Reserve Bulletin • July 1985
proposal would not have a significant effect upon the
concentration of banking resources in New Hampshire.
Applicant's subsidiary bank competes directly with
Bank in the Berlin, New Hampshire, banking market.2
Applicant is the smallest of three commercial banking
organizations in the Berlin banking market, with $16.7
million in deposits, representing 14.7 percent of the
total deposits in commercial banks in the market.
Bank is the second largest commercial banking organization in the Berlin banking market and controls 22.3
percent of the total deposits in commercial banks in
the market. The Berlin banking market contains three
commercial banking organizations controlling 100 percent of the deposits in commercial banks in the market
and has a Herfindahl-Hirschman Index ("HHI") of
4680.
Upon consummation of this proposal, Applicant
would control 37 percent of the total deposits in
commercial banks in the market, only two commercial
banking organizations would remain in the market,
and the HHI would increase by 658 points to 5338.
This increase would make this transaction one that
would be subject to challenge under the Department of
Justice Merger Guidelines, and the Antitrust Division
of the Department has indicated in a letter to the Board
its view that the effect of this transaction on existing
competition would be significantly adverse. 3
The Board is seriously concerned about the effect
this proposal would have on the concentration of
banking resources in the Berlin banking market. The
Berlin market is already highly concentrated with a
limited number of competitors, and consummation of
this proposal would further reduce that number. As
2. The Berlin, New Hampshire, banking market is approximated by
the City of Berlin and the towns of Dummer, Gorham, Milan,
Randolph, and Shelburne in Coos County, New Hampshire. Applicant has contended that the relevant geographic market within which
to evaluate the competitive effects of this acquisition should be
expanded to include the Conway area in Carroll County, New
Hampshire, which is south of the Berlin banking market as presently
defined. The evidence in the record indicates that the Berlin banking
market is geographically isolated from Conway by rugged mountainous terrain; that adverse weather conditions can prevail during the
winter; that the markets are connected only by a two-lane road over
this rugged terrain; that Berlin and Conway, the major towns in the
two markets, are 40 miles apart; that there is little commuting between
the two markets; and that the deposit overlap between the two
banking markets is insubstantial. Based on these facts and other
evidence in the record, the Board concludes that the relevant geographic market within which to evaluate the competitive effects of this
proposal consists of the Berlin banking market, as described above.
3. Under the Department of Justice Merger Guidelines, a market in
which the post-merger HHI is above 1800 is considered highly
concentrated. In such markets, the Department has indicated that
where a merger produces an increase of 100 points or more and an
HHI substantially exceeding 1800, as in this case, only in extraordinary cases will factors establish that the merger is not likely substantially to lessen competition.
discussed below, Bank's financial performance has
improved steadily to the point where Bank currently
serves as a significant source of competition in the
market. The Board believes that under these circumstances the elimination of Bank as one of the few
sources of commercial banking services in the market
is likely to result in a substantial lessening of competition in the Berlin banking market.
The Board believes in this instance that the anticompetitive effects of the transaction are not significantly
mitigated by the presence of thrift institutions in the
Berlin banking market. 4 There is one thrift institution
in the market that holds 33.9 percent of the total
deposits in the market. 5 This thrift institution engages
in little, if any, commercial lending. Moreover, even if
the thrift institution is included in the market as a full
competitor of commercial banks, which is not warranted by its activities in the market, the post-merger HHI
would increase by 287 points to 3481. On this basis,
the Board would continue to regard the competitive
effects of this acquisition as substantially adverse.
Where, as here, consummation of the proposed
transaction is likely substantially to lessen competition, section 3(c) of the Act requires the Board to deny
the application unless the substantial adverse effects
are clearly outweighed in the public interest by the
probable effect of the transaction in meeting the convenience and needs of the community to be served.
The record indicates that the Berlin banking market is
a small, isolated market whose population has declined in recent years compared to the state of New
Hampshire as a whole, which has had an increase in
population. Bank suffered loan losses as a result of the
departure of a major employer in the market at the end
of 1978, and its capital ratios declined in 1982, requiring Bank to reduce its expenses. As a result, Bank
decreased its banking hours and curtailed or limited
expansion of certain of the banking services it offered
to its customers.
While the Board has given serious consideration to
these factors, the Board does not believe that these
4. In a number of earlier cases, the Board has, in its evaluation of
the competitive effects of a bank merger or acquisition, concluded that
thrift institutions have become, or at least have the potential to
become, major competitors of commercial banks in the provision of
both commercial and consumer banking services The Chase Manhattan Corporation,
70 FEDERAL RESERVE BULLETIN 529 (1984); NCNB
Bancorporation,
70 FEDERAL RESERVE BULLETIN 225 (1984); General
Bancshares
Corporation,
69 FEDERAL RESERVE BULLETIN 802 (1983);
First Tennessee National Corporation,
69 FEDERAL RESERVE BULLE-
TIN 298 (1983).
5. There are two credit unions in the market, but these institutions
do not compete over the full range of services of commercial banks to
be considered competitors of commercial banks. Specifically, the
credit unions do not make commercial loans and one of the credit
unions offers no transaction account services. The other credit union
only recently began oflFering transaction accounts.
Legal Developments
factors are sufficient to mitigate, to any significant
degree, the substantial anticompetitive effects of this
proposal. Although Bank's share of deposits has decreased somewhat in recent years, such a result is to
be expected when a financial institution takes steps to
improve its capital position by temporarily reducing
expenses and curtailing expansion. In this regard, the
Board notes that Bank's situation has improved markedly since 1982, demonstrating Bank's ability independently to work itself out of its difficulties. On this
basis, the Board believes that Bank's future prospects
are favorable and that Bank has shown that it will
remain an effective, albeit smaller, competitor in the
Berlin banking market without affiliation with Applicant. Accordingly, financial and managerial factors do
not outweigh the anticompetitive effects of this proposal.
Although Applicant's proposal includes a number of
improvements and expansions in the services and
operations of Bank, it is the Board's view that these
benefits, while lending some weight toward approval
of the application, are not sufficient to meet the
statutory standard required to outweigh the substantially adverse competitive effects of this proposal.
Accordingly, the Board concludes that the substantial
anticompetitive effects of this transaction are not
outweighed by the convenience and needs of the
community to be served.
Based on the foregoing and other considerations
reflected in the record, the Board's judgment is that
the proposed acquisition is not in the public interest
and the application should be, and hereby is, denied.
By order of the Board of Governors, effective
May 29, 1985.
Voting for this action: Vice Chairman Martin and Governors Partee and Gramley. Voting against this action: Governors Wallich and Seger. Absent and not voting: Chairman
Volcker and Governor Rice.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
Suburban Bancorp, Inc.
Palatine, Illinois
Order Approving
Acquisition
of Shares of a Bank
Suburban Bancorp, Inc., Palatine, Illinois, a bank
holding company within the meaning of the Bank
Holding Company Act (12 U.S.C. §§ 1841 et seq.)
("Act"), has applied for the Board's approval under
section 3(a)(3) of the Act (12 U.S.C. § 1842(3)) to
acquire more than 50 percent of the voting shares of
581
The Bartlett Bank and Trust Company, Bartlett, Illinois ("Bank").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the Act
(12 U.S.C. § 1842(b)). The time for filing comments
has expired, and the Board has considered the application and all comments received, including those of
Bank and of Acorn Bankshares, Inc., Bloomingdale,
Illinois ("Acorn'*), in light of the factors set forth in
section 3(c) of the Act (12 U . S . C . § 1842(c)).
Applicant is the 47th largest commercial banking
organization in Illinois, controlling seven banks with
aggregate deposits of $243.4 million, representing 0.22
percent of total deposits in commercial banks in the
state. 1 Bank is the 604th largest banking organization
in Illinois, with total deposits of $34.6 million, representing 0.03 percent of total deposits in commercial
banks in the state. Upon consummation of the proposed acquisition, Applicant would become the 41st
largest commercial banking organization in Illinois and
would control 0.25 percent of total deposits in commercial banks in the state. The proposed acquisition
would have no significant effect on the concentration
of banking resources in Illinois.
Both Applicant and Bank compete in the Chicago
banking market. 2 Applicant is the 40th largest commercial banking organization in the banking market,
controlling 0.30 percent of total deposits in commercial banks. Bank is the 277th largest commercial
banking organization in the Chicago market, and controls 0.04 percent of total deposits in commercial
banks. Upon acquisition of Bank, Applicant would
become the 36th largest commercial banking organization, controlling 0.34 percent of total deposits in
commercial banks in the market.
The Chicago banking market is not highly concentrated, and there are numerous competitors in the
market substantially larger than the combination of
Applicant and Bank. In view of the small relative size
of the banking organizations involved in this proposal,
the Board finds that consummation of the proposed
transaction would not have a significant effect on
existing competition in the market. Accordingly, considerations relating to competitive factors under the
Act are consistent with approval of this application.
The financial and managerial resources and future
prospects of Applicant and Bank are considered generally satisfactory. Accordingly, the Board concludes
that banking factors are consistent with approval of
the application.
1. Banking data are as of December 31, 1983.
2. The Chicago banking market is approximated by Cook, DuPage,
and Lake Counties, all in Illinois.
582
Federal Reserve Bulletin • July 1985
In reaching this conclusion, the Board has considered comments concerning this application from both
Bank and Acorn Bankshares, Inc. 3 Bank and Acorn
(collectively, "Protestants") have protested this application on the following grounds:
(1) that managerial factors are substantially adverse
because of Applicant's alleged violation of federal
securities laws and the "control" provisions of the
Board's Regulation Y in its attempt to acquire Bank;
(2) that Applicant would be able to acquire only a
minority of Bank's shares, resulting in a hostile
minority block that would have a serious negative
effect on Bank's operations; and
(3) that Applicant's acquisition of Bank would have
significant adverse effects on competition in relevant markets. For reasons discussed below, the
Board has determined that Protestants' claims do
not warrant denial of the application.
Securities Laws
Allegations
Protestants' primary allegations under the federal securities laws are that Applicant made numerous misrepresentations or omitted to state material facts in its
tender offer for shares of Bank and thus violated both
sections 14(e) and 10(b) of the Securities Exchange
Act of 1934 ("1934 Act"), 12 U.S.C. §§ 78n(e) and
78j(b). Protestants argue that the alleged violations
reflect so adversely on Applicant's management as to
require denial of this application. Among Protestants'
specific allegations are that:
(1) In its tender offer, Applicant consistently misrepresented the price offered by it as an amount
certain when the price offered was subject to contingent adjustments that were likely to result in a
significant reduction. 4
3. Acorn made a friendly tender offer for the shares of Bank, but
received tenders of only a minority of such shares. Applicant received
tenders of 53.3 percent of Bank's shares in response to its offer.
4. The two adjustments in Applicant's tender offer that Protestants
allege should have been more fully disclosed are:
(1) that if Bank issues a stock dividend or otherwise issues new
shares of stock, the per-share purchase price would be adjusted so
that Applicant's maximum total payment would remain the same as it
would have been without the new shares; and
(2) that the purchase price would be reduced to reflect any payment
made by Bank to Acorn to indemnify Acorn for expenses incurred in
its acquisition attempt. Protestants state that adjustment (1) was in
response to an option granted Acorn by Bank on January 7, 1985, to
acquire 11,453 authorized but unissued shares, and adjustment (2)
answered a "bust-out" clause in the January 7 option agreement that
indemnified Acorn for its expenses if a bidder other than Acorn
received tenders for over 50 percent of Bank's shares. Both the option
agreement and the indemnification clause have been ruled unlawful by
the Illinois Commissioner of Banks (Letter from John E. Treston,
First Deputy Commissioner of Banks and Trust Companies of the
State of Illinois, to the Board of Directors, Bartlett Bank & Trust
Company, February 7, 1985).
(2) Applicant phrased its adjustments to the purchase price in a highly technical manner such that
reasonable investors are not likely to realize that the
contingent adjustments can have a substantial effect
on the price investors will receive for their shares if
tendered pursuant to Applicant's tender offer;
(3) Applicant stated, both in writing and through
oral communications with Bank's shareholders, that
its offer was higher than the Acorn offer when
Applicant knew that the price adjustments contained in its offer could lead to a price for tendered
shares that was lower than Acorn's offer; and
(4) Applicant represented that its tender offer was
on a "first come, first served" basis, limited to 80
percent of the shares, and urged Bank's shareholders to hurry to tender their shares when, in fact,
Applicant never intended to accept less than all
shares tendered and when Applicant knew that the
number of shares tendered would not exceed 80
percent.
Protestants also allege that Applicant violated Rule
14e-3(d), promulgated under section 14 of the 1934
Act, because, during the pendency of Applicant's
tender offers, it received material non-public information from insiders of Bank who had tendered their
shares to Applicant.
Finally, Protestants allege two technical violations
of the securities laws in Applicant's original and
amended tender offers:
(1) that Applicant violated section 14(e) of the 1934
Act in leaving its amended tender offer open for only
14 days, rather than for the minimum of 20 business
days required by section 14(e), thereby forcing
Bank's shareholders to make a hasty and less than
fully informed decision to accept or reject Applicant's offer; and
(2) that Applicant violated Rule 10b-13, promulgated pursuant to section 10(b) of the 1934 Act, by
accepting an option from one of Bank's shareholders on December 20, 1984, after it had made its
tender offer on December 19.
The Board does not believe that the standards of
section 3(c) of the Act for review of bank holding
company expansion proposals require the Board to
adjudicate the type of securities law issues raised by
Protestants. This is particularly true in this case where
the issues raised by Protestants are currently being
litigated in a case brought by Acorn and Bank in
federal district court. 5 The Board notes that the only
remedy requested by Protestants in the litigation is
injunctive relief; if the court were to rule against
5. Acorn Bankshares, Inc. v. Suburban Bancorp, Inc., No. 85
C 0329 (N.D. 111. filed Jan. 14, 1985). In addition, Applicant has filed
suit against Acorn Bank attacking Acorn's tender offer.
Legal Developments
Applicant, the court would simply enjoin Applicant
from accepting the shares offered to it. The effect of
such a ruling would be to force Applicant to issue a
revised tender offer that would remedy any prior
omissions or misstatements. In the Board's view, the
court is fully able to offer Protestants any relief to
which they may be entitled.
The Board has, however, considered Protestants'
allegations in the context of its evaluation of the
financial and managerial factors in this case. 6 The
Board's review of the record does not indicate that the
alleged securities law violations by Applicant, even if
established, reflect any fraudulent intent by Applicant
or otherwise reflect so adversely on Applicant's managerial resources so as to warrant denial of the application. (Protestants make no allegations of common law
fraud or of criminal conduct.)
Allegations
of "Control"
Violations
Protestants allege that Applicant's December, 1984,
acquisition of options for approximately 40 percent of
Bank's shares violates the "control" provisions of
Regulation Y (12 C.F.R. § 225.31(d)(1)) because the
option agreements do not condition the ability of
Applicant to exercise the option upon the Board's
approval and appear to allow for immediate exercise of
the option by Applicant.
Although a bank holding company may not acquire
options for more than 5 percent of a bank's shares that
are immediately convertible into voting securities,
section 225.3l(d)(l)(ii)(C) of Regulation Y exempts
from the rebuttable presumption of control in section
225.31(d) those option agreements for the acquisition
of shares that continue only for the time necessary to
obtain approval from the Board. The Board generally
considers option agreements of a duration of one year
or less to be consistent with the terms of this exemption. If an option agreement terminates by its terms
within one year and meets the other requirements of
section 225.31(d), the Board does not insist upon the
conditioning of options upon Board approval, as long
as the holder of the option promptly files an application to acquire the bank in question. Bank holding
companies are advised, however, that the Board believes the conditioning of options upon the Board's
approval of an application under the Act to be appropriate in these circumstances.
The option agreements entered into by Applicant in
December, 1984, expire by their terms within a year
6 . See
Benson
Bancshares,
1009 (1977).
Inc.,
6 3 FEDERAL RESERVE B U L L E T I N
583
and are otherwise consistent with Regulation Y. Applicant filed its application with reasonable promptness,
on February 15, 1985. Therefore, even though the
option agreements contain no explicit requirement that
Applicant secure the Board's approval prior to exercising the options, the rebuttable presumption of control in section 225.31(d)(1) does not apply to these
options.
Protestants further allege that the payment by Applicant of the legal fees incurred by seven shareholders of
Bank in a stockholder's derivative action against Bank
to invalidate Bank's stock dividend of January 2, 1985,
indicates that Applicant in fact controls the shares
owned by those individuals (11 percent of Bank's
shares). Although Applicant's payment of legal fees
does provide some support for Protestants' assertion,
Applicant's decision to pay these legal fees could just
as easily be explained by noting that Applicant's
interests are parallel to those of the shareholders.
Moreover, no formal tie exists between these seven
shareholders and Applicant except for the shareholders' tender of their shares to Applicant; without further evidence of control of these shares by Applicant,
Protestants' allegation does not support a finding that
the stock owned by these shareholders should be
attributed to Applicant.
Possible Minority Position in Bank
Bank contends that, if this application were approved,
Applicant would be able to acquire only a minority of
Bank's shares, and that the existence of such a hostile
minority block would have a serious negative impact
on Bank's operations and future prospects. Bank
bases its argument that Applicant would not be able to
acquire a majority of shares on the existence of the
January 7 option granted Acorn to acquire 11,453
authorized but unissued shares of Bank.
After consideration of the record in this case, the
Board has determined that Bank's claim does not
require denial of the application. First, Applicant has
committed in writing that it will not consummate its
proposed acquisition of Bank's shares if it cannot
obtain a majority thereof. Second, as noted above, the
Illinois Commissioner of Banks has ruled that the
January 7 option agreement is invalid and that the
shares contained in the option agreement with Acorn
shall not be sold or issued by Bank. 7 If the Commis-
7. Bank and Acorn have contested this ruling and, as part of their
action against Applicant in federal district court, have sought a
declaratory judgment that the option agreement is valid.
584 Federal Reserve Bulletin • July 1985
sioner's position is sustained, Acorn will be unable to
exercise its option or to acquire a majority of Bank's
shares.
By order of the Board of Governors, effective
May 16, 1985.
Voting for this action: Vice Chairman Martin and Governors Partee, Gramley, and Seger. Absent and not voting:
Chairman Volcker and Governors Wallich and Rice.
Competitive
Factors
JAMES M C A F E E
Protestants allege that Applicant's proposal would
have adverse effects on competition in relevant markets. First, Bank argues that Applicant has a "historically low percentage of loans to deposits" and that this
allegedly low loan-to-deposit ratio implies that Applicant's acquisition may reduce competition in the local
area by the "direct reduction of available funds for
lending in the community." While Applicant's ratio of
loans to deposits is under the average for its peer
group, the relevant market for consideration of competitive factors in this case is the Chicago banking
market, rather than the bank's local service area. The
effect of this proposal on competition in the Chicago
banking market, in which hundreds of banks compete
in commercial and consumer lending, would be insignificant. Moreover, the Board has considered this
application in the context of Applicant's overall lending record and is unable to conclude that consummation of the proposed acquisition would result in any
significant lessening of Bank's service to the community.
Second, Acorn alleges that Applicant is already
"among the largest" banking organizations in the
suburban corridor northwest of Chicago and that approval of this proposal would allow Applicant to
strengthen its grip on this market area, thus decreasing
competition. Like the previous claim, this allegation is
without merit, because the competitive effects of this
proposal in the relevant market would be de minimis.
On the basis of all the facts of record, the Board
does not believe that Protestants' comments present
sufficient evidence to support denial of this application
on the basis of adverse managerial, financial, or competitive factors. Considerations relating to the convenience and needs of the community to be served also
are consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the proposed acquisition is
in the public interest and that the application should be
approved. Accordingly, the application is approved
for the reasons summarized above. The transaction
shall not be consummated before the thirtieth calendar
day following the effective date of this Order, or later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Chicago, pursuant to delegated authority.
[SEAL]
Associate
Secretary
of the Board
Orders Issued Under Sections 3 and 4 of Bank
Holding Company Act
Citizens Financial Corporation
Highland Park, Illinois
Order Approving Acquisition of Banks and a
Commercial Finance
Company
Citizens Financial Corporation ("Citizens"), Highland
Park, Illinois, has applied under section 3(a)(1) of the
Bank Holding Company Act of 1956 ("Act"),
12 U.S.C. § 1842(a)(1), to become a bank holding
company by acquiring control of the following bank
holding companies and banks (collectively, "Banks")
in Illinois: First Highland Corporation and its subsidiary, The First National Bank of Highland Park, both
of Highland Park; Elk Grove Investment Corporation
and its subsidiary, Bank of Elk Grove, both of Elk
Grove Village; Financial Investments Corporation and
its subsidiary, Hyde Park Bank and Trust Company,
both of Chicago; Woodfield Investments Corporation
and its subsidiary, Woodfield Bank, both of Schaumburg; and North State Investment Corporation and its
subsidiary, Marina Bank, both of Chicago; and Citizens Bank and Trust Company, Park Ridge. The
acquisition by Citizens of the five bank holding companies will be effected by means of an exchange of
shares, and represents a reorganization of existing
ownership interests. The acquisition of Citizens Bank
and Trust will be effected by means of a cash purchase.
Citizens also has applied under section 4(c)(8) of the
Act, 12 U.S.C. § 1843(c)(8), and section 225.23(a)(2)
of the Board's Regulation Y, 12 C.F.R. § 225.23(a)(2),
to acquire Interfinancial Corporation ("Interfinancial"), Chicago, Illinois. Interfinancial is engaged in
the activity of operating as a commercial finance
company. The Board has determined that this activity
is closely related to banking and permissible for bank
holding companies. 12 C.F.R. § 225.25(b)(l)(iv).
Notice of the applications, affording opportunity for
interested persons to submit comments, has been
given in accordance with sections 3 and 4 of the Act,
Legal Developments
50 Federal Register 8192 (1985). The time for filing
comments has expired, and the Board has considered
the applications and all comments received in light of
the factors set forth in section 3(c) of the Act,
12 U.S.C. § 1842(c), and the considerations specified
in section 4(c)(8) of the Act.
Citizens, a nonoperating Illinois corporation, was
organized for the purpose of becoming a bank holding
company by acquiring Banks. Upon consummation of
the proposal, Applicant would become the sixth largest commercial banking organization in Illinois, controlling total deposits of $1.2 billion, which represents
1.2 percent of the deposits in commercial banks in the
state. 1 Consummation of this proposal will not have an
adverse effect upon the concentration of banking resources in Illinois.
Banks are all located in the Chicago market, 2 and
each controls less than 1 percent of the deposits in
commercial banks in the market. 3 Upon consummation of the proposal, Applicant would become the sixth
largest commercial banking organization in the Chicago market, and would control 1.8 percent of the
deposits in commercial banks in the market. The
Herfindahl-Hirschman Index ("HHI") would increase by 2.6 points to 804.6. 4 On the basis of these
and the other facts of record, the Board concludes that
consummation of the proposal would not have a
significant adverse effect upon existing competition in
the Chicago market.
In evaluating this application, the Board has considered the financial and managerial resources of Citizens
and the effect on these resources of this proposal. The
Board has indicated and continues to believe that
capital adequacy is an especially important factor in
the analysis of bank holding company proposals, particularly in transactions where a significant acquisition
is involved, and that it will consider the implications of
1. Unless otherwise indicated, all deposit data are as of June 30,
1984.
2. The Chicago market is approximated by all of Cook, DuPage,
and Lake Counties, all in Illinois.
3. Applicant's principals have controlled the five one-bank holding
companies for a number of years. In accordance with its policy, the
Board has reviewed the competitive effects of the transactions by
which these banks came under common control. See, e.g., Mahaska
Investment
Company,
63 FEDERAL RESERVE BULLETIN 579 (1977);
Mid-Nebraska Bancshares, Inc. v. Board of Governors, 627 F.2d 266
(D.C. Cir. 1980). Based upon the small market shares of these banks at
the times they came under common control, the Board concludes that
these transactions did not have a significant adverse effect on competition.
4. Under the revised Justice Department Merger Guidelines
(June 14, 1984), a market in which the post-merger HHI is below 1000
is considered to be unconcentrated. In such a market, the Justice
Department is unlikely to challenge a merger producing an increase in
the HHI of less than 100 points.
585
a significant level of intangible assets arising from a
proposed expansion. 5
In this case, the Board notes that Citizens' primary
and total capital ratios are above the minimum levels
specified for bank holding companies under the
Board's Capital Adequacy Guidelines. 6 Under these
guidelines, the Board has stated that, in reviewing
acquisition proposals, the Board will take into consideration both the stated primary capital ratio and the
primary capital ratio after deducting intangibles. In
acting on applications under the guidelines, the Board
also will take into account the nature and amount of
intangible assets and will, as appropriate, adjust capital ratios to include certain intangible assets on a caseby-case basis.
In its assessment of Citizens' capital adequacy, the
Board has considered the fact that the proposed acquisition would increase the amount of goodwill as a
percentage of Citizens' primary capital. However,
Citizens would meet the minimum capital required
under the Board's guidelines without undue reliance
on goodwill. Moreover, Citizens' projections indicate
that its tangible primary capital ratio will exceed the
minimum level specified for bank holding companies
in the revised guidelines by the end of 1985. The
financial and managerial resources and future prospects of Applicant and Banks are regarded as generally
satisfactory, particularly in light of commitments made
in connection with this application. Although Citizens
will incur debt as a result of this transaction, it appears
that Citizens will be capable of serving as a source of
strength to its subsidiaries. Based upon these facts, the
Board believes that banking factors are consistent with
approval. Considerations relating to the convenience
and needs of the communities to be served also are
consistent with approval.
Applicant also has applied under section 4(c)(8) of
the Act to acquire Interfinancial.7 Interfinancial is a
commercial finance company, which initiates and
services asset-based loans and arranges participation
loans.
This proposal is essentially a reorganization of the
ownership of Interfinancial. Consummation of this
5 . Security
Banks
of Montana,
7 1 F E D E R A L RESERVE B U L L E T I N
246 (1985); National City Corporation,
TIN 743 (1984); Eagle Bancorporation,
70 FEDERAL RESERVE BULLE70 FEDERAL RESERVE BULLE-
TIN 728 (1984).
6. Capital Adequacy Guidelines (50 Federal Register 16,057
(1985)).
7. Interfinancial is owned as a joint venture. First Highland Corporation, Elk Grove Investment Corporation, North State Investment
Corporation, and Financial Investments Corporation own 80 percent
of Interfinancial. Applicant will own 80 percent of Interfinancial as a
result of its acquisition of these bank holding companies.
586 Federal Reserve Bulletin • July 1985
proposal will have no effect on competition or the
concentration of resources in any relevant market.
The record does not contain any evidence that consummation of the proposal would result in any other
adverse factors, such as conflicts of interest or unsound banking practices. Accordingly, the Board has
determined that the balance of public interest factors it
must consider under section 4(c)(8) of the Act is
favorable and consistent with approval of the application by Citizens to acquire Interfinancial.
Based upon the foregoing and the facts of record,
the Board has determined that the applications under
sections 3 and 4 of the Act should be, and hereby are,
approved. The proposal shall not be consummated
before the thirtieth calendar day following the effective
date of this Order nor later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Chicago pursuant to delegated authority. The determination as to Applicant's
nonbanking activity is subject to the conditions set
forth in sections 225.4(d) and 225.23(b)(3) of Regulation Y, 12 C.F.R. §§ 225.4(d) and 225.23(b)(3), and the
Board's authority to require such modification or
termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
May 20, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, Gramley, and Seger.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
First Commerce Corporation
New Orleans, Louisiana
Order Approving the Merger of Bank Holding
Companies, the Acquisition of Banks and a
Company Engaged in Data Processing
Activities
First Commerce Corporation, N e w Orleans, Louisiana, a bank holding company within the meaning of
the Bank Holding Company Act ("Act"), has applied
for the Board's approval under section 3 of the Act
(12 U . S . C . § 1842) to merge with First Lafayette Bancorp, Inc., Lafayette, Louisiana ("First Lafayette"),
and thereby indirectly to acquire The First National
Bank of Lafayette, Lafayette, Louisiana, and City
National Bancshares, Baton Rouge, Louisiana ("City
National"), and thereby indirectly acquire City National Bank of Baton Rouge, Baton Rouge, Louisiana;
and to acquire directly The First National Bank of
Lake Charles, Lake Charles, Louisiana ("Lake
Charles Bank"), and Rapides Bank & Trust Company,
Alexandria, Louisiana ("Rapides Bank") (together,
known as "Companies and Banks").
First Commerce Corporation has also applied for
the Board's approval under section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. § 225.23), to acquire
MSDI Company, Lafayette, Louisiana, a subsidiary of
First Lafayette, which currently engages in data processing activities.
Applicant is the third largest commercial banking
organization in Louisiana and controls total domestic
deposits of $1.4 billion, representing 5.1 percent of the
total deposits in commercial banks in the state. 1 First
Lafayette, the 16th largest commercial banking organization in the state, controls one bank with total
domestic deposits of $363.1 million, representing 1.3
percent of the total deposits in commercial banks in
the state. City National, the 14th largest commercial
banking organization in the state, controls one bank
with total domestic deposits of $399.8 million, representing 1.4 percent of the total deposits in commercial
banks in the state. Rapides Bank is the 21st largest
commercial banking organization in the state with
deposits of $314.7 million, representing 1.1 percent of
the total deposits in commercial banks in the state.
Lake Charles Bank is the 35th largest commercial
bank in the state, with deposits of $141.6 million,
representing 0.5 percent of the total deposits in commercial banks therein. Upon consummation of the
proposed transactions, Applicant would become the
largest commercial banking organization in Louisiana,
controlling $2.6 billion in deposits, representing 9.5
percent of the total deposits in commercial banks in
the state. The proposed transaction would have no
significant effect on the concentration of banking resources in Louisiana.
Because Applicant and the banks to be acquired do
not operate in any of the same markets, consummation
of this proposal would not have a significant adverse
effect upon existing competition in any relevant market. 2 The Board has also examined the effect of the
1. Banking data are as of June 30, 1984.
2. Applicant operates in the New Orleans banking market, which is
approximated by the New Orleans MSA. Lake Charles Bank operates
in the Lake Charles banking market, which is defined as the Lake
Charles SMSA. City National operates in the Baton Rouge market,
which is defined as the Baton Rouge SMSA. First Lafayette operates
in the Lafayette banking market, which is approximated by the
Lafayette SMSA. Rapides Bank operates in the Alexandria banking
market, which is approximated by the Alexandria SMSA.
Legal Developments
587
proposed acquisition upon probable future competition in the relevant geographic markets in light of the
Board's proposed market extension Guidelines. 3 After
consideration of these factors in light of the specific
facts of this case, the Board has concluded that
consummation of this proposal would not have any
significant adverse effects on probable future competition in any relevant market. The N e w Orleans, Baton
Rouge, and Lake Charles markets are not considered
highly concentrated under the Board's guidelines, and
there are numerous potential entrants into the Alexandria and Lafayette banking markets.
The financial and managerial resources of Applicant, Companies and Banks are regarded as satisfactory and consistent with approval. There is no evidence in the record indicating that the banking needs
of the communities to be served are not being met.
Applicant is a member of Gulfnet, a regional system of
automatic teller machines and Companies and Banks
will also become members of this system. Considerations relating to the convenience and needs of the
community to be served also are consistent with
approval.
sections 3 and 4 of the Act should be and are hereby
approved. The merger of bank holding companies and
the acquisition of Banks shall not be consummated
before the thirtieth calendar day following the effective
date of this Order, and neither the banking acquisition
nor the nonbanking acquisition shall occur later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Atlanta,
acting pursuant to delegated authority. The determination with respect to Applicant's acquisition of Company is subject to all of the conditions set forth in
Regulation Y, including sections 225.4(d) and
225.23(b) (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to
the Board's authority to require such modification or
termination of activities of a holding company or any
of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
Applicant has also applied, pursuant to section
4(c)(8) of the Act, to acquire MSDI Company, Lafayette, Louisiana ("Company"). Company currently is a
subsidiary of First Lafayette and engages in data
processing activities to the extent permissible for bank
holding companies under section 225.25(b)(7) of Regulation Y (12 C.F.R. § 225.25(b)(7)). Applicant currently offers data processing services through its bank
subsidiary. In view of the presence of numerous other
suppliers of these services in the region, and the small
market shares involved, the Board concludes that no
significant existing competition would be eliminated
by the proposal.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, Gramley, and Seger.
There is no evidence in the record to indicate that
approval of this proposal would result in undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices
or other adverse effects on the public interest. Accordingly, the Board has determined that the balance of the
public interest factors it must consider under section
4(c)(8) of the Act is consistent with approval of the
application to acquire Company.
Based on the foregoing and other facts of record, the
Board has determined that the applications under
3. "Policy Statement of the Board of Governors of the Federal
Reserve System for Assessing Competitive Factors Under the Bank
Merger Act and the Bank Holding Company Act," 47 Federal
Register 9017 (1982). While the proposed policy statement has not
been adopted by the Board, the Board is using the policy Guidelines as
part of its analysis of the effect of a proposal on probable future
competition.
By order of the Board of Governors, effective
May 20, 1985.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the
Board
Key Banks, Inc.
Albany, New York
Key Bancorp of the Pacific Inc.
Anchorage, Alaska
Order Approving Acquisition of Banks, Formation of
of
a Bank Holding Company, and the Performance
Certain Nonbanking
Activities
Key Banks, Inc. ("Key Banks"), Albany, N e w York,
a bank holding company within the meaning of the
Bank Holding Company Act of 1956 ("Act"),
12 U.S.C. § 1841 et seq., has applied under section
3(a)(3) of the Act, 12 U . S . C . § 1842(a)(3), to acquire
Alaska Pacific Bancorporation ("Alaska Pacific"),
Anchorage, Alaska, a bank holding company within
the meaning of the Act, and thereby to acquire indirectly its subsidiary banks: Alaska Pacific Bank
("Alaska Bank"), Anchorage, Alaska, and the First
National Bank of Fairbanks ("Fairbanks Bank"),
Fairbanks, Alaska. Key Banks will effect this acquisition through its wholly owned subsidiary, Key Bancorp of the Pacific, Inc. ("Key Pacific"), Anchorage,
588
Federal Reserve Bulletin • July 1985
Alaska. 1 In a related application, Key Pacific has
applied for the Board's approval under section 3(a)(1)
of the Act, 12 U.S.C. § 1842(a)(1), to become a bank
holding company by acquiring Alaska Pacific and its
subsidiary banks.
Key Banks and Key Pacific also have applied under
section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), and
section 225.23(a)(2) of Regulation Y, 12 C.F.R.
§ 225.23(a)(2), to acquire indirectly Alaska Pacific
Mortgage Company ("Alaska Mortgage"), Anchorage, Alaska; All Coast Financial, Inc. ("All Coast
Financial"), San Diego, California; All Coast Services, Inc. ("All Coast Services"), San Diego, California; and Pentek Leasing, Inc. ("Pentek"), San Jose,
California. The Board has previously determined that
the activities engaged in by these companies are
closely related to banking and permissible for bank
holding companies. 12 C.F.R. §§ 225.25(b)(1) and (5).
Notice of the applications, affording opportunity for
interested persons to submit comments, has been
given in accordance with sections 3 and 4 of the Act,
50 Federal Register 10,857 (1985). The time for filing
comments has expired, and the Board has considered
the applications and all comments received in light of
the factors set forth in section 3(c) of the Act,
12 U.S.C. § 1842(c), and the considerations specified
in section 4(c)(8) of the Act. 2
Key Banks is the fourteenth largest banking organization in the state of New York, and controls ten
subsidiary banks and six nonbanking subsidiaries that
are engaged in investment advisory, leasing, data
processing and credit reinsurance activities. It controls total deposits of $3.4 billion, which represents 1.9
percent of the deposits in commercial banks in New
York. 3 Alaska Pacific is the fifth largest banking
organization in Alaska. It controls total deposits of
$326 million, which represents 9.8 percent of the
deposits in commercial banks in Alaska. Alaska Bank
and Fairbanks Bank do not compete in any banking
market with any subsidiary bank of Key Banks. Accordingly, consummation of this proposal will not
result in any adverse effects upon existing competition
in any relevant market.
The Board also has considered the effect of this
proposal upon probable future competition in light of
1. Key Pacific is a nonoperating company that would become a
bank holding company upon consummation of this proposal.
2. Comments were submitted by the Comptroller of the Currency
and the Director of the Department of Commerce and Economic
Development of the State of Alaska. The Comptroller expressed no
opposition to the applications.
3. Unless otherwise indicated, all deposit data are as of June 30,
1984.
its proposed guidelines for assessing the competitive
effects of market extension mergers and acquisitions. 4
Alaska Pacific operates in the Anchorage and Fairbanks markets. 5 In view of the lack of concentration in
the Anchorage market and the number of potential
entrants in the Fairbanks market, the Board concludes
that consummation of this proposal would not have
any significant adverse effects upon probable future
competition in any relevant market.
Section 3(d) of the Act prohibits a bank holding
company from acquiring a bank outside of the bank
holding company's home state unless the statute laws
of the state where the target bank is located specifically authorize such an acquisition. 6 Section 06.05.235(e)
of the Alaska Statutes allows out-of-state bank holding
companies to acquire banks located in Alaska unless
the bank to be acquired is a recently formed bank. 7
Since Alaska Bank and Fairbanks Bank are not recently formed banks within the meaning of Alaska law, 8
the proposal would not violate the Douglas Amendment to the Act. In this regard, the Director of
Alaska's Department of Commerce and Economic
Development commented that the proposal would not
conflict with any Alaska law or regulation.
The financial and managerial resources and future
prospects of Key Banks, Key Pacific, Alaska Pacific
and their subsidiaries are satisfactory and consistent
with approval of these applications. Considerations
related to the convenience and needs of the communities to be served also are consistent with approval.
Consummation of this proposal will allow Alaska
Pacific to offer a variety of services not currently
offered, including automobile leasing, discount brokerage services, electronic banking services, and credit
life and accident and health insurance.
4. "Proposed Policy Statement of the Board of Governors of the
Federal Reserve System for Assessing Competitive Factors Under the
Bank Merger Act and the Bank Holding Company Act," 47 Federal
Register 9017 (1982). Although the proposed policy statement has not
been approved by the Board, the Board is using the policy guidelines
as part of its analysis of the effect of a proposal on probable future
competition.
5. The Anchorage market is defined to include the Anchorage
Metropolitan Area. The Fairbanks market is defined to include the
Fairbanks Metropolitan Area.
6. 12 U.S.C. § 1842(d). The home state of the acquiring holding
company is defined for Douglas Amendment purposes as the state in
which the operations of the bank holding company's banking subsidiaries were principally conducted on the later of July 1, 1966, or the
date on which the company became a bank holding company. Id.
1. See Alaska Stat. § 06.05.235(e) (1984). The Board has found that
for purposes of section 3(d) of the Act, the statute laws of Alaska
specifically authorize an out-of-state bank holding company to acquire
a bank in Alaska. Rainier
BULLETIN 295 (1983).
Bancorporation,
8. See Alaska Stat. § 06.05.235(g).
69 FEDERAL RESERVE
Legal Developments
Key Banks and Key Pacific also have applied under
section 4(c)(8) of the Act to acquire Alaska Mortgage,
All Coast Financial, All Coast Services and Pentek. 9
Alaska Mortgage originates, sells and services residential mortgage loans in Alaska. All Coast Financial
originates and services commercial mortgage loans in
California. All Coast Services is a wholly owned
subsidiary of All Coast Financial, and engages only in
trustee services required for trust deeds originated by
All Coast Financial. Pentek engages in full-payout
leasing of personal property in Alaska, Washington,
Oregon and California. The Board has previously
determined that these activities are closely related to
banking and permissible for bank holding companies.
12 C.F.R. §§ 225.25(b)(1) and (5).
Consummation of this proposal will not result in any
adverse effects, such as decreased competition. With
respect to existing competition, the nonbanking subsidiaries of Key Banks do not operate in the same
markets as any of Alaska Pacific's nonbanking subsidiaries. Thus, consummation of this proposal would not
eliminate existing competition in any relevant market.
With respect to potential competition, Alaska Pacific
has a very small presence in each of the relevant
nonbanking product markets. Accordingly, consummation of the proposal will not have a significant
adverse effect on potential competition in any relevant
market. There is no evidence in the record that consummation of the proposal would result in any other
adverse effects, such as unsound banking practices,
unfair competition, conflicts of interest, or an undue
concentration of resources.
With respect to public benefits, consummation of
the proposal may result in increased competition since
Alaska Pacific's nonbanking subsidiaries will have
access to the greater financial resources of Key Banks.
Accordingly, the Board has determined that the balance of public interest factors it must consider under
section 4(c)(8) of the Act is favorable and consistent
with approval of the applications by Key Banks and
Key Pacific to acquire the nonbanking subsidiaries of
Alaska Pacific.
Based upon the foregoing and the facts of record,
the Board has determined that the applications under
9. Alaska Pacific has two other nonbanking subsidiaries: Alaska
Pacific Trust Company ("Alaska Trust"), Anchorage, Alaska; and
Alaska Pacific Investment Company ("Alaska Investment"). Alaska
Trust is a subsidiary of Alaska Bank, and is held indirectly by Alaska
Pacific under section 225.22(d)(2) of the Board's Regulation Y,
12 C.F.R. § 225.22(d)(2). Alaska Trust engages in trust activities in
which Alaska Bank may engage, and at locations at which Alaska
Bank may engage in such activities. Alaska Investment is a small
business investment corporation that Alaska Pacific holds directly
under section 4(c)(5) of the Act, 12 U.S.C. § 1843(c)(5), and section
225.22(c)(4) of the Board's Regulation Y, 12 C.F.R. § 225.22(c)(4).
589
section 3 and 4 of the Act should be, and hereby are,
approved. The proposal shall not be consummated
before the thirtieth calendar day following the effective
date of this Order or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of N e w York, pursuant to
delegated authority. The determination as to Applicants' nonbanking activities is subject to the conditions set forth in sections 225.4(d) and 225.23(b)(3) of
Regulation Y, 12 C.F.R. §§ 225.4(d) and 225.23(b)(3),
and the Board's authority to require such modification
or termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
May 15, 1985.
Voting for this action: Vice Chairman Martin and Governors Partee, Gramley, and Seger. Absent and not voting:
Chairman Volcker and Governors Wallich and Rice.
WILLIAM W . WILES
[SEAL]
Secretary
of the Board
United Community Corporation
Shawnee, Oklahoma
Order Approving the Formation of a Bank Holding
Company and the Provision of
Management
Consulting Services to Nonaffiliated
Depository
Institutions
United Community Corporation, Shawnee, Oklahoma, has applied for the Board's approval under section
3(a)(1) of the Bank Holding Company Act ("Act")
(12 U.S.C. § 1842(a)(1)) to become a bank holding
company by acquiring all of the voting shares of seven
bank holding companies, thereby indirectly acquiring
their subsidiary banks and bank holding companies.
Applicant proposes to acquire: Federal National Bancshares, Inc., Shawnee, Oklahoma, and its subsidiaries, The Federal National Bank and Trust Company of
Shawnee, Shawnee, Oklahoma, and Security State
Bank, Comanche, Oklahoma; First Stillwater Bancshares, Inc., and First Union Corporation, both of
Stillwater, Oklahoma, and their subsidiary, The First
National Bank and Trust Company of Stillwater, Stillwater, Oklahoma; First Guthrie Bancshares, Inc.,
Guthrie, Oklahoma, and its subsidiary banks, The
First National Bank, Guthrie, Oklahoma, Liberty
State Bancshares, Inc., and The Liberty State Bank,
590 Federal Reserve Bulletin • July 1985
both of Tahlequah, Oklahoma; Konawa Bancorporation, Inc., Konawa, Oklahoma, and its subsidiary
bank, Oklahoma State Bank, Konawa, Oklahoma;
First Seminole Bancorporation, Inc., Seminole, Oklahoma, and its subsidiary bank, First National Bank,
Seminole, Oklahoma; Sand Springs Bancshares, Inc.,
Sand Springs, Oklahoma, and its subsidiary bank First
Bank and Trust Company, Sand Springs, Oklahoma;
and ABC Bancshares, Inc., McAlester, Oklahoma,
and its subsidiaries American Bank of Commerce,
McAlester, Oklahoma, Wilburton State Bancshares,
Inc., and Wilburton State Bank, both of Wilburton,
Oklahoma.
Applicant also has applied for the Board's approval under section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) to provide management consulting services for nonaffiliated depository institutions. This
activity has previously been determined by the Board
to be closely related to banking and permissible for
bank holding companies (12 C.F.R. § 225.25(b)(ll)).
Notice of the applications, affording opportunity for
interested persons to submit comments, has been
given in accordance with sections 3 and 4 of the Act
(50 Federal Register 7647 (1985)). The time for filing
comments has expired, and the Board has considered
the applications and all comments received in light of
the factors set forth in section 3(c) of the Act
(12 U.S.C. § 1842(c)) and the considerations specified
in section 4(c)(8) of the Act.
Applicant is a nonoperating corporation, formed for
the purpose of becoming a bank holding company by
acquiring seven bank holding companies currently
affiliated through common ownership and their subsidiary bank holding companies and banks. Thus, this
proposal represents a restructuring of existing ownership interests.
Each of the banks to be acquired controls less than 1
percent of total deposits in commercial banks in the
state. 1 Upon consummation of this proposal, Applicant would become the 4th largest commercial banking
organization in Oklahoma, controlling total deposits of
$490.2 million, representing approximately 1.9 percent
of the total deposits in commercial banks in the state.
Consummation of this proposal would have no significant adverse effects on the concentration of banking
resources in Oklahoma.
All of the organizations involved in this proposal
compete in separate banking markets. Applicant's
principal, however, controls a number of other commercial banking organizations in Oklahoma, and three
1. Deposit data are as of December 30, 1983.
of the commercial banks involved in this proposal
operate in banking markets in which Applicant's principal controls other banks. The markets where these
banks operate are the Tulsa, Pottawatomie, and Pontotoc banking markets. 2 In analyzing the competitive
effects of a proposal such as this one, involving
banking organizations located in the same market and
under common control, the Board considers the competitive effects of the transactions whereby common
control of the institutions was established. 3
In the Tulsa banking market, banks owned by
Applicant's principal control less than 1 percent of the
market's commercial bank deposits. In the Pottawatomie market, one of the two banks controlled by
Applicant's principal was started de novo by Applicant's principal. In the Pontotoc banking market,
Applicant's principal controls Oklahoma State Bank
and two other banks that control, in the aggregate,
approximately 16.0 percent of the market's commercial bank deposits. The two affiliated banks held small
market shares (7.6 percent and 4.6 percent) at the time
of affiliation and one of the banks was in danger of
failing when it was acquired by Applicant's principal.
Upon review of the facts concerning the transactions
as a result of which these institutions came under
common control, the Board concludes that the affiliations did not substantially lessen competition in any
relevant banking market.
Based upon the facts of record, the Board has
determined that consummation of this proposal would
have no significant adverse effects on competition in
any relevant banking market.
Where the principal of an applicant controls other
banking organizations, the Board considers the financial and managerial resources and future prospects of
all of the institutions comprising the chain. Accordingly, the banks involved in this proposal and the affiliated banking organizations have been reviewed in light
of the Board's Capital Adequacy Guidelines 4 which
are generally applicable to bank holding companies
and chain banking organizations with total assets of
over $150 million.5 Based upon the record, the financial and managerial resources of Applicant and the
2. The Tulsa banking market is approximated by the Tulsa RMA.
The Pottawatomie banking market is approximated by Pottawatomie
County, Oklahoma. The Pontotoc banking market is approximated by
Pontotoc County plus portions of Seminole and Garvin Counties.
3. See Mid-Nebraska Bancshares, Inc. v. Board of Governors, 627
F.2d 26 (D.C. Cir. 1980).
4. 50 Federal Register 16,057 (1985); to be codified at 12 C.F.R.
Parts 208, 225, 263.
5. The combined banking assets of the chain equal $1.1 billion as of
June 30, 1983.
Legal Developments
banks are considered to be generally satisfactory. 6
Applicant does not plan to provide any new services as
a result of this proposal. There is no evidence in the
record, however, that the needs of the communities to
be served are not being met. Accordingly, considerations relating to the convenience and needs of the
communities to be served are consistent with approval.
Applicant also has applied under section 4(c)(8) of
the Act to engage directly in providing management
consulting services for nonaffiliated depository institutions
pursuant
to
Regulation
Y.
12 C.F.R.
§ 225.25(b)(ll). Applicant will engage in this activity
de novo and thus will provide additional competition in
this area. There is no evidence in the record that
approval of this proposal would result in any undue
concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices, or other adverse effects on the public interest.
Accordingly, the Board has determined that the balance of public interest factors it must consider under
section 4(c)(8) of the Act is consistent with approval of
this proposal.
6. As part of this proposal MCorp, Dallas, Texas (formerly Mercantile Texas Corporation), will purchase $10.0 million of Applicant's
nonvoting preferred stock. Applicant has committed that it will not
consummate this proposal until the Board has reviewed the terms of
MCorp's proposed investment.
Legal Developments
591
Based on the foregoing and the facts of record, the
Board has determined that the applications under
sections 3(a)(1) and 4(c)(8) of the Act are consistent
with the public interest, and should be and hereby are
approved. The banking acquisitions shall not be consummated before the thirtieth calendar day following
the effective date of this Order, and neither the banking acquisitions nor the nonbanking activity shall be
consummated later than three months after the effective date of this Order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of Kansas City, pursuant to delegated authority.
The determinations as to Applicant's nonbanking activities are subject to the conditions set forth in
sections 225.4(d) and 225.23(b)(3) of Regulation Y
(12 C.F.R. §§ 225.4(d) and 225.23(b)(3)) and the
Board's authority to require such modifications or
termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
May 13, 1985.
Voting for this action: Vice Chairman Martin and Governors Rice, Gramley, and Seger. Absent and not voting:
Chairman Volcker and Governors Wallich and Partee.
JAMES M C A F E E
[SEAL]
continued
Associate
on next
page
Secretary
of the Board
592 Federal Reserve Bulletin • July 1985
ORDERS APPROVED UNDER BANK HOLDING COMPANY
ACT
By the Board of Governors
During April 1985 the Board of Governors approved the applications listed below. Copies are available upon
request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551
Section 3
Applicant
Board action
(effective
date)
Bank
First Interstate Corporation of Alaska,
Anchorage, Alaska
First Interstate Bank of Alaska,
Anchorage, Alaska
May 23, 1985
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are
available upon request to the Reserve Banks.
Section 3
Applicant
ABC Holding Company,
Moultrie, Georgia
Adams Bankcorp, Inc.,
Northglenn, Colorado
Allied Bancshares, Inc.,
Houston, Texas
American Bank Holding Corporation,
Corpus Christi, Texas
AmeriWest Bancor, Inc.,
Phoenix, Arizona
Angola State Bancorp,
Angola, Indiana
Atlantic Bancorporation,
Voorhees, N e w Jersey
Bank South Corporation,
Atlanta, Georgia
Bank(s)
Quitman Bancshares, Inc.,
Quitman, Georgia
Adams County Bank,
Northglenn, Colorado
City wide Bank of Thornton,
Thornton, Colorado
Allied Bank Arlington,
Arlington, Texas
American National Bank-Uptown,
Corpus Christi, Texas
Paradise Valley,
Phoenix, Arizona
Angola State Bank,
Angola, Indiana
Glendale National Bank of N e w
Jersey,
Voorhees, N e w Jersey
Bank South Macon, Inc.,
Macon, Georgia
First Citizens Bank,
Forsyth, Georgia
Reserve
Bank
Effective
date
Atlanta
May 8, 1985
Kansas City
May 29, 1985
Dallas
May 15, 1985
Dallas
May 9, 1985
San Francisco
May 10, 1985
Chicago
May 17, 1985
Philadelphia
May 21, 1985
Atlanta
May 24, 1985
Legal Developments
Section 3—Continued
.
Applicant
Benson Investment Company,
San Antonio, Texas
BNH Bancshares, Inc.,
New Haven, Connecticut
Canandaigua National Corporation,
Canandaigua, New York
Capital Peoples Bancshares,
Inc.,
Killeen, Texas
Cattail Bancshares, Inc.,
Atwater, Minnesota
CB&T Bancshares, Inc.,
Columbus, Georgia
CB&T Bancshares, Inc.,
Columbus, Georgia
CB&T Capital Corporation,
Louisville, Mississippi
Centennial Bancshares, Inc.,
Yakima, Washington
C.F.C. Bancorp, Inc.,
Crystal Falls, Michigan
Chapman Bancshares, Inc.,
Chapman, Kansas
Citizens Bancshares, Inc.,
Weston, West Virginia
Citizens Financial Services,
Inc.,
Greenboro, Georgia
Chemical New York Corporation,
New York, New York
CNB Corporation,
Conway, South Carolina
„ . , .
Bank(s)
Kelly Field Bancshaes Corporation,
San Antonio, Texas
Kelly Field National Bank,
Leon Valley, Texas
Exchange National Bank,
San Antonio, Texas
The Bank of New Haven,
New Haven, Connecticut
The Canandaigua National Bank
and Trust Company,
Canandiagua, New York
United Peoples Bank,
Lampasas, Texas
The Peoples National Bank of
Lampasas,
Lampasas, Texas
Atwater State Bank,
Atwater, Minnesota
State Bank of Kimball,
Kimball, Minnesota
Cohutta Bancshares, Inc.,
Chats worth, Georgia
First United Bancshares, Inc.,
Montezuma, Georgia
First United Bank,
Montezuma, Georgia
Citizens Bank & Trust Company,
Louisville, Mississippi
Pioneer National Bank,
Yakima, Washington
First National Bank of Crystal
Falls,
Crystal Falls, Michigan
Valley Insurance Company, Inc.,
Junction City, Kansas
The Citizens Bank of Weston,
Weston, West Virginia
Citizens Union Bank,
Greensboro, Georgia
Reserve
Bank
Effective
date
Dallas
May 10, 1985
Boston
May 6, 1985
New York
April 26, 1985
Dallas
April 18, 1985
Minneapolis
April 18, 1985
Atlanta
May 24, 1985
Atlanta
May 14, 1985
St. Louis
May 13, 1985
San Francisco
May 22, 1985
Minneapolis
May 10, 1985
Kansas City
April 24, 1985
Richmond
April 26, 1985
Atlanta
May 17, 1985
Chemical National Bank,
Jericho, New York
New York
May 3, 1985
The Conway National Bank,
Conway, South Carolina
Richmond
May 6, 1985
593
594 Federal Reserve Bulletin • July 1985
Section 3—Continued
Applicant
Community Bancorp, Inc.,
Manchester, Missouri
Community Bancshares, Inc.,
Grants, New Mexico
Community Bankers, Inc.,
Granbury, Texas
Community State Banking Corporation,
Starke, Florida
C&P Bank Corporation of Pensacola,
Pensacola, Florida
Crosby Bancshares, Inc.,
Crosby, Texas
Cross Plains Bankshares, Inc.,
Cross Plains, Texas
Cynthiana Bancorporation,
Cynthiana, Indiana
Dentel Bancorporation,
Victor, Iowa
DeSoto Bancshares, Inc.,
DeSoto, Illinois
Farmers Capital Bank Corporation,
Frankfort, Kentucky
FCN Banc Corp.,
Brookville, Indiana
First American Bank Corporation,
Elk Grove Village, Illinois
First Atlanta Corporation,
Atlanta, Georgia
First Bancshares of Natchitoches, Inc.,
Natchitoches, Louisiana
FirstBank Corp.,
Alma, Michigan
First Bank Shares of the South
East, Inc.,
Alma, Georgia
_ , , .
Bank(s)
Reserve
Effective
Bank
date
The Citizens Bank of Owensville,
Owensville, Missouri
Grants State Bank,
Grants, New Mexico
Granbury Bancshares, Inc.,
Granbury, Texas
Grandview Bancshares, Inc.,
Grandview, Texas
First State Bank of Cleburne,
Cleburne, Texas
Granbury State Bank,
Grandbury, Texas
First State Bank,
Grandview, Texas
Community State Bank of Starke,
Starke, Florida
St. Louis
May 16, 1985
Kansas City
May 17, 1985
Dallas
May 30, 1985
Atlanta
May 14, 1985
Gulfside National Bank,
Gulf Breeze, Florida
Atlanta
April 30, 1985
Crosby State Bank,
Crosby, Texas
Citizens State Bank,
Cross Plains, Texas
The Cynthiana State Bank,
Cynthiana, Indiana
Victor State Bank,
Victor, Iowa
The Bank of DeSoto,
DeSoto, Illinois
The Lawrenceburg National
Bank,
Lawrenceburg, Kentucky
The Franklin County National
Bank of Brookville,
Brookville, Indiana
Old Orchard Bank & Trust Company,
Skokie, Illinois
Bankshares of Georgia, Inc.,
Montezuma, Georgia
First Bank of Natchitoches and
Trust Company,
Natchitoches, Louisiana
Bank of Alma,
Alma, Michigan
The First National Bank of Alma,
Alma, Georgia
Dallas
May 3, 1985
Dallas
May 2, 1985
St. Louis
May 6, 1985
Chicago
April 25, 1985
St. Louis
May 6, 1985
St. Louis
May 1, 1985
Chicago
May 17, 1985
Chicago
May 24, 1985
Atlanta
May 24, 1985
Dallas
April 18, 1985
Chicago
May 20, 1985
Atlanta
May 8, 1985
Legal Developments
Section 3—Continued
Applicant
First Independent Investment
Group, Inc.,
Vancouver, Washington
First Lehigh Corporation,
Walnutport, Pennsylvania
First National Bancorp in
Fort Lee,
Fort Lee, New Jersey
First National Bancshares of
Paulding County, Ltd.,
Dallas, Georgia
First National Cincinnati Corporation,
Cincinnati, Ohio
First Norton Corporation,
Norton, Kansas
First of America Bank Corporation,
Kalamazoo, Michigan
First New England Bankshares
Corp.,
Taunton, Massachusetts
First Richardson BancShares,
Inc.,
Richardson, Texas
First Shawnee Bancshares, Inc.,
Shawnee, Kansas
First Valley Corporation,
Bethlehem, Pennsylvania
First Virginia Banks, Inc.,
Falls Church, Virginia
Fourth Financial Corporation,
Wichita, Kansas
GCB Bancorp, Inc.,
Princeton, Indiana
GNB Bancorp, Inc.,
Mundelein, Illinois
Great Falls Bancorp,
Totowa, New Jersey
Greene County Bancshares,
Inc.,
Greeneville, Tennessee
Hartsville Bancshares, Inc.,
Hartsville, South Carolina
Independent Community Bancshares, Inc.,
Kiel, Wisconsin
Bank(s)
Reserve
Bank
Effective
date
First Independent Bank,
Vancouver, Washington
San Francisco
May 13, 1985
Albion Bancorp, Inc.,
Pen Argyl, Pennsylvania
First National Bank in Fort Lee,
Fort Lee, New Jersey
Philadelphia
May 2, 1985
New York
April 16, 1985
First National Bank of Paulding
County,
Dallas, Georgia
The Ohio State Bank,
Columbus, Ohio
Atlanta
May 2, 1985
Cleveland
April 18, 1985
First Security Bank and Trust
Company,
Norton, Kansas
Community National Bank of
Pontiac,
Pontiac, Michigan
First Bristol County National
Bank,
Taunton, Massachusetts
First National Bank of Richardson,
Richardson, Texas
First National Bank in Shawnee,
Shawnee, Kansas
Hanover Bank of Pennsylvania,
Wilkes-Bare, Pennsylvania
The Citizens Bank, Inc.,
South Hill, Virginia
Charter Banks, N.A.,
Wichita, Kansas
Gibson County Bank,
Princeton, Indiana
New Century Bank,
Mundelein, Illinois
Great Falls Bank,
Totowa, New Jersey
Greene County Bank,
Greeneville, Tennessee
Kansas City
April 17, 1985
Chicago
May 17, 1985
Boston
May 6, 1985
Dallas
May 24, 1985
Kansas City
May 17, 1985
Philadelphia
May 14, 1985
Richmond
May 15, 1985
Kansas City
May 8, 1985
St. Louis
May 21, 1985
Chicago
May 28, 1985
New York
May 6, 1985
Atlanta
April 16, 1985
The Bank of Hartsville,
Hartsville, South Carolina
The Citizens State Bank,
Kiel, Wisconsin
Richmond
April 12, 1985
Chicago
May 14, 1985
595
596 Federal Reserve Bulletin • July 1985
Section 3—Continued
Applicant
IntraWest Financial Corporation,
Denver, Colorado
Keeco, Inc.,
Chicago, Illinois
Kentucky Southern Bancorp,
Inc.,
Bowling Green, Kentucky
Liberty Bancshares, Inc.,
St. Paul, Minnesota
Luray Bankshares,
Luray, Kansas
Metroplex Bancshares, Inc.,
Dallas, Texas
Mid-Missouri Bancshares, Inc.,
Nevada, Missouri
North Adams Bancshares, Inc.,
Ursa, Illinois
Parker County Bancshares,
Inc.,
Weatherford, Texas
Penn Central Bancorp, Inc.,
Huntingdon, Pennsylvania
Peoples Bancorp of Washington,
Washington, Indiana
Peoples Bank Corporation of
Berea,
Berea, Kentucky
Peoples Commerce Corporation,
North Carrollton, Mississippi
Peoples Financial Corp. Inc.
Ford City, Pennsylvania
Pierson Bancorporation, Inc.,
Pierson, Iowa
w
s
Bank(s)
IntraWest Bank of Arapahoe,
N.A.,
Arapahoe County, Colorado
Round Lake Bankcorp, Inc.,
Round Lake, Illinois
Citizens Bank and Trust Company,
Glasgow, Kentucky
Janada Bancshares, Inc.,
St. Paul, Minnesota
Liberty State Bank,
St. Paul, Minnesota
The Peoples State Bank of Luray,
Luray, Kansas
Gleneagles National Bank,
Piano, Texas
Polk County Bank,
Bolivar, Missouri
North Adams State Bank of
Ursa,
Ursa, Illinois
Weatherford Bancshares, Inc.,
Weatherford, Texas
The First National Bank of
Weatherford,
Weatherford, Texas
Hollidaysburg Trust Company,
Hollidaysburg, Pennsylvania
The Peoples National Bank and
Trust Company,
Washington, Indiana
Powell County Bancorp, Inc.,
Stanton, Kentucky
First National Carlisle Corp.,
Carlisle, Kentucky
Peoples Bank and Trust Company,
North Carrollton, Mississippi
Peoples Bank of Ford City, Pennsylvania,
Ford City, Pennsylvania
New Bethlehem Bank,
New Bethlehem, Pennsylvania
Farmers Savings Bank,
Pierson, Iowa
Reserve
Effective
Bank
date
Kansas City
May 1, 1985
Chicago
May 3, 1985
St. Louis
April 12, 1985
Minneapolis
May 30, 1985
Kansas City
April 26, 1985
Dallas
May 9, 1985
St. Louis
April 10, 1985
St. Louis
May 14, 1985
Dallas
April 17, 1985
Philadelphia
April 16, 1985
St. Louis
April 30, 1985
Cleveland
May 14, 1985
St. Louis
May 15, 1985
Cleveland
April 26, 1985
Chicago
May 3, 1985
Legal Developments
Section 3—Continued
Applicant
Pullman Bancshares, Inc.,
Chicago, Illinois
Round Lake Bancorp, Inc.,
Round Lake, Illinois
Second National Corporation,
Richmond, Illinois
Shamrock Bancshares, Inc.,
Coalgate, Oklahoma
Sidell Bancorp, Inc.,
Sidell, Illinois
Southeast Minnesota Bancshares, Inc.,
Altura, Minnesota
State National Bancorp, Inc.,
Maysville, Kentucky
Summerville/Trion Bancshares,
Inc.,
Trion, Georgia
The Colonial BancGroup, Inc.,
Montgomery, Alabama
The National Holding Company,
Nashville, Georgia
The South First National Corporation,
Ocean Springs, Mississippi
Trivoli Bancorp, Inc.,
Trivoli, Illinois
t, w \
Bank(s)
Heritage/Pullman Bank and Trust
Company,
Chicago, Illinois
First State Bank of Round Lake,
Round Lake, Illinois
Citizens Banking Company,
Lynn, Indiana
Mountain View Bancorporation,
Inc.,
Mountain View, Oklahoma
The First National Bank of
Mountain View,
Mountain View, Oklahoma
Sidell State Bank,
Sidell, Illinois
Altura State Bank,
Altura, Minnesota
Farmers Liberty Bank of Augusta,
Augusta, Kentucky
First National Bank of Chattooga
County,
Trion, Georgia
First Tuscumbia Corporation,
Tuscumbia, Alabama
First National Bank in Tuscumbia,
Tuscumbia, Alabama
Bank of Lexington,
Lexington, Alabama
The Citizens Bank,
Nashville, Georgia
First State Financial Corporation,
Gulfport, Mississippi
Trivoli State Bank,
Trivoli, Illinois
Reserve
Bank
Effective
date
Chicago
May 14, 1985
Chicago
May 3, 1985
Chicago
May 6, 1985
Kansas City
May 24, 1985
Chicago
May 14, 1985
Minneapolis
May 16, 1985
Cleveland
April 25, 1985
Atlanta
April 16, 1985
Atlanta
April 26, 1985
Atlanta
May 8, 1985
Atlanta
May 24, 1985
Chicago
April 29, 1985
597
598 Federal Reserve Bulletin • July 1985
Section 3—Continued
Applicant
United Bancorp of Kentucky,
Inc.,
Lexington, Kentucky
United Community Bancorp,
Inc.,
Greenfield, Illinois
Vernon Bank Corporation,
Vernon, New York
Winona National Holding Company,
Winona, Minnesota
Bank(s)
Richmond Bank and Trust Company,
Richmond, Kentucky
First National Bank of Bunker
Hill,
Bunker Hill, Illinois
First Bunker Hill Bancshares,
Inc.,
Chatham Community Bank,
Chatham, Illinois
The National Bank of Vernon,
Vernon, New York
Winona National and Savings
Bank,
Winona, Minnesota
Reserve
Bank
Effective
date
Cleveland
May 23, 1985
St. Louis
May 21, 1985
New York
May 17, 1985
Minneapolis
May 7, 1985
Section 4
Applicant
Alliance Bancorp,
Danville, Indiana
California Commercial Bancshares,
Santa Ana, California
Commercial Bancshares, Inc.,
Jersey City, New Jersey
Denmark Bancshares, Inc.,
Denmark, Wisconsin
First Bank System, Inc.,
Minneapolis, Minnesota
First Bank System, Inc.,
Minneapolis, Minnesota
First Bank System, Inc.,
Minneapolis, Minnesota
FSB Bancorporation,
Decatur, Alabama
Key Banks, Inc.,
Albany, New York
Manufacturers Hanover Corporation,
New York, New York
Norwest Corporation,
Minneapolis, Minnesota
Bank(s)/Nonbanking
Company
Poynter Insurance Agency, Inc.,
Danville, Indiana
retain commercial lending activities/engage de novo in mortgage banking activities
N A Home Investors Mortgage
Corporation,
Hackensack, New Jersey
McDonald Insurance Agency,
Denmark, Wisconsin
John C. Boe Company, Inc.,
Grand Forks, North Dakota
Professional Insurance People,
Inc.,
Butte, Montana
Transcontinental Brokers, Inc.,
Minneapolis, Minnesota
Peoples Insurance Company,
Birmingham, Alabama
Howe and Rusling, Inc.,
Rochester, New York
C.I.T. Corporation,
Rainier Equipment Finance, Inc.,
Ranier National Bank,
Seattle, Washington
O.K., Inc.,
Kearney, Nebraska
Reserve
Bank
Effective
date
Chicago
April 17, 1985
San Francisco
April 25, 1985
New York
May 24, 1985
Chicago
May 10, 1985
Minneapolis
May 17, 1985
Minneapolis
May 17, 1985
Minneapolis
May 16, 1985
Atlanta
May 6, 1985
New York
April 16, 1985
New York
May 24, 1985
Minneapolis
May 21, 1985
Legal Developments
599
Sections 3 and 4
Bank(s)/Nonbanking
Company
Applicant
Knob Noster Bancshares, Inc.,
Knob Noster, Missouri
The Bank of Knob Noster,
Knob Noster, Missouri
and the sale of general insurance
Mapleton Trust & Savings Bank,
Mapleton, Iowa
DANCO, Inc.,
Mapleton, Iowa
Farmers Savings Bank,
Danbury, Iowa
Selden Investment Inc.,
Selden, Kansas
Selden State Bank,
Selden, Kansas
Knob Noster, Inc.,
Knob Noster, Missouri
Valley Bancshares, Inc.,
Maple ton, Iowa
Western Kansas Investment
Corporation, Inc.,
Winona, Kansas
ORDERS UNDER BANK MERGER
Reserve
Bank
Effective
date
Kansas City
May 13, 1985
Chicago
May 8, 1985
Kansas City
April 25, 1985
ACT
By Federal Reserve Banks
Applicant
New Belknap Bank,
Belmont, N e w Hampshire
PENDING CASES INVOLVING
Reserve
Bank
Bank(s)
Belknap Bank & Trust,
Belmont, N e w Hampshire
Boston
April 26, 1985
THE BOARD OF GOVERNORS
This list of pending cases does not include suits against the Federal Reserve
Governors is not named a party.
Florida Bankers Association v. Board of Governors,
No. 84-3883 and No. 84-3884 (11th Cir., filed Feb.
15, 1985).
Florida Department of Banking v. Board of Governors, No. 84-3831 (11th Cir., filed Feb. 15, 1985).
Florida Department of Banking v. Board of Governors, No. 84-3832 (11th Cir., filed Feb. 15, 1985).
Dimension Financial Corporation v. Board of Governors, No. 84-1274 (U.S., filed Feb. 6, 1985).
Citicorp v. Board of Governors, No. 85-4009 (2d Cir.,
filed Jan. 15, 1985).
Citicorp v. Board of Governors, No. 84-4173 (2d Cir.,
filed Dec. 31, 1984).
Citicorp v. Board of Governors, No. 84-754 (U.S.,
filed Oct. 12, 1984).
Effective
date
Banks in which the Board
of
David Bolger Revocable Trust v. Board of Governors,
No. 84-4141 (2d Cir., filed Aug. 31, 1984).
Citicorp v. Board of Governors, No. 84-4121 (2d Cir.,
filed Aug. 27, 1984).
Seattle Bancorporation, et al. v. Board of Governors,
N o 84-7535 (9th Cir., filed Aug. 15, 1984).
Bank of New York Co., Inc. v. Board of Governors,
No. 84-4091 (2d Cir., filed June 14, 1984).
Citicorp v. Board of Governors, No. 84-4081 (2d Cir.,
filed May 22, 1984).
Lamb v. Pioneer First Federal Savings and Loan
Association, No. C84-702 (D. Wash., filed May 8,
1984).
Melcher v. Federal Open Market Committee, N o . 8 4 1335 (D.D.C., filed, Apr. 30, 1984).
600
Federal Reserve Bulletin • July 1985
Florida Bankers Association, et al. v. Board of Governors, No. 84-3269 and No. 84-3270 (11th Cir., filed
Apr. 20, 1984).
Northeast Bancorp, Inc. v. Board of Governors, No.
84-363 (U.S., filed Mar. 27, 1984).
De Young v. Owens, et al., No. SC 9782-20-6 (D., N.
Dist., Iowa, filed Mar. 8, 1984).
Huston v. Board of Governors, No. 84-1361 (8th Cir.,
filed Mar. 20, 1984); and No. 84-1084 (8th Cir. filed
Jan. 17, 1984).
State of Ohio, v. Board of Governors, No. 84-1270
(10th Cir., filed Jan. 30, 1984).
Ohio Deposit Guarantee Fund v. Board of Governors,
No. 84-1257 (10th Cir., filed Jan. 28, 1984).
Colorado Industrial Bankers Association v. Board of
Governors, No. 84-1122 (10th Cir., filed Jan. 27,
1984).
Financial Institutions Assurance Corp. v. Board of
Governors, No. 84-1101 (4th Cir., filed Jan. 27,
1984).
First Bancorporation v. Board of Governors, No. 841011 (10th Cir., filed Jan. 5, 1984).
Oklahoma Bankers Association v. Federal
Reserve
Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983).
The Committee for Monetary Reform, et al. v. Board
of Governors, No. 84-5067 (D.C. Cir., filed June 16,
1983).
Securities Industry Association v. Board of Governors, No. 80-2614 (D.C. Cir., filed Oct. 24. 1980);
and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980).
A. G. Becker, Inc. v. Board of Governors, No. 802614 (D.C. Cir., filed Oct. 14, 1980); and No. 802730 (D.C. Cir., filed Oct. 14, 1980).
A1
Financial and Business Statistics
WEEKLY REPORTING
CONTENTS
Domestic Financial
Statistics
MONEY STOCK AND BANK
A3
A4
A5
A5
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve
Bank credit
Reserves and borrowings—Depository
institutions
Federal funds and repurchase agreements—
Large member banks
POLICY
A6
A7
A8
A9
CREDIT
INSTRUMENTS
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Maximum interest rates payable on time and
savings deposits at federally insured institutions
Federal Reserve open market transactions
FEDERAL RESERVE
BANKS
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings
MONETAR Y AND CREDIT
AGGREGATES
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
COMMERCIAL BANKING
INSTITUTIONS
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
A19
A20
A21
A22
COMMERCIAL
BANKS
Assets and liabilities
All reporting banks
Banks in N e w York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
FINANCIAL
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL
A28
A29
A30
A30
FINANCE
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A31 U.S. government securities dealers—
Transactions
A32 U.S. government securities dealers—Positions
and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
2
Federal Reserve Bulletin • July 1985
SECURITIES MARKETS AND
CORPORATE FINANCE
International Statistics
A34 N e w security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
A36 Nonfinancial corporations—Assets and
liabilities
A36 Total nonfarm business expenditures on new
plant and equipment
A37 Domestic finance companies—Assets and
liabilities and business credit
SUMMARY
REAL
REPORTED BY BANKS IN THE UNITED
ESTATE
A38 Mortgage markets
A39 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A40 Total outstanding and net change
A41 Terms
FLOW OF FUNDS
STATISTICS
A53
A54
A54
A54
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A55 Foreign branches of U . S . banks—Balance sheet
data
A57 Selected U.S. liabilities to foreign official
institutions
STATES
A57
A58
A60
A61
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES
A42 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
Domestic Nonfinancial Statistics
SECURITIES HOLDINGS AND
SELECTED
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and notes—
Foreign transactions
MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross national product and income
A52 Personal income and saving
INTEREST AND EXCHANGE
TRANSACTIONS
RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular Presentation,
Statistical Releases, and Special
Tables
Money Stock and Bank Credit
1.10
A3
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Monetary and credit aggregates
(annua] rates of change, seasonally adjusted in percent)1
Item
Q4
Q2
Q3
8.6
10.3
-10.8
7.0
6.8
6.6
-44.6
7.2
6.5
7.1
10.5
12.2
13.2
1985
1984
Ql'
Dec.
1985
Jan.
Feb.'
Mar.'
Apr.
institutions2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base3
i
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontransaction
10 In M25
11 In M3 only6
1984
-.7
-1.5
30.7
3.9
21.2
20.7
62.0
8.7
18.8
14.0
72.6
8.0
31.1
35.2
94.4
8.0
19.8
15.2
23.8
12.2
5.9
10.3
-3.2
5.4
10.4
11.4
19.2
4.0
4.5
6.8
9.5
12.2
12.5
3.2
9.1'
11.0
9.4
12.5
10.6
12.0
10.7
9.0
13.3
10.2
13.<y
14.2'
12.0
14.3
9.0
13.7
10.2
8.1
13.0
14.3
11.0
8.3
8.0
12.2
5.7
3.8
5.6
6.5
11.7
6.1
-.8
.7
n.a.
n.a.
7.2
24.9
7.6
20.2'
lO^
18.7'
12.5
5.7
13.9^
18.6
15.2'
-3.3'
10.0
-1.9
3.2
12.6
-2.8
6.1
-6.7
13.1
21.8
-5.6
13.4
19.3
-9.8
-7.1
-9.5
-2.0
-8.4
9.6
-10.9
2.5
23.1
-7.0
15.0
14.7
-.7
13.4
48.1
-6.5
17.1'
37.8'
-6.6
15.2'
29.8'
2.2
1.7
21.0
-6.5
11.2
38.3'
6.5'
-3.4'
22.1'
7.9
-3.9
2.3
2.9
.5
-5.4
-.7
5.3
.8
13.1
13.2
11.0
14.7
11.8
9.1
15.6
11.5
9.2'
16.1
12.4
9.9
17.7
13.3
9.7'
16.2
12.1'
6.4
14.4
11.6
12.7
10.5
12.1
11.4
n.a.
n.a.
4.7
components
Time and savings deposits
Commercial banks
Savings7
Small-denomination time8
Large-denomination time9'10
Thrift institutions
15 Savings7
16 Small-denomination time
17 Large-denomination time9
12
13
14
Debt components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial banks"
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. The monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at Federal Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
-10.4
6.9
12.2
-8.7
-1.8
2.6
-11.6
7.8
3.6
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U.S. government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted is
a consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are on an end-of-month basis. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker/dealer), MMDAs, and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
11. Changes calculated from figures shown in table 1.23.
A4
1.11
Domestic Financial Statistics • July 1985
RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1985
1985
Factors
Feb.
Mar.
Apr.
180,077
182,130
187,124
181,497
182,192
181,141
183,594
184,621
186,787
186,177
157,221
155,848
1,373
8,565
8,378
187
0
1,278
1,248
11,765
11,094
4,618
16,501
159,896
159,737
159
8,386
8,372
14
0
1,646
540
11,662
11,093
4,618
16,565
164,467
163,690
777
8,454
8,372
82
0
1,316
503
12,384
11,093
4,618
16,635
159,115
159,115
0
8,372
8,372
0
0
2,038
506
11,466
11,093
4,618
16,550
159,983
159,614
369
8,415
8,372
43
0
1,681
318
11,794
11,093
4,618
16,568
159,736
159,736
0
8,372
8,372
0
0
897
240
11,896
11,093
4,618
16,586
160,520
160,186
334
8,393
8,372
21
0
1,687
541
12,453
11,093
4,618
16,604
161,541
161,541
0
8,372
8,372
0
0
1,863
813
12,032
11,093
4,618
16,618
164,225
164,225
0
8,372
8,372
0
0
1,198
542
12,450
11,093
4,618
16,632
163,900
163,900
0
8,372
8,372
0
0
1,118
608
12,179
11,092
4,618
16,646
178,273
550
179,085
549
180,972
575
179,430
549
179,306
552
178,860
554
179,570
558
181,334
569
181,698
570
180,816
580
4,344
223
1,71?
3,804
229
1,647'
6,711
218
1,556
4,061
207
1,993
3,818
254
1,577
4,280
205
1,538
2,981
251
1,649
4,189
191
1,568
3,720
231
1,587
6,016
204
1,543
Mar. 13
Mar. 20
Mar. 27
Apr. 3
Apr. 10
Apr. 17
Apr. 24
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
2
U.S. government securities1
3
Bought outright
4
Held under repurchase agreements....
5 Federal agency obligations
Bought outright
6
7
Held under repurchase agreements
8 Acceptances
9
Loans
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE F U N D S
15 Currency in circulation
16 Treasury cash holdings
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 Banks2
533
628
427
440
1,205
473
398
364
653
371
6,061
6,099
6,424
5,907
6,101
6,262
6,572
6,514
6,186
6,407
20,589--
22,367r
22,587
21,171
21,658
21,266
23,930
22,221
24,484
22,596
End-of-month figures
Wednesday figures
1985
1985
Feb.
Mar.
Apr.
181,786
184,711
197,652
186,424
180,792
180,313
180,969
186,866
187,676
189,571
159,632
157,124
2,508
8,752
8,372
380
0
2,329
-56
11,129
160,983
160,983
0
8,372
8,372
0
0
2,582
298
12,476
173,913
166,460
7,453
8,903
8,372
531
0
1,525
254
13,057
160,156
160,156
0
8,372
8,372
0
0
5,840
359
11,697
158,869
158,869
0
8,372
8,372
0
0
1,465
219
11,867
159,169
159,169
0
8,372
8,372
0
0
385
274
12,113
158,841
158,841
0
8,372
8,372
0
0
824
789
12,143
162,407
162,407
0
8,372
8,372
0
0
3,467
277
12,343
164,439
164,439
0
8,372
8,372
0
0
1,270
98
13,497
166,717
166,717
0
8,372
8,372
0
0
1,480
416
12,586
11,093
4,618
16,531r
11,093
4,618
16,602
11,091
4,618
16,658
11,093
4,618
16,565
11,093
4,618
16,583
11,093
4,618
16,602
11,093
4,618
16,616
11,093
4,618
16,630
11,093
4,618
16,644
11,091
4,618
16,658
178,416
557
179,210
554
180,842
586
179,566
552
179,189
554
179,015
554
180,498
569
181,841
569
181,488
579
180,545
586
3,308
332
1,226
3,063
253
1,359
19,305
348
1,302
3,698
232
1,226
3,623
211
1,224
4,204
216
1,224
2,683
192
1,359
2,177
227
1,359
4,284
205
1,326
8,868
180
1,326
Mar. 13
Mar. 20
Mar. 27
Apr. 3
Apr. 10
Apr. 17
Apr. 24
SUPPLYING RESERVE F U N D S
23 Reserve Bank credit
24
25
26
27
28
29
30
31
32
33
U.S. government securities1
Bought outright
Held under repurchase agreements....
Federal agency obligations
Bought outright
Held under repurchase agreements....
Acceptances
Loans
Float
Other Federal Reserve assets
34 Gold stock
35 Special drawing rights certificate account
36 Treasury currency outstanding
...
ABSORBING RESERVE F U N D S
37 Currency in circulation
38 Treasury cash holdings
Deposits, other than reserve balances with
Federal Reserve Banks
39 Treasury
40 Foreign
41 Service-related balances and adjustments . . . .
42
Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks2
461
347
324
411
721
439
402
321
824
315
5,863
6,600
6,652
5,934
5,894
6,101
6,352
6,081
6,071
6,229
23,866
25,638
20,660
27,082
21,671
20,873
21,241
26,632
25,254
23,889
1. Includes securities loaned—fully guaranteed by U.S government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages8
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks1
Total vault cash2
Vault cash used to satisfy reserve requirements3 .
Surplus vault cash 4
Total reserves5
Required reserves
Excess reserve balances at Reserve Banks6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks7
1984
1982
1983
1984
1985
Dec.
Dec.
Dec.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.
24,939
20,392
17,049
3,343
41,853
41,353
500
697
33
187
21,138
20,755
17,908
2,847
38,894
38,333
561
774
96
2
21,738
22,316
18,958
3,358
40,696
39,843
853
3,186
113
2,604
20,099
21,875
18,413
3,462
38,512
37,892
620
6,017
299
5,057
20,843
21,827
18,392
3,434
39,235
38,542
693
4,617
212
3,837
21,738
22,316
18,958
3,358
40,6%
39,843
853
3,186
113
2,604
21,577
23,044
19,547
3,497
41,125
40,380
745
1,395
62
1,050
20,416''
23,927
19,857
4,070
40,273
39,370
903
1,289
71
803
22,065
21,863
18,429
3,434
40,494
39,728
766
1,593
88
1,059
23,218
21,567
18,436
3,131
41,654
40,915
739
1,323
135
868
Biweekly averages of daily figures for weeks ending
1985
11
12
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks1
Total vault cash2
Vault cash used to satisfy reserve requirements3 .
Surplus vault cash4
Total reserves5
Required reserves
Excess reserve balances at Reserve Banks6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks7
Jan. 2
Jan. 16
Jan. 30
Feb. 13
Feb. 27
Mar. 13
Mar. 27
Apr. 1C
Apr. 24
May 8^
22,171
22,129
19,701
19,703
41,832
40,625
1,207
2,691
81
2,038
22,819
22.819
22,089
19,002
41.820
41,187
634
1,631
58
1,371
20,375
20,379
23,828
19,995
40,374
39,590
785
976
63
593
19,924
24,893
20,624
4,269
40,548
39,537
1,012
1,369
60
988
20,734
23,203
19,270
3,933
40,003
39,198
806
1,174
81
603
22,407
21,518
18,093
3,425
40,500
39,719
782
1,865
69
1,224
21,458
22,353
18,828
3,525
40,286
39,477
810
1,289
98
839
23,073
21,274
18,126
3,148
41,199
40,642
557
1,775
121
1,295
23,519
21,880
18,765
3,115
42,284
41,399
885
1,158
131
766
22,761
21,327
18,185
3,142
40,945
40,243
703
953
169
396
1. Excludes required clearing balances and adjustments to compensate for
float.
2. Dates refer to the maintenance periods in which the vault cash can be used to
satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
3. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
4. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
5. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
1.13
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
7. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
8. Before February 1984, data are prorated monthly averages of weekly
averages; beginning February 1984, data are prorated monthly averages of
biweekly averages.
NOTE. These data also appear in the Board's H.3 (502) release. For address, see
inside front cover.
FEDERAL FUNDS AND REPURCHASE AGREEMENTS
Large Member Banks1
Averages of daily figures, in millions of dollars
1985 week ending Monday
By maturity and source
Mar. 18
Mar. 25
59,617
55,739
56,025
26,391
9,082
29,390
25,724
8,195
29,512
24,661
8,652
28,436
9,354
9,495
9,299
8,401
8,366
8,946
8,597
8,010
9,167
8,357
8,641
8,887
26,775'
6,505
26,885
6,521
27,747
6,902
One day and continuing contract
1 Commercial banks in United States
2 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies .
3 Nonbank securities dealers
4 All other
All other maturities
5 Commercial banks in United States
6 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies .
7 Nonbank securities dealers
8 All other
MEMO: Federal funds and resale agreement loans in
maturities of one day or continuing contract
9 Commercial banks in United States
10 Nonbank securities dealers
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
Apr. 1
Apr. 8
Apr. 15'
Apr. 22
Apr. 29
65,950
63,357
62,838
54,786
61,576
59,551
24,529
6,940
22,905
25,116
7,835
25,254
24,127
7,372
26,606
23,921
7,310
26,982
25,587
6,944
25,363
27,101
6,769
26,485
10,036
9,694
9,744
10,079
10,544
10,074
8,777'
8,389'
13,879
8,215
8,063
11,250
7,805
8,376
8,543
8,307
9,475
8,885
8,739
9,946
7,765
8,201
9,766
8,098
31,380
6,281
29,887
6,137
30,838
6,799
27,132
6,581
29,253
6,894
26,710
6,480
May 6
May 13
A6
Domestic Financial Statistics • July 1985
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per annum
Current and previous levels
Extended credit 2
Short-term adjustment credit
and seasonal credit1
Federal Reserve
Bank
Rate on
5/28/85
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City . . . .
Dallas
San Francisco...
V/2
m
First 60 days
of borrowing
Previous
rate
Effective
date
Rate on
5/28/85
Next 90 days
of borrowing
Previous
rate
Rate on
5/28/85
m
5/20/85
5/20/85
5/24/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
Previous
rate
8Vi
m
After 150 days
9
%Vi
9
Rate on
5/28/85
m
Effective date
for current rates
Previous
rate
10
9 Vi
5/20/85
5/20/85
5/24/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
10
Range of rates in recent years 3
Effective date
In effect Dec. 31, 1973
1974— Apr. 25
30
Dec. 9
16
1975— Jan.
6
10
24
Feb. 5
7
Mar. 10
14
May 16
23
1976— Jan.
19
23
Nov. 22
26
1977— Aug. 30
31
Sept. 2
Oct. 26
1978— Jan.
9
20
May 11
12
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
m
m
7Vi-8
8
73/4-8
73/4
8
8
m
m
7V4-73/4
71/4-73/4
73/4
7'/4
7'/4
63/4
63/4
63/4-7'/4
63/4
6'/4-63/4
6V4
6-61/4
6
5'/2-6
5Vi
5'/4-5'/2
m
6V4
6'/4
6
6
SVi
5V2
5V4
51/4
5'/4
5'/4-53/4
5'/4-53/4
Jl/4
53/4
53/4
6
6-6V2
6
6'/2-7
7
Vi
55/4
6
6 Vi
6 Vi
1
1
Effective
1978— July
3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
7-7!/4
71/4
73/4
8
8—8'/^
8Vi
8Vi-9Vi
9 Vi
F.R.
Bank
of
N.Y.
7V4
7V4
7%
8
11
11-12
12
10
10W
lOVi
11
11
12
12
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13
13
13
12
11
11
10
10
11
12
13
13
10
lOVi
1
Effective date
1981— May
Nov.
Dec.
8'/!
9 Vi
9 Vi
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
1. A temporary simplified seasonal program was established on Mar. 8, 1985,
and the interest rate was set at 8'/2 percent at that time. On May 20 this rate was
lowered to 8 percent.
2. Applicable to advances when exceptional circumstances or practices involve
only a particular depository institution and to advances when an institution is
under sustained liquidity pressures. As an alternative, for loans outstanding for
more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes
into account rates on market sources of funds, but in no case will the rate charged
be less than the basic rate plus one percentage point. Where credit provided to a
particular depository institution is anticipated to be outstanding for an unusually
prolonged period and in relatively large amounts, the time period in which each
rate under this structure is applied may be shortened. See section 201.3(b)(2) of
Regulation A.
3. Rates for short-term adjustment credit. For description and earlier data see
Range (or
level)—
All F.R.
Banks
5
8
2
6
4
1982— July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
1984— Apr.
Range (or
level)—
All F.R.
Banks
13-14
14
13-14
13
12
llVi-12
llVi
11—11 Vi
11
10 Vi
lO-lOVi
10
9Vi-10
91/2
9-9V2
9
8>/2-9
8Vi-9
8 Vi
F.R.
Bank
of
N.Y.
14
14
13
13
12
llVi
livi
11
11
10 Vi
10
10
9Vi
9>/2
9
9
9
m
8 Vi
9
13
Nov. 21
26
Dec. 24
May 20
28
m~9
9
8^-9
8>/2
8
7Vi-8
m
9
9
iVi
8Vi
8
7Vi
7Vi
In effect May 28, 1985
m
7l/2
the following publications of the Board of Governors: Banking and Monetary
Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980,
1981, and 1982.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than 4 weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for
applying the surcharge was changed from a calendar quarter to a moving 13-week
period. The surcharge was eliminated on Nov. 17, 1981.
Policy Instruments
1.15
A7
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Percent of deposits
Type of deposit, and
deposit interval
Member bank requirements
before implementation of the
Monetary Control Act
Percent
Time and savings2-*
Savings
Time4
$0 million-$5 million, by maturity
30-179 days
180 days to 4 years
4 years or more
Over $5 million, by maturity
30-179 days
180 days to 4 years
4 years or more
7
W2
113/4
123/4
161/4
12/30/76
12/30/76
12/30/76
12/30/76
12/30/76
3
3/16/67
3
2Vi
1
3/16/67
1/8/76
10/30/75
6
2</>
1
12/12/74
1/8/76
10/30/75
1. For changes in reserve requirements beginning 1963, see Board's Annual
Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report
for 1976, table 13. Under provisions of the Monetary Control Act, depository
institutions include commercial banks, mutual savings banks, savings and loan
associations, credit unions, agencies and branches offoreign banks, and Edge Act
corporations.
2. Requirement schedules are graduated, and each deposit interval applies to
that part of the deposits of each bank. Demand deposits subject to reserve
requirements were gross demand deposits minus cash items in process of
collection and demand balances due from domestic banks.
The Federal Reserve Act as amended through 1978 specified different ranges of
requirements for reserve city banks and for other banks. Reserve cities were
designated under a criterion adopted effective Nov. 9, 1972, by which a bank
having net demand deposits of more than $400 million was considered to have the
character of business of a reserve city bank. The presence of the head office of
such a bank constituted designation of that place as a reserve city. Cities in which
there were Federal Reserve Banks or branches were also reserve cities. Any
banks having net demand deposits of $400 million or less were considered to have
the character of business of banks outside of reserve cities and were permitted to
maintain reserves at ratios set for banks not in reserve cities.
Effective Aug. 24,1978, the Regulation M reserve requirements on net balances
due from domestic banks to their foreign branches and on deposits that foreign
branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent
respectively. The Regulation D reserve requirement of borrowings from unrelated
banks abroad was also reduced to zero from 4 percent.
Effective with the reserve computation period beginning Nov. 16, 1978,
domestic deposits of Edge corporations were subject to the same reserve
requirements as deposits of member banks.
3. Negotiable order of withdrawal (NOW) accounts and time deposits such as
Christmas and vacation club accounts were subject to the same requirements as
savings deposits.
The average reserve requirement on savings and other time deposits before
implementation of the Monetary Control Act had to be at least 3 percent, the
minimum specified by law.
4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent
was imposed on large time deposits of $100,000 or more, obligations of affiliates,
and ineligible acceptances. This supplementary requirement was eliminated with
the maintenance period beginning July 24, 1980.
Effective with the reserve maintenance period beginning Oct. 25, 1979, a
marginal reserve requirement of 8 percent was added to managed liabilities in
excess of a base amount. This marginal requirement was increased to 10 percent
beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and
was eliminated beginning July 24, 1980. Managed liabilities are defined as large
time deposits, Eurodollar borrowings, repurchase agreements against U.S.
government and federal agency securities, federal funds borrowings from nonmember institutions, and certain other obligations. In general, the base for the
marginal reserve requirement was originally the greater of (a) $100 million or (b)
the average amount of the managed liabilities held by a member bank, Edge
corporation, or family of U.S. branches and agencies of a foreign bank for the two
reserve computation periods ending Sept. 26, 1979. For the computation period
beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease
in an institution's U.S. office gross loans to foreigners and gross balances due
from foreign offices of other institutions between the base period (Sept. 13-26,
1979) and the week ending Mar. 12, 1980, whichever was greater. For the
computation period beginning May 29, 1980, the base was increased by 7Vi
percent above the base used to calculate the marginal reserve in the statement
Depository institution requirements
after implementation of the
Monetary Control Act 6
Percent
Effective date
Net transaction accounts7,8
$0-$29.8 million
Over $29.8 million
3
12
1/1/85
1/1/85
Nonpersonal time deposits9
By original maturity
Less than l'/i years
1 '/2 years or more
3
0
10/6/83
10/6/83
Eurocurrency liabilities
All types
3
11/13/80
Effective date
Net demand2
$10 million-$100 million
$100 million-$400 million
Over $400 million
Type of deposit, and
deposit interval5
week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was
reduced to the extent that foreign loans and balances declined.
5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97320) provides that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the next succeeding calendar year by 80 percent of the
percentage increase in the total reservable liabilities of all depository institutions,
measured on an annual basis as of June 30. No corresponding adjustment is to be
made in the event of a decrease. Effective Dec. 9, 1982, the amount of the
exemption was established at $2.1 million. Effective with the reserve maintenance
period beginning Jan. 1, 1985, the amount of the exemption is $2.4 million. In
determining the reserve requirements of a depository institution, the exemption
shall apply in the following order: (1) nonpersonal money market deposit accounts
(MMDAs) authorized under 12 CFR section 1204.122; (2) net NOW accounts
(NOW accounts less allowable deductions); (3) net other transaction accounts;
and (4) nonpersonal time deposits or Eurocurrency liabilities starting with those
with the highest reserve ratio. With respect to NOW accounts and other
transaction accounts, the exemption applies only to such accounts that would be
subject to a 3 percent reserve requirement.
6. For nonmember banks and thrift institutions that were not members of the
Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3,
1987. For banks that were members on or after July 1, 1979, but withdrew on or
before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends
on Oct. 24, 1985. For existing member banks the phase-in period of about three
years was completed on Feb. 2, 1984. All new institutions will have a two-year
phase-in beginning with the date that they open for business, except for those
institutions that have total reservable liabilities of $50 million or more.
7. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers (in excess
of three per month) for the purpose of making payments to third persons or others.
However, MMDAs and similar accounts offered by institutions not subject to the
rules of the Depository Institutions Deregulation Committee (DIDC) that permit
no more than six preauthorized, automatic, or other transfers per month of which
no more than three can be checks—are not transaction accounts (such accounts
are savings deposits subject to time deposit reserve requirements.)
8. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions determined as of June 30 each year. Effective Dec. 31,
1981, the amount was increased accordingly from $25 million to $26 million;
effective Dec. 30, 1982, to $26.3 million; effective Dec. 29, 1983, to $28.9 million;
and effective Jan. 1, 1985, to $29.8 million.
9. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable time deposits held by natural persons, and certain obligations issued
to depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
NOTE. Required reserves must be held in the form of deposits with Federal
Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a
Federal Reserve Bank indirectly on a pass-through basis with certain approved
institutions.
A8
DomesticNonfinancialStatistics • July 1985
1.16
M A X I M U M I N T E R E S T R A T E S P A Y A B L E on Time and Savings Deposits at Federally Insured Institutions'
Percent per annum
Type of deposit
Commercial banks
Savings and loan associations and
mutual savings banks (thrift institutions)1
In effect May 31, 1985
In effect May 31, 1985
Percent
1
2
3
4
Savings
Negotiable order of withdrawal accounts
Negotiable order of withdrawal accounts of $1,000 or more2
Money market deposit account2
Time accounts
5 7-31 days of less than Sl.OOO4
6 7-31 days of $1,000 or more2
7 More than 31 days
1. Effective Oct. 1, 1983, restrictions on the maximum rates of interest payable
by commercial banks and thrift institutions on various categories of deposits were
removed. For information regarding previous interest rate ceilings on all categories of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the
Federal Home Loan Bank Board Journal, and the Annual Report of the Federal
Deposit Insurance Corporation.
2. Effective Dec. 1, 1983, IRA/Keogh (HR10) Plan accounts are not subject to
minimum deposit requirements. Effective Jan. 1, 1985, the minimum denomination requirement was lowered from $2,500 to $1,000.
3. Effective Dec. 14, 1982, depository institutions are authorized to offer a new
account with a required initial balance of $2,500 and an average maintenance
balance of $2,500 not subject to interest rate restrictions. Effective Jan. 1, 1985,
l
5 /2
5 V*
5Vi
Effective date
1/1/84
12/31/80
1/5/83
12/14/82
1/1/84
1/5/83
10/1/83
Effective date
l
5 /2
5'/4
(3)
5'/2
7/1/79
12/31/80
1/5/83
12/14/82
9/1/82
1/5/83
10/1/83
the minimum denomination and average maintenance balance requirements was
lowered to $1,000. No minimum maturity period is required for this account, but
depository institutions must reserve the right to require seven days, notice before
withdrawals. When the average balance is less than $1,000, the account is subject
to the maximum ceiling rate of interest for NOW accounts; compliance with the
average balance requirement may be determined over a period of one month.
Depository institutions may not guarantee a rate of interest for this account for a
period longer than one month or condition the payment of a rate on a requirement
that the funds remain on deposit for longer than one month.
4. Effective Jan. 1, 1985, the minimum denomination requirement was lowered
from $2,500 to $1,000. Deposits of less than $1,000 issued to governmental units
continue to be subject to an interest rate ceiling of 8 percent.
Policy Instruments
1.17
A9
FEDERAL RESERVE OPEN MARKET TRANSACTIONS
Millions of dollars
1984
Type of transaction
1982
1983
1985
1984
Sept.
Nov.
Oct.
Dec.
Jan.
Mar.
Feb.
U . S . G O V E R N M E N T SECURITIES
Outright transactions (excluding matched
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
17,067
8,369
0
3,000
18,888
3,420
0
2,400
20,036
8,557
0
7,700
3,249
71
0
0
507
1,300
0
2,200
4,463
0
0
0
3,410
0
0
0
0
2,668
0
1,600
2,976
214
0
400
916
554
0
500
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
312
0
17,295
-14,164
0
484
0
18,887
-16,553
87
1,126
0
16,354
-20,840
0
600
0
872
0
0
0
0
896
-1,497
0
146
0
1,348
-3,363
0
182
0
771
-966
0
0
0
596
-625
0
0
0
1,987
-2,739
0
961
0
1,299
0
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
1,797
0
-14,524
11,804
1,896
0
-15,533
11,641
1,638
0
-13,709
16,039
0
0
-872
0
0
0
-896
1,497
830
0
594
1,763
0
0
-771
966
0
0
-596
625
0
0
-1,902
1,645
465
0
1,299
0
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
388
0
-2,172
2,128
890
0
-2,450
2,950
536
300
-2,371
2,750
0
0
0
0
0
0
0
0
335
0
-1,893
850
0
0
0
0
0
100
0
0
0
0
-54
600
0
0
0
0
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
307
0
-601
234
383
0
-904
1,962
441
0
-275
2,052
0
0
0
0
0
0
0
0
164
0
-49
750
0
0
0
0
0
0
0
0
0
0
-30
493
0
0
0
0
22
23
24
All maturities
Gross purchases
Gross sales
Redemptions
19,870
8,369
3,000
22,540
3,420
2,487
23,476
7,553
7,700
3,849
71
0
507
1,300
2,200
5,938
0
0
3,591
0
0
0
2,768
1,600
2,976
214
400
2,343
554
500
25
26
Matched transactions
Gross sales
Gross purchases
543,804
543,173
578,591
576,908
808,986
810,432
52,893
55,776
89,689
85,884
51,904
55,516
63,674
61,537
66,668
66,367
57,076
57,283
54,718
57,288
27
28
Repurchase agreements
Gross purchases
Gross sales
130,774
130,286
105,971
108,291
139,441
139,019
26,040
30,867
0
0
12,063
12,063
3,888
2,261
20,225
21,852
19,584
17,077
4,922
7,429
8,358
12,631
8,908
1,835
-6,798
9,549
3,080
-6,295
5,077
1,351
0
0
189
0
0
292
0
0
256
0
0
1
0
0
14
0
0
90
0
0
0
0
0
0
0
0
17
0
0
18,957
18,638
8,833
9,213
1,205
817
3,743
4,112
0
0
698
698
506
119
1,463
1,851
2,428
2,048
445
825
130
-672
132
-370
-14
-90
388
388
363
-380
36 Repurchase agreements, net
1,285
-1,062
-418
0
0
0
0
0
0
0
37 Total net change in System Open Market
Account
9,773
10,897
6,116
1,465
-6,811
9,459
3,468
-6,683
5,440
971
29 Net change in U.S. government securities
FEDERAL A G E N C Y OBLIGATIONS
30
31
32
Outright transactions
Gross purchases
Gross sales
Redemptions
Repurchase agreements
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
*
BANKERS ACCEPTANCES
NOTE: Sales, redemptions, and negative figures reduce holdings of the System
Open Market Account; all other figures increase such holdings. Details may not
add to totals because of rounding.
A10
DomesticNonfinancialStatistics • July 1985
1.18 FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements
Millions of dollars
Account
Mar.
Apr.
27
Wednesday
End of month
1985
1985
Apr.
3
Apr.
10
Apr.
17
Apr.
Mar.
Feb.
24
Consolidated condition statement
ASSETS
1
2
3
Gold certificate account
Special drawing rights certificate account
11,093
4,618
548
11,093
4,618
558
11,093
4,618
551
11,093
4,618
547
11,091
4,618
542
11,093
4,618
551
11,093
4,618
566
11,091
4,618
597
385
0
824
0
3,467
0
1,270
0
1,480
0
2,329
0
2,582
0
1,525
0
0
0
0
0
0
0
0
0
8,372
0
8,372
0
8,372
0
8,372
0
8,372
0
8,372
380
8,372
0
8,372
531
9
10
11
12
13
14
Loans
To depository institutions
Other
Acceptances—Bought outright
Held under repurchase agreements
Federal agency obligations
Bought outright
Held under repurchase agreements
U.S. government securities
Bought outright
Bills
Notes
Bonds
Total bought outright1
Held under repurchase agreements
Total U.S. government securities
69,655
66,070
23,444
159,169
0
159,169
69,327
66,070
23,444
158,841
0
158,841
72,893
66,070
23,444
162,407
0
162,407
73,630
67,269
23,540
164,439
0
164,439
75,908
67,269
23,540
166,717
0
166,717
69,036
64,644
23,444
157,124
2,508
159,632
71,469
66,070
23,444
160,983
0
160,983
75,651
67,269
23,540
166,460
7,453
173,913
15
Total loans and securities
167,926
168,037
174,246
174,081
176,569
170,713
171,937
184,341
16
17
6,429
576
7,741
574
6,644
575
8,083
576
7,679
576
6,241
571
6,127
572
9,730
577
18
19
Cash items in process of collection
Bank premises
Other assets
Denominated in foreign currencies2
All other3
3,643
7,894
3,973
7,596
3,976
7,792
3,979
8,942
3,982
8,028
3,498
7,060
3,971
7,933
4,007
8,473
20
Total assets
202,727
204,190
209,495
211,919
213,085
204,345
206,817
223,434
163,515
165,009
166,331
165,970
165,015
162,992
163,728
165,367
22,097
4,204
216
439
22,600
2,683
192
402
27,991
2,177
227
321
26,580
4,284
205
824
25,215
8,868
180
315
25,092
3,308
332
461
26,997
3,063
253
347
21,962
19,305
348
324
26,956
25,877
30,716
31,893
34,578
29,193
30,660
41,939
6,155
2,412
6,952
2,378
6,367
2,384
7,985
2,378
7,263
2,520
6,297
2,463
5,829
2,445
9,476
2,614
199,038
200,216
205,798
208,226
209,376
200,945
202,662
219,396
1,685
1,624
380
1,687
1,624
663
1,685
1,626
386
1,687
1,626
380
1,687
1,626
396
1,669
1,626
105
1,687
1,624
844
1,702
1,626
710
202,727
204,190
209,495
211,919
213,085
204,345
206,817
223,434
115,079
118,798
115,271
116,287
116,686
116,519
114,890
116,712
4
5
6
7
8
LIABILITIES
22.
23
24
25
Federal Reserve notes
Deposits
To depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
26
Total deposits
27
28
Deferred availability cash items
Other liabilities and accrued dividends4
29
Total liabilities
30
Capital paid in
21
CAPITAL ACCOUNTS
31
32
Other capital accounts
33
Total liabilities and capital accounts
34 MEMO: Marketable U.S. government securities held in
custody for foreign and international account
Federal Reserve note statement
196,165
32,650
163,515
196,118
31,109
165,009
195,990
29,659
166,331
196,059
30,089
165,970
196,630
31,615
165,015
194,635
31,643
162,992
196,021
32,293
163,728
196,490
31,123
165,367
38
39
40
41
Federal Reserve notes outstanding
LESS: Held by bank
Federal Reserve notes, net
Collateral held against notes net:
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. government and agency securities
11,093
4,618
0
147,804
11,093
4,618
0
149,298
11,093
4,618
0
150,620
11,093
4,618
0
150,259
11,091
4,618
0
149,306
11,093
4,618
0
147,281
11,093
4,618
0
148,017
11,091
4,618
0
149,658
42
Total collateral
163,515
165,009
166,331
165,970
165,015
162,992
163,728
165,367
35
36
37
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Assets shown in this line are revalued monthly at market exchange rates.
3. Includes special investment account at Chicago of Treasury bills maturing
within 90 days.
4. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
NOTE: Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holdings
Millions of dollars
Type and maturity groupings
Wednesday
End of month
1985
1985
Mar. 29
Apr. 30
Mar. 27
Apr. 3
Apr. 10
Apr. 17
Apr. 24
Feb. 28
1 Loans—Total
2 Within 15 days
3
16 days to 90 days
4
91 days to 1 year
385
365
20
0
822
755
67
0
3,467
3,414
53
0
1,270
1,247
23
0
1,480
1,458
22
0
2,329
2,320
9
0
2,582
2,558
24
0
1,525
1,438
87
0
5 Acceptances—Total
6
Within 15 days
7
16 days to 90 days
8 91 days to 1 year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9 U.S. government securities—Total
10 Within 15 days1
16 days to 90 days
11
12 91 days to 1 year
13 Over 1 year to 5 years
14 Over 5 years to 10 years
15 Over 10 years
159,169
5,393
34,744
46,481
37,309
14,546
20,696
158,841
5,107
34,748
46,619
37,125
14,546
20,696
162,407
6,199
36,216
47,625
37,125
14,546
20,696
164,439
4,622
39,205
47,196
37,986
14,638
20,792
166,717
4,438
39,293
49,570
37,986
14,638
20,792
159,632
5,276
33,214
49,056
36,844
14,546
20,696
160,983
4,565
37,280
46,587
37,309
14,546
20,696
173,913
12,305
38,406
50,568
37,204
14,638
20,792
16 Federal agency obligations—Total
17 Within 15 days1
18
16 days to 90 days
19 91 days to 1 year
20 Over 1 year to 5 years
Over 5 years to 10 years
21
22
Over 10 years
8,372
142
461
1,942
4,164
1,264
399
8,372
20
581
1,965
4,143
1,264
399
8,372
149
432
2,003
4,105
1,284
399
8,372
223
398
1,963
4,105
1,284
399
8,372
148
465
1,941
4,135
1,284
399
8,752
615
514
1,738
4,222
1,264
399
8,372
142
461
1,942
4,164
1,264
399
8,903
613
533
1,991
4,083
1,284
399
1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements.
A12
1.20
DomesticNonfinancialStatistics • July 1985
A G G R E G A T E R E S E R V E S OF D E P O S I T O R Y I N S T I T U T I O N S A N D M O N E T A R Y B A S E
Billions of dollars, averages of daily figures
_
1981
Dec.
1982
Dec.
1983
Dec.
1984
1984
Dec.
Oct.
Sept.
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Seasonally adjusted
A D J U S T E D FOR
1 Total reserves
2
3
4
5
2
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
32.10
34.28
36.14
38.71
38.14
37.76
38.11
38.71
39.71
31.46
31.61
31.78
158.10
33.65
33.83
33.78
170.14
35.36
35.37
35.58
185.49
35.52
38.13
37.86
198.74
30.90
37.36
37.52
196.25
31.74
36.80
37.14
196.18
33.50
37.33
37.42
197.43
35.52
38.13
37.86
198.74
38.32
39.37
38.97
200.07
40.37
40.57'
40.92
39.08 38.97
39.88 40.03
39.46 39.80
202.10 203.01'
39.60
40.46
40.18
203.69
40.07'
41.26
38.59 38.47
39.39 39.53
38.97 39.30
199.54 200.86'
39.93
40.80
40.52
203.42
Not seasonally adjusted
6 Total reserves2
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
32.82
35.01
36.86
40.13
37.88
37.95
38.69
40.13
40.70
32.18
32.33
32.50
160.94
34.37
34.56
34.51
173.17
36.09
36.09
36.30
188.76
36.94
39.55
39.28
202.02
30.64
37.10
37.25
196.07
31.94
36.99
37.33
196.13
34.07
37.91
37.99
198.22
36.94
39.55
39.28
202.02
39.31
40.36
39.96
200.93
41.92
41.85
38.89
40.70
38.04
38.51
39.23
40.70
41.12
41.29
41.44
41.61
170.47
41.22
41.41
41.35
180.52
38.12
38.12
38.33
192.36
37.51
40.09
39.84
202.59
30.80
37.29
37.41
196.23
32.50
37.37
37.89
196.69
34.62
38.54
38.54
198.77
37.51
40.09
39.84
202.59
39.73
40.88
40.38
201.35
39.88
N O T A D J U S T E D FOR
CHANGES IN RESERVE REQUIREMENTS 5
11 Total reserves2
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit3
Required reserves
Monetary base 4
1. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
2. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
3. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
4. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and the currency component of the money stock less the amount
40.27
40.49
38.98 38.90'
39.83 40.03
39.37 39.73
199.94 201.29'
41.65
40.33
40.77
40.91
203.82
of vault cash holdings of thrift institutions that is included in the currency
component of the money stock plus, for institutions not having required reserve
balances, the excess of current vault cash over the amount applied to satisfy
current reserve requirements. After the introduction of contemporaneous reserve
requirements (CRR), currency and vault cash figures are measured over the
weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock and the remaining items seasonally
adjusted as a whole.
5. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated
with implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
NOTE. Latest monthly and biweekly figures are available from the Board'S
H.3(502) statistical release. Historical data and estimates of the impact on
required reserves of changes in reserve requirements are available from the
Banking Section, Division of Research and Statistics, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
Monetary and Credit Aggregates
1.21
A13
M O N E Y STOCK, LIQUID ASSETS, A N D DEBT M E A S U R E S
Billions of dollars, averages of daily figures
1985
1981
Dec.
1982
Dec.
1983
Dec.
1984
Dec.
Jan.'
Feb.'
Mar.'
Apr.
Seasonally adjusted
441.9
1,796.6
2,236.7
2,598.4
4,323.8
480.5
1,965.3
2,460.3
2,868.7
4,710.1
525.4
2,196.3
2,710.4
3,178.7
5,224.6
124.0
4.3
236.2
77.4
134.1
4.3
239.7
102.4
148.0
4.9
243.7
128.9
1,354.6
440.2
1,484.8
495.0
1,670.9
514.1
Savings deposits9
Commercial Banks
Thrift institutions
159.7
186.1
164.9
197.2
134.6
178.2
14
15
Small denomination time deposits9
Commerical Banks
Thrift institutions
349.6
477.7
382.2
474.7
16
17
Money market mutual funds
General purpose and broker/dealer
Institution-only
150.6
36.2
18
19
Large denomination time deposits 10
Commercial Banks11
Thrift institutions
20
21
Debt components
Federal debt
Non-federal debt
1
2
3
4
5
Ml
M2
M3
L
Debt2
6
7
8
9
Ml components
Currency2
Travelers checks 3
Demand deposits4
Other checkable deposits5
10
11
Nontransactions components
In M26
In M3 only7
12
13
558.5
2,371.8'
2,995.1
3,544. 1'
5,936.6
562.7
2,398.9
3,020.6
3,568.1
6,001.0
569.4
2,420.9
3,041.6
3,591.9
6,062.1
572.1
2,428.6
3,055.7
3,611.4
6,121.5
575.0
2,427.0
3,057.5
n.a.
n.a.
158.7
5.2
248.6
146.0
159.4
5.3
249.1
149.0
160.5
5.3
251.7
151.8
161.3
5.4
251.9
153.6
161.7
5.5
252.5
155.3
1,813.3'
623.4'
1,836.2
621.7
1,851.5
620.7
1,856.4
627.2
1,852.0
630.5
122.6
166.0
121.6
166.9
121.4
168.0
120.3
168.4
119.5
168.3
353.1
440.0
387.0
498.6'
384.7
497.2
382.0
495.6
382.8
495.8
387.6
498.0
185.2
48.4
138.2
43.2
167.7'
62.7
171.9
65.0
175.0
62.2
177.4
59.5
176.1
59.6
247.3
54.3
261.8
66.1
225.1
100.4
264.4
151.8'
262.3
154.6
264.4
154.9
269.5
154.2
272.9
154.4
830.1
3,493.7
991.4
3,718.7
1,173.1
4,051.6
1,385.5
4,615.5
1,402.2
4,660.0
1,414.4
4,707.1
n.a.
n.a.
568.3
2,404.2
3,024.4
3,573.6
5,992.5
558.6
2,414.4
3,034.9
3,590.5
6,038.2
564.9
2,428.8
3,057.4
3,618.4
6,090.8
581.7
2,438.9
3,069.4
n.a.
n.a.
158.3
4.9
254.9
150.1
158.6
5.0
244.9
150.1
159.8
5.1
246.3
153.6
161.2
5.2
255.1
160.1
1,835.9
620.2
1,855.8
620.5
1,863.9
628.6
1,857.2
630.5
1,367.1
4,569.6
Not seasonally adjusted
452.3
1,798.7
2,242.7
2,605.6
4,323.8
491.9
1,967.4
2,466.6
2,876.5
4,710.1
537.9
2,198.1
2,716.5
3,189.4
5,218.5
126.1
4.1
243.6
78.5
136.4
4.1
247.3
104.1
150.5
4.6
251.6
131.3
1,346.3
444.1
1,475.5
499.2
1,660.2
518.4
n.a.
n.a.
26.3
16.6
230.0
145.9
267.1
147.9
280.4
153.2
289.3
159.0
294.0
163.9
295.9
164.4
Savings deposits8
Commercial Banks
Thrift institutions
157.5
184.7
162.1
195.5
132.0
176.5
121.4
164.9
121.1
165.8
120.4
166.5
120.6
168.2
120.9
169.3
37
38
Small denomination time deposits 9
Commercial Banks
Thrift institutions
347.7
475.6
380.1
472.4
351.0
437.6
387.6
499.4'
386.3
502.0
384.1
499.5
383.7
496.2
383.9
495.8
39
40
Money market mutual funds
General purpose and broker/dealer
Institution-only
150.6
36.2
185.2
48.4
138.2
43.2
167.5'
62.7
171.9
65.0
175.0
62.2
177.4
59.5
176.1
59.6
41
42
Large denomination time deposits 10
Commercial Banks11
Thrift institutions
252.1
54.3
266.2
66.2
228.5
100.7
265.9
151.1'
263.1
154.1
263.9
154.9
269.8
153.3
270.3
153.4
43
44
Debt components
Federal debt
Non-federal debt
830.1
3,943.7
991.4
3,718.7
1,170.2
4,048.3
1,383.1
4,609.4
1,397.4
4,640.8
1,412.0
4,678.8
22
23
24
25
26
Ml
M2
M3
L
Debt2
27
28
29
30
Ml components
Currency2
Travelers checks 3
Demand deposits 4
Other checkable deposits5
31
32
Nontransactions
components
M26
M3 only7
33
34
Money market deposit accounts
Commercial banks
Thrift institutions
35
36
For notes see following page.
570.4
2,376.7'
3,002.3
3,545.4'
5,930.2
160.9
4.9
257.4
147.2
1,806.3'
625.5'
1,364.7
4,565.5
n.a.
n.a.
A14
DomesticNonfinancialStatistics • July 1985
NOTES TO TABLE 1.21
1. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U.S. government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted is
a consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are on an end-of-month basis.
2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
commercial banks. Excludes the estimated amount of vault cash held by thrift
institutions to service their OCD liabilities.
3. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
4. Demand deposits at commercial banks and foreign-related institutions other
than those due to domestic banks, the U.S. government, and foreign banks and
official institutions less cash items in the process of collection and Federal
Reserve float. Excludes the estimated amount of demand deposits held at
commercial banks by thrift institutions to service their OCD liabilities.
5. Consists of NOW and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions. Other
checkable deposits seasonally adjusted equals the difference between the seasonally adjusted sum of demand deposits plus OCD and seasonally adjusted demand
deposits. Included are all ceiling free "Super NOWs," authorized by the
Depository Institutions Deregulation committee to be offered beginning Jan. 5,
1983.
6. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker/dealer), MMDAs, and savings and small
time deposits, less the consolidation adjustment that represents the estimated
amount of demand deposits and vault cash held by thrift institutions to service
their time and savings deposits liabilities.
7. Sum of large time deposits, term RPs and term Eurodollars of U.S.
residents, money market fund balances (institution-only), less a consolidation
adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds.
8. Savings deposits exclude MMDAs.
9. Small-denomination time deposits—including retail RPs— are those issued
in amounts of less than $100,000. All individual retirement accounts (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
10. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
11. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
officisd institutions.
NOTE: Latest monthly and weekly figures are available from the Board's H.6
(508) release. Historical data are available from the Banking Section, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Monetary and Credit Aggregates
1.22
A15
B A N K DEBITS A N D DEPOSIT T U R N O V E R
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1984
Oct.
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Seasonally adjusted
DEBITS TO
2
Demand deposits
1 All insured banks
2 Major New York City banks
3 Other banks
4 ATS-NOW accounts3
5 Savings deposits4
80,858.7
34,108.1
46,966.5
761.0
679.6
90,914.4
37,932.9
52,981.5
1,036.2
720.3
109,642.3
47,769.4
61,873.1
1,405.5
741.4
142,907.3
67,488.7
75,418.5
1,698.6
597.2
134,016.3
60,992.8
73,023.5
1,678.5
579.1
137,512.0
62,341.0
75,171.0
1,677.5
486.0
140,678.6
64,474.7
76,203.9
1,552.0
501.3
143,281.5
63,157.0
80,124.5
1,618.6
499.8
139,608.3
62,523.7
77,084.6
1,567.0
539.2
285.8
1,116.7
185.9
14.4
4.1
324.2
1,287.6
211.1
14.5
4.5
379.7
1,528.0
240.9
15.6
5.4
486.8
2,199.6
286.9
16.9
4.9
448.2
1,917.5
273.3
16.5
4.7
453.4
1,903.0
277.8
16.3
4.0
468.6
2,008.6
284.2
14.6
4.2
471.4
1,902.2
295.9
15.0
4.2
456.3
1,967.0
281.1
14.4
4.6
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts3
Savings deposits4
Not seasonally adjusted
DEBITS TO
2
Demand deposits
11
All insured banks
12 Major New York City banks
13 Other banks
14 ATS-NOW accounts3
15 MMDA5
16 Savings deposits4
81,197.9
34,032.0
47,165.9
737.6
91,031.8
38,001.0
53,030.9
1,027.1
672.9
720.0
286.4
1,114.2
186.2
14.0
325.0
1,295.7
211.5
14.4
4.1
4.5
109,517.6
47,707.4
64,310.2
1,397.0
567.4
742.0
141,249.5
64,790.2
76,459.2
1,665.7
901.1
616.2
131,791.6
61,148.7
70,643.0
1,524.8
819.7
538.7
140,166.0
64,498.9
75,667.1
1,625.4
899.7
470.6
148,880.1
68,203.1
80,677.0
1,838.9
1,103.9
544.7
129,297.2
57,337.4
71,959.8
1,524.4
980.9
455.5
143,154.3
64,188.9
78,965.4
1,624.7
1,032.5
552.9
379.9
1,510.0
240.5
15.5
2.8
5.4
479.9
2,120.7
289.9
16.6
3.7
5.1
438.8
1,944.6
262.7
14.9
3.2
4.4
447.1
1,910.8
270.5
15.4
3.4
3.9
486.0
2,025.9
295.9
17.1
4.0
4.6
437.2
1,780.6
273.0
14.3
3.4
3.9
480.9
1,990.7
297.5
14.9
3.5
4.7
DEPOSIT TURNOVER
Demand deposits2
17 All insured banks
18 Major New York City banks
19 Other banks
20 ATS-NOW accounts3
5
~>\ MMDA
22 Savings deposits4
1. Annual averages of monthly figures.
2. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data
availability starts with December 1978.
4. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
5. Money market deposit accounts.
NOTE. Historical data for demand deposits are available back to 1970 estimated
in part from the debits series for 233 SMSAs that were available through June
1977. Historical data for ATS-NOW and savings deposits are available back to
July 1977. Back data are available on request from the Banking Section, Division
of Research and Statistics, Board of Governors of the Federjd Reserve System,
Washington, D.C. 20551.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
A16
1.23
DomesticNonfinancialStatistics • July 1985
LOANS A N D SECURITIES
All Commercial Banks 1
Billions of dollars; averages of Wednesday figures
1984
May
June
July
Aug.
1985
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Seasonally adjusted
1 Total loans and securities2
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
5 Commercial and industrial
6
Bankers acceptances held 3 ..
7
Other commercial and
industrial
8
U.S. addressees4
9
Non-U.S. addressees4
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
lb
Foreign banks
17 Foreign official institutions . . .
18 Lease financing receivables...
19 All other loans
1,629.8
1,636.6
1,652.6
1,662.1
1,674.8'
1,682.8
1,701.1
1,714.8
1,724.0
1,742.3'
1,758.y
1,765.7
257.3
140.5
1,232.0
448.0
5.8
253.7
139.7
1,243.2
452.2
5.8
256.4
139.5
1,256.7
455.0
6.5
257.1
140.8
1,264.2
458.1
6.1
258.0
141.9
1,274.9'
460.0
5.7
257.0
141.5
1,284.3
463.0
5.9
259.4
141.1
1,300.6
467.1
6.2
260.2
139.9
1,314.7
468.1
5.4
260.1
142.4'
1,321.5'
468.4'
5.1
265.8'
140.8'
1,335.6^
473.4'
6.3
266.9'
138.7'
1,353.3'
480.4
6.5
261.1
140.1
1,364.5
480.9
5.5
442.2
430.2
12.0
350.7
229.0
30.1
446.3
434.7
11.7
354.7
233.0
28.6
448.5
436.8
11.6
358.3
236.3
28.0
451.9
440.3
11.6
361.2
238.5
26.1
454.3
443.2
11.1
364.7'
241.3
28.8
457.1
446.5
10.6
367.7
243.5
30.3
460.8
450.5
10.3
371.8
246.7
30.2
462.7
453.1
9.6
375.6
251.0
31.5
463.3'
453.6'
9.7
377.9
254.6
31.9
467.1'
457.0'
10.2
382.1'
257.7
31.6
473.9
463.6
10.3
385.8'
261.9'
32.8
475.4
465.1
10.3
389.9
265.5
35.1
31.4
40.3
31.4
40.4
31.4
40.6
30.9
40.5
31.3
40.7
31.2
40.6
31.2
40.5
31.4
40.3
31.3
40.2
30.9
40.2
30.7
40.3
31.2
40.1
37.6
12.3
8.9
14.1
29.6
38.9
12.3
8.8
14.3
28.8
40.3
12.2
9.3
14.5
30.9
41.1
12.0
9.4
14.8
31.7
41.6
11.5
8.9
15.0
31.1'
41.2
11.4
8.5
15.1
31.9
42.1
11.7
8.4
15.3
35.7
44.0
11.4
8.3
15.5
37.5
46^
11.3
7.8
15.6
35.4'
46.6
11.4
7.9
15.8
38.<y
46.8
11.1
7.7
16.1
39.6'
47.1
10.7
7.8
16.4
39.9
Not seasonally adjusted
20 Total loans and securities2
1,626.6
1,637.6
1,646.7
1,656.1
1,673.2'
1,684.0
1,701.9
1,725.8
1,732.0
1,740.4'
IJSS.V
1,765.9
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24 Commercial and industrial....
25
Bankers acceptances held 3 ..
2b
Other commercial and
industrial
27
U.S. addressees4
28
Non-U.S. addressees4
29 Real estate
30 Individual
31
Security
32 Nonbank financial
institutions
33 Agricultural
34
State and political
subdivisions
35
Foreign banks
3b Foreign official institutions . . .
3/
Lease financing receivables...
38 All other loans
259.4
141.1
1,226.1
446.8
5.7
257.2
139.4
1,241.0
450.9
6.0
256.2
138.2
1,252.4
454.3
6.4
255.5
140.4
1,260.2
456.1
5.9
255.7'
141.3
1,276.2'
459.9
5.6
254.1
140.9
1,289.0
463.8
5.8
255.3
141.2
1,305.5
467.3
6.1
256.9
141.5
1,327.4
471.2
5.8
260.1'
143.3'
1,328.7'
470.3'
5.2
266.8'
141.<y
1,332.6'
472^
6.1
269.C
138.9'
1,347.1'
480.0
6.4
266.6
139.7
1,359.7
481.2
5.6
441.0
429.5
11.6
349.8
227.2
28.9
444.8
433.5
11.3
354.1
231.3
28.5
447.9
436.2
11.7
357.7
234.7
26.6
450.1
438.5
11.6
361.4
238.3
25.4
454.3
443.0
11.3
365.8'
242.3'
27.7
458.0
447.0
11.1
368.9
245.3
30.2
461.2
450.2
11.0
372.8
248.4
31.7
465.3
454.8
10.6
376.2
254.0
35.2
465.C
455.3'
9.8
378.6'
257.C
33.0
466.8'
457.1'
9.7
381.7'
257.4
30.8
473.5'
463.8
9.8
384.7'
259.7'
32.2
475.5
466.0
9.5
388.6
263.2
35.0
31.2
40.2
31.4
40.9
31.4
41.3
31.0
41.4
31.4
41.5
31.1
41.2
31.1
40.6
31.5
40.0
31.3'
39.6
30.7
39.4
30.7
39.3
31.3
39.4
37.6
12.0
8.9
14.1
29.6
38.9
11.8
8.8
14.3
30.1
40.3
12.0
9.3
14.4
30.3
41.1
11.7
9.4
14.7
29.8
41.6
11.7
8.9
14.9
30.5
41.2
11.8
8.5
15.0
32.1
42.1
12.0
8.4
15.1
35.8
44.0
12.0
8.3
15.5
39.5
46.9'
11.6
7.8
15.8
36.7'
46.6
11.4
7.9
16.0
37.8'
46.8
10.9
7.7
16.3'
38.8'
47.1
10.3
7.8
16.4
39.3
1. Data are prorated averages of Wednesday estimates for domestically chartered insured banks, based on weekly sample reports and quarterly universe
reports. For foreign-related institutions, data are averages of month-end estimates
based on weekly reports from large U.S. agencies and branches and quarterly
reports from all U.S. agencies and branches, New York investment companies
majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks.
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the 50 states and the District of Columbia.
NOTE. These data also appear in the Board's G.7 (407) release. For address, see
inside front cover.
Commercial Banking Institutions
All
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS'
Monthly averages, billions of dollars
1985
1984
Source
May
Total nondeposit funds
Seasonally adjusted2
Not seasonally adjusted
Federal funds, RPs, and other
borrowings from nonbanks3
3
Seasonally adjusted
4
Not seasonally adjusted
5 Net balances due to foreign-related
institutions, not seasonally
adjusted
1
2
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
109.1
113.8
99.4
101.8
100.3
99.9
103.5
105.7
106.5
107.0
107.9
109.6
112.0
117.5
108.6
111.1
102.2
104.6
113.7
117.1
116.6
119.0
105.0
108.1
137.4
142.1
133.2
135.7
134.5
134.0
139.3
141.5
141.6
142.1
141.4
143.1
145.0
150.5
140.5
143.1
138.7
141.1
146.7
150.2
147.2
149.6
138.7
141.9
-28.2
-33.9
-34.2
-35.8
-35.1
-33.5
-33.1
-32.0
-36.5
-33.1
-30.6
-33.8
-29.8
73.5
43.6
-32.9
73.8
40.9
-33.1
71.2
38.1
-35.0
72.8
37.7
-35.2
71.5
36.3
-34.2
69.8
35.6
-32.7
68.3
35.6
-31.4
69.0
37.6
-34.9
71.4
36.5
-31.8
70.6
38.8
-29.8
71.5
41.7
-32.6
75.0
42.4
1.6
49.7
51.2
-0.9
50.7
49.7
-1.0
51.9
50.8
-0.7
51.6
50.8
0.1
51.7
51.8
0.7
50.8
51.5
-0.4
50.7
50.4
-0.6
52.0
51.4
-1.6
52.9
51.3
-1.3
54.0
52.7
-0.8
53.3
52.5
-1.2
51.7
50.5
79.6
81.9
76.1
76.0
77.5
74.6
79.9
79.6
81.4
79.4
82.0
81.2
84.0
87.0
81.1
81.1
82.3
82.2
90.1
91.1
92.0
92.0
85.4
86.0
13.4
12.8
14.1
12.4
12.8
11.9
13.1
10.3
16.0
17.5
8.0
11.0
17.3
10.4
16.1
12.5
14.7
18.5
13.0
15.8
11.8'
12.8
14.6
15.3
302.2
300.2
309.9
309.0
314.8
313.7
314.2
315.6
315.4
316.8
321.4
322.2
323.0
322.9
325.8
327.3
324.8
325.6
325.4'
324.9
329.9'
330.3'
332.6
330.1
MEMO
6 Domestically chartered banks' net
positions with own foreign
branches, not seasonally
adjusted4
7 Gross due from balances
8
Gross due to balances
9 Foreign-related institutions' net
positions with directly related
institutions, not seasonally
adjusted5
10 Gross due from balances
11 Gross due to balances
Security RP borrowings
12 Seasonally adjusted®
13 Not seasonally adjusted
U.S. Treasury demand balances7
14 Seasonally adjusted
15 Not seasonally adjusted
Time deposits, $100,000 or more8
16 Seasonally adjusted
17 Not seasonally adjusted
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks, New
York investment companies majority owned by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
nonbanks and not seasonally adjusted net Eurodollars. Includes averages of
Wednesday data for domestically chartered banks and averages of current and
previous month-end data for foreign-related institutions.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking
business. This includes borrowings from Federal Reserve Banks and from foreign
banks, term federal funds, overdrawn due from bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for member and nonmember banks.
5. Averages of daily data.
6. Based on daily average data reported by 122 large banks.
7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
8. Averages of Wednesday figures.
NOTE. These data also appear in the Board's G. 10 (411) release. For address see
inside front cover.
A18
1.25
DomesticNonfinancialStatistics • July 1985
ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series
Billions of dollars
1983
1984
1985
Account
Dec.
July
Aug.
Sept/
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.
1,680.62
1,765.3
378.2
246.5
131.7
15.7
1,371.4
118.6
1,252.8
454.4
356.8
235.2
206.5
1,784.5
376.2
243.5
132.7
20.0
1,388.4
127.1
1,261.2
455.2
361.8
240.0
204.2
1,798.3
377.2
243.4
133.8
20.9
1,400.2
123.3
1,276.9
459.8
366.6
243.3
207.3
1,822.7
375.2
241.2
134.0
22.5
1,424.9
126.1
1,298.8
467.7
369.8
247.1
214.2
1,822.7
374.4
240.4
133.9
21.9
1,426.4
122.6
1,303.8
468.7
374.4
249.6
211.1
1,864.0
377.5
242.5
134.9
22.9
1,463.7
126.9
1,336.8
476.8
377.7
255.5
226.8
1,854.6
380.9
245.0
136.0
24.2
1,449.5
125.2
1,324.3
470.0
380.7
257.4
216.1
1,874.4
382.0
248.0
134.0
27.6
1,464.8
128.6
1,336.2
476.8
382.6
258.1
218.7
1,879.1
383.5
250.9
132.6
23.7
1,471.9
124.3
1,347.6
482.7
386.1
260.4
218.3
1,895.9
383.4
250.0
133.4
23.5
1,489.0
130.7
1,358.3
481.5
389.8
264.2
222.8
219.6
23.5
23.4
73.2
179.1
19.4
21.6
60.2
177.3
17.4
22.2
60.7
181.0
18.0
21.6
63.2
188.0
18.1
21.4
70.2
188.4
20.4
23.9
66.5
201.9
20.5
23.3
75.9
187.8
20.9
21,9
66.9
189.2
19.6
21.8
68.8
183.7
20.0
21.3
63.9
187.3
22.9
21.3
64.1
9 9 5
29.3
48.6
29.5
47.5
30.8
47.4
32.0
46.3
30.9
46.7
34.5
47.7
30.8
47.3
32.2
46.7
31.6
46.9
30.1
48.9
A L L COMMERCIAL B A N K I N G
INSTITUTIONS 1
1
2
3
4
5
6
7
8
9
10
11
12
Loans and securities
Investment securities
U.S. government securities
Other
Trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Individual
All other
Total cash assets
Reserves with Federal Reserve Banks
Cash in vault
lb
Cash items in process of collection . . .
17
Demand balances at U.S. depository
institutions
18
Other cash assets
n.a.
n.a.
n.a.
n.a.
1.249.32
111.42
1,137.92
419.4
332.4
217.6
168.52
13
14
15
19
Other assets
20
Total assets/total liabilities and capital . . .
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
2b Other liabilities
2 7 Residual (assets less liabilities)
21
22
23
24
25
J
191.3
190.6
196.8
201.6
190.1
196.8
191.9
195.2
192.5
188.7
2,093.8
193.6
2,135.6
2,152.4
2,176.1
2,212.2
2,201.2
2,262.6
2,234.2
2,258.8
2,255.3
2,272.0
1,508.9
374.62
457.22
677.1
273.22
164.42
147.32
1,535.5
441.4
368.5
725.6
292.0
167.9
140.2
1,539.0
440.0
365.1
734.0
301.5
169.7
142.1
1,549.9
442.3
364.9
742.7
307.1
172.9
146.2
1,578.9
462.7
371.1
745.0
314.3
175.1
144.0
1,578.2
453.1
378.1
747.0
298.8
179.4
144.8
1,631.2
491.1
386.3
753.8
304.1
181.1
146.2
1,604.5
456.9
400.0
747.5
306.7
174.2
148.9
1,617.9
459.3
406.8
751.8
309.0
182.6
149.3
1,625.1
457.6
409.8
757.7
300.2
180.7
149.4
1,636.4
465.3
409.4
761.7
309.8
175.3
150.5
254.I2
255.6
255.1
255.5
256.3
255.2
256.9
262.0
269.5
268.4
266.4
177.22
138.3
141.0
142.7
141.5
141.1
143.4
143.1
140.1
138.8
140.6
1,591.32
1,676.7
371.2
241.4
129.8
15.7
1,289.8
95.2
1,194.6
414.0
353.1
235.1
192.4
1,688.4
369.1
238.5
130.7
20.0
1,299.4
97.6
1,201.8
414.5
358.0
239.8
189.6
1,707.4
369.8
238.4
131.5
20.9
1,316.6
99.9
1,216.7
418.7
362.3
243.1
192.5
1,728.5
367.9
236.1
131.8
22.5
1,338.0
103.3
1,234.7
423.0
365.5
246.9
199.3
1,726.7
367.5
235.8
131.6
21.9
1,337.3
96.1
1,241.2
424.7
369.1
249.4
198.0
1,765.4
370.5
237.9
132.6
22.9
1,372.1
102.8
1,269.3
430.2
372.1
255.3
211.7
1,759.6
373.7
240.2
133.5
24.2
1,361.7
100.6
1,261.2
425.7
375.1
257.2
203.1
1,774.6
374.7
243.2
131.5
27.6
1,372.3
100.9
1,271.4
431.5
377.3
257.9
204.8
1,781.9
376.6
246.6
130.0
23.7
1,381.6
99.9
1,281.6
435.5
380.9
260.2
205.0
1,796.4
376.7
246.0
130.6
23.5
1,396.2
103.1
1,293.1
436.0
384.5
263.9
208.7
166.7
18.0
21.6
60.1
165.9
16.7
22.2
60.5
169.0
17.4
21.6
63.0
176.6
17.1
21.4
69.9
176.8
19.7
23.9
66.3
190.3
19.2
23.3
75.7
175.7
20.2
21.9
66.7
177.8
18.7
21.8
68.5
172.5
19.2
21.3
63.7
175.7
22.3
21.3
63.9
27.9
39.2
28.2
38.3
29.4
37.7
30.7
37.5
29.4
37.5
32.9
39.3
29.5
37.5
30.9
37.9
30.3
38.0
28.7
39.5
MEMO
28
29
U.S. government securities (including
trading account)
Other securities (including trading
account)
DOMESTICALLY CHARTERED
COMMERCIAL B A N K S 3
30 Loans and securities
Investment securities
U.S. government securities
33
Other
34
Trading account assets
35
Total loans
3b
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
41
All other
31
32
42
43
44
45
46
47
Total cash assets
Reserves with Federal Reserve Banks
Cash in vault
Cash items in process of collection . . .
Demand balances at U.S. depository
institutions
Other cash assets
48
Other assets
49
Total assets/total liabilities and capital . . .
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
5b Residual (assets less liabilities)
50
51
52
53
54
55
n.a.
n.a.
n.a.
n.a.
1,167.42
87.02
1.080.42
381.32
327.2
217.4
154.62
207.0
19.9
23.4
73.0
150.4
138.9
140.6
141.2
147.9
139.7
142.1
137.6
139.0
137.2
137.6
1,948.7
1,982.3
1,995.0
2,017.6
2,053.1
2,043.2
2,097.8
2,072.9
2,091.4
2,091.7
2,109.7
1,468.1
368.52
456.62
643.0
214.I2
122.32
144.I2
1,495.4
434.8
367.5
693.1
228.0
121.5
137.4
1,500.3
433.7
364.2
702.4
236.0
119.3
139.3
1,510.9
435.9
363.9
711.1
243.5
119.7
143.4
1,539.1
456.2
370.1
712.8
251.3
120.5
142.1
1,538.0
446.8
377.1
714.1
240.9
122.3
142.0
1,587.8
484.5
385.2
718.1
243.1
123.5
143.4
1,561.8
450.6
398.9
712.3
246.5
118.4
146.1
1,573.7
452.9
405.6
715.2
247.0
124.2
146.5
1,580.5
451.4
408.6
720.5
239.9
124.7
146.6
1,591.7
458.9
408.3
724.5
247.9
122.3
147.8
1. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks, Edge Act and
Agreement corporations, and New York State foreign investment corporations.
2. Data are not comparable with those of later dates. See the Announcements
section of the March 1985 BULLETIN for a description of the differences.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
NOTE. Figures are partly estimated. They include all bank-premises subsidiaries and other significant majority-owned domestic subsidiaries. Loan and securities data for domestically chartered commercial banks are estimates for the last
Wednesday of the month based on a sample of weekly reporting banks and
quarter-end condition report data. Data for other banking institutions are estimates made for the last Wednesday of the month based on a weekly reporting
sample of foreign-related institutions and quarter-end condition reports.
Weekly Reporting Commercial Banks
1.26
A19
ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on
December 31, 1982, Assets and Liabilities
Millions of dollars, Wednesday figures
Mar. 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
Cash and balances due from depository institutions
Total loans, leases and securities, net
U.S. Treasury and government agency
Trading account
Investment account, by maturity
One year or less
Over one through five years
Over five years
Other securities
Trading account
Investment account
States and political subdivisions, by maturity
One year or less
Over one year
Other bonds, corporate stocks, and securities
Other trading account assets
Federal funds sold1
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross2
Other loans, gross2
Commercial and industrial2
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans2
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve2
Other loans and leases, net2
All other assets
Total assets
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks..
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money3
Other liabilities and subordinated note and debentures
Total liabilities
Residual (total assets minus total liabilities)4
67
68
69
70
71
72
73
Total loans and leases (gross) and investments adjusted5
Total loans and leases (gross) adjusted2-5
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates—total6
Commercial and industrial
Other
Nontransaction savings deposits (including MMDAs)...
MEMO
Mar. 27
Apr. 3
Apr. 10
Apr. 17
Apr. 24
May 1
May 8
105,047
90,317
92,705'
97,789
89,499
92,427'
91,00c
87,182'
94,050
838,794
846,151
834,758
829,742 827,169' 829,288' 836,335' 832,76c 837,989
85,607
86,882
85,471
84,150
86,111
86,954
86,950
87,428
90,327
16,344
14,750
15,533
16,040
17,360
17,652
17,512
17,316
20,417
69,522
69,127
69,401
70,073
70,071
70,112
69,302
69,438
69,910
20,902
21,579
21,132
20,860
20,753
21,576
21,043
21,211
21,687
34,772
34,520
35,246
34,884
34,074
35,254
35,224
35,213
35,002
13,925
13,618
14,020
13,608
14,300
13,035
13,282
13,013
13,220
48,431
45,814
48,792
48,785
48,909
46,742
45,845
47,143
46,710
4,263
2,534
4,862
5,112
5,131
2,614
3,610
3,802
3,248
44,167
43,922
43,798
43,280
43,661
43,132
43,341
43,231
43,463
38,865
38,518
38,959
38,903
39,111
38,577
38,737
38,471
38,886
4,851
4,8%
4,527
4,728
4,723
4,543
4,559
4,542
4,922
34,214
33,991
34,137
34,236
34,052
33,928
33,964
34,018
34,195
4,894
5,057
4,762
4,7%
4,%3
4,604
4,761
4,556
4,577
2,905
3,101
3,061
2,980
2,309
2,490
2,427
3,018
3,047
52,697
51,816
56,572
53,292
57,708
54,904
48,994
51,804
51,504
35,225
35,762
40,271
40,639
36,430
38,245
33,478
36,335
35,205
10,754
12,055
12,056
11,091
10.775
10,368
10,281
11,080
11,514
5,837
4,879
5,381
4,842
6,086
5,579
5,148
5,187
4,785
669,171
666,842
661,703
658,794' 657,582' 661,818' 658,018' 663,493
654,985
655,683
653,322
648,260
641,780 645,589' 644,386' 648,570' 644,752' 650,230
255,807
253,810
254,891
254,941' 255,877' 255,670 256,344' 254,377' 254,784
2,724
2,389
3,503'
3,042
2,645
3,724'
3,758
3,795
4,138
252,167
253,418
251,166
252,620 250,875' 251,742
250,803' 252,12C 251,875
248,018
245,684
246,770
245,240' 246,232
247,078
245,086' 246,352' 246,263
5,397
5,400
5,634
5,510
5,481
5,542
5,717
5,768
5,612
166,255
166,332
164,872
165,203
165,662
164,306
164,536
164,469
164,360
119,023
116,769'
117,653
118,302
118,878
115,946' 116,272' 116,542'
115,693
39,407
40,663
39,189'
39,672
41,446
39,492
38,550
39,646'
39,254
10,182
11,841
11,394
9,739'
10,840
9,883
9,855
lo.ory
9,774
5,508
5,256
5,109
5,265
5,488'
5,528'
5,888
5,381
5,846
23,760
23,968
24,340
23,
%2
23,723
23,722
23,314
24,040'
23,634
18,737
17,502
15,352
18,438
16,663
15,684
14,952
16,496
13,857
7,036
7,086
7,119
7,111
7,130
7,056'
7,018
6,985'
7,076
29,949
29,988
29,779
29,750
29,880
29,725
29,766
29,631
29,563
3,646
3,875
3,760
3,890
3,859
3,646
3,876
3,839
3,640
14,034
14,655
13,230
13,485'
13,293
13,856
13,725
14,549
13,487
13,521
13,267
13,262
13,442
13,488
13,204
13,196
13,249
13,205
5,218
5,208
5,238
5,241
5,257
5,264
5,274
5,293
5,223
11,537
11,671
11,755
11,497
11,544
11,457
11,540'
11,325
11,556
649,880
644,902
652,282
638,154
641,989' 640,964' 645,139' 641,284' 646,714
127,541
129,025
130,326
129,475' 128,863' 133,980' 131,698' 131,248
128,705
1,052,497 1,047,644' l,045,33y 1,062,742' 1,057,16* 1,067,026 1,053,282 1,081,524 1,056,652
182,638
182,742
204,544
181,664
185,050' 182,371' 194,813' 187,907' 193,048
139,035
154,030
138,811
140,179' 139,194' 145,352' 144,190' 147,564
141,993
4,714
5,074
5,659
6,184
5,256
5,169
4,693
4,719
4,408
1,874
1,491
2,595
2,471
3,555
4,040
2,581
4,512
1,156
21,549
20,695'
23,570
20,877
25,346
21,511
23,456
21,428'
20,259
5,901
5,122
4,921
5,719
5,496'
5,429
6,050
5,302
4,989
902
1,175
889
981
937
776
810
850
690
8,357
10,598
8,179
9,000
8,159
8,029
8,254
9,900
8,169
37,070
39,100
40,518
37,681
36,878
36,409
36,111
38,852
36,597
464,520 464,676
463,948
465,132
462,460 463,404 464,684 465,610 465,372
428,655
427,916
428,262
426,942
427,898 428,769' 430,603' 429,999' 428,788
23,977
24,432
23,279'
23,501
24,235
23,452
23,68C
22,952'
23,170
350
316
333
342
386
349
347
342
355
9,327
9,321
9,205
9,212
9,226
8,991
9,073
9,242
9,169'
2,517
2,588
2,525
2,508
2,448
2,714
2,640
2,750
2,720
203,437
204,307
198,541
193,034
193,630' 194,180' 200,800
191,960
199,639
925
70
3,175
977
700
5,521
1,043
500
13,583
15,935
15,948
92
15,439
2,164
8,675
4,597
7,106
188,289
182,125
186,801
188,532' 190,913' 186,291
191,954
183,316
184,854
%,513'
94,270
95,781
98,550
93,200
98,458
96,391
96,005'
96,870'
982,348
979,422 1,007,357
978,817
974,288' 971,996' 988,910' 983,072' 993,156
74,092
73,870
74,167
74,304
73,860
73,357
73,832
73,679
73,337
801,594
661,510
156,691'
2,855'
1,926'
929
176,492
1. Includes securities purchased under agreements to resell.
2. Levels of major loan items were affected by the Sept. 26, 1984 transaction
between Continental Illinois National Bank and the Federal Deposit Insurance
Corporation. For details see the H.4.2 statistical release dated Oct. 5, 1984.
3. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
4. This is not a measure of equity capital for use in capital adequacy analysis or
for other analytic uses.
Mar. 20
800,613'
664,427'
156,978
2,905'
1,982'
923
176,916
799,716'
663,196'
157,742
2,836'
1,935'
900
177,132
804,690'
668,399'
156,7%
2,863'
1,97(K
893
178,585
799,117'
664,212'
156,047
2,862'
1,%7'
894
178,6%
808,823
670,245
155,639
2,834
1,933
901
177,3%
804,289
667,724
156,658
2,800
1,902
898
176,467
810,928
674,767
155,419
2,805
1,922
882
176,773
809,138
672,040
155,930
2,768
1,875
894
177,473
5. Exclusive of loans and federal funds transactions with domestic commercial
banks.
6. Loans sold are those sold outright to a bank's own foreign branches,
nonconsolidated nonbank affiliates of the bank, the bank's holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
A20
1.28
DomesticNonfinancialStatistics • July 1985
L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S IN N E W Y O R K CITY A s s e t s and Liabilities
Millions of dollars, Wednesday figures
Account
Mar. 13
Mar. 20
Mar. 27
Apr. 3
Apr. 10
Apr. 17
Apr. 24
May 1
May 8
1 Cash and balances due from depository institutions
.
24,355
22,556
20,303
21,876
22,600
22,779
20,337
27,343
23,523
2 Total loans, leases and securities, net1
.
176,578
175,223
174,424
176,765
175,284
175,425
174,972
183,291
178,733
13,335
2,257
9,447
1,631
13,411
2,276
9,527
1,609
13,365
2,255
9,494
1,615
13,404
2,293
9,365
1,747
13,335
2,321
9,280
1,734
12,557
1,847
8,895
1,815
12,210
1,803
8,652
1,754
12,020
1,683
8,546
1,790
12,295
1,664
8,840
1,791
9,254
8,360
995
7,365
894
9,137
8,269
909
7,360
868
9,194
8,349
933
7,416
845
9,iii
8,291
908
7,383
880
9,231
8,354
910
7,444
877
9,489
8,598
1,082
7,516
890
9,530
8,612
1,092
7,520
918
9,560
8,603
1,227
7,376
957
9,674
8,643
1,227
7,416
1,031
22,388
13,590
5,812
2,986
136,541
134,274
61,824
902
. 60,922
. 60,265
656
. 25,328
16,125
11,390
1,973
1,989
7,427
7,054
438
7,910
793
3,413
2,267
1,490
3,450
131,601
67,786
19,894
11,735
4,822
3,338
137,709
135,435
62,146
773
61,373
60,712
660
25,359
16,185
11,467
1,976
2,026
7,464
7,682
472
7,886
799
3,439
2,274
1,488
3,440
132,781
67,642
20,082
11,936
4,760
3,386
136,667
134,404
61,840
825
61,016
60,359
657
25,486
16,251
10,932
1,975
1,782
7,174
7,219
486
7,915
788
3,487
2,264
1,505
3,379
131,783
68,061
20,452
11,175
5,558
3,719
138,536
136,279
61,988
800
61,188
60,533
654
25,268
16,320
11,711
2,425
1,990
7,2%
8,307
466
7,842
840
3,536
2,257
1,457
3,341
133,738
68,778
21,640
13,469
5,330
2,841
135,944
133,671
61,210
798
60,412
59,729
683
25,359
16,357
11,129
1,920
2,035
7,174
7,064
487
7,874
900
3,289
2,273
1,470
3,3%
131,078
66,9%
19,090
9,548
6,533
3,008
139,156
136,878
61,926
700
61,226
60,556
670
25,392
16,481
11,215
2,153
1,884
7,179
9,276
478
7,868
918
3,324
2,278
1,466
3,400
134,289
70,312
20,593
11,092
5,316
4,185
137,506
135,044
61,240
614
60,626
59,978
648
25,623
16,577
11,101
2,255
1,633
7,213
7,956
444
7,894
925
3,284
2,462
1,470
3,3%
132,640
67,797
24,788
14,804
6,759
3,225
141,783
139,320
62,063
665
61,398
60,752
646
25,697
16,682
12,329
2,774
1,919
7,636
9,766
435
7,938
839
3,569
2,463
1,441
3,418
136,924
66,731
21,200
11,461
5,744
3,9%
140,471
138,005
62,552
656
61,897
61,227
670
25,800
16,789
11,920
2,432
2,212
7,276
8,680
435
7,943
788
3,097
2,466
1,446
3,462
135,564
64,716
268,720
265,421
262,788
267,420
264,880
268,516
263,106
277,366
266,972
44,348
31,420
687
166
4,028
3,675
510
3,862
47,193
32,189
799
841
4,896
4,146
526
3,795
44,275
30,741
615
548
4,683
3,984
610
3,093
47,910
31,732
665
853
5,058
4,665
674
4,262
46,144
31,702
657
428
4,127
4,226
811
4,192
46,230
32,036
704
270
5,209
3,802
721
3,487
45,098
30,916
876
611
4,520
3,662
756
3,756
54,385
37,065
926
177
5,871
4,323
1,003
5,020
44,757
29,828
778
537
4,508
4,557
717
3,832
3,830
84,581
76,478
4,037
69
2,537
1,460
68,962
2,776
524
65,662
43,442
3,823
84,715
76,760
4,044
65
2,386
1,460
64,374
3,794
84,555
76,552
4,011
65
2,466
1,461
65,248
4,133
84,935
77,235
3,887
62
2,354
1,397
65,241
4,486
84,820
76,%3
4,149
60
2,324
1,324
67,946
4,124
84,%3
76,977
4,197
67
2,418
1,304
63,121
3,958
85,608
77,568
4,208
66
2,469
1,298
66,421
3,919
85,688
77,508
4,440
66
2,454
1,220
68,760
2,446
61,928
41,946
1,765
63,483
41,621
1,072
64,169
41,669
4,233
84,642
77,038
3,860
61
2,360
1,324
64,412
950
9
63,453
41,864
3,876
64,069
41,535
4,129
58,992
42,331
4,306
62,115
43,468
4,144
64,615
40,308
245,164
242,052
239,494
243,888
241,296
245,017
239,637
253,840
243,432
23,556
23,369
23,294
23,532
23,584
23,499
23,469
23,526
23,539
165,955
143,366
33,436
166,440
143,892
33,395
165,396
142,838
33,173
167,963
145,388
33,083
164,761
142,195
32,582
168,590
146,544
32,981
166,491
144,752
33,441
170,573
148,993
33,546
169,747
147,778
33,842
Securities
3 U.S. Treasury and government agency 2
Trading account2
4
Investment account, by maturity
5
6
One year or less
Over one through five years
7
8
Over five years
9 Other securities2
10 Trading account2
11 Investment account
12
States and political subdivisions, by maturity
13
One year or less
14
Over one year
15
Other bonds, corporate stocks and securities
16 Other trading account assets 2
Loans and leases
17 Federal funds sold3
18 To commercial banks
19 To nonbank brokers and dealers in securities
20
To others
21 Other loans and leases, gross
22
Other loans, gross
23
Commercial and industrial
24
Bankers acceptances and commercial paper
25
All other
26
U.S. addressees
27
Non-U.S. addressees
28
Real estate loans
29
To individuals for personal expenditures
30
To depository and financial institutions
31
Commercial banks in the United States
32
Banks in foreign countries
33
Nonbank depository and other financial institutions .
34
For purchasing and carrying securities
35
To finance agricultural production
36
To states and political subdivisions
37
To foreign governments and official institutions.
38
All other
39 Lease financing receivables
40 LESS: Unearned income
41
Loan and lease reserve
42 Other loans and leases, net
43 All other assets 4
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
ATS, NOW, Super NOW, telephone transfers)...
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks ..
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money5
Other liabilities and subordinated note and debentures .,
65 Total liabilities
66 Residual (total assets minus total liabilities)6
MEMO
1 7
67 Total loans and leases (gross) and investments adjusted ' ..
68 Total loans and leases (gross) adjusted7
69 Time deposits in amounts of $100,000 or more
.
.
.
1. Excludes trading account securities.
2. Not available due to confidentiality.
3. Includes securities purchased under agreements to resell.
4. Includes trading account securities.
5. Includes federal funds purchased and securities sold under agreements to
repurchase.
6. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
7. Exclusive of loans and federal funds transactions with domestic commercial
banks.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
Weekly Reporting Commercial Banks
1.30
A21
L A R G E W E E K L Y R E P O R T I N G U . S . B R A N C H E S A N D A G E N C I E S O F F O R E I G N B A N K S WITH A S S E T S O F
$750 M I L L I O N OR M O R E O N J U N E 30, 1980 A s s e t s and Liabilities •
Millions of dollars, Wednesday figures
1985
Account
Mar. 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Cash and due from depository institutions.
Total loans and securities
U.S. Treasury and govt, agency securities
Other securities
Federal funds sold1
To commercial banks in the United States
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
Non-U.S. addressees
To financial institutions
Commercial banks in the United States.
Banks in foreign countries
Nonbank financial institutions
To foreign govts, and official institutions..
For purchasing and carrying securities ..
All other
Other assets (claims on nonrelated parties)..
Net due from related institutions
Total assets
Deposits or credit balances due to other
than directly related institutions
Credit balances
Demand deposits
Individuals, partnerships, and
corporations
Other
Time and savings deposits
Individuals, partnerships, and
corporations
Other
Borrowings from other than directly
related institutions
Federal funds purchased2
From commercial banks in the
United States
From others
Other liabilities for borrowed m o n e y . . . .
To commercial banks in the
United States
To others
Other liabilities to nonrelated parties
Net due to related institutions
Total liabilities
Mar. 20
Mar. 27
Apr. 3
Apr. 24
May 1
May 8
6,346
45,032
3,581
1,460
4,035
3,661
374
35,956
21,272
6,152
46,013
3,630
1,442
4,582
4,186
396
36,359
21,405
6,2%
44,734'
3,466
1,542
3,172
2,673
500
36,554'
21,415'
6,751
44,8203,461
1,575
4,002
3,611
390
35,782'
21,328'
6,466
43,667
3,620
1,626
3,431
3,113
318
34,990
20,566
6,621
46,339
3,431
1,629
5,262
4,916
346
36,016
20,620
6,717
45,826
3,379
1,674
4,911
4,473
438
35,862
20,899
6,921
44,862
3,439
1,642
4,246
3,837
409
35,535
20,639
1,843
18,161
16,925
1,236
11,013
8,855
1,262
896
653
8%
2,161
19,061
9,871
79,623
1,871
19,401
18,163
1,238
11,081
8,893
1,256
932
654
870
2,077
18,864
10,904
81,146
1,798
19,607
18,383
1,224
11,344
8,929
1,258
1,156
651
939
2,020
18,282
9,786
80,233
1,%7'
19,448'
18,195'
1,253
11,416
9,055
1,332
1,029
660
1,047
2,016'
17,940
11,689
80,659'
1,927'
19,400
18,195
1,205
10,604
8,374
1,166
1,063
685
1,084
2,082
17,%9'
10,664
80,205'
2,031
18,535
17,406
1,129
10,587
8,441
1,132
1,014
694
1,039
2,104
18,009
10,490
78,632
1,962
18,657
17,539
1,119
11,334
8,906
1,191
1,237
686
1,243
2,134
18,418
9,952
81,329
1,8%
19,003
17,902
1,102
10.916
8,545
1,098
1,273
678
1,323
2,045
18,572
10,292
81,408
1,776
18,863
17,743
1,119
10,832
8,497
1,080
1,255
680
1,275
2,108
18,778
10,360
80,920
25,019
130
1,640
24,934
128
1,601
25,479
152
1,630
25,326
253
1,692
24,978'
135
1,528'
25,076
177
1,632
25,180
188
1,629
25,100
139
1,812
24,122
135
1,574
822
817
23,249
809
792
23,205
844
786
23,697
871
821
23,380
836
692'
23,315'
888
743
23,267
872
757
23,363
982
830
23,149
825
749
22,412
18,949
4,300
18,965
4,240
19,396
4,301
18,981
4,399
18,783'
4,532
18,648
4,619
18,764
4,599
18,370
4,778
17,775
4,636
27,122
9,851
28,257
11,421
28,450
11,212
30,304
13,262
29,532
12,547
28,641
11,481
29,207
11,704
29,706
12,474
29,874
12,484
7,516
2,335
17,270
8,913
2,508
16,836
8,397
2,815
17,238
10,948
2,314
17,042
10,237
2,310
16,985
9,218
2,263
17,159
9,659
2,045
17,502
9,966
2,507
17,232
10,166
2,318
17,390
15,920
1,351
20,813
6,669
79,623
15,604
1,232
20,508
7,447
81,146
15,953
1,285
20,606
5,698
80,233
15,889
1,153
19,833
5,197'
80,659'
15,823
1,162
19,689
6,006'
80,205'
15,934
1,225
19,786
5,130
78,632
16,256
1,246
20,277
6,665
81,329
16,006
1,226
20,514
6,088
81,408
16,080
1,309
20,749
6,175
80,920
31,234
26,318
32,478
27,437
32,897
27,826
33,(X^
27,998'
32,835'
27,798'
32,112
26,867
32,517
27,456
32,807
27,755
32,527
27,446
A Levels of many asset and liability items were revised beginning Oct. 31,
1984. For details, see the H.4.2 (504) statistical release dated Nov. 23, 1984.
1. Includes securities purchased under agreements to resell.
2. Inciudes securities sold under agreements to repurchase.
Apr. 17
6,484
44,208
3,445
1,471
4,564
4,118
446
34,727
20,004
MEMO
42 Total loans (gross) and securities adjusted3
43 Total loans (gross) adjusted3
Apr. 10
3. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
A22
1.31
DomesticNonfinancialStatistics • July 1985
GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations'
Billions of dollars, estimated daily-average balances
Commercial banks
Type of holder
19792
Dec.
1980
Dec.
1981
Dec.
1984
1983
1982
Dec.
Sept.
Dec.
Mar.
June
Sept.
Dec.
1 All holders—Individuals, partnerships, and
corporations
302.3
315.5
288.9
291.8
280.3
293.5
279.3
285.8
284.7
304.5
2
3
4
5
6
27.1
157.7
99.2
3.1
15.1
29.8
162.8
102.4
3.3
17.2
28.0
154.8
86.6
2.9
16.7
35.4
150.5
85.9
3.0
17.0
32.1
150.2
77.9
2.9
17.1
32.8
161.1
78.5
3.3
17.8
31.7
150.3
78.1
3.3
15.9
31.7
154.9
78.3
3.4
17.4
31.3
154.8
78.4
3.3
16.8
33.0
166.3
81.7
3.6
19.9
Financial business
Nonfinancial business
Consumer
Foreign
Other
Weekly reporting banks
19793
Dec.
1980
Dec.
1981
Dec.
1983
1982
Dcc.
Sept.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
Dec. 4
Mar.
June
Sept.
Dec.
139.3
147.4
137.5
144.2
136.3
146.2
139.2
145.3
145.3
157.1
20.1
74.1
34.3
3.0
7.8
21.8
78.3
35.6
3.1
8.6
21.0
75.2
30.4
2.8
8.0
26.7
74.3
31.9
2.9
8.4
23.6
72.9
28.1
2.8
8.9
24.2
79.8
29.7
3.1
9.3
23.5
76.4
28.4
3.2
7.7
23.6
79.7
29.9
3.2
8.9
23.7
79.2
29.8
3.2
9.3
25.3
87.1
30.5
3.4
10.9
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types of
depositors in each category are described in the June 1971 BULLETIN, p. 466.
1. Beginning with the March 1979 survey, the demand deposit ownership
survey sample was reduced to 232 banks from 349 banks, and the estimation
procedure was modified slightly. To aid in comparing estimates based on the old
and new reporting sample, the following estimates in billions of dollars for
December 1978 have been constructed using the new smaller sample; financial
business, 27.0; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and
other, 15.1.
3. After the end of 1978 the large weekly reporting bank panel was changed to
170 large commercial banks, each of which had total assets in domestic offices
1984
exceeding $750 million as of Dec. 31, 1977. Beginning in March 1979, demand
deposit ownership estimates for these large banks are constructed quarterly on the
basis of 97 sample banks and are not comparable with earlier data. The following
estimates in billions of dollars for December 1978 have been constructed for the
new large-bank panel; financial business, 18.2; nonfinancial business, 67.2;
consumer, 32.8; foreign, 2.5; other, 6.8.
4. In January 1984 the weekly reporting panel was revised; it now includes 168
banks. Beginning with March 1984, estimates are constructed on the basis of 92
sample banks and are not comparable with earlier data. Estimates in billions of
dollars for December 1983 based on the newly weekly reporting panel are:
financial business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1;
other, 9.5.
Financial Markets A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1984'
1979'
Dec.
Instrument
1980
Dec.
1981
Dec.
1982
Dec. 2
1983
Dec.
Oct.
Nov.
1985
Dec.
Jan.
Feb.
Mar.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies4
Dealer-placed paper5
Total
Bank-related (not seasonally
adjusted)
Directly placed paper6
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies7
112,803
124,374
165,829
166,436
188,312
228,194
235,363
239,117
245,322
247,095
250,575
17,359
19,599
30,333
34,605
44,622
54,527
55,176
56,917
59,713
60,186
60,895
2,784
3,561
6,045
2,516
2,441
2,060
1,996
2,035
2,137
2,265
2,304
64,757
67,854
81,660
84,393
96,918
105,379
109,419
110,474
113,101
114,824
118,029
17,598
30,687
22,382
36,921
26,914
53,836
32,034
47,437
35,566
46,772
38,112
68,288
40,185
70,768
42,105
71,726
43,046
72,508
42,759
72,085
43,334
71,651
Bankers dollar acceptances (not seasonally adjusted)8
7 Total
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports from United States
16 All other
8
9
10
11
12
13
45,321
54,744
69,226
79,543
78,309
77,928
75,741
75,179
75,470
72,273
76,109
9,865
8,327
1,538
10,564
8,963
1,601
10,857
9,743
1,115
10,910
9,471
1,439
9,355
8,125
1,230
10,534
8,960
1,574
10,397
9,113
1,284
10,255
9,065
1,191
10,060
8,839
1,220
10,623'
9,726'
897
10,473
9,166
1,340
704
1,382
33,370
776
1,791
41,614
195
1,442
56,731
1,480
949
66,204
418
729
68,225
0
658
64,549
0
615
64,167
0
671
64,543
0
679
61,603
0
761
64,779
0
737
65,865
10,270
9,640
25,411
11,776
12,712
30,257
14,765
15,400
39,060
17,683
16,328
45,531
15,649
16,880
45,781
16,256
16,312
43,172
16,433
15,849
42,897
16,975
15,859
42,635
16,733
15,445
40,095
17,115
15,881
43,113
16,124
15,179
42,428
1. A change in reporting instructions results in offsetting shifts in the dealerplaced and directly placed financial company paper in October 1979.
2. Effective Dec. 1,1982, there was a break in the commercial paper series. The
key changes in the content of the data involved additions to the reporting panel,
the exclusion of broker or dealer placed borrowings under any master note
agreements from the reported data, and the reclassification of a large portion of
bank-related paper from dealer-placed to directly placed.
3. Correction of a previous misclassification of paper by a reporter has created
a break in the series beginning December 1983. The correction adds some paper to
nonfinancial and to dealer-placed financial paper.
4. Institutions engaged primarily in activities such as, but not limited to,
commercial, savings, and mortgage banking; sales, personal, and mortgage
financing; factoring, finance leasing, and other business lending; insurance
underwriting; and other investment activities.
5. Includes all financial company paper sold by dealers in the open market.
6. As reported by financial companies that place their paper directly with
investors.
7. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
8. Beginning October 1984, the number of respondents in the bankers acceptance survey will be reduced from 340 to 160 institutions—those with $50 million or
more in total acceptances. The new reporting group accounts for over 95 percent
of total acceptances activity.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per annum
Month
Effective Date
11.00
10.50
11.00
11.50
12.00
12.50
13.00
1984—Sept.27..
Oct. 17..
29..
Nov. 9 . .
28..
Dec. 2 0 . .
12.75
12.50
12.00
11.75
11.25
10.75
1985—Jan. 15,
10.50
1983—Jan..
Feb.
Mar.
Apr.
May.
June
July.
Aug.
Sept.
Oct..
Nov.
Dec.
1984—Jan..
Feb.
Mar.
NOTE. These data also appear in the Board's H.15 (519) release. For address,
see inside front cover.
Average
rate
11.16
10.98
10.50
10.50
10.50
10.50
10.50
10.89
11.00
11.00
11.00
11.00
11.00
11.00
11.21
Month
1984—Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1985—Jan
Feb
Mar
Apr
May
A24
1.35
DomesticNonfinancialStatistics • July 1985
I N T E R E S T R A T E S M o n e y and Capital Markets
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1985
1982
1985, week ending
1983
Jan.
Feb.
Apr.
Mar. 29
Apr. 5
Apr. 12
Apr. 19
Apr. 26
MONEY MARKET RATES
1 Federal funds 1 ' 2
2 Discount window borrowing1'2-3
Commercial paper4-5
3
1-month
4
3-month
5
6-month
Finance paper, directly placed 4 - 5
6
1-month
7
3-month
8
6-month
Bankers acceptances 5 - 6
9
3-month
10
6-month
Certificates of deposit, secondary market7
11
1-month
12
3-month
13
6-month
14 Eurodollar deposits, 3-month 8
U.S. Treasury bills 5
Secondary market9
15
3-month
16
6-month
17
1-year
Auction average 10
18
3-month
19
6-month
20
1-year
12.26
11.02
9.09
8.50
11.83
11.89
11.89
10.23
8.35
8.50
8.80
8.00
8.00
8.58
8.00
8.38
8.00
8.89
10.05
10.10
10.16
7.99
8.03
8.15
8.46
8.54
8.69
8.74
8.90
9.23
8.67
8.75
9.02
8.80
8.70
8.69
9.97
9.73
9.65
7.95
7.81
7.82
8.42
8.25
8.20
8.70
8.67
8.65
8.61
11.20
11.89
11.83
8.90
8.91
10.14
10.19
8.01
8.11
8.55
8.69
9.20
12.04
12.27
12.57
13.12
8.96
9.07
9.27
9.56
10.17
10.37
10.68
10.73
8.05
8.14
8.45
8.37
8.50
8.69
9.04
9.05
8.73
9.02
9.60
9.32
10.61
11.07
11.07
8.61
9.52
9.76
9.92
7.76
8.73
8.00
8.27
8.39
8.56
8.52
8.90
9.06
10.686
11.084
11.099
8.63
8.75
9.58
9.80
9.91
7.76
8.03
8.39
8.22
8.34
8.46
12.27
12.80
9.57
10.21
10.89
11.65
9.02
9.93
12.92
13.01
13.06
13.00
12.92
12.76
'10.45
10.80
11.02
11.10
11.34
11.18
11.89
12.24
12.40
12.44
12.48
12.39
12.23
10.84
10.88
8.80
12.48
11.66
14.94
13.79
14.41
15.43
8.68
8.45
8.00
8.64
8.69
8.82
8.53
8.58
8.67
8.67
8.54
8.52
8.61
8.52
8.51
8.55
8.68
8.66
8.91
8.76
8.52
8.58
8.64
8.82
9.31
9.14
8.65
9.15
9.01
8.56
8.69
9.00
8.89
7.95
8.23
8.44
8.29
8.71
8.90
8.17
8.58
8.79
8.41
8.60
8.57
8.92
9.24
8.00
8.41
8.31
8.44
8.86
8.18
8.55
8.14
8.56
9.29
10.17
9.86
10.71
9.14
10.09
9.54
10.49
9.32
10.29
10.43
10.93
11.27
11.38
11.58
11.45
10.55
11.13
11.44
11.51
11.70
11.47
11.05
11.52
11.82
11.86
11.01
12.06
11.81
11.34
11.44
11.69
11.47
9.68
10.59
10.95
10.93
11.43
11.73
11.77
11.97
11.73
10.84
11.33
11.64
11.71
11.92
11.70
10.66
11.19
11.49
11.57
11.79
11.55
11.99
11.15
11.35
11.78
11.42
11.70
11.65
11.51
10.17
9.51
9.61
10.38
10.10
9.08
10.16
9.51
8.98
10.05
9.65
9.18
10.18
9.77
8.95
9.95
9.42
9.15
10.10
9.75
9.15
10.10
9.63
9.00
10.00
9.39
13.49
12.71
13.31
13.74
14.19
12.64
12.66
12.08
12.43
12.13
12.49
16.11
12.78
12.04
12.42
13.10
13.55
12.80
12.80
13.26
13.23
13.13
12.56
12.91
13.36
13.69
12.89
12.23
12.69
13.14
13.51
13.13
12.50
12.93
13.41
13.68
13.08
12.44
12.90
13.37
13.61
12.98
12.34
12.75
13.22
13.61
15.49
12.73
13.81
12.78
12.76
13.17
12.75
13.06
12.98
12.71
12.53
5.81
11.02
11.59
4.64
11.13
4.51
10.88
4.30
10.97
4.37
10.75
4.37
10.95
10.84
4.41
10.79
4.40
11.64
11.23
8.80
8.33
8.60
8.00
8.80
CAPITAL MARKET RATES
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
U.S. Treasury notes and bonds 11
Constant maturities 12
1-year
2-year
2-k-year 1 3
3-year
5-year
7-year
10-year
20-year
30-year
Composite 14
Over 10 years (long-term)
State and local notes and bonds
Moody's series 15
Aaa
Baa
Bond Buyer series 16
Corporate bonds
Seasoned issues 17
All industries
Aaa
Aa
A
Baa
A-rated, recently-offered utility
bonds 18
MEMO: Dividend/price ratio 19
40
Preferred stocks
41
Common stocks
4.40
1. Weekly and monthly figures are averages of all calendar days, where the
rate for a weekend or holiday is taken to be the rate prevailing on the preceding
business day. The daily rate is the average of the rates on a given day weighted by
the volume of transactions at these rates.
2. Weekly figures are averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150—
179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than an investment yield
basis (which would give a higher figure).
6. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
10.49
4.38
11. Yields are based on closing bid prices quoted by at least five dealers.
12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
13. Each biweekly figure is the average of five business days ending on the
Monday following the date indicated. Until Mar. 31, 1983, the biweekly rate
determined the maximum interest rate payable in the following two-week period
on 2-!/2-year small saver certificates. (See table 1.16.)
14. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including several very low yielding "flower" bonds.
15. General obligations based on Thursday figures; Moody's Investors Service.
16. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
17. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
18. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
19. Standard and Poor's corporate series. Preferred stock ratio based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A25
Selected Statistics
1984
Indicator
1982
1985
1984
1983
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3 Transportation
Utility
4
5
Finance
6 Standard & Poor's Corporation (1941-43 = 10)1 . . .
7 American Stock Exchange2
(Aug. 31, 1973 = 100)
68.93
78.18
60.41
39.75
71.99
119.71
92.63
107.45
89.36
47.00
95.34
160.41
92.46 94.49
108.01 111.20
85.63 86.86
46.44 46.69
89.28 87.92
160.50 164.42
95.68
112.18
86.88
47.47
91.59
166.11
95.09
110.44
86.82
49.02
92.94
164.82
95.85
110.91
87.37
49.93
95.28
166.27
94.85
109.05
88.00
50.58
95.29
164.48
99.11
113.99
94.88
51.95
101.34
171.61
104.73
120.71
101.76
53.44
109.58
180.88
103.92
119.64
98.30
53.91
107.59
179.42
104.66
119.93
96.47
55.51
109.39
180.62
141.31
216.48
207.96 207.90
214.50
210.39
209.47
202.28
211.82
228.40
225.62
229.46
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
64,617
5,283
85,418
8,215
91,084 109,892
6,107 7,477
93,108
5,967
91,676
5,587
83,692
6,008
89,032
7,254
121,545
9,130
115,489
10,010
102,591
8,677
94,387
7,801
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers3
13,325
23,000
11 Margin stock
12 Convertible bonds
13 Subscription issues
12,980
344
22,720
279
5,735
8,390
6,620
8,430
1
Free credit balances at brokers4
14 Margin-account
15 Cash-account
22,470 22,810
\
22,800
t
22,330
t
22,350
t
22,470
22,090
22,970
t
i
1
7,015
10,215
6,770
9,725
6,680
9,840
1
7,015
10,215
6,855
8,185
6,690
8,315
6,580
8,650
6,699
8,420
Margin-account debt at brokers (percentage distribution, end of period)
16 Total
17
18
19
20
21
22
By equity class (in percent)5
Under 40
40-49
50-59
60-69
70-79
80 or more
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
21.0
24.0
24.0
14.0
9.0
8.0
41.0
22.0
16.0
9.0
6.0
6.0
46.0
18.0
16.0
9.0
5.0
6.0
40.0
22.0
16.0
9.0
6.0
7.0
42.0
22.0
15.0
9.0
6.0
6.0
44.0
21.0
14.0
9.0
6.0
6.0
47.0
19.0
13.0
9.0
6.0
6.0
46.0
18.0
16.0
9.0
5.0
6.0
35.0
19.0
20.0
36.0
20.0
18.0
7.0
8.0
8.0
8.0
38.0
20.0
18.0
10.0
7.0
7.0
39.0
19.0
18.0
10.0
7.0
7.0
83,729
82,990
11.0
11.0
Special miscellaneous-account balances at brokers (end of period)
23 Total balances (millions of dollars)
6
Distribution by equity status (percent)
24 Net credit status
Debt status, equity of
25 60 percent or more
26 Less than 60 percent
35,598
58,329
75,840 71,840
72,350
71,914
73,904
75,840
79,600
81,830
62.0
63.0
59.0
58.0
58.0
59.0
59.0
59.0
59.0
59.0
60.0
60.0
29.0
9.0
28.0
9.0
29.0
31.0
31.0
30.0
29.0
12.0
29.0
30.0
10.0
31.0
10.0
30.0
10.0
30.0
10.0
11.0 11.0
11.0
11.0
11.0
Margin requirements (percent of market value and effective date)7
27 Margin stocks
28 Convertible bonds
29 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
Jan. 3, 1974
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
50
50
50
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T, margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in Apnl 1984, and margin credit at
broker-dealers became the total that is distributed by equity class and shown on
lines 17-22.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. Each customer's equity in his collateral (market value of collateral less net
debit balance) is expressed as a percentage of current collateral values.
6. Balances that may be used by customers as the margin deposit required for
additional purchases. Balances may arise as transfers based on loan values of
other collateral in the customer's margin account or deposits of cash (usually sales
proceeds) occur.
7. Regulations G, T, and U of the Federal Reserve Board of Governors,
prescribed in accordance with the Securities Exchange Act of 1934, limit the
amount of credit to purchase and carry margin stocks that may be extended on
securities as collateral by prescribing a maximum loan value, which is a specified
percentage of the market value of the collateral at the time the credit is extended.
Margin requirements are the difference between the market value (100 percent)
and the maximum loan value. The term "margin stocks" is defined in the
corresponding regulation.
A26
t.37
DomesticNonfinancialStatistics • July 1985
SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1985
1984
Account
1982
1983
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Savings and loan associations
887,696
902,449 898,537
898,086
904,827
2 Mortgages
3 Cash and investment securities1 . . . .
4 Other
483,614 494,789 519,628 528,172 535,814 540,644 550,129 552,516 556,229
85,438 104,274 110,033 109,752 108,456 108,820 112,350 112,023 114,879
138,594 174,354 195,8% 202,758 206,510 210,624 215,163 217,088 216,588
555,277 558,276
125,358 119,673
221,814 220,588
556,184
119,724
222,178
559,263
119,713
225,851
5 Liabilities and net worth
707,646
887,696
902,449 898,537
898,086
904,827
567,961 634,455 670,666 681,947 687,817 691,704 704,558 708,846 714,780
97,850 92,127 103,119 108,417 110,238 114,747 121,329 119,305 117,775
63,383
56,558
52,626 53,485
57,115 60,178 63,627 63,412
63,861
54,392
51,859
54,569 57,702 55,893
49,634
53,123
33,989 39,501
26,754
26,683
21,117
25,726 26,122
26,773
27,141
24,761
9,934
19,894 21,302
17,586
15,968
19,832
19,970 20,599
18,050
15,602
724,301 730,709
126,169 114,806
64,207 63,152
61,%2 51,654
26,959 26,546
17,215 18,358
726,308
116,879
63,452
53,427
26,636
19,857
732,406
119,461
63,187
56,274
27,004
17,471
707,646
6
7
8
9
10
11
Savings capital
Borrowed money
FHLBB
Other
Loans in process2
Other
773,417
773,417
825,557
825,557
840,682
840,682
850,780
850,780
860,088
860,088
877,642
877,642
881,627
881,627
12 Net worth3
26,233
30,867
31,940
32,732
32,755
33,038
33,705
33,582
33,839
34,764
34,664
35,042
35,489
13 MEMO: Mortgage loan commitments
outstanding*
18,054
32,9%
45,274
44,878
43,878
41,182
40,089
38,530
37,856
34,841
33,305
34,217
35,889
Mutual savings banks
5
174,197
193,535
200,087
198,864
199,128
200,722
201,445
203,274
204,499
203,898 204,859'
206,175
94,091
16,957
97,356
19,129
99,881
22,907
99,433
23,198
100,091
23,213
101,211
24,068
101,621
24,535
102,704
24,486
102,953
24,884
102,895 103,393'
24,954 25,747
103,654
26,456
9,743
2,470
36,161
6,919
7,855
15,360
2,177
43,580
6,263
9,670
16,404
2,024
43,200
5,031
10,640
15,448
2,037
42,479
5,452
10,817
15,457
2,037
42,682
4,8%
10,752
15,019
2,055
42,632
4,981
10,756
14,965
2,052
42,605
4,795
10,872
15,295
2,080
43,003
4,605
11,101
15,034
2,077
43,361
4,795
11,395
14,643
2,077
42,%2
4,954
11,413
14,628'
2,067'
43,351'
4,14c
11,533'
14,917
2,069
43,063
4,423
11,593
22 Liabilities
174,197
193,535
200,087
198,864
199,128
200,722
201,445
203,274
204,499
203,898
204,859'
206,175
23
24
25
26
27
28
29
30
155,1%
152,777
46,862
%,369
2,419
8,336
9,235
172,665
170,135
38,554
95,129
2,530
10,154
10,368
176,253
173,310
37,147
97,236
2,943
12,861
10,554
174,972
171,858
36,322
97,168
3,114
12,999
10,404
174,823
171,740
35,511
98,410
3,083
13,269
10,495
176,085
172,990
34,787
101,270
3,095
13,604
10,498
177,345
174,2%
34,564
102,934
3,049
12,979
10,488
178,624
175,727
34,221
104,151
2,897
13,853
10,459
180,073
177,130
34,009
104,849
2,943
13,453
10,535
180,616 181,062'
177,418 177,954'
33,739 33,413'
104,732 104,098'
3,198
3,108'
12,504 12,931'
10,510 1 0 , 6 ^
181,849
178,791
33,413
103,536
3,058
13,387
10,670
1,285
2,387
0
0
n.a.
n.a.
n.a.
n.a.
14 Assets
15
16
17
18
19
20
21
Loans
Mortgage
Other
Securities
U.S. government6
State and local government
Corporate and other7
Cash
Other assets
Deposits
Regular8
Ordinary savings
Time
Other
Other liabilities
General reserve accounts
MEMO: Mortgage loan commitments
outstanding9
n.a.
n.a.
n.a.
n. I.
n.a.
Life insurance companies
31 Assets
32
33
34
35
36
37
38
39
40
41
42
Securities
Government
United States10
State and local.
Foreign"
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
588,163
654,948
673,518
679,449
684,573
694,082
699,996
705,827
712,271
62,678
53,970 54,688 56,263
57,552 59,825
53,422
36,499 50,752
37,594 40,288
33,886
32,066
32,654
35,586
31,706
16,529 28,636
9,344
9,357
9,385
9,213
9,236
9,221
9,986
9,239
8,664
12,887
13,020
12,745
13,005
12,477
12,691
12,798
12,130
11,306
287,126 322,854 334,151 338,508 341,802 348,614 350,512 352,059 354,815
231,406 257,986 273,212 276,902 281,113 283,673 285,543 287,607 291,021
64,452 63,794
64,%9
60,939 61,606 60,689 64,941
55,720 64,868
141,989 150,999 152,968 153,845 154,299 155,438 155,802 156,064 156,691
24,947
23,792
25,467
23,517
24,019 24,117
24,685
20,264 22,234
54,574 54,571
54,441
54,517
54,551
54,063
54,399 54,430
52,961
54,904
55,324 55,133
56,894 58,358 58,049
54,046
55,061
48,571
720,807
730,120
734,920
64,683 65,367
41,970 42,183
9,757
9,895
12,956 13,289
354,902 364,617
290,731 297,666
64,171 66,951
157,283 157,583
25,985 26,343
54,610 54,442
63,344 61,768
67,111
43,929
9,956
13,226
367,411
298,381
69,030
158,052
26,567
54,523
61,256
n.a.
Credit unions12
43 Total assets/liabilities and capital
44
Federal
45
State
69,585
81,961
88,350
90,276
90,145
90,503
91,651
91,619
92,521
93,036
94,646
%,183
98,646
45,493
24,092
54,482
27,479
59,636
28,714
61,316
28,960
61,163
28,982
61,500
29,003
62,107
29,544
61,935
29,684
62,690
29,831
63,205
29,831
64,505
30,141
65,989
30,194
67,799
30,847
46 Loans outstanding
47
Federal
48
State
49 Savings
50 Federal (shares)
51
State (shares and deposits)..
43,232
27,948
15,284
62,990
41,352
21,638
50,083
32,930
17,153
74,739
49,889
24,850
54,437
36,274
18,163
80,702
54,632
26,070
55,915
37,547
18,368
82,578
56,261
26,317
57,286
38,490
18,7%
82,402
56,278
26,124
58,802
39,578
19,224
82,135
56,205
25,930
59,874
40,310
19,564
83,172
56,734
26,438
60,483
40,727
19,756
83,129
56,655
26,474
62,170
41,762
20,408
84,000
57,302
26,698
62,561
42,337
20,224
84,348
57,539
26,809
62,662
42,220
20,442
86,047
58,820
27,227
62,393
42,283
20,110
86,048
59,914
26,134
62,936
42,804
20,132
88,560
61,758
26,802
Financial Markets
1.37
All
Continued
1984
Account
1982
1985
1983
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
FSLIC-insured federal savings banks
52
53
54
55
Assets
Mortgages
Cash and investment securities' . .
Other
6,859
64,969
78,952
81,310
83,989
87,209
82,174
87,743
94,536
98,559
98,747
106,657
109,720
3,353
38,698
10,436
15,835
46,791
12,814
19,347
48,084
13,071
20,155
49,996
13,184
20,809
52,039
13,331
21,839
48,841
12,867
20,466
51,554
13,615
22,574
55,861
14,826
23,849
57,429
16,001
25,129
57,667
15,378
25,702
60,938
17,511
28,208
62,608
18,237
28,875
56 Liabilities and net worth ,
6,859
64,969
78,952
81,310
83,989
87,209
82,174
87,743
94,536
98,559
98,747
106,657
109,720
57
58
59
60
61
62
5,877
... 3
53,227
7,477
4,640
2,837
1,157
3,108
63,026
10,475
5,900
4,575
1,747
3,704
64,364
11,489
6,538
4,951
1,646
3,811
66,227
12,060
6,897
5,163
1,807
3,895
68,443
12,863
7,654
5,209
1,912
3,991
65,079
11,828
6,600
5,228
1,610
3,657
70,080
11,935
6,867
5,068
1,896
3,832
76,167
11,937
7,041
4,896
2,259
4,173
79,572
12,798
7,515
5,283
1,903
4,286
80,091
12,372
7,361
5,011
1,982
4,302
85,632
14,079
8,023
6,056
2,356
4,590
88,001
14,860
8,491
6,369
2,174
4,685
Savings and capital
Borrowed money ..
FHLBB
Other
Other
Net worth3
MEMO
63 Loans in process2
64 Mortgage loan commitments
outstanding4
1,264
1,787
1,839
1,901
1,895
1,505
1,457
1,689
1,738
1,685
1,747
1,919
2,151
3,763
3,583
3,988
3,860
2,970
2,925
3,298
3,234
3,510
3,646
3,752
1. Holdings of stock of the Federal Home Loan Banks are in "other assets."
2. Beginning in 1982, loans in process are classified as contra-assets and are
not included in total liabilities and net worth. Total assets are net of loans in
process.
3. Includes net undistributed income accrued by most associations.
4. Excludes figures for loans in process.
5. The National Council reports data on member mutual savings banks and on
savings banks that have converted to stock institutions, and to federal savings
banks.
6. Beginning April 1979, includes obligations of U.S. government agencies.
Before that date, this item was included in "Corporate and other."
7. Includes securities of foreign governments and international organizations
and, before April 1979, nonguaranteed issues of U.S. government agencies.
8. Excludes checking, club, and school accounts.
9. Commitments outstanding (including loans in process) of banks in New
York State as reported to the Savings Banks Association of the State of New
York.
10. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
11. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
12. As of June 1982, data include only federal or federally insured state credit
unions serving natural perons.
NOTE. Savings and loan associations: Estimates by the FHLBB for all
associations in the United States. Data are based on monthly reports of federally
insured associations and annual reports of other associations. Even when revised,
data for current and preceding year are subject to further revision.
Mutual savings banks: Estimates of National Council of Savings Institutions for
all savings banks in the United States.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. Adjustments for interest due and accrued and for
differences between market and book values are not made on each item separately
but are included, in total, in "other assets."
Credit unions: Estimates by the National Credit Union Administration for a
group of federal and federally insured state credit unions serving natural persons.
Figures are preliminary and revised annually to incorporate recent data.
A28
1.38
DomesticNonfinancialStatistics • July 1985
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Fiscal
year
1982
Type of account or operation
Fiscal
year
1983
Fiscal
year
1984
1983
HI
U.S. budget
1 Receipts1
2 Outlays1
3 Surplus, or deficit ( - )
Trust funds
4
5
Federal funds2'3
Off-budget entities (surplus, or deficit
6 Federal Financing Bank outlays
7 Other3'4
1984
H2
HI
1985
Feb.
Mar.
54,021
74,851
-20,830
2,313
-23,140
49,606
78,067
-28,461
-1,682
-26,780
Apr.
617,766
728,375
-110,609
5,456
-116,065
600,562
795,917
-195,355
23,056
-218,410
666,457
841,800
-175,343
30,565
-205,908
306,331
3%,477
-90,146
22,680
-112,822
306,584
406,849
-100,265
7,745
-108,005
341,808
420,700
-78,892
18,080
—96,971
-14,142
-3,190
-10,404
-1,953
-7,277
-2,719
-5,418
-528
-3,199
-1,206
-2,813
-838
-427'
-202'
-1,134'
91'
-1,108
128
-127,940
-207,711
-185,339
-96,094
-104,670
-84,884
-21,056'
-29,504'
11,386
134,993
212,425
170,817
102,538
84,020
80,592
15,994
13,159
-11,911
4,858
-9,889
5,176
5,636
8,885
-9,664
3,222
-16,294
4,358
-3,127
7,418
9,094
-4,033'
3,212'
13,133'
29,164
10,975
18,189
37,057
16,557
20,500
22,345
3,791
18,553
27,997
19,442
8,764
11,817
3,661
8,157
13,567
4,397
9,170
17,160
3,308
13,852
13,868
3,063
10,805
94,593
82,228
12,365
5.182
7.183
(-))
U.S. budget plus off-budget, including
Federal Financing Bank
8 Surplus, or deficit ( - )
Source of financing
Borrowing from the public
9
10 Cash and monetary assets (decrease, or
increase ( - ) ) 4
11 Other5
17,036
-27,927
-495
MEMO
12 Treasury operating balance (level, end of
period)
13 Federal Reserve Banks
14 Tax and loan accounts
1. Effective Feb. 8, 1982, supplemental medical insurance premiums and
voluntary hospital insurance premiums, previously included in other insurance
receipts, have been reclassified as offsetting receipts in the health function.
2. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
3. Other off-budget includes Postal Service Fund; Rural Electrification and
Telephone Revolving Fund; Rural Telephone Bank; and petroleum acquisition
and transportation and strategic petroleum reserve effective November 1981.
4. Includes U.S. Treasury operating cash accounts; SDRs; gold tranche
drawing rights; loans to International Monetary Fund; and other cash and
monetary assets.
40,022
19,305
20,717
5. Includes accrued interest payable to the public; allocations of special
drawing rights; deposit funds; miscellaneous liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S.
currency valuation adjustment; net gain/loss for IMF valuation adjustment; and
profit on the sale of gold.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" Treasury Bulletin, and the Budget of the U.S. Government, Fiscal
Year 1985.
Federal Finance
1.39
A29
U.S. BUDGET RECEIPTS AND OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
1983
Fiscal
year
1984
1985
1984
1983
1982
H2
HI
H2
HI
Feb.
Apr.
Mar.
RECEIPTS
1 All sources
2 Individual income taxes, net
3 Withheld
4
Presidential Election Campaign Fund . . .
5
Nonwithheld
Refunds
6
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10 Payroll employment taxes and
contributions1
11
Self-employment taxes and
contributions2
12 Unemployment insurance
13 Other net receipts3
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts4
600,563
666,457
286,337
306,331
305,122
341,808
54,021
49,606
94,593
288,938
266,010
36
83,586
60,692
295,955
279,345
35
81,346
64,771
145,676
131,567
5
20,041
5,938
144,551
135,531
30
63,014
54,024
147,663
133,768
6
20,703
6,815
144,691
140,657
29
61,463
57,458
23,769
23,127
1
1,683
1,041
15,254
23,952
8
3,136
11,842
51,602
26,343
9
43,235
17,986
61,780
24,758
74,179
17,286
25,660
11,467
33,522
13,809
31,064
8,921
40,328
10,045
2,673
919
10,304
1,888
11,265
2,409
209,001
241,902
94,277
110,520
100,832
131,372
23,080
20,551
28,032
179,010
203,476
85,064
90,912
88,388
106,436
19,433
19,045
18,822
6,756
18,799
4,436
8,709
25,138
4,580
177
6,856
2,180
6,427
10,984
2,197
398
8,714
2,290
7,667
14,942
2,329
664
2,615
362
610
515
380
5,757
3,062
391
35,300
8,655
6,053
15,594
37,361
11,370
6,010
16,965
16,555
4,299
3,444
7,890
16,904
4,010
2,883
7,751
19,586
5,079
3,050
7,811
18,304
5,576
3,102
8,481
2,585
842
504
1,488
2,739
998
430
1,218
2,700
939
671
1,793
OUTLAYS
18 All types
795,917
841,800
390,847
396,477
406,849
420,700
74,851
78,067
82,228
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology . . .
Energy
Natural resources and environment
Agriculture
210,461
8,927
7,777
4,035
12,676
22,173
227,405
13,313
8,271
2,464
12,677
12,215
100,419
4,406
3,903
2,058
6,941
13,259
105,072
4,705
3,486
2,073
5,892
10,154
108,967
6,117
4,216
1,533
6,933
5,278
114,639
5,426
3,981
1,080
5,463
7,129
19,785
884
715
215
786
2,054
21,782
1,416
740
207
929
1,732
20,239
946
743
355
1,006
2,822
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, social
services
4,721
21,231
7,302
5,198
24,705
7,803
2,244
10,686
4,187
2,164
9,918
3,124
2,648
13,323
4,327
2,572
10,616
3,154
-805
1,505
438
75
1,583
538
1,128
2,045
683
25,726
26,616
12,186
12,801
13,246
13,445
2,628
2,233
2,344
29 Health
30 Social security and medicare
31 Income security
28,655]
223,311>
106,211J
30,435
235,764
96,714
39,072
133,779
41,206
143,001
42,150
15,748
135,579
65,212
2,778
20,583
10,220
2,685
21,031
11,530
2,909
21,355
13,347
32
33
34
35
36
37
24,845
5,014
4,991
6,287
89,774
-21,424
25,640
5,616
4,836
6,577
111,007
-15,454
13,240
2,373
2,323
3,153
44,948
-8,332
13,621
2,628
2,479
3,290
47,674
-7,262
12,849
2,807
2,462
2,943
53,729
-7,333
2,218
453
699
116
11,820
-2,238
2,296
471
343
75
10,517
-2,118
2,293
572
80
1,258
10,858
-2,754
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest6
Undistributed offsetting receipts7
1. Old-age, disability, and hospital insurance, and railroad retirement accounts.
2. Old-age, disability, and hospital insurance.
3. Federal employee retirement contributions and civil service retirement and
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
5. In accordance with the Social Security Amendments Act of 1983, the
Treasury now provides social security and medicare outlays as a separate
11,334
2,522
2,434
3,124
42,358
-8,887
function. Before February 1984, these outlays were included in the income
security and health functions.
6. Net interest function includes interest received by trust funds.
7. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S. Government, Fiscal Year 1985.
A30
1.40
DomesticNonfinancialStatistics • July 1985
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1984
1983
1982
Item
Dec. 31
Mar. 31
Sept. 30
June 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding
1,201.9
1,249.3
1,324.3
1,381.9
1,415.3
1,468.3
1,517.2
1,576.7
1,667.4
2 Public debt securities
3 Held by public
Held by agencies
4
1,197.1
987.7
209.4
1,244.5
1,043.3
201.2
1,319.6
1,090.3
229.3
1,377.2
1,138.2
239.0
1,410.7
1,174.4
236.3
1,463.7
1,223.9
239.8
1,512.7
1,255.1
257.6
1,572.3
1,309.2
264.1
1,663.0
1,373.4
289.6
4.8
3.7
1.2
4.8
3.7
1.1
4.7
3.6
1.1
4.7
3.6
1.1
4.6
3.5
1.1
4.6
3.5
1.1
4.5
3.4
1.1
4.5
3.4
1.1
4.5
3.4
1.1
5 Agency securities
6
Held by public
Held by agencies
7
1,197.9
1,245.3
1,320.4
1,378.0
1,411.4
1,464.5
1,513.4
1,573.0
1,663.7
9 Public debt securities
10 Other debt1
1,196.5
1.4
1,243.9
1.4
1,319.0
1.4
1,376.6
1.3
1,410.1
1.3
1,463.1
1.3
1,512.1
1.3
1,571.7
1.3
1,662.4
1.3
11 MEMO: Statutory debt limit
1,290.2
1,290.2
1,389.0
1,389.0
1,490.0
1,490.0
1,520.0
1,573.0
1,823.8
8 Debt subject to statutory limit
1. Includes guaranteed debt of government agencies, specified participation
certificates, notes to international lending organizations, and District of Columbia
stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
NOTE. Data from Treasury Bulletin (U.S. Treasury Department),
Types and Ownership
Billions of dollars, end of period
1984
Type and holder
1 Total gross public debt
By type
7 Interest-bearing debt
3 Marketable
4
5 Notes
6 Bonds
7 Nonmarketable1
8
State and local government series
9 Foreign issues2
10
Government
11
Public
12 Savings bonds and notes
13 Government account series3
1980
1982
1981
1985
1983
Q2
Q3
04
Q1
930.2
1,028.7
1,197.1
1,410.7
1,512.7
1,572.3
1,663.0
1,710.7
928.9
623.2
216.1
321.6
85.4
305.7
23.8
24.0
17.6
6.4
72.5
185.1
1,027.3
720.3
245.0
375.3
99.9
307.0
23.0
19.0
14.9
4.1
68.1
196.7
1,195.5
881.5
311.8
465.0
104.6
314.0
25.7
14.7
13.0
1.7
68.0
205.4
1,400.9
1,050.9
343.8
573.4
133.7
350.0
36.7
10.4
10.4
.0
70.7
231.9
1,501.1
1,126.6
343.3
632.1
151.2
374.5
39.9
8.8
8.8
.0
72.3
253.2
1,559.6
1,176.6
356.8
661.7
158.1
383.0
41.4
8.8
8.8
.0
73.1
259.5
1,660.6
1,247.4
374.4
705.1
167.9
413.2
44.4
9.1
9.1
.0
73.3
286.2
1,695.2
1,271.7
379.5
713 .8
178.4
423.6
47.7
9.1
9.1
n.a.
74.4
292.2
1.3
1.4
1.6
9.8
11.6
12.7
2.3
15.5
15
16
17
18
19
20
21
22
By holder*
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local governments
192.5
121.3
616.4
112.1
3.5
24.0
19.3
87.9
203.3
131.0
694.5
111.4
21.5
29.0
17.9
104.3
209.4
139.3
848.4
131.4
42.6
39.1
24.5
127.8
236.3
151.9
1,022.6
188.8
22.8
56.7
39.7
155.1
257.6
152.9
1,102.2
182.3
14.9
61.6
45.3
165.0
263.1
155.0
1,154.1
183.0
13.6
58.6
47.7
n.a.
289.6
160.9
1,212.5
185.5
26.0
73.9
50.2
n.a.
n a.
23
74
25
26
Individuals
Savings bonds
Other securities
Foreign and international5
Other miscellaneous investors6
72.5
44.6
129.7
122.8
68.1
42.7
136.6
163.0
68.3
48.2
149.5
217.0
71.5
61.9
166.3
259.8
72.9
69.3
171.5
319.4
73.7
73.8
175.5
n.a.
74.5
70.8
193.1
n.a.
14 Non-interest-bearing debt
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. government agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
5. Consists of investments of foreign and international accounts. Excludes noninterest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. government deposit accounts, and U.S. government-sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department, Monthly
Statement of the Public Debt of the United States; data by holder. Treasury
Bulletin.
Federal Finance
1.42
U.S. GOVERNMENT SECURITIES DEALERS
A31
Transactions
Par value; averages of daily figures, in millions of dollars
1985 week ending Wednesday
1985
Item
1982C
1983
1984
Feb.'
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Immediate delivery1
U.S. government securities
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others2
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures transactions3
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions4
U.S. government securities
Federal agency securities
Apr.
Mar.
20
Mar.
27
Apr.
3
Apr.
10
Apr.
17
Apr.
24
32,260
42,135
52,786
71,763
73,353
72,165
66,193'
77,754'
80,195
73,956
83,940
75,757
18,392
810
6,271
3,555
3,232
22,393
708
8,758
5,279
4,997
26,040
1,305
11,734
7,607
6,100
33,453
1,650
17,542
10,476
8,643
38,110
1,727
16,150
10,485
6,882
35,723
1,960
16,963
10,842
6,678
38,931'
1,671
12,063'
7,625
5,903
37,638'
1,766
22,241'
10,049'
6,060
38,560
1,757
17,765
12,729
9,384
40,151
1,795
13,832
11,182
6,9%
40,331
2,083
20,686
13,2%
7,543
37,709
1,736
18,359
10,%5
6,988
1,770
2,257
2,920
4,326
3,979
3,868
3,202
4,104
5,128
4,381
4,929
2,592
15,794
14,697
4,976
5,000
2,502
2,595
21,045
18,832
5,576
4,333
2,642
8,036
25,584
24,282
7,846'
4,947
3,244
10,018
33,853
33,584
9,477
4,607
3,240
9,958
36,408
32,966
8,754
3,727
2,925
10,205
34,583
33,714
10,125
4,327
3,473
11,944
33,564
29,427'
10,138'
3,458
2,411'
10,525
36,480
37,171'
8,185
3,649
2,790
10,429
38,449
36,618
8,570
3,973
2,835
11,469
35,811
33,763
10,218
3,989
3,628
11,251
38,966
40,046
14,383
4,914
3,912
12,333
37,141
36,023
10,003
5,200
3,994
12,248
5,055
1,487
261
6,655
2,501
265
6,947
4,503
262
7,113
6,150
128
8,066
5,104
112
6,642
5,480
120
10,710
4,776
109
6,018
3,751'
119
6,888
5,158
170
6,261
5,362
150
6,725
5,879
41
7,733
6,277
154
1,493'
1,646'
1,364'
2,843'
1,554
3,298
1,329
2,145
1,020
2,602
1,502
2,609
2,048'
1,768
757
2,440
1,360
2,424
790
3,794
1,673
2,330
835
978
1. Before 1981, data for immediate transactions include forward transactions.
2. Includes, among others, all other dealers and brokers in commodities and
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
3. Futures contracts are standardized agreements arranged on an organized
exchange in which parties commit to purchase or sell securities for delivery at a
future date.
4. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after 5 business days
Mar.'
from the date of the transaction for government securities (Treasury bills, notes,
and bonds) or after 30 days for mortgage-backed agency issues.
NOTE. Averages for transactions are based on number of trading days in the
period.
Transactions are market purchases and sales of U.S. government securities
dealers reporting to the Federal Reserve Bank of New York. The figures exclude
allotments of, and exchanges for, new U.S. government securities, redemptions
of called or matured securities, purchases or sales of securities under repurchase
agreement, reverse repurchase (resale), or similar contracts.
A32
1.43
DomesticNonfinancialStatistics • July 1985
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing
Averages of daily figures, in millions of dollars
1985
Item
1982
1983
1985 week ending Wednesday
1984
Feb.
Mar.
Apr.
Mar. 27
Apr. 3
Apr. 10
Apr. 17
Apr. 24
Positions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Net immediate1
U.S. government securities
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. government securities
Federal agency securities
13,663
7,297
972
3,256
-318
2,026
4,145
5,532
2,832
3,317
10,701
8,020
394
1,778
-78
528
7,232
5,839
3,332
3,159
5,538
5,500
63
2,159
-1,119
-1,174
15,294
7,369
3,874
3,788
13,624'
12,456'
851
3,078
-2,900'
5C
19,612'
9,491'
4,728
5,226
11,201'
13,979
1,316
449
-2,546'
-2,240
19,337'
8,005
3,563'
4,646
8,553
11,559
1,203
2,237
-4,468
-2,303
18,048
8,652
3,949
4,965
io, s t ^
14,342
625
2,011
-3,223'
-3,256
18,456
7,883
3,249
4,586
10,915
11,723
858
2,453
-2,077
-2,364
16,693
8,487
3,9%
4,334
7,030
10,255
705
721
-2,990
-1,984
17,372
8,334
3,821
4,195
9,848
13,109
1,019
1,955
-4,418
-2,139
18,862
8,364
3,825
4,348
8,330
12,198
1,649
2,301
-5,710
-2,431
18,671
8,907
3,948
5,825
-2,507
-2,303
-224
-4,125
-1,032
171
-4,525
1,794
233
-2,556'
3,135'
-9
1,213'
5,573'
-101
-2,877
6,333
38
-2,676'
6,729
-168
-3,572
6,038
-108
-3,701
6,258
-33
-3,023
6,936
48
-3,215
6,627
78
-788
-1,432
-1,936
-3,561
-1,643
-9,205
-1,745
-8,155'
-814
-7,881
-1,428
-7,686
-2,160
-7,897
-810
-8,506
-660
-7,958
-717
-7,489
-1,320
-8,250
Financing2
Reverse repurchase agreements3
Overnight and continuing
Term agreements
Repurchase agreements4
18 Overnight and continuing
19 Term agreements
16
17
26,754
48,247
29,099
52,493
44,078
68,357
59,989
71,570
60,818
75,298
*
59,0%
78,752
61,351
77,184
61,341
76,353
62,917
76,958
59,814
78,588
49,695
43,410
57,946
44,410
75,717
57,047
96,535
62,327
96,019
62,890
n.a.
91,832
65,514
96,123
62,991
93,090
63,129
92,528
63,501
93,057
69,561
1. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on a
commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Prior to 1984, securities
owned, and hence dealer positions, do not include all securities acquired under
reverse RPs. After January 1984, immediate positions include reverses to maturity, which are securities that were sold after having been obtained under reverse
repurchase agreements that mature on the same day as the securities. Before
1981, data for immediate positions include forward positions.
1
2. Figures cover financing involving U.S. government and federal agency
securities, negotiable CDs, bankers acceptances, and commercial paper.
3. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities
obtained have been used as collateral on borrowings, that is, matched agreements.
4. Includes both repurchase agreements undertaken to finance positions and
"matched book" repurchase agreements.
NOTE. Data for positions are averages of daily figures, in terms of par value,
based on the number of trading days in the period. Positions are shown net and are
on a commitment basis. Data for financing are based on Wednesday figures, in
terms of actual money borrowed or lent.
Federal Finance
1.44
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1982
Agency
1983
Sept.
Dec.
Oct.
221,946
237,085
239,716
267,399
268,964
270,314
271,564
270,965
271,479
2 Federal agencies
3 Defense Department1
4
Export-Import Bank2 3
Federal Housing Administration4
5
6 Government National Mortgage Association
participation certificates5
7
Postal Service6
8 Tennessee Valley Authority
9
United States Railway Association6
31,806
484
13,339
413
33,055
354
14,218
288
33,940
243
14,853
194
34,754
153
15,733
140
35,012
149
15,721
139
35,078
146
15,721
138
35,145
142
15,882
133
35,235
133
15,882
132
35,360
122
15,881
129
2,715
1,538
13,115
202
2,165
1,471
14,365
194
2,165
1,404
14,970
111
2,165
1,337
15,160
51
2,165
1,337
15,450
51
2,165
1,337
15,520
51
2,165
1,337
15,435
51
2,165
1,337
15,535
51
2,165
1,337
15,675
51
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation.
13 Federal National Mortgage Association8 . . .
14 Farm Credit Banks
15 Student Loan Marketing Association
190,140
54,131
5,480
58,749
71,359
421
204,030
55,967
4,524
70,052
71,8%
1,591
205,776
48,930
6,793
74,594
72,409
3,050
232,645
65,616
8,950
80,123
73,131
4,824
233,952'
66,126
9,634
80,357
72,859
5,143
235,236
66,230
10,299
81,119
72,267
5,321
236,419
65,085
10,270
83,720
71,255
5,369
235,730
64,705
10,195
84,612
70,642
5,576
236,119"
64,706
11,237
84,701
70,012
5,463
110,698
126,424
135,791
144,836
144,978
145,174
145,217
146,034
146,611
12,741
5,400
11,390
202
14,177
1,221
5,000
12,640
194
14,789
1,154
5,000
13,245
111
15,690
1,087
5,000
13,435
51
15,690
1,087
5,000
13,725
51
15,690
1,087
5,000
13,795
51
15,852
1,087
5,000
13,710
51
15,852
1,087
5,000
13,810
51
15,852
1,087
5,000
13,950
51
48,821
13,516
12,740
53,261
17,157
22,774
55,266
19,766
26,460
59,511
20,587
29,475
59,021
20,694
29,710
58,801
20,889
29,861
58,971
20,693
29,853
59,066
20,653
30,515
59,041
20,804
30,826
1 Federal and federally sponsored agencies
MEMO
16 Federal Financing Bank debt9
17
18
19
20
21
Lending to federal and federally sponsored
agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
Other Lending10
22 Farmers Home Administration
23 Rural Electrification Administration
24 Other
1,288
1. Consists of mortgages assumed by the Defense Department between 1957
and 1%3 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1%9 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: Notes, bonds, and debentures.
8. Before late 1981, the Association obtained financing through the Federal
Financing Bank.
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
10. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any
particular agency being generally small. The Farmers Home Administration item
consists exclusively of agency assets, while the Rural Electrification Administration entry contains both agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • July 1985
NEW SECURITY ISSUES State and Local Governments
Millions of dollars
1984
Type of issue or issuer,
or use
1982
1 All issues, new and refunding1
1983
1985
1984'
July
Aug.
Sept.
Oct/
Nov/
Dec/
Jan/
Feb.
79,138
86,421
106,641
7,537
11,726
7,967
12,558
13,548
17,713
6,275
7,856
21,094
225
58,044
461
21,566
96
64,855
253
266,485
16
80,156
17
1,919
1
5,618
1
1,781
1
9,945
1
1,433
4
6,534
1
3,770
1
8,788
3
2,611
3
10,937
1
2,185
2
15,528
0
1,804
7
4,471
3
3,424
0
4,432
0
Type of issuer
6 State
7 Special district and statutory authority
8 Municipalities, counties, townships, school districts
8,438
45,060
25,640
7,140
51,297
27,984
9,129
63,550
33,962
465
5,121
1,951
2,157
7,321
2,248
5%
5,202
2,169
1,110
7,087
4,361
405
7,265
5,878
725
11,894
5,093
367
3,847
2,061
1,542
4,172
2,142
9 Issues for new capital, total
74,804
72,441
94,050
6,592
10,749
7,454
11,105
12,352
16,354
4,904
5,342
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
6,482
6,256
14,259
26,635
8,349
12,822
8,099
4,387
13,588
26,910
7,821
11,637
7,553
7,552
17,844
29,928
15,415
15,758
466
118
385
3,728
884
1,011
627
423
1,015
4,823
1,055
2,806
333
590
2,013
3,018
679
821
755
1,018
2,784
3,500
1,522
1,526
999
2,151
534
3,701
3,866
1,101
671
1,339
4,133
3,598
5,572
1,041
661
341
1,315
1,567
376
644
896
472
902
1,685
167
1,220
2
3
4
5
10
11
12
13
14
15
Type of issue
General obligation
U.S. government loans2
Revenue
U.S. government loans2
1. Par amounts of long-term issues based on date of sale.
2. Consists of tax-exempt issues guaranteed by the Farmers Home Administration.
1.46
SOURCE. Public Securities Association.
NEW SECURITY ISSUES Corporations
Millions of dollars
Type of issue or issuer,
or use
1984
1982
1983
Aug.
1 2
1985
1984
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
1 All issues '
84,638
98,948
95,986
10,917
7,758
12,350
11,931
6,940
7,294
6,74y
14,005
2 Bonds
54,076
47,369
73,357
8,863
6,225
10,403
9,524
5,918
5,739
4,027'
11,641
Type of offering
3 Public
4 Private placement
44,278
9,798
47,369
n.a.
73,357
n.a.
8,863
n.a.
6,225
n.a.
10,403
n.a.
9,524
n.a.
5,918
n.a.
5,739
n.a.
4,027'
n.a.
11,641
n.a.
12,822
5,442
1,491
12,327
2,390
19,604
7,842
5,186
1,039
7,241
3,159
22,900
14,438
8,745
1,272
6,754
2,407
39,741
2,484
776
183
765
0
4,654
1,614
576
200
758
0
3,076
2,989
988
161
1,150
240
4,875
1,447
1,198
19
555
1,557
4,749
1,741
555
110
575
169
2,768
1,326
144
297
309
375
3,288
1,476
469
30
80
353
1,619'
5,660
974
130
500
300
4,077
11 Stocks3
30,562
51,579
22,628
2,054
1,533
1,947
2,407
1,022
1,555
2,716
2,364
Type
12 Preferred
13 Common
5,113
25,449
7,213
44,366
4,118
18,510
334
1,720
155
1,378
555
1,392
655
1,752
91
931
170
1,385
218
2,498
311
2,053
5,649
7,770
709
7,517
2,227
6,690
14,135
13,112
2,729
5,001
1,822
14,780
4,054
6,277
589
1,624
419
9,665
258
558
0
44
123
1,071
212
378
87
92
9
755
712
489
16
146
69
515
227
1,025
66
150
3
936
137
112
71
66
26
610
172
234
0
225
271
653
229
760
153
283
101
1,190
224
472
32
197
15
1,424
5
6
7
8
9
10
14
15
16
17
18
19
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures, which represent gross proceeds of issues maturing in more than one
year, sold for cash in the United States, are principal amount or number of units
multiplied by offering price. Excludes offerings of less than $100,000, secondary
offerings, undefined or exempted issues as defined in the Securities Act of 1933,
employee stock plans, investment companies other than closed-end, intracorporate transactions, and sales to foreigners.
2. Data for 1983 include only public offerings.
3. Beginning in August 1981, gross stock offerings include new equity volume
from swaps of debt for equity.
SOURCE. Securities and Exchange Commission and the Board of Governors of
the Federal Reserve System.
Securities Market and Corporate Finance
1.47
OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1984
Item
1983
1985
1984'
Aug.
Sept.
Nov.
Oct.
Dec.
Jan.
Feb/
Mar.
INVESTMENT COMPANIES 1
1 Sales of own shares2
2 Redemptions of own shares3
3 Net sales
4 Assets 4
5
Cash position5
Other
6
84,345
57,100
27,245
107,485
77,033
30,452
8,956
6,497
2,459
8,156
6,185
1,971
9,517
6,766
2,751
9,458
6,343
3,115
10,006
8,948
1,058
19,152
9,183
9,969
14,786
8,005
6,781
14,512
9,412
5,100
113,599
8,343
105,256
137,126
11,978
125,148
128,209
12,698
115,511
129,657
13,221
116,436
131,539
11,417
120,122
132,709
11,518
121,191
137,126
11,978
125,148
151,534
13,114
138,420
154,707
14,567
140,140
156,988
13,098
143,890
1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment of capital gains distributions and share issue of conversions from one fund to
another in the same group.
3. Excludes share redemption resulting from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
1.48
5. Also includes all U.S. government securities and other short-term debt
securities.
NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1983
Account
1982
1983
1984
1985
1984
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2
3
4
5
6
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
159.1
165.5
60.7
104.8
69.2
35.6
225.2
203.2
75.8
127.4
72.9
54.5
285.7
235.7
89.8
145.9
80.5
65.3
216.7
198.2
74.8
123.4
71.7
51.7
245.0
227.4
84.7
142.6
73.3
69.3
260.0
225.5
84.5
141.1
75.4
65.6
277.4
243.3
92.7
150.6
77.7
72.9
291.1
246.0
95.8
150.2
79.9
70.2
282.8
224.8
83.1
141.7
81.3
60.3
291.6
228.7
87.7
141.0
83.1
58.0
294.0
224.2
84.2
140.0
84.5
55.5
7 Inventory valuation
8 Capital consumption adjustment
-9.5
3.1
-11.2
33.2
-5.6
55.7
-12.1
30.6
-19.3
36.9
-9.2
43.6
-13.5
47.6
-7.3
52.3
-.2
58.3
-1.6
64.5
.5
69.3
SOURCE. Survey of Current Business (Department of Commerce).
A36
1.49
DomesticNonfinancialStatistics • July 1985
NONFINANCIAL CORPORATIONS
Assets and Liabilities
Billions of dollars, except for ratio
1984
1983
Account
1978
1 Current assets
2
3
4
5
6
Cash
U.S. government securities
Notes and accounts receivable
Inventories
Other
1979
1980
1981
1982
Q4
Ql
Q2
Q3
Q4
1,043.7
1,214.8
1,327.0
1,418.4
1,432.7
1,557.3
1,600.6
1,630.6
1,667.2
1,680.9
105.5
17.2
388.0
431.8
101.1
118.0
16.7
459.0
505.1
116.0
126.9
18.7
506.8
542.8
131.8
135.5
17.6
532.0
583.7
149.5
147.0
22.8
519.2
578.6
165.2
165.8
30.6
577.8
599.3
183.7
159.3
35.1
596.9
623.1
186.3
155.0
36.7
612.4
633.3
193.2
150.6
32.3
628.1
662.2
194.0
161.6
36.4
617.7
659.0
206.3
7 Current liabilities
669.5
807.3
889.3
970.0
976.8
1,043.0
1,079.0
1,111.9
1,143.3
1,149.6
8 Notes and accounts payable
9 Other
383.0
286.5
460.8
346.5
513.6
375.7
546.3
423.7
543.0
433.8
577.9
465.2
584.1
495.0
604.6
507.3
624.8
518.5
627.7
521.9
10 Net working capital
374.3
407.5
437.8
448.4
455.9
514.3
521.6
518.6
523.9
531.4
11 MEMO: Current ratio1
1.559
1.505
1.492
1.462
1.467
1.493
1.483
1.466
1.458
1.462
Statistics, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
SOURCE. Federal Trade Commission and Bureau of the Census.
1. Ratio of total current assets to total current liabilities.
NOTE. For a description of this series, see "Working Capital of Nonfinancial
C o r p o r a t i o n s " in the July 1978 BULLETIN, pp. 5 3 3 - 3 7 .
All data in this table reflect the most current benchmarks. Complete data are
available upon request from the Flow of Funds Section, Division of Research and
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment •
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1984
1983
Industry1
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5 Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and other2
1983
1984
Q3
Q4
Ql
Q2
Q3
Q4
Ql'
Q21
304.78
353.74
384.40
309.25
325.45
337.48
348.34
361.12
367.21
380.05
388.86
53.08
63.12
65.95
72.43
75.01
78.62
54.15
62.59
57.56
66.19
61.26
68.71
63.12
72.21
68.31
73.72
71.13
75.07
74.01
77.00
76.84
80.16
15.19
16.88
16.49
15.66
16.27
17.61
16.01
16.96
16.93
16.93
16.21
4.88
4.36
4.72
6.77
3.55
6.17
7.35
3.86
6.33
5.31
4.20
4.69
6.04
3.75
5.48
5.76
3.23
5.96
7.46
3.52
6.06
7.47
3.73
6.50
6.40
3.73
6.16
6.21
3.64
6.11
7.20
3.90
6.21
37.27
7.70
114.45
37.09
10.30
134.39
36.13
12.27
148.35
37.64
7.13
117.88
37.79
8.07
124.30
38.36
8.77
127.83
37.82
10.07
132.07
36.82
11.07
136.55
35.37
11.31
141.10
36.73
11.97
148.17
36.14
12.45
149.10
•Trade and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1. Anticipated by business.
1985
19851
2. "Other" consists of construction; wholesale and retail trade; finance and
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
Securities Markets and Corporate Finance
1.51
DOMESTIC FINANCE COMPANIES
A37
Assets and Liabilities
Billions of dollars, end of period
1983
Account
1979
1978
1980
1981
1984
1982
Q3
Q4
Q2
QL
Q3
ASSETS
1
2
3
4
5
6
7
8
Accounts receivable, gross
Consumer
Business
Total
LESS: Reserves for unearned income and losses
Accounts receivable, net
Cash and bank deposits
Securities
All other
52.6
63.3
116.0
15.6
100.4
3.5
1.3
17.3
9
Total assets
65.7
70.3
136.0
20.0
116.0
73.6
72.3
145.9
23.3
122.6
85.5
80.6
166.1
28.9
137.2
89.5
81.0
170.4
30.5
139.8
92.3
86.8
179.0
30.1
148.9
92.8
95.2
188.0
30.6
157.4
96.9
101.1
198.0
31.9
166.1
99.6
104.2
203.8
33.4
170.4
103.4
103.2
206.6
34.7
171.9
24.9'
27.5
34.2
39.7
45.0
45.3
47.1
48.1
49.1
122.4
140.9
150.1
171.4
179.5
193.9
202.7
213.2
218.5
220.9
6.5
34.5
8.5
43.3
13.2
43.4
15.4
51.2
18.6
45.8
17.0
49.7
19.1
53.6
14.7
58.4
15.3
62.0
16.0
60.1
8.1
43.6
12.6
17.2
8.2
46.7
14.2
19.9
7.5
52.4
14.3
19.4
9.6
54.8
17.8
22.8
8.7
63.5
18.7
24.2
8.7
66.2
24.4
27.9
11.3
65.4
27.1
26.2
12.2
68.7
29.8
29.4
15.0
67.6
29.0
29.6
15.1
71.2
29.2
29.2
122.4
140.9
150.1
171.4
179.5
193.9
202.7
213.2
218.5
220.9
1
\
/
LIABILITIES
12
13
14
15
Bank loans
Commercial paper
Debt
Short-term, n.e.c
Long-term, n.e.c
Other
Capital, surplus, and undivided profits
16
Total liabilities and capital
10
11
1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined.
NOTE. Components may not add to totals due to rounding.
1.52 DOMESTIC FINANCE COMPANIES
These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Changes in accounts
receivable
Extensions
Repayments
1985
1985
1985
Accounts
receivable
outstanding
Mar. 3 1 ,
1985'
Jan.
1 Total
2
3
4
5
6
7
8
9
10
Retail financing of installment sales
Automotive (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All other
Leasing
Automotive
Equipment
Loans on commercial accounts receivable and factored commercial accounts receivable
All other business credit
1. Not seasonally adjusted.
Feb.
Mar.
Jan.
Feb.
Mar.
Jan.
Feb.
Mar.
141,439
4,368
869
873
28,010
26,444
26,283
23,642
25,575
25,410
11,502
20,293
-25
-218
43
-25
298
84
720
1,254
797
1,272
1,060
1,427
745
1,472
754
1,297
762
1,343
20,580
4,972
6,750
1,0%
157
147
709
-15
106
476
105
86
10,165
711
1,824
9,394
485
1,690
10,201
540
1,652
9,069
554
1,677
8,685
500
1,584
9,725
435
1,566
13,792
36,396
623
928
305
39
271
-252
1,121
1,767
966
916
872
1,222
498
839
661
877
601
1,474
15,873
11,281
1,659
1
-687
394
-419
224
9,475
973
9,650
1,274
8,262
1,047
7,816
972
10,337
880
8,681
823
NOTE. These data also appear in the Board's G.20 (422) release. For address,
see inside front cover.
A38
1.53
DomesticNonfinancialStatistics • July 1985
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1984
Item
1982
1983
1985
1984
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Terms and yields in primary and secondary markets
PRIMARY M A R K E T S
1
2
3
4
5
6
Conventional mortgages on new homes
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)2
Contract rate (percent per annum)
Yield (percent per annum)
7 FHLBB series5
8 HUD series4
94.6
69.8
76.6
27.6
2.95
14.47
92.8
69.5
77.1
26.7
2.40
12.20
96.8
73.7
78.7
27.8
2.64
11.87
98.4
74.0
78.2
27.6
2.58
12.27
99.5
75.2
77.9
27.5
2.54
12.27
102.6
76.9
77.9
28.0
2.65
12.05
94.8
71.4
77.9
27.7
2.65
11.77
101.8
76.5
77.6
28.1
2.58
11.74
91.3'
69.9^
79.8'
27.2'
2.65'
11.42'
98.6
75.1
79.1
27.4
2.63
11.56
15.12
15.79
12.66
13.43
12.37
13.80
12.77
13.59
12.75
13.20
12.55
13.05
12.27
12.88
12.21
13.06
11.92'
13.26
12.05
13.01
15.30
14.68
13.11
12.25
13.81
13.13
13.43
13.09
12.90
12.71
12.99
12.54
13.01
12.26
13.27
12.23
13.43
12.68
12.97
12.31
SECONDARY MARKETS
Yield (percent per annum)
9 FHA mortgages (HUD series)5.
10 GNMA securities6
Activity in secondary markets
F E D E R A L N A T I O N A L MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/V A-insured
13 Conventional
66,031
39,718
26,312
74,847
37,393
37,454
83,339
35,148
48,191
85,539
34,791
50,749
86,416
34,752
51,664
87,940
34,711
53,229
89,353
34,602
54,751
90,369
34,553
55,816
91,975
34,585
57,391
92,765
34,516
58,250
Mortgage transactions (during period)
14 Purchases
15 Sales
15,116
2
17,554
3,528
16,721
978
1,087
0
1,297
0
1,962
0
1,943
0
1,559
0
2,256
100
1,515
0
Mortgage commitments7
16 Contracted (during period)
17 Outstanding (end of period)
22,105
7,606
18,607
5,461
21,007
6,384
1,638
6,656
2,150
5,916
2,758
6,384
1,230
5,678
1,895
5,665
1,636
5,019
1,921
5,361
5,131
1,027
4,102
5,9%
974
5,022
9,283
910
8,373
9,726
891
8,835
9,900
886
9,014
10,399
881
9,518
10,362
876
9,485
11,118
859
10,259
11,549
854
10,694
Mortgage transactions (during period)
21 Purchases
22 Sales
23,673
24,170
23,089
19,686
21,886
18,506
2,864
2,573
2,241
1,961
4,137
3,635
2,197
2,162
3,247
2,428
3,232
2,751
Mortgage commitments9
23 Contracted (during period)
24 Outstanding (end of period)
28,179
7,549
32,852
16,964
32,603
26,990
2,663
25,676
4,158
27,550
4,174
26,990
4,264
29,654
3,622
30,135
3,453
30,436
F E D E R A L H O M E L O A N MORTGAGE CORPORATION
Mortgage holdings (end of period)8
18 Total
19 FHA/VA
20 Conventional
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups; compiled by the Federal Home Loan Bank
Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages; from Department of Housing and Urban Development.
5. Average gross yields on 30-year, minimum-downpayment, Federal Housing
Administration-insured first mortgages for immediate delivery in the private
secondary market. Any gaps in data are due to periods of adjustment to changes in
maximum permissible contract rates.
n.a.
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the
prevailing ceiling rate. Monthly figures are averages of Friday figures from the
Wall Street Journal.
7. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in FNMA's free market
auction system, and through the FNMA-GNMA tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for FNMA exclude swap
activity.
Real Estate
1.54
A39
MORTGAGE DEBT OUTSTANDING
Millions of dollars, end of period
1984
Type of holder, and type of property
1982
1983
Q1
1
7
3
4
5
All holders
1- to 4-family
Multifamily
Commercial
6 Major financial institutions
7 Commercial banks'
8
1- to 4-family
9
Multifamily
10
Commercial
Farm
11
Q3
Q4
Ql
1,658,450
1,110,315
140,063
301,362
106,710
1,829,761'
1,220,359'
150,271'
349,757'
109,374'
2,033,701'
1,350,203'
164,439'
408,194'
110,865'
1,873,345'
1,250,361'
153,486'
359,880'
109,618'
1,932,749'
1,287,016'
158,18c
377.06C
110,493'
1,984,75c
1,318,664'
160,523'
394,494'
111,069'
2,033,701'
1,350,203'
164,439'
408,194'
110,865'
2,076,898
1,381,134
168,131
416,370
111,263
1,024,680
301,272
173,804
16,480
102,553
8,435
1,112,363'
330,521'
182,514'
18,410'
120,210'
9,387'
1,247,573'
374,689'
196,112'
21,395'
146,653'
10,529'
1,137,787'
339,653'
185,213'
19,836'
124,890'
9,714'
1,181,792'
352,258'
190,185'
20,501'
131,533'
10,039'
1,219,436'
363,043'
193,138'
20.04C
139,663'
10,202'
1,247,573'
374,689'
1%,112'
21,395'
146,653'
10,529'
1,267,245
383,187
200,024
22,033
150,401
10,729
136,054
96,569
17,785
21,671
29
160,324'
114,076'
20,123'
26,094'
31
143,180
101,868
18,441
22,841
30
147,517
105,063
18,752
23,672
30
150,462
106,944
19,138
24,349
31
160,324'
114,076'
20,123'
26,094'
31
166,612
118,723
20,767
27,091
31
Savings and loan associations
1- to 4-family
Multifamily
Commercial
483,614
393,323
38,979
51,312
494,789
390,883
42,552
61,354
555,277
431,450
48,309
75,518
503,509
397,017
43,553
62,939
528,172
414,087
45,951
68,134
550,129
429,101
47,861
73,167
555,277
431,450
48,309
75,518
559,263
433,429
48,936
76,898
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
141,989
16,751
18,856
93,547
12,835
150,999
15,319
19,107
103,831
12,742
157,283
14,180
19,017
111,642
12,444
151,445
14,917
19,083
104,890
12,555
153,845
14,437
19,028
107,7%
12,584
155,802
14,204
18,828
110,149
12,621
157,283
14,180
19,017
111,642
12,444
158,183
14,153
19,114
112,641
12,275
138,138
4,227
676
3,551
147,370
3,395
630
2,765
157,377'
2,301
585
1,716
150,784
2,900
618
2,282
152,669
2,715
605
2,110
153,355
2,389
594
1,795
157,377'
2,301
585
1,716
162,416
1,964
576
1,388
1,276'
213'
119^
497'
447'
1,062
156
82
421
403
Mutual savings banks
1- to 4-family
Multifamily
Commercial
Farm
17
18
19
20
71
73
74
25
Q2
97,805
66,777
15,305
15,694
29
12
13
14
15
16
V
1985
1984
26 Federal and related agencies
27 Government National Mortgage Association
78
1- to 4-family
Multifamily
29
30
31
37
33
34
Fanners Home Administration
1- to 4-family
Multifamily
Commercial
Farm
1,786
783
218
377
408
2,141
1,159
173
409
400
1,276'
213'
119'
497'
447'
2,094
1,005
303
319
467
1,344
281
463
81
519
738
206
126
113
293
35
36
37
Federal Housing and Veterans
Administration
1- to 4-family
Multifamily
5,228
1,980
3,248
4,894
1,893
3,001
4,782
2,007
2,775
4,832
1,956
2,876
4,753
1,894
2,859
4,749
1,982
2,767
4,782
2,007
2,775
4,938
2,113
2,825
38
39
40
Federal National Mortgage Association
1- to 4-family
Multifamily
71,814
66,500
5,314
78,256
73,045
5,211
87,940
82,175
5,765
80,975
75,770
5,205
83,243
77,633
5,610
84,850
79,175
5,675
87,940
82,175
5,765
91,975
86,129
5,846
41
47
43
Federal Land Banks
1- to 4-family
Farm
50,350
3,068
47,282
51,052
3,000
48,052
50,679
2,948
47,731
51,004
2,982
48,022
51,136
2,958
48,178
51,182
2,954
48,228
50,679
2,948
47,731
50,929
2,998
47,931
44
45
46
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
4,733
4,686
47
7,632
7,559
73
10,399
9,654
745
8,979
8,847
132
9,478
8,931
547
9,447
8,841
606
10,399
9,654
745
11,548
10,642
906
216,654
118,940
115,831
3,109
285,073
159,850
155,801
4,049
332,057
179,981
175,084
4,897
296,481
166,261
161,943
4,318
305,051
170,893
166,415
4,478
317,548
175,770
171,095
4,675
332,057'
179,981
175,084
4,897
347,793
185,954
180,878
5,076
42,964
42,560
404
57,895
57,273
622
70,822
70,253
569
59,376
58,776
600
61,267
60,636
631
63,964
63,352
612
70,822
70,253
569
76,759
75,781
978
47 Mortgage pools or trusts2
48 Government National Mortgage Association
49
1- to 4-family
Multifamily
50
51
5?
53
Federal Home Loan Mortgage Corporation
54
55
56
Federal National Mortgage Association3
1- to 4-family
Multifamily
14,450
14,450
n.a.
25,121
25,121
n.a.
36,215
35,965
250
28,354
28,354
n.a.
29,256
29,256
n.a.
32,888
32,730
158
36,215
35,%5
250
39,370
38,772
598
57
58
59
60
61
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
40,300
20,005
4,344
7,011
8,940
42,207
20,404
5,090
7,351
9,362
45,00c
21,813'
5,841'
7,559'
9,826'
42,490
20,573
5,081
7,456
9,380
43,635
21,331
5,081
7,764
9,459
44,926
21,595
5,618
7,844
9,869
45,039'
21,813'
5,841'
7,559'
9,826'
45,710
21,928
6,041
7,681
10,060
278,978
189,121
30,208
30,868
28,781
284,955
189,189
31,433
34,931
29,402
296,694'
193,688'
32,918'
40,231'
29,857'
288,293
190,522
31,776
36,545
29,450
293,237
193,304
32,169
38,080
29,684
294,411'
192,753'
32,624'
39,209'
29,825'
2%,694'
193,688'
32,918'
40,231'
29,857'
299,444
194,832
33,541
41,237
29,834
Multifamily
67 Individual and others4
63 1- to 4-family5
64 Multifamily
65 Commercial
66 Farm
1. Includes loans held by nondeposit trust companies but not bank trust
departments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Outstanding balances on FNMA's issues of securities backed by pools of
conventional mortgages held in trust. Implemented by FNMA in October 1981.
4. 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 U.S. agencies for which amounts are small or
for which separate data are not readily available.
5. Includes estimate of residential mortgage credit provided by individuals.
NOTE. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve in conjunction with the
Federal Home Loan Bank Board and the Department of Commerce. Separation of
nonfarm mortgage debt by type of property, if not reported directly, and
interpolations and extrapolations when required, are estimated mainly by the
Federal Reserve. Multifamily debt refers to loans on structures of five or more
units.
A40
1.55
DomesticNonfinancialStatistics • July 1985
CONSUMER INSTALLMENT CREDIT' Total Outstanding, and Net ChangeA
Millions of dollars
1984
Holder, and type of credit
1983
1985
1984
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Amounts outstanding (end of period)
1 Total
383,701
460,500
422,008
430,795
437,469
441,358
447,783
460,500
461,530
463,628'
471,567
By major holder
Commercial banks
Finance companies . . . .
Credit unions
Retailers2
Savings and loans
Gasoline companies . . .
Mutual savings banks..
171,978
87,429
53,471
37,470
23,108
4,131
6,114
212,391
96,747
67,858
40,913
29,945
4,315
8,331
195,265
92,534
61,151
35,058
26,057
4,472
7,471
199,654
94,070
62,679
35,359
26,922
4,452
7,659
202,452
95.594
63,808
35.595
27,880
4,328
7,812
204,582
95,113
64,716
35,908
28,781
4,290
7,968
206,635
95,753
66,528
37,124
29,358
4,217
8,168
212,391
96,747
67,858
40,913
29,945
4,315
8,331
213,951
96,732
68,538
38,978
30,520
4,329
8,482
215,778
97,360
68,939'
37,483
31,405
4,012
8,651
219,970
99,133
70,432
37,082
32,349
3,820
8,781
By major type of credit
9 Automobile
10 Commercial banks...
11 Credit unions
12 Finance companies . .
143,114
67,557
25,574
49,983
172,589
85,501
32,456
54,632
161,834
80,103
29,248
52,483
165,177
81,786
29,979
53,412
167,231
82,706
30,519
54,006
168,923
83,620
30,953
54,350
170,731
84,326
31,820
54,585
172,589
85,501
32,456
54,632
173,769
86,223
32,781
54,765
175,491'
87,333
32,973'
55,185
179,661
89,257
33,687
56,717
13 Revolving
14 Commercial banks...
15 Retailers
16 Gasoline companies .
81,977
44,184
33,662
4,131
101,555
60,549
36,691
4,315
86,003
50,358
31,173
4,472
88,202
52,313
31,437
4,452
90,231
54,258
31,645
4,328
91,505
55,276
31,939
4,290
93,944
56,641
33,086
4,217
101,555
60,549
36,691
4,315
100,565
61,445
34,791
4,329
99,316
61,978
33,326
4,012
100,434
63,684
32,930
3,820
17 Mobile home
18 Commercial banks...
19 Finance companies . .
20 Savings and loans . . .
21 Credit unions
23,862
9,842
9,547
3,906
567
24,556
9,610
9,243
4,985
718
24,639
9,681
9,883
4,428
647
24,947
9,711
9,992
4,581
663
25,198
9,761
10,065
4,697
675
24,573
9,627
9,470
4,791
685
24,439
9,613
9,235
4,887
704
24,556
9,610
9,243
4,985
718
24,281
9,498
9,053
5,005
725
24,379'
9,456
9,044
5,150
729'
24,456
9,425
8,981
5,305
745
22 Other
23 Commercial banks...
24 Finance companies ..
25
Credit unions
26 Retailers
27
Savings and loans . . .
28
Mutual savings banks
134,748
50,395
27,899
27,330
3,808
19,202
6,114
161,800
56,731
32,872
34,684
4,222
24,960
8,331
149,532
55,123
30,168
31,256
3,885
21,629
7,471
152,469
55,844
30,666
32,037
3,922
22,341
7,659
154,809
55,727
31,523
32,614
3,950
23,183
7,812
156,357
56,059
31,293
33,078
3,969
23,990
7,968
158,669
56,055
31,933
34,004
4,038
24,471
8,168
161,800
56,731
32,872
34,684
4,222
24,960
8,331
162,915
56,785
32,914
35,032
4,187
25,515
8,482
164,442'
57,011
33,131
35,237'
4,157
26,255
8,651
167,016
57,604
33,435
36,000
4,152
27,044
8,781
2
3
4
5
6
7
8
Net change (during period)
48,742
76,799
6,481
6,022
4,982
5,631
6,080
6,819
7,223
9,041'
8,342
By major holder
Commercial banks
Finance companies
Credit unions
Retailers2
Savings and loans
Gasoline companies . . .
Mutual savings banks ..
19,488
18,572
6,218
5,075
7,285
68
1,322
40,413
18,636
14,387
3,443
6,837
184
2,217
3,192
1,138
1,360
36
586
-23
192
2,631
1,381
927
197
804
-63
145
1,384
1,571
871
225
770
-38
199
2,756
398
1,224
128
864
98
163
2,483
778
1,731
278
546
86
178
3,028
1,196
1,336
389
576
117
177
3,799
901
1,290
251
922
-91
151
5,071
1,203
1,423'
269
997
-102
180
4,847
2,048
797
91
715
-142
-14
By major type of credit
37 Automobile
38 Commercial banks...
39 Credit unions
40
Finance companies ..
16,856
8,002
2,978
11,752
29,475
17,944
6,882
9,298
3,087
1,852
650
585
2,482
1,150
444
888
1,513
434
416
663
2,504
1,057
587
860
2,549
1,019
828
702
2,687
1,275
640
772
2,887
1,616
598
673
3,198'
1,790
696'
712
3,391
1,767
381
1,243
41 Revolving
42
Commercial banks...
43
Retailers
44 Gasoline companies .
12,353
7,518
4,767
68
19,578
16,365
3,029
184
772
764
31
-23
1,263
1,159
167
-63
1,484
1,323
199
-38
1,488
1,279
111
98
1,614
1,289
239
86
1,445
1,001
327
117
1,957
1,809
239
-91
2,527
2,429
200
-102
2,631
2,698
75
-142
45 Mobile home
46
Commercial banks...
47
Finance companies ..
48
Savings and loans . . .
49
Credit unions
1,452
237
776
763
64
694
-232
-608
1,079
151
334
31
137
152
14
217
4
63
140
10
127
4
19
95
9
-392
-91
-381
67
13
-91
-1
-192
84
18
117
29
-13
88
13
-159
-89
-144
60
14
282'
41
33
192
W
-11
-50
-63
92
10
50 Other
51
Commercial banks...
52
Finance companies ..
53
Credit unions
54 Retailers
55
Savings and loans . . .
56 Mutual savings banks
18,081
3,731
6,044
3,176
308
6,522
1,322
27,052
6,336
9,946
7,354
414
5,758
2,217
2,288
545
416
696
5
434
192
2,060
318
430
473
30
664
145
1,858
-377
889
446
26
675
199
2,031
511
-81
624
17
797
163
2,008
176
268
885
39
462
178
2,570
723
437
683
62
488
177
2,538
463
372
678
12
862
151
3,034'
811
458
711'
69
805
180
2,331
432
868
406
16
623
-14
29 Total
30
31
32
33
34
35
36
• These data have not been revised this month due to revisions that were not
available at time of publication.
1. The Board's series cover most short- and intermediate-term credit extended
to individuals through regular business channels, usually to finance the purchase
of consumer goods and services or to refinance debts incurred for such purposes,
and scheduled to be repaid (or with the option of repayment) in two or more
installments.
2. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.
3. For 1982 and earlier, net change equals extensions, seasonally adjusted less
liquidations, seasonally adjusted. Beginning 1983, net change equals outstandings,
seasonally adjusted less outstandings of the previous period, seasonally adjusted.
NOTE. Total consumer noninstallment credit outstanding—credit scheduled to
be repaid in a lump sum, including single-payment loans, charge accounts, and
service credit—amounted to, not seasonally adjusted, $80.7 billion at the end of
1981, $85.9 billion at the end of 1982, and $96.9 billion at the end of 1983.
These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
Consumer Installment Credit
A41
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT
Percent unless noted otherwise
1984
Item
1982
1985
1984
1983
Sept.
Nov.
Oct.
Dec.
Jan.
Feb.
Mar.
INTEREST RATES
1
2
3
4
5
6
Commercial banks1
48-month new car2
24-month personal
120-month mobile home2
Credit card
Auto finance companies
New car
Used car
16.82
18.64
18.05
18.51
13.92
16.50
16.08
18.78
13.71
16.47
15.58
18.77
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
13.91
16.63
15.60
18.82
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
13.37
16.21
15.42
18.85
n.a.
n.a.
n.a.
n.a.
16.15
20.75
12.58
18.74
14.62
17.85
15.16
18.10
15.18
18.19
15.24
18.30
15.24
18.34
15.11
17.88
13.78
17.91
12.65
17.78
45.9
37.0
45.9
37.9
48.3
39.7
49.5
39.9
49.7
39.9
50.0
39.9
50.2
39.8
50.7
41.3
51.4
41.1
52.2
41.3
85
90
86
92
88
92
89
93
88
93
89
93
89
93
90
93
90
93
91
93
8,178
4,746
8,787
5,033
9,333
5,691
9,402
5,792
9,449
5,826
9,577
5,900
9,707
5,975
9,654
5,951
9,1%
5,968
9,232
5,976
OTHER TERMS 3
7
8
9
10
11
12
Maturity (months)
New car
Used car
Loan-to-value ratio
New car
Used car
Amount financed (dollars)
New car
Used car
1. Data for midmonth of quarter only.
2. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
3. At auto finance companies.
NOTE. These data also appear in the Board's G.19 (421) release. For address,
see inside front cover,
A42
1.57
DomesticNonfinancialStatistics • July 1985
F U N D S RAISED IN U.S. CREDIT MARKETS
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1982
1979
1983
1984
1981
HI
H2
HI
H2
HI
H2
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
By sector and instrument
2 U.S. government
i
Treasury securities
4 Agency issues and mortgages
386.0
344.6
380.4
404.1
526.4
715.3
358.1
450.1
448.9
563.8
697.9
732.6
37.4
38.8
-1.4
79.2
79.8
-.6
87.4
87.8
-.5
161.3
162.1
-.9
186.6
186.7
-.1
198.8
199.0
-.2
104.1
105.5
-1.4
218.4
218.8
-.4
222.0
222.1
-.1
151.1
151.2
-.1
177.4
177.6
-.2
220.2
220.3
-.1
5 Private domestic nonfinancial sectors
6 Debt capital instruments
7
Tax-exempt obligations
8
Corporate bonds
y
Mortgages
10
Home mortgages
u
Multifamily residential
12
Commercial
13
Farm
348.6
211.2
30.3
17.3
163.6
120.0
7.8
23.9
11.8
265.4
192.0
30.3
26.7
135.1
96.7
8.8
20.2
9.3
293.1
159.1
22.7
21.8
114.6
76.0
4.3
24.6
9.7
242.8
158.9
53.8
18.7
86.5
52.5
5.5
23.6
5.0
339.8
239.3
56.3
15.7
167.3
108.7
8.4
47.3
2.9
516.5
288.4
54.6
32.2
201.5
128.9
13.8
57.3
1.6
254.0
140.7
43.9
12.0
84.8
53.6
5.1
19.7
6.5
231.7
177.2
63.7
25.3
88.2
51.3
5.8
27.5
3.5
266.9
214.4
62.8
23.0
128.6
83.8
2.8
40.3
1.6
412.7
264.2
49.7
8.4
206.0
133.6
13.9
54.3
4.1
520.5
280.4
37.9
24.1
218.3
140.9
17.1
58.5
1.8
512.4
296.4
71.3
40.3
184.8
116.9
10.4
56.1
1.3
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
137.5
45.4
51.2
11.1
29.7
73.4
6.3
36.7
5.7
24.8
134.0
26.7
54.7
19.2
33.4
83.9
21.0
55.5
-4.1
11.5
100.5
51.3
27.3
-1.2
23.1
228.1
100.6
71.5
23.8
32.3
113.2
20.6
69.0
10.0
13.6
54.6
21.4
42.0
-18.2
9.4
52.5
35.9
13.3
-10.6
13.9
148.5
66.6
41.2
8.3
32.3
240.2
103.0
83.2
31.5
22.4
216.1
98.2
59.7
16.0
42.1
19
20
21
22
23
24
By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
348.6
17.6
179.3
21.4
34.4
96.0
265.4
17.2
122.1
14.4
33.7
78.1
293.1
6.2
127.5
16.3
40.2
102.9
242.8
31.3
94.5
7.6
39.5
70.0
339.8
36.7
175.4
4.3
63.9
59.5
516.5
33.0
241.6
2.2
76.3
163.5
254.0
24.1
94.7
9.6
36.6
89.0
231.7
38.5
94.3
5.6
42.3
51.0
266.9
41.9
134.8
.8
50.1
39.3
412.7
31.6
216.0
7.9
77.6
79.6
520.5
18.9
236.6
.6
86.1
178.3
512.4
47.0
246.6
3.8
66.5
148.6
25 Foreign net borrowing in United States
26
Bonds
21
Bank loans n.e.c
28 Open market paper
29
U.S. government loans
20.2
3.9
2.3
11.2
2.9
27.2
.8
11.5
10.1
4.7
27.2
5.4
3.7
13.9
4.2
15.7
6.7
-6.2
10.7
4.5
18.9
3.8
4.9
6.0
4.3
1.7
2.7
-6.2
.4
4.8
10.2
2.4
-7.6
12.5
3.0
21.2
11.0
-4.7
9.0
6.0
15.3
4.6
11.3
-4.6
3.9
22.5
2.9
-1.5
16.5
4.6
19.2
1.1
-6.0
18.9
5.3
-15.7
4.4
-6.3
-18.1
4.4
406.2
371.8
407.6
419.8
545.3
717.0
368.3
471.4
504.2
586.3
717.1
717.0
30 Total domestic plus foreign
Financial sectors
31 Total net borrowing by financial sectors
By instrument
32 U.S. government related
33 Sponsored credit agency securities
J4 Mortgage pool securities
is
Loans from U.S. government
36 Private financial sectors
37
Corporate bonds
38 Mortgages
39 Bank loans n.e.c
40 Open market paper
41
Loans from Federal Home Loan Banks
By sector
42 Sponsored credit agencies
43 Mortgage pools
44 Private financial sectors
45
Commercial banks
46
Bank affiliates
47
Savings and loan associations
48
Finance companies
49 REITs
82.4
62.9
84.1
69.0
90.7
126.5
84.2
53.8
74.0
107.3
121.0
131.9
47.9
24.3
23.1
.6
34.5
7.8
47.4
30.5
15.0
1.9
36.7
-.8
-.5
.9
20.9
16.2
64.9
14.9
49.5
.4
4.1
2.5
.1
1.9
-1.2
.8
67.8
1.4
66.4
74.2
30.0
44.2
66.2
-4.1
70.3
69.4
6.9
62.5
69.1
30.8
38.3
79.2
29.2
50.0
22.9
17.1
52.3
14.5
38.0
18.9
51.9
14.9
52.7
14.1
.9
21.2
15.7
-16.0
7.6
.1
.6
-14.7
-9.5
7.8
15.2
-.2
13.0
-7.0
60.0
22.4
36.8
.8
24.2
-2.5
.1
3.2
12.3
11.1
69.7
7.5
62.2
-.5
18.0
9.2
44.8
24.4
19.2
1.2
18.1
7.1
-.1
-.9
4.8
7.1
-2.5
7.2
-12.1
2.2
18.8
-2.0
.1
21.2
15.7
1.7
21.1
15.7
24.8
23.1
34.5
1.6
6.5
12.6
16.5
-1.3
25.6
19.2
18.1
.5
6.9
7.4
5.8
-2.2
32.4
15.0
36.7
.4
8.3
15.5
12.8
.2
15.3
49.5
4.1
1.2
1.9
2.5
-.9
.1
1.4
66.4
22.9
.5
8.6
-2.7
17.0
.2
30.0
44.2
52.3
2.7
10.8
20.1
19.5
.1
.1
7.5
62.2
-16.0
1.7
-5.8
-9.3
-1.9
.1
-4.1
70.3
7.8
.8
6.1
-10.0
11.4
.2
6.9
62.5
38.0
.2
11.1
4.5
22.7
.2
30.8
38.3
51.9
4.8
20.0
18.2
9.6
.1
29.2
50.0
52.7
.6
1.5
21.9
29.4
.1
452.5
163.5
43.9
11.8
84.8
20.6
64.6
34.8
28.5
525.1
288.3
63.7
43.8
88.2
21.4
37.9
-23.9
5.9
578.2
288.4
62.8
42.8
128.5
35.9
22.1
-8.0
5.7
693.6
220.5
49.7
30.3
206.0
66.6
41.9
43.6
35.0
838.1
246.7
37.9
40.1
218.2
103.0
77.3
71.5
43.4
848.9
299.5
71.3
58.8
184.7
98.2
55.1
19.0
62.2
52.0
28.9
23.1
18.4
2.5
2.2
-43.3
39.0
-82.3
-84.5
2.9
-.7
-16.4
37.2
-53.6
-59.6
3.2
2.9
*
*
23.2
36.8
24.2
.7
9.7
14.3
*
*
*
All sectors
50 Total net borrowing
51
U.S. government securities
52
State and local obligations
53
Corporate and foreign bonds
54 Mortgages
55
Consumer credit
56 Bank loans n.e.c
57
Open market paper
58 Other loans
488.7
84.8
30.3
29.0
163.5
45.4
52.9
40.3
42.4
434.7
122.9
30.3
34.6
134.9
6.3
47.3
20.6
37.8
491.8
133.0
22.7
26.4
113.9
26.7
59.3
54.0
55.8
488.8
225.9
53.8
27.8
86.5
21.0
51.2
5.4
17.2
635.9
254.4
56.3
36.5
167.2
51.3
32.0
17.8
20.3
843.5
273.1
54.6
49.4
201.5
100.6
66.2
45.3
52.8
External corporate equity funds raised in United States
59 Total new share issues
60
Mutual funds
61
All other
62
Nonfinancial corporations
63
Financial corporations
64
Foreign shares purchased in United States
-3.8
.1
-3.9
-7.8
3.2
.8
22.2
5.2
17.1
12.9
2.1
2.1
-4.1
6.3
-10.4
-11.5
.8
.3
35.3
18.4
16.9
11.4
4.0
1.5
67.8
32.8
34.9
28.3
2.7
4.0
-29.8
38.1
-67.9
-72.1
3.0
1.1
23.3
12.5
10.9
7.0
3.9
-.1
47.2
24.3
22.9
15.8
4.1
3.0
83.5
36.8
46.8
38.2
2.8
5.7
Flow of Funds
1.58
A43
DIRECT A N D INDIRECT SOURCES OF F U N D S TO CREDIT MARKETS
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates.
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
1979
1980
1981
1982
1983
1984
1983
1982
Transaction category, or sector
1984
HI
H2
HI
H2
HI
H2
386.0
344.6
380.4
404.1
526.4
715.3
358.1
450.1
488.9
563.8
697.9
7 3 2!.6
By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
FHLB advances to savings and loans
Other loans and securities
75.2
-6.3
35.8
9.2
36.5
97.0
15.7
31.7
7.1
42.4
97.7
17.2
23.5
16.2
40.9
109.1
18.0
61.0
.8
29.3
117.1
27.6
76.1
-7.0
20.5
142.6
35.8
56.5
15.7
34.6
100.8
9.7
47.6
11.1
32.4
117.3
26.2
74.4
-9.5
26.2
119.7
40.5
80.1
-12.1
11.1
114.6
14.6
72.0
-2.0
29.9
123.7
33.4
52.0
15.7
22.6
161 .5
381.2
61
15i.7
46i.6
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
19.0
53.0
7.7
-4.6
23.7
45.6
4.5
23.2
24.1
48.2
9.2
16.3
16.0
65.3
9.8
18.1
9.7
69.5
10.9
27.1
16.7
71.8
8.4
45.7
14.8
61.8
3.8
20.4
17.1
68.7
15.7
15.8
9.1
68.2
15.6
26.8
10.3
70.7
6.2
27.4
6.1
73.0
17.1
27.5
27'.2
701.6
— .3
64kO
11
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
47.9
20.2
44.8
27.2
47.4
27.2
64.9
15.7
67.8
18.9
74.2
1.7
60.0
10.2
69.7
21.2
66.2
15.3
69.4
22.5
69.1
19.2
/91.2
- 1 5i.7
379.0
91.1
30.3
18.5
91.9
156.3
9.2
319.6
107.2
30.3
19.3
73.7
96.2
7.1
357.3
115.8
22.7
18.8
56.7
159.5
16.2
375.6
207.9
53.8
14.8
-3.2
103.2
.8
495.9
226.9
56.3
14.6
40.9
150.2
-7.0
648.6
237.3
54.6
17.4
86.1
268.9
15.7
327.5
153.7
43.9
-.1
11.0
130.2
11.1
423.8
262.0
63.7
29.6
-17.4
76.3
-9.5
450.8
247.8
62.8
22.9
6.4
98.7
-12.1
541.1
205.9
49.7
6.3
75.5
201.7
-2.0
662.5
213.2
37.9
18.0
105.9
303.2
15.7
6341.7
261 .3
/I .3
16i.9
66..2
2341.7
15i.7
Private financial intermediation
70 Credit market funds advanced by private financial
institutions
Commercial banking
71
Savings institutions
7?
23
Insurance and pension funds
24 Other finance
313.9
123.1
56.5
85.9
48.5
281.5
100.6
54.5
94.3
32.1
323.4
102.3
27.8
97.4
96.0
285.6
107.2
31.3
108.8
38.3
376.7
136.1
136.8
98.8
5.0
541.9
176.1
147.7
113.2
104.9
274.4
99.9
25.2
111.4
37.9
296.7
114.5
37.4
106.3
38.6
323.2
121.6
128.9
89.5
-16.8
430.1
150.6
144.6
108.1
26.8
522.2
192.8
157.0
95.6
76.7
561 .6
159(.4
138!.4
130
133
75 Sources of funds
76
Private domestic deposits and RPs
27 Credit market borrowing
313.9
137.4
34.5
281.5
169.6
18.1
323.4
211.9
36.7
285.6
174.7
4.1
376.7
203.5
22.9
541.9
283.9
52.3
274.4
147.6
24.2
296.7
201.9
-16.0
323.2
192.7
7.8
430.1
214.2
38.0
522.2
277.0
51.9
5611.6
290).7
52
78
29
30
31
32
142.0
27.6
.4
72.8
41.2
93.9
-21.7
-2.6
83.9
34.2
74.8
-8.7
-1.1
90.4
-5.9
106.7
-26.7
6.1
104.6
22.8
150.4
22.1
-5.3
99.2
34.4
205.8
20.8
3.8
108.2
72.9
102.6
-28.3
-2.0
111.4
21.5
110.8
-25.1
14.1
97.8
24.1
122.8
-14.2
10.1
90.0
36.8
177.9
58.5
-20.8
108.4
31.9
193.2
15.7
.9
107.6
69.0
218(.3
25i.9
6
1081.9
lb,.8
Private domestic nonfinancial investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
36 Corporate and foreign bonds
Open market paper
37
Other
38
99.6
52.5
9.9
-1.4
8.6
30.0
56.1
24.6
7.0
-5.7
-3.1
33.3
70.6
29.3
10.5
-8.1
2.7
36.3
94.2
37.4
34.4
-5.2
-.1
27.8
142.1
88.7
42.5
2.0
3.9
5.0
159.0
114.0
31.8
-6.2
1.0
18.4
77.3
35.3
30.1
-17.7
3.5
26.2
111.0
39.5
38.7
7.3
-3.7
29.3
135.3
95.9
52.7
-1.7
-8.1
-3.4
148.9
81.4
32.3
5.7
15.9
13.5
192.3
139.4
21.5
7.8
3.0
20.7
125i.7
881.6
421.1
-20
- 1 .0
16
39 Deposits and currency
40
Currency
41
Checkable deposits
Small time and savings accounts
4?
43
Money market fund shares
44 Large time deposits
45
Security RPs
46 Deposits in foreign countries
146.8
8.0
18.3
59.3
34.4
18.8
6.6
1.5
181.1
10.3
5.2
82.9
29.2
45.8
6.5
1.1
221.9
9.5
18.0
47.0
107.5
36.9
2.5
.5
181.9
9.7
15.7
138.2
24.7
-7.7
3.8
-2.5
222.6
14.3
21.7
219.1
-44.1
-7.5
14.3
4.8
294.6
14.2
16.4
148.0
47.2
69.8
2.4
-3.4
152.1
6.7
1.9
83.2
39.4
21.9
1.1
-2.2
211.7
12.7
29.5
193.1
10.0
-37.3
6.6
-2.9
214.5
14.8
48.0
278.6
-84.0
-61.0
11.0
7.0
230.7
13.8
-4.7
159.7
-4.2
45.9
17.5
2.7
290.2
17.7
36.6
124.9
30.2
80.0
5.3
-4.5
101.7
- 31.9
1/1 .2
64
591.7
- .5
-2
47 Total of credit market instruments, deposits and
currency
246.5
237.2
292.5
276.1
364.7
453.6
229.4
322.7
349.8
379.6
482.5
4 2 41.8
18.5
82.8
23.0
26.1
88.1
1.5
24.0
90.5
7.6
26.0
76.0
-8.6
21.5
76.0
49.2
19.9
83.5
66.5
27.4
83.8
-7.9
24.9
70.0
-9.3
23.7
71.7
12.6
19.5
79.5
85.9
17.2
78.8
43.1
22
881.5
89>.9
-3.8
22.2
-4.1
35.3
-43.3
- 1 6 I.4
18.4
16.9
39.2
-3.9
23.3
12.5
10.9
11.0
12.3
52.0
6.3
-10.4
20.1
-24.2
-29.8
38.1
-67.9
19.4
-49.2
83.5
5.2
17.1
24.9
-2.7
67.8
32.8
34.9
57.5
10.2
47.2
.1
-3.9
12.9
-16.7
24.3
22.9
67.3
-20.1
36.8
46.8
75.9
7.6
28.9
23.1
39.2
12.8
39.0
-82.3
7.6
-50.8
37
- 5 31.6
31 .3
-47
?
3
4
5
6
N
14
15
16
17
18
19
Private domestic funds advanced
Total net advances
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
48
49
50
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
MEMO: Corporate equities not included above
51 Total net issues
5? Mutual fund shares
53 Other equities
54 Acquisitions by financial institutions
55 Other net purchases
NOTES BY LINE NUMBER.
1.
2.
6.
11.
13.
18.
26.
27.
29.
30.
31.
Line 1 of table 1.58.
Sum of lines 3-6 or 7-10.
Includes farm and commercial mortgages.
Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. Also
sum of lines 28 and 47 less lines 40 and 46.
Includes farm and commercial mortgages.
Line 39 less lines 40 and 46.
Excludes equity issues and investment company shares. Includes line 19.
Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates.
Demand deposits at commercial banks.
Excludes net investment of these reserves in corporate equities.
i.l
).8
l.l
!.7
>.8
>.1
..2
2991.0
L2
!.3
!.5
'.2
'.6
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 12 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance. Line 38 includes
mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Division of Research
and Statistics, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
A44
2.10
DomesticNonfinancialStatistics • July 1985
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1984
Measure
1982
1983
1985
1984
Aug.
Sept.
Oct.
Nov.
Dec.
Jan/
Feb/
Mar/
Apr.
1 Industrial production
138.6
147.6
166.3
166.0
165.0
164.4
164.8
164.8
165.1
165.3
165.8
165.4
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
141.8
141.5
142.6
139.8
143.3
133.7
149.2
147.1
151.7
140.8
156.6
145.2
164.7
162.7
161.7
164.1
172.3
161.2
167.2
165.1
162.5
168.7
175.1
164.0
166.4
164.6
161.6
168.9
173.0
162.8
166.9
165.2
161.6
170.1
173.4
160.4
167.7
166.2
162.6
171.2
173.1
160.4
168.1
166.7
162.2
172.8
173.2
159.8
168.0
166.7
162.1
173.0
172.7
160.5
168.0
166.4
162.0
172.5
173.7
161.3
168.5
166.9
162.5
173.1
174.1
161.8
168.2
166.6
161.9
173.1
173.9
161.1
137.6
148.2
164.8
167.6
166.6
166.2
166.6
166.6
166.6
166.5
167.1
166.7
71.1
70.1
75.2
75.2
81.6
82.0
82.8
83.3
82.2
82.4
81.7
81.0
81.6
80.9
81.4
80.4
81.2
80.5
80.9
80.8
81.0
80.8
80.5
80.2
2
3
4
5
6
7
Industry groupings
8 Manufacturing
Capacity utilization (percent)1
9 Manufacturing
10 Industrial materials industries
11 Construction contracts (1977 = 100)2
111.0
137.0
149.0
148.0
146.0
145.0
151.0
150.0
153.0
145.0
162.0
161.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total3
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker . . .
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income 4
Retail sales5
136.1
102.2
96.6
89.1
154.7
410.3
367.4
285.5
398.0
326.0
137.0
100.4
95.1
87.9
157.1
435.6
388.6
294.7
427.1
373.0
143.1
106.8
100.7
94.0
163.0
478.1
422.5
323.6
470.3
412.0
143.6
107.7
101.4
94.8
163.4
483.5
425.5
326.2
475.5
410.4
144.1
107.3
100.9
94.0
164.2
487.0
428.4
325.7
479.1
414.1
144.6
107.6
101.2
94.3
164.9
488.8
428.8
326.7
480.6
416.4
145.1
107.8
101.4
94.4
165.6
491.7
432.6
330.0
482.9
421.3
145.4
108.4
101.8
94.8
165.7
493.9
436.7
333.2
484.5
422.3
146.0
108.7
101.9
94.8
166.4
496.4
438.5
334.4
487.2
424.0
146.1
108.3
101.5
94.3
166.9
498.3
440.5
332.9
483.6
428.3
146.7
108.7
101.4
94.1
167.5
501.0
443.9
334.6
481.9
425.1
147.0
108.8
101.2
94.0
167.9
503.8
446.6
334.1
495.9
428.8
22
23
Prices6
Consumer
Producer finished goods
289.1
280.7
298.4
285.2
311.1
291.2
313.0
291.3
314.5
289.5
315.3
291.5
315.3
292.3
315.5
292.(K
316.1
292.7
317.4
292.5
318.8
292.4
320.1
293.1
1. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources.
2. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. Dodge Division.
3. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
4. Based on data in Survey of Current Business (U.S. Department of Commerce).
5. Based on Bureau of Census data published in Survey of Current Business.
6. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.
Selected Measures
2.11
A45
LABOR FORCE, EMPLOYMENT, A N D U N E M P L O Y M E N T
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1984
Category
1982
1983
1985
1984
Sept.
Oct.
Nov.
Dec.
Jan.
Feb/
Mar/
Apr.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
174,450
176,414
178,602
179,005
179,181
179,353
179,524
179,600
179,742
179,891
180,024
2 Labor force (including Armed Forces)1
3 Civilian labor force
112,383
110,204
113,749
111,550
115,763
113,544
116,006
113,764
116,241
114,016
116,292
114,074
116,682
114,464
117,091
114,875
117,310
115,084
117,738
115,514
117,5%
115,371
96,125
3,401
97,450
3,383
101,685
3,321
102,075
3,319
102,480
3,169
102,598
3,334
102,888
3,385
103,071
3,320
103,345
3,340
103,757
3,362
103,517
3,428
10,678
9.7
62,067
10,717
9.6
62,665
8,539
7.5
62,839
8,370
7.4
62,999
8,367
7.3
62,940
8,142
7.1
63,061
8,191
7.2
62,842
8,484
7.4
62,509
8,399
7.3
62,432
8,3%
7.3
62,153
8,426
7.3
62,428
9 Nonagricultural payroll employment3
89,566
90,138
94,166
94,807
95,157
95,497
95,681
96,045
96,161
%,514
96,731
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
18,781
1,128
3,905
5,082
20,457
5,341
19,036
15,837
18,497
957
3,940
4,958
20,804
5,467
19,665
15,851
19,589
999
4,315
5,169
21,790
5,665
20,666
15,973
19,616
1,020
4,374
5,213
21,930
5,684
20,861
16,109
19,686
1,012
4,382
5,225
22,080
5,705
20,964
16,103
19,718
1,009
4,3%
5,226
22,267
5,725
21,030
16,126
19,801
1,000
4,457
5,249
22,267
5,749
21,095
16,063
19,808
1,000
4,530
5,266
22,372
5,764
21,231
16,074
19,742
1,001
4,492
5,281
22,426
5,7%
21,335
16,088
19,720
1,000
4,606
5,255
22,527
5,825
21,478
16,103
19,676
1,009
4,676
5,272
22,574
5,858
21,570
16,096
Nonagricultural industries2
Agriculture
Unemployment
6
Number
Rate (percent of civilian labor force) . . .
7
8 Not in labor force
4
5
ESTABLISHMENT S U R V E Y D A T A
10
11
12
13
14
1")
16
17
1. Persons 16 years of age and over. Monthly figures, which are based on
sample data, relate to the calendar week that contains the 12th day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures. Based on data from Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.
3. Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family
workers, and members of the Armed Forces. Data are adjusted to the March 1983
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).
A46 Domestic Nonfinancial Statistics • July 1985
2.12
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION
Seasonally adjusted
1984
Q2
Q3
1985
04
QK
Output (1967 = 100)
1984
Q2
Q3
1985
Q4
Q1
1984
Q2
Capacity (percent of 1967 output)
1985
Q3
Q4
Qlr
Utilization rate (percent)
1 Total industry
163.1
165.6
164.7
165.4
199.7
201.1
202.4
204.0
81.7
82.4
81.3
81.1
2 Mining
3 Utilities
125.1
183.1
129.0
181.1
124.3
183.0
125.5
186.5
165.9
215.3
166.1
216.8
166.3
218.3
166.5
219.8
75.4
85.0
77.7
83.5
74.7
83.8
75.4
84.8
4 Manufacturing
164.4
167.2
166.5
166.7
201.0
202.5
204.0
205.7
81.8
82.5
81.6
81.0
5 Primary processing . . .
6 Advanced processing .
162.5
165.2
162.2
169.7
159.8
169.6
160.8
170.3
197.2
203.0
198.0
204.9
198.7
206.8
199.7
208.9
82.4
81.4
81.9
82.8
80.4
82.0
80.5
81.5
7 Materials
162.1
163.4
160.2
161.2
195.9
197.2
198.4
199.7
82.7
82.9
80.7
80.7
8 Durable goods
9 Metal materials
10 Nondurable g o o d s . . . .
11 Textile, paper, and chemical..
12
Paper
13
Chemical
162.0
100.3
186.6
195.9
168.5
240.4
164.6
97.2
185.7
194.9
171.0
238.4
162.1
91.0
181.5
189.6
168.3
233.5
161.8
92.0
181.1
189.2
167.1
234.0
198.3
138.5
223.4
236.2
169.5
305.2
199.5
137.9
225.2
238.2
170.5
308.0
200.8
137.3
226.9
240.3
171.5
310.9
202.4
136.8
228.4
242.0
172.5
313.5
81.7
72.4
83.5
82.9
99.4
78.8
82.5
70.5
82.5
81.8
100.3
77.4
80.7
66.3
80.0
79.0
98.1
75.1
79.9
67.2
79.3
78.2
96.8
74.7
14 Energy materials
132.4
133.1
129.4
135.1
156.4
157.0
157.6
158.4
84.6
84.8
82.1
85.3
Previous cycle1
High
Low
Latest cycle 2
1984
Low
Apr.
High
1984
Aug.
Sept.
Oct.
1985
Nov.
Dec.
Jan/
Feb/
Mar/
Apr.
Capacity utilization rate (percent)
15 Total industry
88.4
71.1
87.3
69.6
81.3
82.5
81.9
81.4
81.4
81.2
81.1
81.0
81.1
80.6
16 Mining
17 Utilities
91.8
94.9
86.0
82.0
88.5
86.7
69.6
79.0
74.3
85.0
77.3
83.3
77.4
83.2
74.3
82.9
75.1
84.6
74.8
83.9
75.4
83.7
74.?
85.6
75.7
85.2
74.5
85.2
18 Manufacturing
87.9
69.0
87.5
68.8
81.5
82.8
82.0
81.7
81.6
81.4
81.2
80.9
81.0
80.5
19 Primary processing . . .
20 Advanced processing .
93.7
85.5
68.2
69.4
91.4
85.9
66.2
70.0
82.2
81.0
82.1
83.1
81.5
82.4
81.2
81.8
80.6
82.0
79.5
82.2
80.1
82.0
80.7
81.3
80.7
81.2
80.4
80.7
21 Materials
92.6
69.3
88.9
66.6
82.5
83.2
82.4
81.0
80.9
80.4
80.5
80.8
80.8
80.2
22 Durable goods
23 Metal materials
91.4
97.8
63.5
68.0
88.4
95.4
59.8
46.2
81.5
73.0
82.9
70.8
82.2
69.8
81.3
67.6
80.8
66.7
80.0
64.5
80.0
65.2
79.9
67.7
79.8
68.8
79.0
68.4
24 Nondurable goods
25
Textile, paper, and
chemical
26
Paper
27
Chemical
94.4
67.4
91.7
70.7
83.2
82.9
81.5
80.5
80.2
79.4
79.2
79.2
79.5
79.3
95.1
99.4
95.5
65.4
72.4
64.2
92.3
97.9
91.3
68.6
86.3
64.0
82.7
98.5
78.9
82.4
99.7
78.1
80.5
99.7
76.1
79.7
98.7
75.7
79.1
97.2
75.7
78.0
98.5
73.9
78.0
98.2
74.3
78.2
96.4
74.7
78.4
95.9
75.0
78.2
n.a.
n.a.
28 Energy materials
94.5
84.4
88.9
78.5
84.5
84.7
84.3
81.0
82.1
83.2
84.2
85.7
86.0
85.3
1. Monthly high 1973; monthly low 1975.
2. Monthly highs 1978 through 1980; monthly lows 1982.
NOTE. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value
Monthly data are seasonally adjusted
Grouping
1967
proportion
1984
avg.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan/
Feb.
Index (1967 = 100)
MAJOR MARKET
1 Total index
2 Products
3
Final products
4
Consumer goods
5
Equipment
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and utility vehicles
11
Autos
12
Auto parts and allied goods
13
Home goods
14
Appliances, A/C, and TV
15
Appliances and TV
16
Carpeting and furniture
17
Miscellaneous home goods
18 Nondurable consumer goods
19
Clothing
20
Consumer staples
21
Consumer foods and tobacco
22
Nonfood staples
23
Consumer chemical products
24
Consumer paper products
25
Consumer energy products
26
Residential utilities
27
28
29
30
31
Equipment
Business
Industrial
Building and mining
Manufacturing
Power
162.8
164.4
165.9
166.0
165.0
164.4
164.8
164.8
165.1
163.3
161.1
161.7
160.3
171.6
162.0
165.3
163.1
163.0
163.3
173.5
162.9
167.4
165.2
163.8
167.0
175.8
163.5
167.2
165.1
162.5
168.7
175.1
164.0
166.4
164.6
161.6
168.9
173.0
166.9
165.2
161.6
170.1
173.4
160.4
167.7
168.1
166.7
162.2
172.8
173.2
159.8
168.0
166.7
162.1
173.0
172.7
160.5
163.6
184.3
158.7
136.2
249.3
152.0
134.9
138.0
179.4
150.0
163.7
185.0
161.1
138.7
245.8
151.8
133.4
136.9
179.5
150.3
162.6
161.0
159.2
134.3
239.1
151.9
132.3
135.9
159.6
173.0
145.6
164.7
142.5
239.9
147.0
133.0
136.0
173.2
143.8
160.5
192.0
174.3
151.5
236.8
142.9
121.9
124.2
168.9
143.6
162.4
189.8
169.8
144.9
240.6
147.0
148.0
161.4
179.8
155.9
132.9
240.6
151.1
134.0
136.7
179.6
148.6
161.5
161.1
161.8
162.7
163.9
162.4
162.4
162.7
163.0
162.7
162.8
161.8
171.5
160.6
184.2
240.7
145.7
155.6
177.9
170.2
160.4
171.6
173.2
161.9
186.3
241.5
147.9
159.0
182.4
174.5
162.9
172.7
173.1
173.9
161.8
162.1
247.1
151.5
155.3
178.6
185.9
247.3
146.7
153.0
174.1
245.7
148.5
160.7
186.5
173.2
162.1
186.1
246.4
146.7
154.4
178.6
173.2
162.2
185.4
244.3
148.7
153.3
175.0
173.8
162.4
187.0
247.5
146.9
155.6
177.4
247.6
147.7
152.1
177.9
172.5
160.8
186.2
245.7
145.2
156.4
186.9
185.5
143.1
190.0
130.1
131.0
187.6
143.3
191.6
129.7
131.2
186.4
143.5
190.7
129.8
133.0
187.3
145.3
194.6
131.0
134.5
188.4
145.6
197.2
129.9
135.8
189.6
147.0
199.8
130.9
137.3
189.2
144.6
195.0
129.3
135.2
188.4
142.8
186.9
235.9
336.5
121.4
76.4
235.8
338.5
117.8
76.1
237.9
342.1
240.7
348.4
118.5
69.2
241.1
349.8
118.5
65.0
163.3
162.1
60.71
47.82
27.68
20.14
12.89
39.29
164.7
162.7
161.6
164.1
172.3
162.5
7.89
2.83
2.03
1.90
.80
5.06
1.40
1.33
1.07
2.59
162.0
100.00
19.79
4.29
15.50
8.33
7.17
2.63
1.92
2.62
1.45
12.63
6.77
1.44
3.85
1.47
161.2
181.3
158.1
135.3
240.3
151.1
134.3
137.5
179.2
148.6
181.0
140.6
187.6
127.4
128.8
160.2
161.4
158.5
171.0
161.5
162.2
180.9
158.4
134.5
238.0
151.7
136.1
138.8
181.0
181.6
233.4
144.0
157.1
177.4
173.5
135.9
173.6
126.2
124.1
161.0
183.9
235.9
145.6
159.8
181.1
176.5
138.5
182.9
127.4
124.1
181.1
140.4
185.8
128.6
126.7
228.1
188.0
181.8
180.8
150.6
162.8
121.1
242.7
152.0
136.4
140.2
179.3
149.2
158.7
171.9
145.0
123.6
240.2
151.4
133.5
136.8
178.1
150.0
166.2
162.6
171.2
173.1
160.4
161.5
184.1
161.5
138.9
241.2
148.9
130.5
133.2
177.5
147.0
161.2
188.6
186.0
186.0
165.3
168.0
166.4
162.0
172.5
173.7
161.3
126.2
128.2
175.5
146.5
128.8
136.2
5.86
3.26
1.93
.67
227.6
325.1
115.4
76.4
217.0
309.6
108.9
78.0
220.5
315.5
109.7
77.1
326.3
115.1
76.1
81.8
238.9
339.2
124.5
80.3
76.2
238.8
343.5
119.6
72.2
36 Defense and space
7.51
135.6
133.2
133.1
133.5
135.9
136.8
139.5
141.1
142.2
144.7
145.8
145.9
Intermediate
products
37 Construction supplies
38 Business supplies
39
Commercial energy products
6.42
6.47
1.14
158.9
185.7
193.5
159.6
182.3
190.0
159.5
183.5
190.8
160.9
186.1
195.3
161.9
189.5
194.9
160.9
189.1
193.3
158.2
187.6
194.5
158.6
188.0
194.8
156.9
189.2
199.8
157.5
188.8
196.1
156.9
188.4
195.7
157.6
189.6
197.5
20.35
4.58
5.44
10.34
5.57
161.6
134.4
212.5
146.9
100.9
161.3
133.2
210.9
147.7
105.7
161.6
132.6
210.6
164.2
135.1
218.8
148.3
103.4
165.3
136.6
220.1
149.2
102.0
164.3
136.2
219.6
147.7
99.8
162.9
136.3
216.1
146.7
97.8
162.3
134.8
216.4
146.0
95.7
161.0
136.9
215.0
143.3
91.7
212.2
148.6
104.5
163.0
134.7
214.0
148.7
104.1
145.2
93.5
139.8
208.0
147.2
97.1
10.47
184.3
185.7
187.4
186.7
186.5
186.7
184.0
182.1
181.9
180.4
180.6
180.8
7.62
1.85
1.62
4.15
1.70
1.14
193.3
117.1
196.8
121.9
169.2
241.1
176.6
140.5
195.8
119.6
169.5
240.2
176.7
140.5
195.9
172.8
239.3
176.6
138.8
196.3
120.1
170.0
240.6
175.3
139.6
192.4
115.6
170.3
235.3
175.8
140.8
190.7
112.0
168.9
234.5
174.3
136.0
190.2
109.3
166.7
235.5
176.5
134.7
187.8
237.2
175.5
137.3
195.0
118.9
166.7
240.0
175.7
138.6
169.2
230.5
177.2
135.7
188.3
107.2
169.1
232.1
175.5
136.2
189.2
108.5
166.3
234.2
170.1
140.9
8.48
4.65
3.82
131.5
119.5
146.3
132.1
119.5
147.3
131.9
119o8
146.5
133.2
120.1
149.0
133.7
122.7
147.1
133.0
121.8
146.8
132.7
121.6
146.1
127.6
113.1
145.2
129.4
115.3
146.7
131.3
117.9
147.6
133.3
120.5
148.8
135.8
123.3
151.0
9.35
12.23
3.76
8.48
139.4
142.5
167.1
131.5
141.0
142.8
167.1
132.1
139.8
143.3
169.2
131.9
139.6
144.5
170.0
133.2
139.7
144.0
167.3
133.7
139.6
143.0
165.4
133.0
138.9
142.8
165.5
132.7
138.3
139.8
167.5
127.6
137.2
142.7
172.6
129.4
136.7
142.3
167.0
131.3
134.8
143.1
165.4
133.3
136.0
146.0
168.9
135.8
32
33
34
35
Commercial transit, farm
Commercial
Transit
Farm
Materials
40 Durable goods materials
41
Durable consumer parts
42
Equipment parts
43
Durable materials n.e.c
44
Basic metal materials
45 Nondurable goods materials
46
Textile, paper, and chemical
materials
47
Textile materials
48
Paper materials
49
Chemical materials
50
Containers, nondurable
51
Nondurable materials n.e.c
52 Energy materials
53
Primary energy
54
Converted fuel materials
Supplementary groups
55 Home goods and clothing
56 Energy, total
57
Products
58
Materials
168.2
234.5
333.4
120.4
118.8
118.2
108.8
161.6
138.4
161.8
Mar.P
Apr,
A48
2.13
Domestic Nonfinancial Statistics • July 1985
INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued
Grouping
SIC
code
1967
proportion
1984
1984
avg.
Apr.
May
June
July
Aug.
1985
Sept.
Oct.
Nov.
Dec.
Jan/
Feb.
Mar.P Apr. c
Index (1967 = 100)
MAJOR INDUSTRY
1 Mining and utilities
2
Mining
3
Utilities
Electric
4
5 Manufacturing
6
Nondurable
7
Durable
12.05
6.36
5.69
3.88
87.95
35.97
51.98
152.0
125.7
181.5
205.4
164.8
179.4
154.6
151.3
123.3
182.7
207.7
163.4
179.1
152.6
152.1
125.0
182.3
206.8
164.2
179.9
153.3
154.1
127.0
184.3
209.6
165.7
181.3
154.9
154.4
129.9
181.8
205.9
167.3
181.8
157.2
153.0
128.3
180.6
204.0
167.6
181.7
157.8
153.3
128.7
180.9
204.4
166.6
180.3
157.1
150.5
123.6
180.6
203.8
166.2
179.4
157.1
153.1
124.8
184.7
209.1
166.6
179.6
157.6
152.4
124.4
183.7
205.3
166.5
179.5
157.6
153.0
125.6
183.6
206.7
166.6
179.6
157.6
154.7
124.8
188.2
213.6
166.5
178.9
158.0
155.2
126.1
187.7
212.4
167.1
178.9
159.0
154.4
124.2
188.2
213.1
166.7
178.8
158.4
10
11.12
13
14
.51 91.7
.69 155.8
4.40 121.7
.75 145.0
98.5
151.4
118.8
140.4
98.0
153.9
120.4
144.0
96.8
161.5
121.6
147.9
96.4
176.5
122.8
151.9
83.4
171.7
122.5
153.5
84.5
173.7
122.4
154.6
91.2
127.8
122.6
147.8
87.5
134.4
123.8
147.5
76.3
142.1
123.6
146.0
82.7
144.5
124.0
146.7
87.3
154.8
120.5
147.8
84.7
168.0
120.6
148.0
160.8
118.5
131.2
8
9
10
11
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
12
13
14
15
16
Nondurable manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
8.75 163.2
.67 115.2
2.68 138.6
3.31
3.21 174.4
163.1
113.3
140.0
164.2
112.8
140.5
165.1
118.3
140.7
164.9
115.1
139.8
164.7
113.8
140.3
164.3
113.1
135.4
164.0
119.5
133.3
162.9
117.4
132.0
164.1
120.5
132.0
164.9
115.7
131.5
163.2
115.0
131.5
172.4
174.1
174.6
176.7
176.7
177.5
173.5
173.0
173.7
174.3
176.4
175.5
174.5
17
18
19
20
21
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
27
28
29
30
31
4.72
7.74
1.79
2.24
.86
169.7
228.1
124.4
331.7
59.9
166.3
228.3
126.8
328.0
63.5
167.5
227.9
127.9
334.1
61.4
169.0
231.0
127.5
341.0
60.0
172.6
232.0
124.7
341.4
60.6
173.1
231.6
124.3
341.5
59.1
170.5
230.8
122.6
338.4
57.9
172.3
228.0
122.9
338.6
55.0
174.0
230.2
124.0
332.2
55.9
174.1
228.1
120.3
331.3
56.6
174.5
227.8
116.1
334.5
54.1
173.7
227.5
117.7
334.1
54.1
174.4
226.9
121.0
335.7
55.0
175.1
22
23
24
25
Durable manufactures
Ordnance, private and government
Lumber and products
Furniture and fixtures
Clay, glass, stone products
19.91
24
25
32
3.64
1.64
1.37
2.74
103.5
148.7
190.2
159.7
101.4
151.2
186.6
160.0
100.8
146.3
190.5
160.6
101.7
148.5
191.9
159.7
102.7
146.0
192.6
160.9
105.5
148.8
195.3
160.0
107.1
149.2
194.3
158.0
107.7
152.6
194.7
160.1
108.6
152.2
192.1
159.0
108.3
150.4
190.6
158.9
107.5
150.4
187.0
159.4
107.9
148.5
190.8
160.4
108.0
149.5
189.3
161.0
26
27
28
29
30
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
33
331.2
34
35
36
6.57 95.1
4.21 79.8
5.93 137.5
9.15 181.5
8.05 217.4
99.3
84.0
135.5
174.9
214.6
98.2
83.5
136.5
178.8
214.5
97.9
83.5
138.7
182.0
216.0
94.5
76.5
140.6
186.9
221.5
94.4
77.7
140.0
189.1
221.5
94.1
77.5
139.5
187.9
222.8
92.7
74.6
140.7
187.7
222.3
91.5
73.9
139.0
188.9
222.5
87.8
72.1
140.2
188.3
224.5
89.7
72.2
139.4
189.2
220.3
91.8
74.3
141.7
188.4
219.8
94.5
79.3
142.7
188.6
221.3
143.0
188.4
218.8
37
371
9.27 137.6
4.50 165.7
134.5
161.9
135.0
163.0
137.2
165.3
140.6
169.0
141.0
169.6
137.6
162.4
137.2
161.7
141.3
170.8
143.3
171.8
145.8
176.3
144.7
172.3
145.6
172.5
145.4
171.7
4.77
2.11
1.51
108.8
171.0
152.1
108.6
171.8
151.5
110.8
174.5
150.8
113.8
176.7
152.4
113.9
177.4
149.2
114.2
178.5
147.0
114.1
176.5
148.3
113.6
177.5
143.5
116.4
180.3
137.7
117.2
179.3
141.0
118.6
179.0
144.1
120.2
180.8
144.7
120.6
181.1
143.2
31 Transportation equipment
32 Motor vehicles and parts
33 Aerospace and miscellaneous
transportation equipment..
34 Instruments
35 Miscellaneous manufactures
372-9
38
39
111.2
174.2
148.9
124.2
108.5
93.2
Gross value (billions of 1972 dollars, annual rates)
MAJOR MARKET
36 Products, total
507.4
670.1
661.1
665.9
671.5
682.4
678.2
673.6
674.7
679.1
680.5
681.0
682.3
684.8
683.4
37 Final
38
Consumer goods
39 Equipment
40 Intermediate
390.9
277.5
113.4
116.6
516.9
348.2
168.7
153.2
509.0
347.8
161.2
152.2
514.0
349.5
164.4
151.9
518.1
350.9
167.2
153.4
525.9
353.2
172.8
156.5
522.3
347.4
174.9
155.9
519.7
345.4
174.4
153.8
521.3
346.7
174.5
153.5
525.8
350.1
175.7
153.3
527.0
349.4
177.6
153.5
527.8
350.7
177.1
153.3
527.4
350.6
176.8
154.9
529.3
352.1
177.2
155.5
529.2
351.4
177.8
154.2
NOTE. These data also appear in the Board's G.12.3 (414) release. For address,
see inside front cover.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1984
1982
Item
1983
1985
1984
July
June
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.'
Feb.'
Mar.
Private residential real estate activity (thousands of units)
N E W UNITS
7
1 Permits authorized
1-family
3 2-or-more-family
1,000
546
454
1,605
902
703
1,682
922
759
1,805'
939'
866'
1,591'
864'
727'
1,542'
853'
689'
1,517'
866'
651'
1,477'
827'
65(K
I,6l6r
846'
770'
4 Started
1-family
6
2-or-more-family
1,062
663
400
1,703
1,067
635
1,749
1,084
665
1,837
1,077
760
1,730
9%
734
1,590
962
628
1,669
1,009
660
1,564
979
585
1,600
1,043
557
720
400
320
1,003
524
479
1,051
556
494
1,098
587
511
1,100
582
518
1,091
574
517
1,088
568
520
1,081
571
510
1,005
631
374
1,390
924
466
1,652
1,025
627
1,718
1,045
673
1,699
1,062
637
1,681
1,035
646
1,657
1,040
617
13 Mobile homes shipped
240
296
295
298
301
302
Merchant builder activity in 1-family units
14 Number sold
15 Number for sale, end of period1
413
255
622
304
639
358
636
338
615
340
557
343
7
8
9
Under construction, end of period1
1-family
2-or-more-family
10 Completed
11
1-family
12 2-or-more-family
1,635
903
732
1,624
927
697
1,741
993
748
1,630
1,112
518
1,849
1,060
789
1,647
1,135
512
1,883
1,171
712
1,077
574
503
1,073
579
495
1,072
572
500
1,031
559
471
1,068
581
487
1,614
972
642
1,587
1,001
586
1,635
985
650
1,717
1,120
597
1,754
1,041
713
1,679
1,009
670
282
302
291
282
273
276
283
670
343
652
346
596
349
604
356
622
356
641
362
698
358
843'
756'
Price (thousands of dollars)2
Median
16 Units sold
69.3
75.5
80.0
80.5
80.7
82.0
81.3
80.1
82.5
78.3
82.9
83.4
83.0
17
83.8
89.9
97.5
98.8
97.1
96.9
101.3
95.7
101.4
96.3
98.8
98.5
100.2
1,991
2,719
2,868
2,920
2,790
2,770
2,730
2,740
2,830
2,870
3,000
2,880
3,030
67.7
80.4
69.8
82.5
72.3
85.9
73.4
87.2
74.2
87.9
73.5
87.6
71.9
85.4
71.9
86.2
71.9
85.1
72.1
85.9
73.8
87.7
73.5
87.2
74.2
88.6
Units sold
EXISTING U N I T S ( 1 - f a m i l y )
18 Number sold
2
Price of units sold (thousands of dollars)
19 Median
20 Average
Value of new construction3 (millions of dollars)
CONSTRUCTION
21 Total put in place
230,068 262,167 309,740 315,279 314,223 318,031 318,685 312,849 308,111
307,579
316,356 323,775 324,162
Private
Residential
Nonresidential, total
Buildings
75
Industrial
76
Commercial
77
Other
28
Public utilities and other
179,090 211,369 253,924 257,789 258,245 261,165 260,871 256,121 251,607
74,808 111,727 133,519 136,418 137,818 138,926 137,106 131,143 125,906
104,282 99,642 120,405 121,371 120,427 122,239 123,765 124,978 125,701
251,283
122,727
128,556
258,579 265,707 265,556
128,449 133,133 134,807
130,130 132,574 130,749
7?
73
24
79 Public
30 Military
31
Highway
37, Conservation and development
33 Other
17,346
37,281
10,507
39,148
12,863
35,787
11,660
39,332
14,426
49,273
12,725
43,981
14,065
48,947
13,327
45,032
13,784
48,436
12,744
45,463
14,613
49,496
12,059
46,071
14,917
50,861
12,079
45,908
14,867
53,509
12,111
44,491
15,287
54,579
11,975
43,860
15,353
56,661
12,396
44,146
15,075
58,456
11,847
44,752
15,687
59,123
12,012
45,752
15,430
59,580
11,428
44,311
50,977
2,205
13,428
5,029
30,315
50,798
2,544
14,225
4,822
29,207
55,818
2,837
16,881
4,586
31,514
57,490
2,703
16,824
4,492
33,471
55,979
2,345
17,136
4,520
31,978
56,866
2,851
17,322
4,520
32,173
57,814
3,508
17,209
4,890
32,207
56,729
2,890
16,794
4,591
32,454
56,504
3,082
17,458
5,073
30,891
56,296
2,974
17,588
4,555
31,179
57,777
3,254
18,133
4,592
31,798
58,067
3,309
18,323
4,645
31,790
58,606
3,184
19,378
4,705
31,339
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in prior periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
NOTE. Census Bureau estimates for all series except (a) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of
existing units, which are published by the National Association of Realtors. All
back and current figures are available from originating agency. Permit authorizations are those reported to the Census Bureau from 16,000 jurisdictions beginning
with 1978.
A50
2.15
Domestic Nonfinancial Statistics • July 1985
C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Change from 1 month earlier
Index
level
Apr.
Item
1984
1984
1985
Apr.
Apr.
1985
1984
1985
=
June
Sept.
Dec/
Mar/
Dec/
Jan.
Feb.
Mar.
1985
(1967
100)1
Apr.
CONSUMER PRICES 2
1
All items
4.5
3.7
3.2
4.5
3.0
4.1
.3
.2
.3
.5
.4
320.1
2
3
4
5
6
Food
Energy items
All items less food and energy
Commodities
Services
3.6
2.8
5.0
4.8
5.2
2.4
.7
4.5
3.3
5.3
-.5
.3
4.8
3.9
5.2
3.9
.1
5.3
3.8
6.2
3.7
-.7
3.5
.9
5.0
2.6
-.8
5.5
6.6
5.0
.4
-.2
.3
.2
.4
.2
-.8
.4
.5
.4
.5
-1.4
.6
.8
.4
.0
1.9
.4
.3
.4
-.2
1.8
.3
.0
.4
309.6
424.4
311.8
260.0
370.7
.V
-,3R
-2.4
.8'
.2
-.2
-.9
.6
.4
.3
-1.0
5.8
-.2
.0
293.1
272.4
713.9
251.0
300.0
PRODUCER PRICES
7
8
9
10
11
Finished goods
Consumer foods
Consumer energy
Other consumer goods
Capital equipment
2.9
4.3
.3
2.7
2.9
.7
-.7
-5.0
2.4
1.9
-.4
-7.5
5.0
.8
2.2
.0
4.5
-19.7
2.5
2.3
1.1
3.3
5.6
-.2
-1.1
1.0
-2.4
-21.0
6.6
6.5
.0
.4
-.6
.1
-.3
.1'
-.1
-.1
-2.5
.2
.5
12
13
Intermediate materials3
Excluding energy
3.6
3.7
.2
.6
2.7
2.0
-1.1
.9
1.2
1.5
-2.5
-1.0
.0
.1
.0
.0
-.5
-.2
-.1
-.1
.3
.0
325.6
305.7
14
15
16
Crude materials
Foods
Energy
Other
5.0
-1.3
13.0
-10.8
-4.4
-6.9
-19.2
4.0
14.3
-1.7
.4
-15.3
10.6
-7.6
-10.7
-24.1
-12.7
-13.4
.2
-.7
-.6
-2.1'
-L.Y
-1.4
-2.0
-.4
-4.3
-2.8
-1.0
2.3
-3.0
.1
2.1
240.5
748.3
257.4
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental equivalence measure of homeownership after 1982.
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures
2.16
A51
GROSS N A T I O N A L PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1984
Account
1982
1983
1985
1984
Q1
Q2
Q3
Q4
Ql'
GROSS NATIONAL PRODUCT
1
3,069.3
3,304.8
3,662.8
3,553.3
3,644.7
3,694.6
3,758.7
3,817.1
By source
2 Personal consumption expenditures
3 Durable goods
4
Nondurable goods
5 Services
1,984.9
245.1
757.5
982.2
2,155.9
279.8
801.7
1,074.4
2,341.8
318.8
856.9
1,166.1
2,276.5
310.9
841.3
1,124.4
2,332.7
320.7
858.3
1,153.7
2,361.4
317.2
861.4
1,182.8
2,396.5
326.3
866.5
1,203.8
2,446.1
334.5
877.0
1,234.6
6 Gross private domestic investment
7 Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
Residential structures
11
Nonfarm
12
414.9
441.0
349.6
142.1
207.5
91.4
86.6
471.6
485.1
352.9
129.7
223.2
132.2
127.6
637.8
579.6
425.7
150.4
275.3
153.9
148.8
623.8
550.0
398.8
142.2
256.7
151.2
146.4
627.0
576.4
420.8
150.0
270.7
155.6
150.5
662.8
591.0
435.7
151.4
284.2
155.3
150.1
637.8
601.1
447.7
157.9
289.7
153.5
148.3
651.2
610.6
455.3
165.3
290.1
155.3
150.1
13
14
-26.1
-24.0
-13.5
-3.1
58.2
49.6
73.8
60.6
50.6
47.0
71.8
63.7
36.6
27.2
40.6
33.5
15 Net exports of goods and services
16
17 Imports
19.0
348.4
329.4
-8.3
336.2
344.4
-64.2
364.3
428.5
-51.5
358.9
410.4
-58.7
362.4
421.1
-90.6
368.6
459.3
-56.0
367.2
423.2
-69.1
363.5
432.6
18 Government purchases of goods and services
19 Federal
State and local
20
650.5
258.9
391.5
685.5
269.7
415.8
747.4
295.4
452.0
704.4
267.6
436.8
743.7
296.4
447.4
761.0
302.0
458.9
780.5
315.7
464.8
789.0
316.8
472.2
3,095.4
1,276.7
499.9
776.9
1,510.8
281.7
3,318.3
1,355.7
555.3
800.4
1,639.3
309.8
3,604.6
1,542.9
655.6
887.3
1,763.3
356.5
3,479.5
1,498.0
632.3
865.7
1,713.7
341.6
3,594.1
1,544.8
647.9
896.9
1,742.6
357.2
3,622.8
1,549.1
654.7
894.4
1,783.3
362.1
3,722.1
1,579.8
687.7
892.1
1,813.7
365.2
3,776.6
1,585.3
676.8
908.5
1,859.6
372.3
-26.1
-18.0
-8.1
-13.5
-2.1
-11.3
58.2
30.4
27.8
73.8
34.9
38.9
50.6
18.2
32.4
71.8
41.7
30.1
36.6
26.7
9.9
40.6
27.6
12.9
1,480.0
1,534.7
1,639.3
1,610.9
1,638.8
1,645.2
1,662.4
1,665.4
2,446.8
2,646.7
2,959.9
2,873.5
2,944.8
2,984.9
3,036.3
3,075.4
1,864.2
1,568.7
306.6
1,262.2
295.5
140.0
155.5
1,984.9
1,658.8
328.2
1,331.1
326.2
153.1
173.1
2,173.2
1,804.1
349.8
1,454.2
369.0
173.5
195.5
2,113.4
1,755.9
342.9
1,413.0
357.4
169.4
188.1
2,159.2
1,793.3
347.5
1,445.8
365.9
172.4
193.5
2,191.9
1,819.1
352.0
1,467.1
372.8
174.7
198.1
2,228.1
1,848.2
357.2
1,490.9
380.0
177.5
202.5
2,272.9
1,883.1
365.5
1,517.6
389.9
183.6
206.3
111.1
89.2
21.8
121.7
107.9
13.8
154.4
126.2
28.2
154.9
122.5
32.5
149.8
126.3
23.4
153.7
126.4
27.3
159.1
129.7
29.4
154.1
134.3
19.8
Change in business inventories
Nonfarm
By major type of product
71
77
73
74
75
26
Goods
Durable
Nondurable
Services
Structures
71 Change in business inventories
78
29 Nondurable goods
30 MEMO: Total GNP in 1972 dollars
NATIONAL INCOME
31
32
33
34
35
36
37
38
Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
39 Proprietors' income1
Business and professional1
40
Farm1
41
2
42 Rental income of persons
51.5
58.3
62.5
61.0
62.0
63.0
64.1
64.8
43 Corporate profits1
44
Profits before tax3
45
Inventory valuation adjustment
46 Capital consumption adjustment
159.1
165.5
-9.5
3.1
225.2
203.2
-11.2
33.2
285.7
235.7
-5.7
55.7
277.4
243.3
-13.5
47.6
291.1
246.0
-7.3
52.3
282.8
224.8
-.2
58.3
291.6
228.7
-1.6
64.5
294.0
224.2
.5
69.3
47 Net interest
260.9
256.6
284.1
266.8
282.8
293.5
293.4
289.5
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A52
2.17
Domestic Nonfinancial Statistics • July 1985
PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1985
1984
Account
1982
1984
1983
Q1
Q2
Q3
Q4
PERSONAL INCOME A N D SAVING
1 Total personal income
2.584.6
2,744.2
3,012.1
2,920.5
2,984.6
3,047.3
3,096.2
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises.
1.568.7
509.3
382.9
378.6
374.3
306.6
1,659.2
519.3
395.2
398.6
413.1
328.2
1.804.0
569.3
433.9
432.0
452.9
349.8
1,755.7
555.9
424.6
419.2
437.9
342.8
1,793.1
567.0
432.2
429.5
449.3
347.3
1,819.5
573.3
436.4
436.4
457.3
352.4
1,847.6
580.9
442.4
443.1
466.9
356.7
155.5
173.1
121.7
107.9
13.8
58.3
70.3
376.3
405.0
195.5
154.4
188.1
154.9
122.5
32.5
61.0
75.0
403.9
411.3
232.1
193.5
149.8
126.3
23.4
198.1
153.7
126.4
27.3
63.0
78.5
449.3
418.6
238.2
202.5
159.1
129.7
29.4
64.1
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income 1
Business and professional 1
Farm1
Rental income of persons 2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits...
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
111.1
89.2
21.8
51.5
66.5
366.6
376.1
204.5
221.6
126.2
28.2
62.5
77.7
433.7
416.7
237.3
62.0
77.2
425.6
415.2
235.2
80.2
456.1
421.8
243.5
111.4
119.6
132.5
129.6
131.8
133.4
135.2
2,584.6
2,744.2
3.012.1
2.920.5
2,984.6
3.047.3
3,096.2
404.1
404.2
435.3
418.3
430.3
440.9
451.7
20 EQUALS: Disposable personal income
2,180.5
2,340.1
2,576.8
2,502.2
2,554.3
2.606.4
2,644.5
21
LESS: Personal outlays
2,044.5
2,222.0
2,420.7
2.349.6
2,409.5
2,442.3
2,481.5
22 EQUALS: Personal saving
136.0
118.1
156.1
152.5
144.8
164.1
163.0
6,369.7
4,145.9
4,555.0
6,926.1
4,488.7
4,939.0
6.829.4
4.426.5
4,865.0
6.933.2
4.502.3
4,930.0
5.7
6,943.2
4,498.4
4,965.0
6.3
6,998.3
4,527.1
4,996.0
6.2
6,543.4
4,302.8
4,670.0
5.0
27 Gross saving
408.8
437.2
551.8
543.9
551.0
556.4
556.0
28
29
30
31
524.0
136.0
29.2
-9.5
571.7
651.3
152.5
107.0
-13.5
660.2
689.4
164.1
118.4
698.2
163.0
-11.2
674.8
156.1
115.4
-5.7
137.1
231.2
145.9
246.2
157.0
239.9
151.8
244.1
156.0
.0
.0
.0
.0
.0
-115.3
-148.2
32.9
-134.5
-178.6
44.1
-122.9
-175.8
52.9
-107.4
-161.3
53.9
-109.2
-163.7
54.5
.0
.0
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1972 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
6.1
6.1
6.2
GROSS SAVING
Gross private saving
Personal saving
Undistributed corporate profits 1
Corporate inventory valuation adjustment
Capital consumption
allowances
32 Corporate
33 Noncorporate
34 Wage accruals less disbursements
35 Government surplus, or deficit ( - ) , national income and
product accounts
36
Federal
37
State and local
38 Capital grants received by the United States, net
221.8
118.1
76.5
39 Gross investment
408.3
437.7
40 Gross private domestic
41 Net foreign
414.9
471.6
-33.9
42 Statistical discrepancy.
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
-6.6
144.8
115.3
-7.3
-.2
120.8
-1.6
248.1
158.8
252.8
161.5
.0
.0
-133.0
-142.2
-197.8
55.6
-180.6
47.6
.0
.0
.0
.0
543.4
546.1
662.8
-119.4
637.8
-91.6
546.1
542.0
637.8
-93.4
623.8
-77.7
627.0
-85.0
-7.4
2.2
-9.0
-9.9
SOURCE. Survey of Current Business (Department of Commerce).
3.10
Q1
Q2
Q4P
1984P
Q4
1 Balance on current account
2
Not seasonally adjusted
9
10
A53
U.S. INTERNATIONAL TRANSACTIONS
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted.1
Item credits or debits
3
4
5
6
7
8
Summary Statistics
Merchandise trade balance 2
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net 3
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
Q3
-101,647
-17,213
-15,964
-19,669
-18,616
-24,704
-24,380
-33,599
-36,190
-23,679
-22,461
-36,469
211,198
-247,667
195
27,802
7,331
-61,055
200,257
-261,312
515
23,508
4,121
-107,435
220,343
-327,778
-1,635
18,115
506
-19,407
51,829
-71,236
-273
5,119
434
-25,813
53,920
-79,733
-370
7,744
917
-25,802
54,548
-80,350
-404
3,455
204
-32,941
55,616
-88,557
-320
2,876
-352
-22,879
56,259
-79,138
-542
4,039
-263
-2,635
-5,423
-2,590
-6,060
-2,946
-8,253
-688'
-2,398
-717
-1,430
-726
-1,431
-693
-2,169
-3,223
-811
-6,143
-5,013
-5,460
-1,429
-2,037
-1,235
-1,440
-748
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
-4,965
-1,196
-3,130
-953
-657
-565
-799
-1,109
-1,371
-2,552
-1,041
-66
-979
-995
-1,156
545
-1,996
498
-226
-200
-288
-4,434
3,304
-271
-331
-197
-194
-143
-772
17 Change in U.S. private assets abroad (increase, - ) 3
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net3
-107,790
-111,070
6,626
-8,102
4,756
-43,281
-25,391
-5,333
-7,676
-4,881
-12,574
-7,337
5,566
-4,761
-6,043
-12,461
-8,239
-1,671
-983
-1,568
742
1,955
1,659
637
-3,509
-17,200
-20,612
2,120
2,112
19,245
16,871
1,787
-1,322
1,909
-15,362
-5,551
n.a.
-3,257
-6,554
22 Change in foreign official assets in the United States
(increase, + )
23
U.S. Treasury securities
24
Other U.S. government obligations
25
Other U.S. government liabilities 4
26
Other U.S. liabilities reported by U.S. banks
27
Other foreign official assets 5
3,318
5,728
-694
382
-1,747
-351
5,339
6,989
-487
199
433
-1,795
2,998
4,644
12
333
676
-2,667
6,555
2,603
417
161
3,498
-124
-2,784
-830
-577
85
-153
302
-487
6,956
5,819
242
-2,131
-599
-345
-310
147
448
349
-979
28 Change in foreign private assets in the United States
(increase, +) 3
29
U.S. bank-reported liabilities
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33
Foreign direct investments in the United States, net 3
91,863
65,922
-2,383
7,062
6,396
14,865
76,383
49,059
-1,318
8,731
89,800
27,571
5,529
22,487
13,036
21,177
27,249
22,325
18,444
8,775
4,404
1,358
1,516
2,391
40,750
20,789
4,055
6,477
587
8,842
3,662
-5,410
-2,930
5,121
1,609
5,272
26,945
3,417
n.a.
9,531
9,325
4,672
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
0
0
32,916
0
8,612
11,299
0
9,331
0
0
30,015
0
-228
1,673
1,134
2,345
0
-1,748
2,657
0
-231
-288
- 8
0
5,961
-195
0
-321
44
-820
0
3,299
-140
0
0
13,761
-2,410
-212
-205
2,156
-602
0
6,997
2,748
4,249
30,015
32,916
0
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in the United States
(increase, +)
—
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
-4,965
-1,196
-3,131
-953
-657
-566
-799
-1,110
2,936
5,140
2,665
6,394
-3,026
-793
-677
7,161
7,291
-8,639
-4,198
-1,640
-2,447
-2,170
-494
913
593
205
187
84
41
44
45
58
1. Seasonal factors are no longer calculated for lines 6, 10, 12-16, 18-20, 22-34,
and 38-41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing; military
exports are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(Department of Commerce).
A54
3.11
International Statistics • July 1985
U.S. FOREIGN TRADE
Millions of dollars; monthly data are seasonally adjusted.
1984
Item
1981
Sept.
1 EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments
233,677
1985
1983
1982
212,193
Oct.
18,210
200,486
Nov.
18,411
Dec.
18,395
Jan.
19,142
Mar.
Feb.
19,401
17,853
18,446
2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded
warehouses
261,305
243,952
258,048
28,409
26,783
27,331
25,933
28,297
27,985
28,129
3 Trade balance
-27,628
-31,759
-57,562
-10,199
-8,372
-8,936
-6,791
-8,896
-10,131
-9,683
NOTE. The data through 1981 in this table are reported by the Bureau of Census
data of a free-alongside-ship (f.a.s.) value basis—that is, value at the port of
export. Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in
the Census basis trade data; this adjustment has been made for all data shown in
the table. Beginning with 1982 data, the value of imports are on a customs
valuation basis.
The Census basis data differ from merchandise trade data shown in table 3.10,
U.S. International Transactions Summary, for reasons of coverage and timing. On
the export side, the largest adjustments are: (1) the addition of exports to Canada
3.12
not covered in Census statistics, and (2) the exclusion of military sales (which are
combined with other military transactions and reported separately in the "service
account" in table 3.10, line 6). On the import side, additions are made for gold,
ship purchases, imports of electricity from Canada, and other transactions;
military payments are excluded and shown separately as indicated above.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
U.S. RESERVE ASSETS
Millions of dollars, end of period
1984
Type
1981
1985
1983
1982
Nov.
Oct.
Dec.
Jan.
Mar.
Feb.
Apr.
1 Total
30,075
33,958
33,747
34,570
34,727
34,934
34,380
34,272
35,493
35,493
2 Gold stock, including Exchange Stabilization Fund1
11,151
11,148
11,121
11,096
11,096
11,0%
11,095
11,093
11,093
11,091
4,095
5,250
5,025
5,539
5,693
5,641
5,693
5,781
5,973
5,971
5,055
7,348
11,312
11,618
11,675
11,541
11,322
11,097'
11,386
11,382
9,774
10,212
6,289
6,317
6,263
6,656
6,270
6,301
7,041
7,049
3 Special drawing rights2'3
4 Reserve position in International Monetary Fund2
5
Foreign currencies4
3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in SDRs.
4. Valued at current market exchange rates.
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981,5 currencies have been used. The U.S. SDR holdings and reserve position in
the IMF also are valued on this basis beginning July 1974.
3.13
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS
Millions of dollars, end of period
1984
Assets
1981
Nov.
Oct.
1 Deposits
Assets held in custody
2 U.S. Treasury securities1
3 Earmarked gold2
505
328
190
104,680
14,804
112,544
14,716
117,670
14,414
1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. Earmarked gold is valued at $42.22 per fine troy ounce.
1985
1983
1982
-
Dec.
Jan.
Mar.
Feb.
Apr.
270
392
253
244
331
253
348
115,542
14,260
117,433
14,265
118,267
14,265
117,330
14,261
115,179
14,260
113,532
14,264
115,184
14,264
NOTE. Excludes deposits and U.S. Treasury securities held for international
and regional organizations. Earmarked gold is gold held for foreign and international accounts and is not included in the gold stock of the United States.
Summary Statistics
3.14
FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data1
Millions of dollars, end of period
1984
1981
Asset account
1982
1985
1983
Sept.
Oct.
Nov.
Dec.
Jan.'
Feb.
Mar.P
All foreign countries
1 Total, all currencies
? Claims on United States
Parent bank
4 Other banks in United States2
5 Nonbanks2
6 Claims on foreigners
7 Other branches of parent bank
8
Banks
9 Public borrowers
10 Nonbank foreigners
1
11 Other assets
12 Total payable in U.S. dollars
n Claims on United States
14 Parent bank
15 Other banks in United States2
16 Nonbanks2
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
70 Public borrowers
Nonbank foreigners
21
1
22 Other assets
462,847
469,712
477,090
453,711
448,499
452,914
452,205
445,041
452,873
462,098
63,743
43,267
in AT*
91,805
61,666
115,542
82,026
378,954
87,821
150,763
28,197
112,173
358,493
91,168
133,752
24,131
109,442
342,689
96,004
117,668
24,517
107,785
113,789
79,664
13,125
21,000
319,375
92,646
101,567
22,568
102,594
109,292
75,736
12,591
20,965
319,075
90,821
102,258
23,053
102,943
112,815
77,958
13,554
21,303
319,431
91,313
103,050
22,907
102,161
113,435
78,151
13,915
21,369
318,710
94,738
100,307
22,872
100,793
115,501
79,318
13,918
22,265
309,193
87,416
99,806
22,430
99,541
119,003
84,053
13,971
20,979
314,271
89,303
104,278
22,208
98,482
117,960
84,891
13,046
20,023
323,726
95,002
105,210
22,448
101,066
20,150
19,414
18,859
20,547
20,132
20,668
20,060
20,347
19,599
20,412
350,735
361,982
371,508
346,543
340,675
345,511'
349,342'
343,461
351,786
354,579
62,142
42,721
in
90,085
61,010
113,436
80,909
276,937
69,398
122,110
22,877
62,552
259,871
73,537
106,447
18,413
61,474
247,406
78,431
93,332
17,890
60,977
111,291
78,476
12,769
20,046
224,603
75,509
76,566
16,946
55,582
106,651
74,366
12,338
19,947
223,376
73,472
76,915
17,337
55,652
110,442
76,763
13,356
20,323
224,251
74,600
77,0%
17,374
55,181
111,468
77,271
13,745
20,452
227,303
78,300
76,851
17,160
54,992
113,250
78,392
13,719
21,139
219,768
72,391
75,691
16,983
54,703
116,699
83,043
13,692
19,964
224,738
74,367
79,122
16,743
54,506
115,595
83,809
12,744
19,042
228,942
79,241
78,707
16,966
54,028
11,656
12,026
10,666
10,649
10,648
10,818'
10,571'
10,443
10,349
10,042
United Kingdom
23 Total, all currencies
74 Claims on United States
75
Parent bank
76 Other banks in United States2
77
Nonbanks2
7.8 Claims on foreigners
7,9 Other branches of parent bank
30 Banks
31
Public borrowers
32 Nonbank foreigners
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
36 Parent bank
37 Other banks in United States2
38
Nonbanks2
39 Claims on foreigners
40 Other branches of parent bank
41
Banks
47
Public borrowers
Nonbank foreigners
43
157,229
161,067
158,732
147,696
147,562
149,377
144,385
146,130
149,534
150,705
11,823
7,885
27,354
23,017
34,433
29,111
138,888
41,367
56,315
7,490
33,716
127,734
37,000
50,767
6,240
33,727
119,280
36,565
43,352
5,898
33,465
29,333
23,772
1,327
4,234
113,299
37,499
39,133
5,330
31,337
28,952
23,283
1,214
4,455
113,524
37,638
38,696
5,441
31,749
29,502
23,773
1,484
4,245
114,264
37,395
39,262
5,424
32,183
27,731
21,918
1,429
4,384
111,772
37,897
37,443
5,334
31,098
28,783
22,2%
1,540
4,947
112,284
36,367
39,063
5,345
31,509
31,910
25,313
1,561
5,036
112,937
35,381
40,%1
5,306
31,289
29,675
23,250
1,511
4,914
115,889
35,857
40,812
5,186
34,034
6,518
5,979
5,019
5,064
5,086
5,611
4,882
5,063
4,687
5,141
115,188
123,740
126,012
114,358
113,437
114,895
112,809
112,953
116,232
114,122
11,246
7,721
26,761
22,756
99,850
35,439
40,703
5,595
18,113
92,228
31,648
36,717
4,329
19,534
33,756
28,756
(¥¥1
5,UOO
88,917
31,838
32,188
4,194
20,697
28,282
23,323
1,195
3,764
83,082
32,704
27,986
3,879
18,513
27,917
22,825
1,113
3,979
82,456
32,461
27,093
4,063
18,839
28,610
23,378
1,437
3,795
82,971
32,669
27,290
4,094
18,918
26,924
21,551
1,363
4,010
82,889
33,551
26,805
4,030
18,503
27,807
21,960
1,4%
4,351
82,161
31,899
27,465
4,021
18,776
30,945
24,911
1,498
4,536
82,268
31,099
28,523
3,964
18,682
28,839
22,910
1,466
4,463
82,437
31,331
27,982
3,804
19,320
4,092
4,751
3,339
2,994
3,064
3,314
2,9%
2,985
3,019
2,846
1
1
44 Other assets
,
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
47
Parent bank
48
Other banks in United States2
49
Nonbanks2
50 Claims on foreigners
51 Other branches of parent bank
57 Banks
53 Public borrowers
54 Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
1
149,108
145,156
152,083
144,207
138,981
141,610
146,811
141,834
144,665
147,041
46,546
31,643
59,403
34,653
75,309
48,720
98,057
12,951
55,151
10,010
19,945
81,450
18,720
42,699
6,413
13,618
72,868
20,626
36,842
6,093
12,592
76,642
49,707
11,072
15,863
63,545
15,639
30,075
6,119
11,712
71,911
45,641
10,716
15,554
63,031
15,117
30,263
6,057
11,594
75,655
48,202
11,284
16,169
62,024
13,837
30,529
6,075
11,583
77,296
49,449
11,795
16,052
65,598
17,682
30,225
6,089
11,602
76,856
48,892
11,558
16,406
61,204
14,447
29,165
6,151
11,441
76,457
50,044
11,539
14,864
64,408
16,330
30,832
6,070
11,176
78,836
53,936
10,715
14,185
64,389
15,780
31,433
6,305
10,871
4,505
4,303
3,906
4,020
4,039
3,931
3,917
3,774
3,810
3,816
143,743
139,605
145,641
138,307
133,002
136,211
141,562
137,090
139,543
141,543
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
2. Data for assets vis-a-vis other banks in the United States and vis-a-vis
nonbanks are combined for dates before June 1984.
A56
3.14
International Statistics • July 1985
Continued
1984
1985
Liability account
Sept.
Oct.
Nov.
Dec.
Jan.'
Feb.
Mar.P
All foreign countries
57 Total, all currencies
462,847
469,712
477,090
453,711
448,499
452,914
452,205
445,041
452,873
462,098
58 Negotiable CDs3
59 To United States
60 Parent bank
Other banks in United States
61
Nonbanks
62
n.a.
137,767
56,344
19,197
62,226
n.a.
179,015
75,621
33,405
69,989
n.a.
188,070
81,261
29,453
77,356
39,866
146,632
74,655
20,120
51,857
38,520
139,567
74,757
18,937
45,873
37,915
138,498
70,346
18,601
49,551
37,725
146,955
78,111
18,394
50,450
38,804
143,680
75,230
18,112
50,338
41,798
140,903
72,326
17,820
50,757
40,889
145,3%
75,403
18,068
51,925
63 To foreigners
64 Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
305,630
86,396
124,906
25,997
68,331
19,450
270,853
90,191
96,860
19,614
64,188
19,844
269,685
90,615
92,889
18,896
68,845
19,335
245,746
90,426
77,471
21,566
56,283
21,467
248,164
89,492
82,235
19,501
56,936
22,248
253,925
90,681
86,822
20,883
55,539
22,576
246,894
93,206
78,203
20,281
55,204
20,631
241,359
87,722
79,291
19,484
54,862
21,198
249,151
89,872
84,013
19,356
55,910
21,021
253,888
94,564
82,601
20,831
55,892
21,925
69 Total payable in U.S. dollars
364,447
379,270
388,291
363,876
356,601
361,875
365,859
357,853
366,043
369,049
70 Negotiable CDs 3
71 To United States
72 Parent bank
73 Other banks in United States
74 Nonbanks
n.a.
134,700
54,492
18,883
61,325
n.a.
175,528
73,295
33,040
69,193
n.a.
184,305
79,035
28,936
76,334
37,629
142,111
71,883
19,457
50,771
36,102
135,2%
72,246
18,283
44,767
35,608
134,303
67,821
18,052
48,430
35,227
142,943
75,626
17,920
49,397
36,295
139,811
72,892
17,574
49,345
39,544
137,142
70,072
17,290
49,780
38,197
141,031
72,%2
17,509
50,560
75 To foreigners
76 Other branches of parent bank
77
Banks
78
Official institutions
79 Nonbank foreigners
80 Other liabilities
217,602
69,299
79,594
20,288
48,421
12,145
192,510
72,921
57,463
15,055
47,071
11,232
194,139
73,522
57,022
13,855
51,260
9,847
173,610
73,412
42,772
16,850
40,576
10,526
174,107
72,204
46,227
14,850
40,826
11,0%
180,841
74,552
50,509
16,068
39,712
11,123
177,638
77,222
45,131
15,773
39,512
10,051
171,479
72,648
44,948
14,861
39,022
10,268
178,745
74,926
48,734
14,653
40,432
10,612
179,590
79,027
44,812
16,049
39,702
10,231
United Kingdom
157,229
161,067
158,732
147,696
147,562
149,377
144,385
146,130
149,534
150,705
n.a.
38,022
5,444
7,502
25,076
n.a.
53,954
13,091
12,205
28,658
n.a.
55,799
14,021
11,328
30,450
36,600
27,280
16,130
3,451
7,699
34,948
26,558
16,598
3,388
6,572
34,269
25,338
15,116
3,002
7,220
34,413
25,250
14,651
3,110
7,489
35,455
27,757
16,714
3,556
7,487
38,281
23,439
13,763
2,936
6,740
37,350
23,992
14,509
2,913
6,570
87 To foreigners
88 Other branches of parent bank
Banks
89
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
112,255
16,545
51,336
16,517
27,857
6,952
99,567
18,361
44,020
11,504
25,682
7,546
95,847
19,038
41,624
10,151
25,034
7,086
75,901
21,536
28,996
10,625
14,744
7,915
77,985
21,023
32,436
9,650
14,876
8,071
81,217
20,846
34,739
10,505
15,127
8,553
77,424
21,631
30,436
10,154
15,203
7,298
75,039
20,199
31,216
9,084
14,540
7,879
80,188
22,146
33,789
9,374
14,879
7,626
80,712
23,699
31,993
10,305
14,715
8,651
93 Total payable in U.S. dollars
119,287
81 Total, all currencies
82 Negotiable CDs3
83 To United States
84 Parent bank
85
Other banks in United States
86 Nonbanks
120,277
130,261
131,167
119,337
118,103
117,497
117,198
120,623
117,984
94- Negotiable CDs3
95 To United States
% Parent bank
Other banks in United States
97
98 Nonbanks
n.a.
37,332
5,350
7,249
24,733
n.a.
53,029
12,814
12,026
28,189
n.a.
54,691
13,839
11,044
29,808
35,398
25,763
15,679
3,131
6,953
33,703
25,178
16,209
3,144
5,825
33,168
24,024
14,748'
2,786'
6,490
33,070
24,105
14,339
2,%5
6,801
34,084
26,587
16,349
3,407
6,831
37,033
22,386
13,506
2,792
6,088
35,719
22,481
14,129
2,733
5,619
99 To foreigners
100 Other branches of parent bank
101
Banks
102 Official institutions
103 Nonbank foreigners
104 Other liabilities
79,034
12,048
32,298
13,612
21,076
3,911
73,477
14,300
28,810
9,668
20,699
3,755
73,279
15,403
29,320
8,279
20,277
3,197
54,590
18,175
16,015
9,375
11,025
3,586
55,482
17,600
18,309
8,306
11,267
3,740
58,163
17,562
20,262
9,072
11,267
3,932
56,923
18,294
18,356
8,871
11,402
3,399
52,954
16,940
17,889
7,748
10,377
3,563
57,654
18,772
20,022
7,854
11,006
3,550
56,327
20,127
17,191
8,734
10,275
3,457
Bahamas and Caymans
149,108
145,156
152,083
144,207
138,981
141,610
146,811
141,834
144,665
147,041
106 Negotiable CDs3
107 To United States
108 Parent bank
109 Other banks in United States
110 Nonbanks
n.a.
85,759
39,451
10,474
35,834
n.a.
104,425
47,081
18,466
38,878
n.a.
111,299
50,980
16,057
44,262
788
100,311
41,693
15,459
43,159
878
95,249
42,851
14,167
38,231
898
95,975
40,517
14,187
41,271
615
102,955
47,161
13,938
41,855
734
98,466
43,783
13,320
41,363
953
99,199
43,356
13,591
42,252
779
103,099
45,444
13,959
43,696
111 To foreigners
112 Other branches of parent bank
113 Banks
114 Official institutions
115 Nonbank foreigners
116 Other liabilities
60,012
20,641
23,202
3,498
12,671
3,337
38,274
15,796
10,166
1,967
10,345
2,457
38,445
14,936
11,876
1,919
11,274
2,339
40,213
15,283
11,978
3,028
9,924
2,895
39,872
14,823
13,068
2,211
9,770
2,982
41,764
16,455
13,993
2,376
8,940
2,973
40,320'
16,782
12,405
2,054
9,079
2,921
39,785
16,014
12,274
2,020
9,477
2,849
41,529
17,111
12,976
1,992
9,450
2,984
40,305
16,744
12,503
1,884
9,174
2,858
145,284
141,908
148,278
140,531
135,326
137,874
143,590
138,200
140,972
143,223
105 Total, all currencies
117 Total payable in U.S. dollars
3. Before June 1984, liabilities on negotiable CDs were included in liabilities to
the United States or liabilities to foreigners, according to the address of the initial
purchaser.
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1984
Item
1982
Sept/
1 Total1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States2
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities5
By area
Western Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries6
Oct/
Nov/
Dec/
Jan.
Feb.
Mar.P
172,718
177,950
173,583
176,258
178,468
180,640
176,828
173,334
169,703
24,989
46,658
25,534
54,341
24,146
54,627
26,934
55,780
25,986
59,570
26,197
59,976
23,310
56,662
23,420
52,474
22,910
54,685
67,733
8,750
24,588
68,514
7,250
22,311
68,530
5,800
20,480
67,678
5,800
20,066
67,076
5,800
20,036
68,995
5,800
19,672
71,522
5,800
19,534
72,846
5,300
19,294
67,560
5,300
19,248
61,298
2,070
6,057
96,034
1,350
5,909
67,645
2,438
6,248
92,572
958
8,089
67,706
1,069
7,067
90,852
896
5,993
68,2%
1,321
8,141
91,916
981
5,603
70,510
1,466
8,904
90,115
1,423
6,050
69,756
1,528
8,645
93,951
1,290
5,470
68,260
1,491
7,450
93,044
1,120
5,463
67,354
1,136
7,278
91,030
1,397
5,139
63,650
1,715
7,501
90,711
1,200
4,926
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable in foreign currencies through 1974) and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies.
3.16
1985
1983
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States.
LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies
Millions of dollars, end of period
1984
Item
1981
1982
1983
Mar.
1 Banks' own liabilities
2 Banks' own claims
3 Deposits
Other claims
4
5 Claims of banks' domestic customers1
1. 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 their domestic customers.
3,523
4,980
3,398
1,582
971
4,844
7,707
4,251
3,456
676
5,219
7,231
2,731
4,501
1,059
5,817
9,034
4,024
5,010
361
June'
6,459
9,687
4,284
5,404
227
Sept/
6,227
9,334
3,685
5,649
281
Dec.
7,501
10,801
3,964
6,837
569
NOTE. Data on claims exclude foreign currencies held by U.S. monetary
authorities,
A58
3.17
International Statistics • July 1985
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States
Millions of dollars, end of period
1984
Holder and type of liability
1981A
1982
1985
1983
Sept.
Oct.
Nov.'
Dec.
Jan.'
Feb.
Mar.P
1 All foreigners
243,889
307,056
369,607
398,894'
388,894'
399,681
406,381
398,987
405,432
413,064
2 Banks' own liabilities
3 Demand deposits
4 Time deposits1
3 Other2
6 Own foreign offices3
163,817
19,631
29,039
17,647
97,500
227,089
15,889
68,797
23,184
119,219
279,087
17,470
90,632
25,874
145,111
300,028'
17,209'
111,922'
22,170'
148,727'
290,184'
16,490
109,608'
24,441'
139,645'
297,857
18,351
112,218
23,684
143,604
306,758
19,542
110,235
26,332
150,650
301,398
17,975
114,145
23,542
145,736
311,838
19,369
116,956
25,511
150,001
316,936
18,174
119,434
24,770
154,558
80,072
55,315
79,967
55,628
90,520
68,669
98,866
73,160
98,710'
73,295
101,824
76,531
100,074
75,838
97,588
73,635
93,595
69,189
96,128
71,552
18,788
5,970
20,636
3,702
17,467
4,385
20,833
4,873
20,281
5,135'
19,703
5,590
18,775
5,460
18,141
5,812
18,029
6,377
18,099
6,477
2,721
4,922
5,957
6,279
4,801
5,852
4,083
6,929
5,812
5,900
638
262
58
318
1,909
106
1,664
139
4,632
297
3,584
750
3,305
209
2,526
570
2,053
144
1,513
396
2,779
354
2,114
311
1,644
263
1,093
288
3,571
417
2,682
472
2,092
341
936
815
2,328
191
1,483
654
2,083
541
3,013
1,621
1,325
463
2,975
1,834
2,748
1,455
3,073
1,448
2,440
916
3,358
1,921
3,719
2,258
3,572
2,082
1,542
0
1,392
0
862
0
1,140
0
1,292
0
1,604
21
1,524
0
1,429
8
1,461
1
1,490
0
7 Banks' custody liabilities4
8 U.S. Treasury bills and certificates5
9 Other negotiable and readily transferable
instruments6
10 Other
11 Nonmonetary international and regional
organizations7
12 Banks' own liabilities
13 Demand deposits
14 Time deposits1
15 Other2
16 Banks' custody liabilities4
17 U.S. Treasury bills and certificates
18 Other negotiable and readily transferable
instruments6
19 Other
8
20 Official institutions
79,126
71,647
79,876
78,77V
82,714'
85,556
86,173
79,972
75,894
77,594
21 Banks' own liabilities
22 Demand deposits
23 Time deposits'
24 Other2
17,109
2,564
4,230
10,315
16,640
1,899
5,528
9,212
19,427
1,837
7,318
10,272
16,382'
1,969
7,866'
6,547'
19,247
1,725
8,677'
8,846'
18,790
2,133
9,457
7,201
19,065
1,823
9,391
7,852
16,970
1,780
8,371
6,818
17,249
1,881
8,687
6,681
16,696
1,923
8,471
6,301
25 Banks' custody liabilities4
26
U.S. Treasury bills and certificates5
27 Other negotiable and readily transferable
instruments6
28 Other
62,018
52,389
55,008
46,658
60,448
54,341
62,391
54,627
63,467'
55,780
66,766
59,570
67,108
59,976
63,002
56,662
58,645
52,474
60,898
54,685
9,581
47
8,321
28
6,082
25
7,746
18
7,626
61'
7,010
186
7,038
94
6,277
63
6,086
85
6,109
105
29 Banks9
136,008
185,881
226,887
246,251'
233,555'
239,806
248,360
241,515
250,399
257,439
30 Banks' own liabilities
Unaffiliated foreign banks
31
32
Demand deposits
33
Time 2deposits1
34
Other
33 Own foreign offices3
124,312
26,812
11,614
8,720
6,477
97,500
169,449
50,230
8,675
28,386
13,169
119,219
205,347
60,236
8,759
37,439
14,038
145,111
221,359'
72,632'
8,464'
49,780'
14,388'
148,727'
209,431'
69,786'
8,389
46,770
14,627
139,645'
214,240
72,635
9,430
47,717
15,488
143,604
225,512
74,862
10,526
47,059
17,278
150,650
218,980
73,244
9,030
48,612
15,602
145,736
228,040
78,038
9,656
50,986
17,396
150,001
235,006
80,448
9,152
54,280
17,016
154,558
36 Banks' custody liabilities4
37
U.S. Treasury bills and certificates
Other negotiable and readily transferable
38
instruments6
39 Other
11,696
1,685
16,432
5,809
21,540
10,178
24,892
12,234
24,124
11,828
23,566
11,409
22,848
10,927
22,535
10,933
22,360
10,493
22,433
10,602
4,400
5,611
7,857
2,766
7,485
3,877
8,421
4,236
7,802
4,494
7,360
4,797
7,156
4,766
6,487
5,114
6,215
5,651
6,206
5,625
40 Other foreigners
26,035
44,606
56,887
67,591'
67,824
68,467
68,215
70,571
73,328
72,131
41 Banks' own liabilities
42 Demand deposits
43 Time deposits
44 Other2
21,759
5,191
16,030
537
39,092
5,209
33,219
664
49,680
6,577
42,290
813
58,983'
6,567
51,750'
665
59,453
6,232
52,648
573
60,048
6,433
52,930
685
60,537
6,930
52,693
914
61,877
6,747
54,481
650
64,457
7,491
56,347
619
62,907
6,909
55,199
799
4,276
699
5,514
1,540
7,207
3,686
8,609
4,465
8,372
4,232
8,419
4,103
7,678
4,020
8,693
4,118
8,871
3,964
9,224
4,182
3,265
312
3,065
908
3,038
483
3,525
619
3,560
580
3,730
586
3,058
601
3,948
628
4,267
640
4,294
748
10,747
14,307
10,346
11,048
10,714
10,437
10,476
9,287
9,168
9,412
45 Banks' custody liabilities4
46
U.S. Treasury bills and certificates
47
Other negotiable and readily transferable
instruments6
48
Other
49 MEMO: Negotiable time certificates of
deposit in custody for foreigners
A Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
1. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due to head office or parent foreign bank, and
foreign branches, agencies or wholly owned subsidiaries of head office or parent
foreign bank.
4. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments, and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
3.17
Data
Continued
1985
1984
Area and country
1981A
1982
1983
Sept.
1 Total
2 Foreign countries
3 Europe
4 Austria
5 Belgium-Luxembourg
6 Denmark
7 Finland
8 France
9 Germany
10 Greece
11 Italy
17 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia
21 Other Western Europe1
22 U.S.S.R
23 Other Eastern Europe2
243,889
307,056
369,607
398,894'
Oct.
388,894'
Nov.
399,681'
Dec.
Jan.
Feb.
Mar.?
406,831
398,987'
405,432
413,064
399,621
407,164
152,319
625
4,638
545
789
12,430
3,258
583
9,148
4,622
1,647
614
1,887
1,551
31,542
501
70,219
602
6,628
60
431
151,967
670
4,890
452
804
12,768
2,920
730
8,297
4,929
1,889
715
2,072
1,667
30,441
518
70,720
671
6,203
94
518
241,168
302,134
363,649
392,615'
384,094'
393,829'
402,748
392,057'
91,275
596
4,117
333
296
8,486
7,645
463
7,267
2,823
1,457
354
916
1,545
18,716
518
28,286
375
6,541
49
493
117,756
519
2,517
509
748
8,171
5,351
537
5,626
3,362
1,567
388
1,405
1,390
29,066
296
48,172
499
7,006
50
576
138,072
585
2,709
466
531
9,441
3,599
520
8,462
4,290
1,673
373
1,603
1,799
32,246
467
60,683
562
7,403
65
596
147,282'
693
4,278
341
638
11,554'
3,036
567
8,266
5,239
1,912
434
1,984
2,008
33,015'
320
65,456'
514
6,247
41
738
146,308'
744
4,093
337
407
11,641
3,331
609
8,976
4,421
1,895
540
1,905
1,945
32,461
557
65,280'
579
6,062
50
476
150,659'
627
3,613
434
487
11,935
3,425'
602
11,056
5,077
1,693
552
1,873
1,839
31,494
457
67,964'
565
6,429'
54
481
152,395
615
4,114
438
418
12,701
3,353
699
10,757
4,799
1,548
597
2,082
1,676
31,054
584
68,553
602
7,184
79
542
149,264'
734
4,000'
452
425
11,908
3,586'
615
9,477'
4,663
1,712'
570
2,016
2,133
31,397
495
68,039'
545
5,855
66
575'
24 Canada
10,250
12,232
16,026
17,536
16,767
16,549
16,048
16,233
18,163
17,297
7,5 Latin America and Caribbean
26 Argentina
77 Bahamas
78 Bermuda
79 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala
36 Jamaica
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41 Uruguay
47 Venezuela
43 Other Latin America and Caribbean
85,223
2,445
34,856
765
1,568
17,794
664
2,993
9
434
479
87
7,235
3,182
4,857
694
367
4,245
2,548
114,163
3,578
44,744
1,572
2,014
26,381
1,626
2,594
9
455
670
126
8,377
3,597
4,805
1,147
759
8,417
3,291
140,088
4,038
55,818
2,266
3,168
34,545
1,842
1,689
8
1,047
788
109
10,392
3,879
5,924
1,166
1,244
8,632
3,535
152,267'
4,375'
58,441'
3,158'
4,462'
35,996'
1,874
1,957
8
931
810
180
12,869
4,179
6,811
1,343
1,418
9,615
3,839
145,799'
4,484
52,838'
3,043
4,729'
34,485'
2,052
2,022
8
924
855
122
12,488'
4,187
6,585'
1,297'
1,361
10,367
3,952
149,794'
4,558'
55,470'
3,222
4,997'
34,385'
2,063'
2,057
8
1,029
884
110
13,422
4,180
6,847
l,2W
1,309
10,013
4,03c
153,985
4,424
56,955
2,370
5,332
36,949
2,001
2,514
10
1,092
896
183
12,695
4,153
6,928
1,247
1,394
10,545
4,297
151,229'
4,523
55,398'
2,706'
4,92C
35,269'
1,948'
2,356
26
912
920
157
13,298'
4,346
6,873'
1,151'
1,485
10,667
4,275
154,716
4,361
56,783
3,453
6,143
35,157
1,916
2,453
8
981
915
182
13,015
4,662
7,156
1,063
1,413
10,742
4,311
157,523
4,528
59,471
2,907
4,595
36,536
1,891
2,529
7
1,024
950
163
13,246
4,579
7,482
1,132
1,443
10,641
4,401
44
49,822
48,716
58,570
66,457'
66,033'
66,952'
71,139
66,536'
65,260
71,740
158
2,082
3,950
385
640
592
20,750
2,013
874
534
12,992
4,853
203
2,761
4,465
433
857
606
16,078
1,692
770
629
13,433
6,789
249
4,051
6,657
464
997
1,722
804'
5,098'
6,236
616
1,344'
2,017
19,644
1,552
1,097
980
13,890
12,755'
844
5,142'
6,535
606
893'
1,023
20,750
1,609
1,252
1,458
13,399'
13,442'
1,153
4,975
7,240
507
1,033
1,268
980
5,312
6,927
740
1,052
941
22,724
24,177
1,691
1,396
1,257
16,804
12,886
1,075'
5,098
6,558'
554
1,136
1,003
21,662
1,560'
1,327'
1,161
15,965'
9,437'
1,068
5,231
6,648
725
914
995
1,648
1,234
747
12,976
9,748
803'
5,042'
7,037'
644
939
750
21,310
1,572
1,020
741
13,754
12,844
1,623
1,124
1,062
15,202
7,945
1,525
1,102
1,383
16,398
11,203
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries4
63 Other Africa
3,180
360
32
420
26
1,395
946
3,124
432
81
292
23
1,280
1,016
2,827
671
84
449
87
620
917
3,018
629
136
318
148
821
966
3,343'
763
115
459
141
1,012'
852
3,599'
739
117
460
163
1,141'
978
3,506
757
118
328
153
1,189
961
3,17C
541'
115
376
76
1,186'
876'
3,573
649
121
371
79
1,450
904
3,476
715
167
244
100
1,346
903
64 Other countries
65 Australia
66 All other
1,419
1,223
196
6,143
5,904
239
8,067
7,857
210
6,055
5,687
368
5,844
5,464
379
6,277
5,598
679
5,674
5,290
384
5,624'
5,248'
377'
5,589
5,024
565
5,161
4,747
414
67 Nonmonetary international and regional
organizations
International
Latin American regional
Other regional5
2,721
1,661
710
350
4,922
4,049
517
357
5,957
5,273
419
265
6,279
5,411
488
381
4,801
4,086
518
1%
5,852'
5,055
593
204'
4,083
3,376
587
120
6,929
6,165
600
165
5,812
4,935
580
296
5,900
5,127
632
141
45
46
47
48
49
50
51
57
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries3
Other Asia
68
69
70
• Liabilities and claims of banks in the United States were increased, beginning
in December 1981, by the shift from foreign branches to international banking
facilities in the United States of liabilities to, and claims on, foreign residents.
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
18,079
20,929
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A59
A60
3.18
International Statistics • July 1985
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1984
Area and country
1985
1981A
1982
1 Total
251,589
355,705
391,312
393,92*
383,489'
384,634'
398,722
386,911'
392,589
394,581
2 Foreign countries
251,533
355,636
391,148
393,85Y
382,807'
384,072'
398,048
385,986'
392,289
394,361
49,262
121
2,849
187
546
4,127
940
333
5,240
682
384
529
2,095
1,205
2,213
424
23,849
1,225
211
377
1,725
85,584
229
5,138
554
990
7,251
1,876
452
7,560
1,425
572
950
3,744
3,038
1,639
560
45,781
1,430
368
263
1,762
91,927
401
5,639
1,275
1,044
8,766
1,284
476
9,018
1,267
690
1,114
3,573
3,358
1,863
812
47,364
1,718
477
192
1,598
98,168''
572
6,286
1,057
882
9,084r
1,220
1,086
7,803
1,470
649
1,387
3,355
2,5%
1,741
1,132
53,681'
1,888
660
176
1,442
95,415'
521
5,363
544
887
8,812'
1,097
929
7,820
1,190
676
1,346
3,189
2,362
2,067
1,121'
53,348'
1,868
660
159
1,454
97,930'
532
4,988
520
1,098
9,299
1,261
819
8,854
1,229
602
1,262
3,017
2,313
2,275
1,097
54,637'
1,866
625
169
1,467
97,%2
433
4,794
648
898
9,085
1,305
817
9,079
1,351
675
1,243
2,884
2,220
2,201
1,130
55,184
1,886
5%
142
1,391
%,044'
339
4,683
589
817
8,617
1,001'
896
8,040
1,480
651
1,212'
2,858'
2,497
2,308
1,232
54,843'
1,862
671'
118
1,329'
97,994
367
5,097
589
907
9,601
944
840
8,481
1,490
808
1,286
3,134
2,586
2,106
1,155
54,618
1,783
683
208
1,310
101,0%
469
5,225
633
829
9,820
1,064
847
8,423
1,342
625
1,156
2,970
2,335
1,917
1,220
58,006
1,793
646
400
1,375
1983
Sept.
3 Europe
4 Austria
5 Belgium-Luxembourg
6 Denmark
7 Finland
8 France
9 Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia
21
Other Western Europe1
22 U.S.S.R
23 Other Eastern Europe2
24 Canada
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.P
9,193
13,678
16,341
16,549'
16,634
15,778
16,057
16,343
19,080
16,854
25 Latin America and Caribbean
26 Argentina
27
Bahamas
Bermuda
28
29 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala3
36 Jamaica3
37
Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41
Uruguay
42 Venezuela
43
Other Latin America and Caribbean
138,347
7,527
43,542
346
16,926
21,981
3,690
2,018
3
1,531
124
62
22,439
1,076
6,794
1,218
157
7,069
1,844
187,969
10,974
56,649
603
23,271
29,101
5,513
3,211
3
2,062
124
181
29,552
839
10,210
2,357
686
10,643
1,991
205,491
11,749
59,633
566
24,667
35,527
6,072
3,745
0
2,307
129
215
34,802
1,154
7,848
2,536
977
11,287
2,277
203,026'
11,108
55,216
508
26,140
36,007'
6,836
3,438
0
2,365
120
225
35,602
1,2%
7,639
2,397
934
10,982
2,211'
198,372
11,014
52,006
551
26,146
34,871'
6,795
3,343
0
2,452
141
234
35,364
1,337
7,540
2,416
%2
11,029
2,170'
199,058
10,983
54,084
635
26,275
33,727'
6,703
3,406
0
2,431
148
222
35,288
1,337
7,360
2,358
990
10,994
2,118'
207,577
11,043
58,027
592
26,307
38,105
6,839
3,499
0
2,420
158
252
34,697
1,350
7,707
2,384
1,088
11,017
2,091
199,378'
11,453
54,369'
596'
25,886
35,358'
6,746
3,369
0
2,477
154
242'
34,021'
1,273
6,864
2,414
1,053
10,%8
2,135
200,139
11,200
54,931
428
26,146
36,806
6,713
3,406
1
2,489
157
253
33,654
1,393
6,200
2,337
1,021
10,929
2,074
203,403
11,347
57,355
456
26,076
37,119
6,790
3,315
0
2,455
154
233
33,366
1,284
7,082
2,321
1,016
10,903
2,131
44 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries4
Other Asia
49,851
60,952
67,837
66,006
62,356
61,398
66,380
64,387'
65,354
63,376
107
2,461
4,132
123
352
1,567
26,797
7,340
1,819
565
1,581
3,009
214
2,288
6,787
222
348
2,029
28,379
9,387
2,625
643
3,087
4,943
292
1,908
8,489
330
805
1,832
30,354
9,943
2,107
1,219
4,954
5,603
563
1,651
7,139
354
886
1,802
30,601
9,586
2,578
1,113
4,506
5,227
409
1,588
7,155
302
821
1,890
26,862
9,253
2,510
1,072
4,650
5,844
543
1,679
6,945
381
797
1,938
26,421
8,8%
2,487
1,112
4,687
5,512
710
1,849
7,368
425
734
2,088
29,059
9,285
2,550
1,125
5,054
6,133
507
1,745
6,801
299
710
1,993
28,495
8,799'
2,499
1,123
5,004
6,411'
741
1,827
7,351
354
780
2,041
29,110
8,7%
2,560
1,076
4,856
5,860
660
1,940
6,639
284
790
1,622
28,092
9,2%
2,435
1,004
4,722
5,893
57 Africa
58
Egypt
59 Morocco
South Africa
60
61
Zaire
62 Oil-exporting countries5
63
Other
3,503
238
284
1,011
112
657
1,201
5,346
322
353
2,012
57
801
1,802
6,654
747
440
2,634
33
1,073
1,727
6,830
650
545
3,152
18
944
1,522
6,862
674
582
3,140
18
938
1,510
6,719
693
536
2,960
19
911
1,600
6,615
728
583
2,795
18
842
1,649
6,536
668
552
2,791
41
812
1,672
6,375
584
582
2,666
29
791
1,724
6,198
674
582
2,400
24
874
1,645
64 Other countries
65
Australia
66
All other
1,376
1,203
172
2,107
1,713
394
2,898
2,256
642
3,274
2,673
601
3,169
2,508
661
3,189
2,487
702
3,456
2,778
678
3,297
2,593
704
3,348
2,635
713
3,435
2,757
678
56
68
164
71
681
562
674
925
300
220
45
46
47
48
49
50
51
52
53
54
55
56
67 Nonmonetary international and regional
organizations6
• Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
NOTE. Data for period before April 1978 include claims of banks' domestic
customers on foreigners.
Nonbank-Reported
3.19
Data
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States
Payable in U.S. Dollars
Millions of dollars, end of period
1984
Type of claim
1981A
1982
1985
1983
Sept/
Oct/
Nov/
383,489
61,367
143,631
120,879
46,787
74,092
57,612
384,634
61,443
144,809
120,890
45,788
75,102
57,492
Dec.
1 Total
287,557
396,015
426,215
428,461
2
3
4
5
6
7
8
251,589
31,260
96,653
74,704
23,381
51,322
48,972
355,705
45,422
127,293
121,377
44,223
77,153
61,614
391,312
57,569
146,393
123,837
47,126
76,711
63,514
393,924
59,617
152,055
122,477
47,367
75,110
59,775
35,968
1,378
40,310
2,491
34,903
2,969
34,537
4,575
32,916
3,380
26,352
30,763
26,064
23,907
23,805
8,238
7,056
5,870
6,055
5,732
29,952
38,153
37,715
38,536
36,575
40,369
42,499
45,856
44,201
Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices1
Unaffiliated foreign banks
Deposits
Other
All other foreigners
9 Claims of banks' domestic customers2 ..
Jan.
Feb.
Mar.?
386,911
61,364
153,586
116,903
45,070
71,832
55,058
392,589
61,712
154,004
121,486
47,688
73,798
55,387
394,581
61,374
156,476
121,371
49,841
71,529
55,360
431,639
398,722
61,371
156,497
123,775
48,112
75,663
57,080
11 Negotiable and readily transferable
12 Outstanding collections and other
13 MEMO: Customer liability on
Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4
1. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due from head office or parent foreign bank,
and foreign branches, agencies, or wholly owned subsidiaries of head office or
parent foreign bank.
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 account
of their domestic customers.
3. Principally negotiable time certificates of deposit and bankers acceptances.
3.20
43,007
44,152
40,129'
41,921'
39,955
n.a.
4. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see July 1979 BULLETIN,
p. 550.
• Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
NOTE. Beginning April 1978, data for banks' own claims are given on a monthly
basis, but the data for claims of banks' own domestic customers are available on a
quarterly basis only.
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1984
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of 1 year or less1
Foreign public borrowers
All other foreigners
Maturity of over 1 year1
Foreign public borrowers
All other foreigners
By area
Maturity of 1 year or less1
Europe
Canada
Latin America and Caribbean
Africa
All other2
Maturity of over 1 year1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other2
1981A
1983
Mar.'
June'
Sept.
Dec.
154,590
228,150
243,715
238,829
249,904
240,595'
243,049
116,394
15,142
101,252
38,197
15,589
22,608
173,917
21,256
152,661
54,233
23,137
31,095
176,158
24,039
152,120
67,557
32,521
35,036
163,582
20,436
143,146
75,247
36,320
38,927
172,474
21,066
151,407
77,430
37,747
39,683
162,863'
21,059
141,804'
77,731'
38,410
39,321'
165,200
22,076
143,124
77,849
39,620
38,229
28,130
4,662
48,717
31,485
2,457
943
50,500
7,642
73,291
37,578
3,680
1,226
56,117
6,211
73,660
34,403
4,199
1,569
54,393
6,509
65,673
31,206
4,472
1,330
59,924
6,959
65,136
34,012
4,790
1,652
56,773'
5,841'
61,479
32,252
4,798
1,720
58,170
5,978
60,692
33,450
4,442
2,468
8,100
1,808
25,209
1,907
900
272
11,636
1,931
35,247
3,185
1,494
740
13,576
1,857
43,888
4,850
2,286
1,101
13,324
2,038
51,238
5,150
2,291
1,206
12,778
2,203
54,249
5,098
1,865
1,237
l l ^
1,801
56,568'
5,106
1,857
1,150
9,590
1,890
57,834
5,386
2,033
1,116
• Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
1982
1. Remaining time to maturity,
2. Includes nonmonetary international and regional organizations,
A61
A62
3.21
International Statistics • July 1985
CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks'
Billions of dollars, end of period
1982
Area or country
1 Total
1980
1983
1984
1981
Dec.
Mar.
June
Sept.
Dec.
Mar.
June7
Sept.
Dec.P
352.0
415.2
438.7
443.7
439.9
431.0
437.3
434.2
429.2
409.7
407.6
162.1
13.0
14.1
12.1
8.2
4.4
2.9
5.0
67.4
8.4
26.5
175.5
13.3
15.3
12.9
9.6
4.0
3.7
5.5
70.1
10.9
30.2
179.7
13.1
17.1
12.7
10.3
3.6
5.0
5.0
72.1
10.4
30.2
182.5
13.8
17.1
13.4
10.2
4.3
4.3
4.5
73.4
12.5
29.0
177.1
13.3
17.1
12.6
10.5
4.0
4.7
4.8
70.8
10.8
28.5
168.8
12.6
16.2
11.6
9.9
3.6
4.9
4.2
67.8
8.9
29.0
168.0
12.4
16.3
11.3
11.4
3.5
5.1
4.3
65.4
8.3
29.9
166.1
11.0
15.9
11.7
11.2
3.4
5.2
4.3
65.1
8.6
29.8
157.8
10.8
14.3
11.0
11.5
3.0
4.3
4.2
60.2
8.9
29.5
148.1
9.8
14.3
10.0
9.7
3.4
3.5
3.9
57.4
8.1
27.9
147.5
8.8
14.0
9.0
10.1
3.9
3.2
4.0
59.7
7.8
27.1
13 Other developed countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
21 Turkey
22 Other Western Europe
23
South Africa
24 Australia
21.6
1.9
2.3
1.4
2.8
2.6
.6
4.4
1.5
1.7
1.1
1.3
28.4
1.9
2.3
1.7
2.8
3.1
1.1
6.6
1.4
2.1
2.8
2.5
33.7
1.9
2.4
2.2
3.0
3.3
1.5
7.5
1.4
2.3
3.7
4.4
34.0
2.1
3.3
2.1
2.9
3.3
1.4
7.0
1.5
2.3
3.6
4.6
34.5
2.1
3.4
2.1
2.9
3.4
1.4
7.2
1.4
2.0
3.9
4.5
34.3
1.9
3.3
1.8
2.9
3.2
1.4
7.1
1.5
2.1
4.7
4.4
36.1
1.9
3.4
2.4
2.8
3.3
1.5
7.1
1.7
1.8
4.7
5.5
35.7
2.0
3.4
2.1
3.0
3.2
1.4
7.1
1.9
1.8
4.8
5.2
37.1
2.0
3.1
2.3
3.3
3.2
1.7
7.3
2.0
1.9
4.7
5.7
36.3
1.8
2.9
1.9
3.2
3.2
1.6
6.9
2.0
1.7
5.0
6.2
33.8
1.7
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.1
25 OPEC countries2
26
Ecuador
27
Venezuela
28 Indonesia
29 Middle East countries
30 African countries
22.7
2.1
9.1
1.8
6.9
2.8
24.8
2.2
9.9
2.6
7.5
2.5
27.4
2.2
10.5
3.2
8.7
2.8
28.5
2.2
10.4
3.5
9.3
3.0
28.3
2.2
10.4
3.2
9.5
3.0
27.2
2.1
9.8
3.4
9.1
2.8
28.9
2.2
9.9
3.8
10.0
3.0
28.6
2.1
9.7
4.0
9.8
3.0
26.7
2.1
9.5
4.0
8.4
2.7
25.0
2.1
9.2
3.8
7.4
2.5
25.6
2.2
9.3
3.7
8.2
2.3
31 Non-OPEC developing countries
77.4
96.3
107.1
108.1
108.8
109.8
111.6
112.1
112.7
111.9
112.3
7.9
16.2
3.7
2.6
15.9
1.8
3.9
9.4
19.1
5.8
2.6
21.6
2.0
4.1
8.9
22.9
6.3
3.1
24.5
2.6
4.0
9.0
23.2
6.0
2.9
25.1
2.4
4.2
9.4
22.7
5.8
3.2
25.3
2.6
4.3
9.5
23.1
6.3
3.2
25.9
2.4
4.2
9.5
23.1
6.4
3.2
26.1
2.4
4.2
9.5
25.1
6.5
3.1
25.6
2.3
4.4
9.2
25.4
6.7
3.0
26.0
2.3
4.0
9.1
26.3
7.1
2.9
26.1
2.2
3.9
8.7
26.3
7.0
2.9
25.8
2.2
3.9
.2
4.2
.3
1.5
7.1
1.1
5.1
1.6
.6
.2
5.1
.3
2.1
9.4
1.7
6.0
1.5
1.0
.2
5.3
.6
2.3
10.9
2.1
6.3
1.6
1.1
.2
5.1
.7
2.0
10.9
2.5
6.6
1.6
1.4
.2
5.1
.7
2.3
10.9
2.6
6.4
1.8
1.2
.2
5.2
.8
1.7
10.9
2.8
6.2
1.8
1.0
.3
5.3
1.0
1.9
11.3
2.9
6.2
2.2
1.0
.3
4.9
1.0
1.6
11.1
2.8
6.7
2.1
.9
.6
5.3
1.0
1.9
11.2
2.7
6.3
1.9
1.1
.5
5.2
1.1
1.7
10.3
3.0
5.9
1.8
1.0
.7
5.1
1.0
1.8
10.7
2.8
6.0
1.8
1.1
.8
.7
.2
2.1
1.1
.7
.2
2.3
1.2
.7
.1
2.4
1.1
.8
.1
2.3
1.3
.8
.1
2.2
1.4
.8
.1
2.4
1.5
.8
.1
2.3
1.4
.8
.1
2.2
1.4
.8
.1
1.9
1.2
.8
.1
1.9
1.2
.8
.1
2.1
7.4
.4
2.3
4.6
7.8
.6
2.5
4.7
6.2
.3
2.2
3.7
5.7
.3
2.2
3.2
5.8
.4
2.3
3.0
5.3
.2
2.3
2.8
5.3
.2
2.4
2.8
4.9
.2
2.3
2.5
4.9
.2
2.3
2.4
4.5
.2
2.3
2.1
4.5
.1
2.3
2.1
56 Offshore banking centers
57
Bahamas
Bermuda
58
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama4
62
Lebanon
63
Hong Kong
64
Singapore
65
Others5
47.0
13.7
.6
10.6
2.1
5.4
.2
8.1
5.9
.3
63.7
19.0
.7
12.4
3.2
7.7
.2
11.8
8.7
.1
66.8
19.0
.9
12.9
3.3
7.6
.1
13.9
9.2
.0
68.0
18.6
1.0
12.6
3.1
7.1
.1
15.1
10.4
.0
69.3
20.7
.8
12.7
2.6
6.6
.1
14.5
11.2
.0
68.7
21.6
.8
10.5
4.1
5.7
.1
15.2
10.5
.1
70.5
21.8
.9
12.2
4.2
6.0
.1
15.0
10.3
.0
70.5
24.6
.7
11.2
3.3
6.3
.1
14.4
10.0
.0
73.0
27.3
.7
11.3
3.3
6.6
.1
13.5
10.2
.0
66.5
23.7
1.0
10.7
3.1
5.7
.1
12.7
9.5
.0
66.8
21.6
.9
11.7
3.4
6.8
.1
12.5
9.8
.0
66 Miscellaneous and unallocated6
14.0
18.8
17.9
16.9
16.2
16.9
17.0
16.3
17.3
17.3
17.2
2 G-10 countries and Switzerland
3
Belgium-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
39
40
41
42
43
44
45
46
47
48
49
50
51
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Other Latin America
Asia
China
Mainland
Taiwan
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
Africa
Egypt
Morocco
Other Africa
3
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches).
2. Besides the Organization of Petroleum Exporting Countries shown individually, this group includes other members of OPEC (Algeria, Gabon, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well
as Bahrain and Oman (not formally members of OPEC).
3. Excludes Liberia.
4. Includes Canal Zone beginning December 1979.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional organizations.
7. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to ail reporting branches.
Nonbank-Reported
3.22
Data
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States'
Millions of dollars, end of period
1984
1983
Type, and area or country
1980
1981
1982
Dec.
Mar.
Sept.
June
Dec.P
1 Total
29,434
28,618
27,512
25,197
29,481
34,013
30,738''
28,788
2 Payable in dollars
3 Payable in foreign currencies
25,689
3,745
24,909
3,709
24,280
3,232
22,176
3,020
26,243
3,237
30,815
3,198
27,934'
2,804'
25,915
2,873
By type
4 Financial liabilities
5 Payable in dollars
6 Payable in foreign currencies
11,330
8,528
2,802
12,157
9,499
2,658
11,066
8,858
2,208
10,423
8,644
1,779
14,177
12,159
2,018
18,339
16,297
2,043
15,879
14,082
1,797
13,932
12,064
1,868
7 Commercial liabilities
8 Trade payables
9 Advance receipts and other liabilities
18,104
12,201
5,903
16,461
10,818
5,643
16,446
9,438
7,008
14,774
7,765
7,009
15,304
7,893
7,411
15,674
7,897
7,776
14,859'
6,900'
7,959'
14,857
6,990
7,867
17,161
943
15,409
1,052
15,423
1,023
13,533
1,241
14,085
1,219
14,518
1,155
13,852'
1,007'
13,851
1,006
6,481
479
327
582
681
354
3,923
6,825
471
709
491
748
715
3,565
6,501
505
783
467
711
792
3,102
5,691
302
843
492
581
486
2,839
7,087
428
956
514
527
641
3,790
7,230
359
900
561
583
563
4,013
6,679
428
910
521
595
514
3,463
6,798
471
995
489
578
569
3,389
10
11
12
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
964
963
746
764
795
735
825
863
3,136
964
1
23
1,452
99
81
3,356
1,279
7
22
1,241
102
98
2,751
904
14
28
1,027
121
114
2,607
751
13
32
1,018
213
124
4,912
1,419
51
37
2,635
243
121
8,888
3,603
13
25
4,457
237
124
6,780
2,606
11
33
3,250
260
130
4,556
1,423
13
35
2,059
369
137
723
644
38
976
792
75
1,039
715
169
1,332
898
170
1,355
947
170
1,462
1,013
180
1,566
1,085
144
1,682
1,121
147
Africa
Oil-exporting countries3
11
1
14
0
17
0
19
0
19
0
16
0
16
1
14
0
All other4
15
24
12
10
9
9
14
19
4,402
90
582
679
219
499
1,209
3,770
71
573
545
220
424
880
3,831
52
598
468
346
367
1,027
3,245
62
437
427
268
241
732
3,567
40
488
417
259
477
847
3,409
45
525
501
265
246
794
3,961'
34
430
558'
239'
405'
1,133
3,987
48
438
619
245
257
1,082
19
Canada
20
21
77
7,3
24
2.5
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
71
28
29
Asia
Japan
Middle East oil-exporting countries2
30
31
32
33
34
35
36
37
38
39
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
888
897
1,495
1,841
1,776
1,840
1,906'
1,975
1,300
8
75
111
35
367
319
1,044
2
67
67
2
340
276
1,570
16
117
60
32
436
642
1,473
1
67
44
6
585
432
1,807
14
158
68
33
682
560
1,705
17
124
31
5
568
630
1,758
1
110
68
8
641
628
1,871
7
114
124
32
586
636
10,242
802
8,098
9,384
1,094
7,008
8,144
1,226
5,503
6,741
1,247
4,178
6,620
1,291
3,735
6,989
1,235
4,190
5,569'
1,429'
2,364'
5,307
1,256
2,372
Africa
Oil-exporting countries3
817
517
703
344
753
277
553
167
539
243
684
217
597'
251
588
233
All other4
456
664
651
921
995
1,046
1,068'
1,128
40
Canada
41
47,
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
48
49
50
Asia
Japan
Middle East oil-exporting countries2'5
51
52
53
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
International Statistics • July 1985
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1983
Type, and area or country
1981
1980
1984
1982
Dec.
Mar.
June
Sept.
Dec.P
1 Total
34,482
36,185
28,725
34,932
33,645
31,740
30,18y
28,673
2 Payable in dollars
3 Payable in foreign currencies
31,528
2,955
32,582
3,603
26,085
2,640
31,842
3,090
30,755
2,890
28,770
2,970
27,391''
2,792
26,068
2,605
By type
4 Financial claims
3 Deposits
6
Payable in dollars
7
Payable in foreign currencies
8 Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
19,763
14,166
13,381
785
5,597
3,914
1,683
21,142
15,081
14,456
625
6,061
3,599
2,462
17,684
13,058
12,628
430
4,626
2,979
1,647
23,801
18,356
17,859
497
5,445
3,489
1,956
22,781
17,486
17,057
429
5,296
3,506
1,790
21,292
16,124
15,614
510
5,168
3,407
1,761
19,794
15,014
14,574
439
4,781
3,088
1,693
18,108
13,475
13,056
420
4,632
3,182
1,450
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
14,720
13,960
759
15,043
14,007
1,036
11,041
9,994
1,047
11,131
9,721
1,410
10,864
9,540
1,323
10,448
9,105
1,343
10,389'
8,885'
1,503'
10,565
9,084
1,481
14
13
14,233
487
14,527
516
10,478
563
10,494
637
10,193
671
9,749
699
9,729'
659
9,830
735
6,069
145
298
230
51
54
4,987
4,596
43
285
224
50
117
3,546
4,873
15
134
178
97
107
4,064
6,434
37
150
159
71
38
5,767
6,252
30
171
148
57
90
5,548
6,364
37
151
161
158
61
5,543
5,569
15
146
187
62
64
4,863
5,365
15
114
220
66
66
4,486
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
5,036
6,755
4,377
6,166
5,665
5,180
4,419
3,964
24
23
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
7,811
3,477
135
96
2,755
208
137
8,812
3,650
18
30
3,971
313
148
7,546
3,279
32
62
3,255
274
139
10,144
4,745
96
53
4,163
291
134
9,823
3,927
3
87
4,903
279
130
8,469
3,213
5
83
4,348
230
124
8,633
3,255
5
84
4,423
232
128
7,512
2,951
6
100
3,703
215
125
31
32
33
Asia
Japan
Middle East oil-exporting countries2
607
189
20
758
366
37
698
153
15
764
297
4
753
309
7
963
307
8
900
371
7
944
353
37
34
33
Africa
Oil-exporting countries3
208
26
173
46
158
48
147
55
144
42
158
35
160
37
210
85
32
48
31
145
145
158
113
114
5,544
233
1,129
599
318
354
929
5,405
234
776
561
299
431
985
3,826
151
474
357
350
360
811
3,670
135
459
348
334
317
809
3,610
173
413
363
310
336
787
3,555
142
408
443
306
250
812
3,570'
128
411'
370'
303
289
891'
3,805
138
439
374
340
271
1,061
36
37
38
39
40
41
42
43
4
All other
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
914
967
633
829
1,061
933
1,026'
1,020
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
3,766
21
108
861
34
1,102
410
3,479
12
223
668
12
1,022
424
2,526
21
261
258
12
775
351
2,695
8
190
493
7
884
272
2,419
8
216
357
7
745
268
2,042
4
89
310
8
577
241
1,976'
14
88
219
10
595'
245'
1,972
8
115
214
7
583
206
52
53
54
Asia
Japan
Middle East oil-exporting countries2
3,522
1,052
825
3,959
1,245
905
3,050
1,047
751
3,063
1,114
737
2,997
1,186
701
3,085
1,178
710
2,884'
1,08c
703'
3,070
1,180
687
55
56
Africa
Oil-exporting countries3
653
153
772
152
588
140
588
139
497
132
536
128
595'
135
470
134
321
461
417
286
280
297
338
228
57
All other
4
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
3.24
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1984
1985
Transactions, and area or country
1983
1985
1984
Jan.Mar.
Sept.
Nov.
Oct.
Dec.
Jan.
Mar.P
Feb.
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
4,052
4,892
4,657
5,398
4,838
4,746'
4,487
5,049
5,005
5,701
7,102
7,127
6,305
6,721
-1,137
-840
-741
92'
-562
-696
-26
-416
-1,107
-909
-752
81'
-461
-713
-21
-374
-2,986'
-405
-50
-315
-1,490
-658'
1,673
493
-1,998
-372
-23
171
-1,344
-73
-357
-279
-414
-235
213
389
-37
-404
-23
98
-690
-67
-63
-66
-335
-131
149
9
-207
-160
-6
-3
-529
-37
-10
-47
-130
-251
150
-89
-270
-92
-8
87
-90'
-46
11
-15
-34
17'
47
30
-12
74
-8
39
-359
-54
-105
-29
-249
91
134
67
-1%
-91
- 6
-11
-558
-19
-134
-44
-159
-178
46
103
-52
-264
-7
19
-212
-41
-109
-107
-133
131
169
185
-101
-99
-2
40
-574
-13
-113
-128
-122
-188
-2
101
116
-41
-13
39
98
115
-30
69
11
11
-101
17
-5
-43
24,000
23,097
39,341'
26,071'
19,618
9,353
3,356
2,035
6,994
3,060
4,902'
2,556
6,403
2,900
5,937
3,106
8,218
3,649
5,462
2,598
20 Net purchases, or sales ( - )
903
13,269'
10,265
1,321
3,934
2,346'
3,503
2,831
4,570
2,864
21 Foreign countries
888
12,972'
10,239
1,278
3,954
2,13y
3,527
2,835
4,489
2,914
909
-89
344
51
583
434
123
100
-1,161
865
0
52
11,792'
207
1,731
93
644
8,520'
-71
390
-1,011
1,862
1
IC
9,708
29
-199
61
810
8,988
44
208
-335
566
0
48
1,004
8
19
2
9
922
3
64
-19
223
1
3
3,956
143
606
22
253
2,860
-3
42
-232
192
0
0
1,954'
-11
139
-1
159
1,603'
13
44
-45
169
-2
2
3,338
24
184
15
276
2,776
14
78
-179
276
1
0
2,635
55
67
9
12
2,441
59
90
-123
140
0
35
4,142
-17
-153
44
315
4,018
-11
50
-84
337
0
54
2,930
-10
-112
8
483
2,528
-5
69
-127
89
0
-41
15
297
26
43
-20
213
-24
-4
81
-50
69,770
64,360
60,462
63,388'
18,412
19,549
3 Net purchases, or sales ( - )
5,410
—2,926'
4 Foreign countries
5,312
-3,041'
3,979
-97
1,045
-109
1,325
1,799
1,151
529
-808
395
42
24
5
6
7
8
9
10
11
12
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Africa
Other countries
17 Nonmonetary international and
regional organizations
BONDS
2
18 Foreign purchases
19 Foreign sales
22
23
24
25
26
27
28
29
30
31
32
33
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Africa
Other countries
34 Nonmonetary international and
regional organizations
Foreign securities
35 Stocks, net purchases, or sales ( - )
36 Foreign purchases
37
Foreign sales
-3,765
13,281
17,046
-1,077'
14,591'
15,668'
-1,870
4,042
5,911
-340
921
1,261
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
40 Foreign sales
-3,239
36,333
39,572
-3,931'
57,338'
61.27C
-577
16,342
16,919
-482'
4,122
4,604
-318
1,333
1,651
-1,195'
4,527
5,722'
-177
1,147
1,324
-221
1,169
1,390
-781'
1,149'
1,93c
-652
1,562
2,215
-437
1,330
1,767
-578'
6,601
7,179'
-1,159
5,134
6,293
168
5,396'
5,228'
198
5,294
5,0%
-943
5,652
6,594
41 Net purchases, or sales ( - ) , of stocks and bonds
-7,004
-5,008'
-2,446
-822'
-1,513'
-755'
-1,379
—613'
-454
-1,379
42
43
44
45
46
47
48
49
-6,559
-4,619'
-2,685
-886'
-1,477'
-908'
-671
-742'
-754
-1,189
-5,492
-1,328
1,120
-855
141
-144
-8,532
413
2,472'
1,345
-107
—21C
-2,024
-414
162
-549
-33
172
-963'
-198
28
169
-14
92
-1,582'
-68
217
-30
-19
6
-707
-23
207
88
-16
-457'
-1,086
254
104
-115
3
169
-732'
75
194'
-394'
-4
120
-91
-422
-47
-255
64
-1,200
-68
15
100
-26
-11
239
64
153
-709
129
300
-190
Foreign countries
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
Nonmonetary international and
regional organizations
-445
-389
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securi-
-36
-3
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A66
3.25
International Statistics • July 1985
MARKETABLE U.S. TREASURY BONDS AND NOTES
Millions of dollars
Foreign Transactions
1985
Country or area
1984
1985
1984r
1983
Jan.Mar.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.P
Transactions, net purchases or sales ( - ) during period1
1 Estimated total2
3,693
21,412
238
-3,799
2,931
2,197
7,508
2,312
2,319
-4,393
2 Foreign countries2
3,162
16,432
1,212
-1,736
1,092
2,293
5,066
3,797
2,163
-4,748
6,226
-431
2,450
375
170
-421
1,966
2,118
0
699
11,070
289
2,958
454
46
635
5,223
1,465
0
1,526
-984
122
-1,787
-261
141
636
370
-205
0
-277
-718
20
-747
-6
77
99
-313
153
0
288
795
27
-39
458
-1
-172
742
-219
0
237
776
41
36
-7
1
-288
244
748
0
193
1,300
46
336
16
-88
26
716
248
0
249
532
104
-120
-71
150
-35
419
86
0
-92
-81
18
-129
11
-10
358
-342
12
0
-231
-1,435
0
-1,538
-201
1
313
293
-303
0
47
-212
-124
60
-149
-3,535
2,315
3
-17
1,413
14
528
871
2,377
6,062
-67
114
802
-4
134
672
1,530
1,315
3
138
165
3
92
69
-1,475
-18
27
-23
320
1
61
258
-302
851
-1
43
965
7
57
902
369
1,287
-5
-5
380
-10
213
177
3,218
1,585
2
-83
149
5
-2
146
3,093
578
2
113
735
-11
71
674
1,726
559
1
14
-82
2
65
-149
-3,289
177
1
11
535
218
0
4,982
4,612
0
- 9 7 6 -2,063
-833 -2,149
1
0
1,839
1,651
0
-96
-188
0
2,442
2,361
0
-1,485
-1,675
0
154
504
1
355
338
3,162
779
2,382
16,432
481
15,951
1,212
-1,436
2,648
-1,736
-1,968
232
1,092
-852
1,944
2,293
-602
2,895
5,066
1,919
3,147
3,797
2,527
1,270
2,163
1,324
840
-4,748
-5,286
538
-5,419
-1
-6,277
-101
209
0
-144
0
-983
0
-1,284
0
-200
0
27
0
-372
0
554
3 Europe2
4
Belgium-Luxembourg
5 Germany2
Netherlands
6
Sweden
7
8
Switzerland2
9
United Kingdom
10 Other Western Europe
11 Eastern Europe
12 Canada
13 Latin America and Caribbean
14 Venezuela
15 Other Latin America and Caribbean
16 Netherlands Antilles
18 Japan
19 Africa
20 All other
21 Nonmonetary international and regional organizations
22 International
23 Latin American regional
0
MEMO
24 Foreign countries2
25
Official institutions
26 Other foreign2
27
28
Oil-exporting countries
Middle East3
Africa4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
0
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria,
Interest and Exchange Rates
3.26
A67
DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on Apr. 30, 1985
Austria..
Belgium.
Brazil...
Canada..
Denmark
Country
Country
Percent
Month
effective
4.5
June 1984
Feb. 1984
Mar. 1981
Apr. 1985
Oct. 1983
11.0
49.0
10.02
7.0
France1
Germany, Fed. Rep. of
Italy
Japan
Netherlands
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
3.27
Rate on Apr. 30, 1985
Rate on Apr. 30, 1985
Country
Percent
Month
effective
10.25
4.5
15.5
5.0
5.5
Apr. 1985
June 1984
Jan. 1985
Oct. 1983
Feb. 1985
Percent
8.0
4.0
Norway
Switzerland
United Kingdom2.
Venezuela
11.0
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to such
discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
1984
Country, or type
1
2
3
4
5
6
7
8
9
10
1982
1983
1985
1984
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Eurodollars
United Kingdom
Canada
Germany
Switzerland
12.24
12.21
14.38
8.81
5.04
9.57
10.06
9.48
5.73
4.11
10.75
9.91
11.29
5.96
4.35
10.77
10.60
11.99
6.06
5.23
9.50
9.87
11.09
5.92
5.03
8.90
9.74
10.41
5.81
4.96
8.37
11.63
9.70
5.84
5.13
9.05
13.69
10.63
6.13
5.66
9.32
13.52
11.42
6.36
5.77
8.74
12.70
10.15
5.99
5.35
Netherlands
France
Italy
Belgium
Japan
8.26
14.61
19.99
14.10
6.84
5.58
12.44
18.95
10.51
6.49
6.08
11.66
17.08
11.41
6.32
6.16
10.75
17.13
5.87
10.54
17.13
10.81
6.32
5.77
10.66
16.86
10.75
6.33
5.87
10.43
15.82
10.75
6.27
6.90
10.60
15.79
10.75
6.29
7.14
10.71
15.82
10.75
6.30
6.82
10.49
15.15
10.09
6.26
11.00
6.31
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A68 International Statistics • July 1985
3.28
FOREIGN EXCHANGE RATES
Currency units per dollar
1984
Country/currency
1982
1983
1985
1984
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Australia/dollar1
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
China, P.R./yuan
Denmark/krone
101.65
17.060
45.780
179.22
1.2344
1.8978
8.3443
90.14
17.968
51.121
573.27
1.2325
1.9809
9.1483
87.937
20.005
57.749
1841.50
1.2953
2.3308
10.354
85.88
21.075
60.475
2734.16
1.3168
2.6785
10.824
84.00
21.802
62.380
3008.55
1.3201
2.7953
11.126
81.51
22.267
63.455
3346.67
1.3240
2.8160
11.330
73.74
23.190
66.310
3768.17
1.3547
2.8347
11.807
69.70
23.247
66.308
4158.19
1.3840
2.8533
11.797
65.84
21.717
62.283
4511.58
1.3658
2.8480
11.114
8
9
10
11
12
13
14
15
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/pound1
Israel/shekel
4.8086
6.5793
2.428
66.872
6.0697
9.4846
142.05
24.407
5.5636
7.6203
2.5539
87.895
7.2569
10.1040
124.81
55.865
6.0007
8.7355
2.8454
112.73
7.8188
11.348
108.64
n.a.
6.2653
9.1981
2.9985
123.63
7.8235
12.078
103.41
n.a.
6.4563
9.5083
3.1044
127.26
7.8287
12.293
100.37
n.a.
6.6368
9.7036
3.1706
129.38
7.8110
12.612
98.23
n.a.
6.8616
10.093
3.3025
134.73
7.8017
12.922
94.23
n.a.
6.8464
10.078
3.2982
140.62
7.8009
12.861
94.58
n.a.
6.4652
9.4427
3.0946
134.86
7.7902
12.400
101.17
n.a.
16
17
18
19
20
21
22
23
24
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar1
Norway/krone
Philippines/peso
Portugal/escudo
1354.00
249.06
2.3395
72.990
2.6719
75.101
6.4567
8.5324
80.101
1519.30
237.55
2.3204
155.01
2.8543
66.790
7.3012
11.0940
111.610
1756.10
237.45
2.3448
192.31
3.2083
57.837
8.1596
n.a.
147.70
1863.05
243.63
2.4300
210.79
3.3817
49.278
8.7175
n.a.
163.10
1912.52
247.96
2.4164
219.56
3.5035
48.260
8.9805
n.a.
167.31
1948.76
254.18
2.4804
227.56
3.5819
47.040
9.1765
n.a.
172.56
2042.00
260.48
2.5513
236.06
3.7387
45.223
9.4695
n.a.
183.24
2078.50
257.92
2.5734
246.15
3.7290
45.276
9.4608
n.a.
183.98
1975.89
251.84
2.4922
246.57
3.4981
45.520
8.9314
n.a.
174.56
25
26
27
28
29
30
31
32
33
34
35
Singapore/dollar
South Africa/rand1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound1
Venezuela/bolivar
2.1406
92.297
731.93
110.09
20.756
6.2838
2.0327
n.a.
23.014
174.80
4.2981
2.1136
89.85
776.04
143.500
23.510
7.6717
2.1006
n.a.
22.991
151.59
10.6840
2.1325
69.534
807.91
160.78
25.428
8.2706
2.3500
39.633
23.582
133.66
n.a.
2.1554
55.47
818.89
168.10
26.075
8.5957
2.4700
39.419
26.736
123.92
n.a.
2.1732
52.66
825.73
171.98
26.213
8.8614
2.5602
39.509
27.091
118.61
n.a.
2.2011
46.34
832.16
175.13
26.392
9.0716
2.6590
39.209
27.330
112.71
n.a.
2.2557
50.57
839.16
182.35
26.605
9.3364
2.8045
39.228
27.961
109.31
n.a.
2.2582
50.33
850.71
183.13
26.836
9.4135
2.8033
39.542
28.097
112.53
n.a.
2.2199
51.50
861.21
172.85
27.113
8.9946
2.5948
39.728
27.466
123.77
n.a.
116.57
125.34
138.19
144.92
149.24
152.83
158.43
158.14
149.56
1
2
i
4
5
6
7
MEMO
36 United States/dollar2
1. Value in U.S. cents.
2. Index of weighted-average exchange value of U.S. dollar against currencies
of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76
global trade of each of the 10 countries. Series revised as of August 1978. For
description and back data, see "Index of the Weighted-Average Exchange Value
of the U.S. Dollar: Revision" on p. 700 of the August 1978 BULLETIN.
NOTE. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
A69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR
PRESENTATION
Symbols and Abbreviations
c
e
p
r
*
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
General Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
STATISTICAL
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.
RELEASES
List Published Semiannually, with Latest Bulletin Reference
Issue
June 1985
Anticipated schedule of release dates for periodic releases
SPECIAL
Page
A83
TABLES
Published Irregularly, with Latest Bulletin Reference
Assets and liabilities of commercial banks, March 31, 1983
Assets and liabilities of commercial banks, June 30, 1983
Assets and liabilities of commercial banks, September 30, 1983
Assets and liabilities of commercial banks, December 31, 1983
Assets and liabilities of U.S. branches and agencies of foreign banks,
Assets and liabilities of U.S. branches and agencies of foreign banks,
Assets and liabilities of U.S. branches and agencies of foreign banks,
Assets and liabilities of U.S. branches and agencies of foreign banks,
Terms of lending at commercial banks, November 1984
December 31, 1983
March 31, 1984
June 30, 1984
September 30, 1984
August
December
March
June
June
November
April
April
June
1983
1983
1984
1984
1984
1984
1985
1985
1985
A70
A68
A68
A66
A72
A4
A70
A74
A70
A70
Federal Reserve Board of Governors
PAUL A . VOLCKER, Chairman
PRESTON MARTIN, Vice Chairman
HENRY C . WALLICH
J . CHARLES PARTEE
OFFICE OF BOARD
OFFICE OF STAFF DIRECTOR
MONETARY AND FINANCIAL
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
STEVEN M . ROBERTS,
to the
to the
Board
Board
STEPHEN H . AXILROD, Staff Director
D O N A L D L . K O H N , Deputy Staff Director
Assistant to the Chairman
ANTHONY F. COLE, Special Assistant to the Board
NAOMI P. SALUS, Special Assistant to the Board
LEGAL
STANLEY J. SIGEL, Assistant to the Board
NORMAND R . V . BERNARD, Special Assistant
DIVISION
DIVISION
MICHAEL BRADFIELD, General
J. VIRGIL M A T T I N G L Y , J R . ,
Counsel
Deputy General Counsel
RICHARD M. ASHTON, Associate
General
Counsel
OLIVER IRELAND, Associate
General
Counsel
RICKI TIGERT, Assistant General
Counsel
MARYELLEN A . BROWN, Assistant to the General
OFFICE OF THE
SECRETARY
WILLIAM W . W I L E S ,
Secretary
BARBARA R. LOWREY, Associate
Secretary
JAMES MCAFEE, Associate
Secretary
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
Director
JERAULD C . K L U C K M A N , Associate Director
G L E N N E . L O N E Y , Assistant Director
DOLORES S . SMITH, Assistant Director
DIVISION OF BANKING
SUPERVISION AND
REGULATION
Counsel
OF RESEARCH
1. On loan from the Federal Reserve Bank of Boston.
AND
to the
STATISTICS
JAMES L . KICHLINE, Director
E D W A R D C . E T T I N , Deputy Director
MICHAEL J. PRELL, Deputy Director
JOSEPH S . ZEISEL, Deputy Director
JARED J. E N Z L E R , Associate Director
D A V I D E . L I N D S E Y , Associate Director
ELEANOR J. STOCKWELL, Associate Director
THOMAS D . SIMPSON, Deputy Associate Director
LAWRENCE SLIFMAN, Deputy
Associate
Director
H E L M U T F . W E N D E L , Deputy Associate Director
MARTHA B E T H E A , Assistant Director
ROBERT M . FISHER, Assistant Director
D A V I D B . H U M P H R E Y , Assistant Director
S U S A N J. LEPPER, Assistant Director
RICHARD D . PORTER, Assistant Director
PETER A . TINSLEY, Assistant Director
LEVON H . G A R A B E D I A N , Assistant Director
(Administration)
DIVISION
OF INTERNATIONAL
FINANCE
E D W I N M . T R U M A N , Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
D A L E W . H E N D E R S O N , Associate Director
ROBERT F. GEMMILL, Staff
WILLIAM TAYLOR, Director
THOMAS E . CIMENO, J R . , Deputy Director'
FREDERICK R . D A H L , Associate Director
D O N E . K L I N E , Associate Director
FREDERICK M . STRUBLE, Associate Director
HERBERT A . B I E R N , Assistant Director
A N T H O N Y C O R N Y N , Assistant Director
ROBERT S . PLOTKIN, Assistant Director
STEPHEN C . SCHEMERING, Assistant Director
RICHARD SPILLENKOTHEN, Assistant Director
S I D N E Y M . S U S S A N , Assistant Director
L A U R A M . HOMER, Securities Credit Officer
FOR
POLICY
Adviser
PETER HOOPER I I I , Assistant Director
D A V I D H . H O W A R D , Assistant Director
RALPH W . S M I T H , J R . , Assistant Director
Board
A71
and Official Staff
EMMETT J . RICE
LYLE E . GRAMLEY
OFFICE OF
STAFF DIRECTOR FOR
MARTHA R . SEGER
MANAGEMENT
S . D A V I D FROST, Staff Director
E D W A R D T . M U L R E N I N , Assistant Staff Director
CHARLES L . H A M P T O N , Senior Technical Adviser
PORTIA W . THOMPSON, Equal Employment Opportunity
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESERVE BANK
ACTIVITIES
THEODORE E. ALLISON, Staff
Director
Adviser, Equal Employment
Opportunity Programs, Federal Reserve System
JOSEPH W . D A N I E L S , S R . ,
Programs Officer
DIVISION
OF COMPUTING
SERVICES
BRUCE M . BEARDSLEY, Director
THOMAS C . J U D D , Assistant Director
ELIZABETH B . RIGGS, Assistant Director
ROBERT J. Z E M E L , Assistant Director
DIVISION
WILLIAM
STEPHEN
RICHARD
WILLIAM
DIVISION
OF INFORMATION
SERVICES
R . JONES, Director
R . M A L P H R U S , Assistant Director
J . MANASSERI, Assistant Director
C . SCHNEIDER, J R . , Assistant Director
OF
DIVISION OF FEDERAL
BANK
OPERATIONS
C L Y D E H . FARNSWORTH, J R . , Director
ELLIOTT C . M C E N T E E , Associate Director
D A V I D L . ROBINSON, Associate Director
C . WILLIAM SCHLEICHER, J R . , Associate Director
WALTER A L T H A U S E N , Assistant Director
CHARLES W . B E N N E T T , Assistant Director
A N N E M . D E B E E R , Assistant Director
JACK D E N N I S , J R . , Assistant Director
EARL G . H A M I L T O N , Assistant Director
2
WILLIAM E . PASCOE I I I , Assistant Director
FLORENCE M . Y O U N G ,
Adviser
PERSONNEL
D A V I D L . S H A N N O N , Director
JOHN R . W E I S , Assistant Director
CHARLES W . W O O D , Assistant Director
OFFICE OF THE
CONTROLLER
GEORGE E . LIVINGSTON, Controller
B R E N T L . B O W E N , Assistant Controller
DIVISION
OF SUPPORT
SERVICES
Director
Associate Director
Assistant Director
ROBERT E . FRAZIER,
WALTER W . K R E I M A N N ,
GEORGE M . LOPEZ,
2. On loan from the Federal Reserve Bank of Richmond (Baltimore Branch).
RESERVE
All
Federal Reserve Bulletin • July 1985
Federal Open Market Committee
FEDERAL
OPEN MARKET
PAUL A . VOLCKER,
COMMITTEE
Chairman
JOHN J. BALLES
ROBERT P . BLACK
ROBERT P . FORRESTAL
STEPHEN H . AXILROD,
LYLE E . GRAMLEY
SILAS K E E H N
PRESTON MARTIN
Staff Director and Secretary
NORMAND R . V . BERNARD, Assistant
NANCY M . STEELE,
Secretary
Deputy Assistant Secretary
MICHAEL BRADFIELD, General
JAMES H . OLTMAN,
E . GERALD CORRIGAN,
Counsel
Deputy General Counsel
JAMES L . KICHLINE,
E D W I N M . TRUMAN,
Economist
Economist (International)
JOSEPH R. BISIGNANO, Associate
Economist
PETER D . STERNLIGHT, Manager
SAM Y . CROSS, Manager for
FEDERAL ADVISORY
J. CHARLES PARTEE
EMMETT J. RICE
MARTHA R . SEGER
HENRY C . WALLICH
J. ALFRED BROADDUS, Associate
Economist
RICHARD G. DAVIS, Associate
Economist
DONALD L. KOHN, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
MICHAEL J. PRELL, Associate
Economist
KARL A . SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
SHEILA L. TSCHINKEL, Associate
Economist
for Domestic Operations, System Open Market Account
Foreign Operations, System Open Market Account
COUNCIL
LEWIS T . PRESTON,
President
PHILIP F . SEARLE, Vice President
WILLIAM H . B O W E N , E . PETER GILLETTE, AND N . BERNE HART,
ROBERT L . N E W E L L , First District
LEWIS T. PRESTON, Second District
GEORGE A . BUTLER, Third District
JULIEN L . MCCALL, Fourth District
JOHN G . MEDLIN, JR., Fifth District
PHILIP F. SEARLE, Sixth District
Directors
H A L C . K U E H L , Seventh District
WILLIAM H . B O W E N , Eighth District
E. PETER GILLETTE, JR., Ninth District
N. BERNE HART, Tenth District
N A T S. ROGERS, Eleventh District
G . ROBERT TRUEX, JR., Twelfth District
HERBERT V . PROCHNOW,
Secretary
WILLIAM J. KORSVIK, Associate
Secretary
Vice Chairman
A73
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
TIMOTHY D . MARRINAN, Minneapolis, Minnesota, Chairman
THOMAS L . CLARK, JR., New York, New York, Vice Chairman
RACHEL G. BRATT, Medford, Massachusetts
JONATHAN BROWN, W a s h i n g t o n , D . C .
JEAN A. CROCKETT, Philadelphia, Pennsylvania
THERESA FAITH CUMMINGS, Springfield, Illinois
STEVEN M. GEARY, Jefferson City, Missouri
RICHARD M. HALLIBURTON, Kansas City, Missouri
CHARLES C . HOLT, Austin, Texas
EDWARD N. LANGE, Seattle, Washington
KENNETH V. LARKIN, Berkeley, California
FRED S. MCCHESNEY, Atlanta, Georgia
FREDERICK H . MILLER, Norman, Oklahoma
MARGARET M. MURPHY, Columbia, Maryland
ROBERT F . MURPHY, Detroit, Michigan
HELEN NELSON, Mill Valley, California
THRIFT INSTITUTIONS
ADVISORY
LAWRENCE S. OKINAGA, Honolulu, Hawaii
JOSEPH L. PERKOWSKI, Centerville, Minnesota
ELVA QUIJANO, San Antonio, Texas
BRENDA L. SCHNEIDER, Detroit, Michigan
PAULA A. SLIMAK, Cleveland, Ohio
GLENDA G . SLOANE, W a s h i n g t o n , D . C .
HENRY J. SOMMER, Philadelphia, Pennsylvania
TED L. SPURLOCK, New York, New York
MEL STILLER, Boston, Massachusetts
CHRISTOPHER J. SUMNER, Salt Lake City, Utah
WINNIE F. TAYLOR, Gainesville, Florida
MICHAEL M . V A N BUSKIRK, Columbus, Ohio
MERVIN WINSTON, Minneapolis, Minnesota
MICHAEL ZOROYA, St. Louis, Missouri
COUNCIL
THOMAS R . BOMAR, Miami, Florida, President
RICHARD H. DEIHL, LOS Angeles, California, Vice President
ELLIOTT G . CARR, Harwich Port, Massachusetts
M. T O D D COOKE, Philadelphia, Pennsylvania
J. MICHAEL CORNWALL, Dallas, Texas
HAROLD W . GREENWOOD, JR., Minneapolis, Minnesota
MICHAEL R. WISE,
JOHN A. HARDIN, Rock Hill, South Carolina
FRANCES LESNIESKI, East Lansing, Michigan
JOHN T. MORGAN, New York, New York
SARAH R. WALLACE, Newark, Ohio
Denver, Colorado
A74
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REMARKS BY CHAIRMAN PAUL A . VOLCKER, AT XIII AMERICAN-GERMAN BIENNIAL CONFERENCE, MARCH 1 9 8 5
A75
CONSUMER EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies
available without charge.
130. EFFECTS OF EXCHANGE RATE VARIABILITY ON INTERNATIONAL TRADE A N D OTHER ECONOMIC VARIABLES: A REVIEW OF THE LITERATURE, by Victoria S.
Farrell with Dean A. DeRosa and T. Ashby McCown.
January 1984. 21 pp.
Alice in Debitland
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
The Equal Credit Opportunity Act and . . . Age
The Equal Credit Opportunity Act and . . . Credit Rights in
Housing
The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide Incidental Credit
The Equal Credit Opportunity Act and . . . Women
Fair Credit Billing
Federal Reserve Glossary
Guide to Federal Reserve Regulations
How to File A Consumer Credit Complaint
If You Borrow To Buy Stock
If You Use A Credit Card
Instructional Materials of the Federal Reserve System
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Monetary Control Act of 1980
Organization and Advisory Committees
Truth in Leasing
U.S. Currency
What Truth in Lending Means to You
STAFF STUDIES.-
Bulletin
Summaries Only Printed in the
Studies and papers on economic and financial subjects that
are of general interest. Requests to obtain single copies of
the full text or to be added to the mailing list for the series
may be sent to Publications Services.
Staff Studies 115-125 are out of print.
131. CALCULATIONS OF PROFITABILITY FOR U . S . D O L L A R DEUTSCHE MARK INTERVENTION, by Laurence R.
Jacobson. October 1983. 8 pp.
132. TIME-SERIES STUDIES OF THE RELATIONSHIP BETWEEN EXCHANGE RATES AND INTERVENTION: A
REVIEW OF THE TECHNIQUES AND LITERATURE, b y
Kenneth Rogoff. October 1983. 15 pp.
133. RELATIONSHIPS AMONG EXCHANGE RATES, INTERVENTION, A N D INTEREST RATES: A N EMPIRICAL IN-
VESTIGATION, by Bonnie E. Loopesko. November
1983. 20 pp.
134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: A REVIEW OF THE LITERATURE, b y
Ralph W. Tryon. October 1983. 14 pp.
135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: APPLICATIONS TO C A N A D A , GERMA-
NY, AND JAPAN, by Deborah J. Danker, Richard A.
Haas, Dale W. Henderson, Steven A. Symansky, and
Ralph W. Tryon. April 1985. 27 pp.
136. THE EFFECTS OF FISCAL POLICY ON THE U . S . ECONO-
MY, by Darrell Cohen and Peter B. Clark. January
1984. 16 pp.
137. THE IMPLICATIONS FOR BANK MERGER POLICY OF
FINANCIAL DEREGULATION, INTERSTATE BANKING,
AND
FINANCIAL
Rose. Jan. 1982. 9 pp.
126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR-
KET INTERVENTION, by Donald B. Adams and Dale
W. Henderson. August 1983. 5 pp.
127. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: JANUARY-MARCH 1 9 7 5 , by Margaret L .
Greene. August 1984. 16 pp.
128. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: SEPTEMBER 1977-DECEMBER 1 9 7 9 , b y M a r -
garet L. Greene. October 1984. 40 pp.
129. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: OCTOBER 1 9 8 0 - O c T O B E R 1 9 8 1 , by Margaret
L. Greene. August 1984. 36 pp.
by
Stephen
A.
138. ANTITRUST L A W S , JUSTICE DEPARTMENT G U I D E LINES, AND THE LIMITS OF CONCENTRATION IN LOCAL BANKING MARKETS, by James Burke. June 1984.
14 pp.
139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN
THE UNITED STATES, by Thomas D. Simpson and
Patrick M. Parkinson. August 1984. 20 pp.
140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF
THE LITERATURE, by John D. Wolken. November
1984. 38 pp.
141. A COMPARISON OF DIRECT DEPOSIT A N D CHECK PAYMENT COSTS, by William Dudley. November 1984. 15
pp.
142. MERGERS A N D
BANKS, 1 9 6 0 - 8 3 ,
114. MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON COMPETITION AND PERFORMANCE IN
BANKING MARKETS, by Timothy J. Curry and John T.
SUPERMARKETS,
Rhoades. February 1984. 8 pp.
ACQUISITIONS
A.
by Stephen
BY
COMMERCIAL
Rhoades. December
1984. 30 pp.
143. COMPLIANCE COSTS A N D CONSUMER BENEFITS OF
THE ELECTRONIC F U N D TRANSFER ACT: RECENT
SURVEY EVIDENCE, by Frederick J. Schroeder. April
1985. 23 pp.
144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CONSUMER CREDIT REGULATIONS: THE TRUTH IN L E N D ING A N D EQUAL CREDIT OPPORTUNITY L A W S , b y
Gregory E. Elliehausen and Robert D. Kurtz. May
1985. 10 pp.
A76
REPRINTS OF BULLETIN
ARTICLES
Most of the articles reprinted do not exceed 12 pages.
The Commercial Paper Market since the Mid-Seventies. 6/82.
Applying the Theory of Probable Future Competition. 9/82.
International Banking Facilities. 10/82.
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
U.S. International Transactions in 1983. 4/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
U.S. International Transactions in 1984. 5/85.
A77
Index to Statistical Tables
References are to pages A3-68 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
Domestic finance companies, 37
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Nonfinancial corporations, 36
Automobiles
Consumer installment credit, 40, 41
Production, 47, 48
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20 (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 55
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 36
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 10
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
Commercial and industrial loans, 16, 19, 21
Consumer loans held, by type, and terms, 40, 41
Loans sold outright, 19
Nondeposit funds, 17
Number, by classes, 18
Real estate mortgages held, by holder and
property, 39
Time and savings deposits, 3
Commercial paper, 23, 24, 37
Condition statements (See Assets and liabilities)
Construction, 44, 49
Consumer installment credit, 40, 41
Consumer prices, 44, 50
Consumption expenditures, 51, 52
Corporations
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 26, 40 (See also Thrift institutions)
Currency and coin, 18
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Adjusted, commercial banks, 15
Banks, by classes, 18-21
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
Depository institutions
Reserve requirements, 7
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Federal Reserve Banks and at foreign
central banks and foreign countries (See Interest
rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 39
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 5, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 38, 39
Federal Housing Administration, 33, 38, 39
Federal Land Banks, 38
Federal National Mortgage Association, 33, 38, 39
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 37
Business credit, 36
Loans, 19, 40, 41
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66
A78
GOLD
Certificate account, 10
Stock, 4, 54
Government National Mortgage Association, 33, 38, 39
Gross national product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 40, 41
Insurance companies, 26, 30, 39
Interest rates
Bonds, 24
Consumer installment credit, 41
Federal Reserve Banks, 6
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 38
Prime rate, commercial banks, 23
Time and savings deposits, 8
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63 , 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 39
Federal Reserve Banks, 10, 11
Financial institutions, 26, 39
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20
Federal Reserve Banks, 4, 5, 6, 10, 11
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 5
Reserve requirements, 7
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks, 8, 26, 39, 40 (See also Thrift
institutions)
NATIONAL defense outlays, 29
National income, 51
Nontransaction balances, 3, 13, 19, 20
OPEN market transactions, 9
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, commercial banks, 23
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 39
Financial institutions, 26
Terms, yields, and activity, 38
Type of holder and property mortgaged, 39
Repurchase agreements, 5, 17, 19, 20, 21
Reserve requirements, 7
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 54
Residential mortgage loans, 38
Retail credit and retail sales, 40, 41, 44
SAVING
Flow of funds, 42, 43
National income accounts, 51
Savings and loan associations, 8, 26, 39, 40, 42 (See also
Thrift institutions)
Savings deposits (See Time and savings deposits)
Securities (See specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 53, 54
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3 (See also Credit unions, Mutual
savings banks, and Savings and loan associations)
Time and savings deposits, 3, 8, 13, 17, 18, 19, 20, 21 (See
also Transaction and Nontransaction balances)
Trade, foreign, 54
Transaction balances, 13, 19, 20
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 17, 18-20, 21, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 66
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 38, 39
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
A79
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK, Chairman
branch, or facility
Zip
Deputy Chairman
President
First Vice President
BOSTON*.
02106
Joseph A. Baute
Thomas I. Atkins
Frank E. Morris
Robert W. Eisenmenger
NEW YORK*
10045
John Brademas
Clifton R. Wharton, Jr.
M. Jane Dickman
E. Gerald Corrigan
Thomas M. Timlen
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Robert M. Landis
Nevius M. Curtis
Edward G. Boehne
Richard L. Smoot
CLEVELAND*
44101
William H. Knoell
E. Mandell de Windt
Robert E. Boni
Milton G. Hulme, Jr.
Karen N. Horn
William H. Hendricks
Leroy T. Canoles, Jr.
Robert A. Georgine
Robert L. Tate
Wallace J. Jorgenson
Robert P. Black
Jimmie R. Monhollon
John H. Weitnauer, Jr.
Bradley Currey, Jr.
Martha Mclnnis
E. William Nash, Jr.
Eugene E. Cohen
Condon S. Bush
Leslie B. Lampton
Robert P. Forrestal
Jack Guynn
Stanton R. Cook
Robert J. Day
Russell G. Mawby
Silas Keehn
Daniel M. Doyle
W.L. Hadley Griffin
Mary P. Holt
Sheffield Nelson
Henry F. Frigon
Donald B. Weis
Thomas C. Melzer
Joseph P. Garbarini
John B. Davis, Jr.
Michael W. Wright
Gene J. Etchart
Gary H. Stern
Thomas E. Gainor
Irvine O. Hockaday, Jr.
Robert G. Lueder
James E. Nielson
Patience Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Robert D. Rogers
Bobby R. Inman
John R. Sibley
Robert T. Sakowitz
Robert F. McDermott
Robert H. Boykin
William H. Wallace
Alan C. Furth
Fred W. Andrew
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
John W. Ellis
John J. Balles
Richard T. Griffith
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30301
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino
Harold J. Swart
Robert D. McTeer, Jr.
Albert D. Tinkelenberg
John G. Stoides
Fred R. HenJames D. Hawkins
Patrick K. Barron
Jeffrey J. Wells
Henry H. Bourgaux
Roby L. Sloan
John F. Breen
James E. Conrad
Paul I. Black, Jr.
Robert F. McNellis
Wayne W. Martin
William G. Evans
Robert D. Hamilton
Joel L. Koonce, Jr.
J.Z. Rowe
Thomas H. Robertson
Robert M. McGill
Angelo S. Carella
E. Ronald Liggett
Gerald R. Kelly
•Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
A80
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
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P B o W
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Boundaries of Federal Reserve Districts
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Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
*
Federal Reserve Branch Cities
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Federal Reserve Bank Facility
Board of Governors of the Federal Reserve
System
Publications of Interest
FEDERAL RESERVE CONSUMER CREDIT
PUBLICATIONS
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to use Truth in Lending
information to compare credit costs.
The Board also publishes the Consumer Handbook
to Credit Protection Laws, a complete guide to con-
sumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair deal.
Protections offered by the Electronic Fund Transfer
Act are explained in Alice in Debitland. This booklet
offers tips for those using the new "paperless" systems for transferring money.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 138,
Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. Multiple copies for classroom use are also available free of charge.
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Publications of Interest
FEDERAL RESERVE REGULATORY
SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf service
containing all Board regulations and related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are
published separately as handbooks pertaining to monetary policy, securities credit, and consumer affairs.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated at least monthly, and each
contains conversion tables, citation indexes, and a
subject index.
The Monetary Policy and Reserve
Requirements
Handbook contains Regulations A, D, and Q plus
related materials. For convenient reference, it also
contains the rules of the Depository Institutions
Deregulation Committee.
The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with all related statutes, Board interpretations, rulings, and staff opinions. Also included is the Board's
list of OTC margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, and BB and
associated materials.
For domestic subscribers, the annual rate is $175 for
the Federal Reserve Regulatory Service and $60 for
each handbook. For subscribers outside the United
States, the price including additional air mail costs is
$225 for the Service and $75 for each Handbook. All
subscription requests must be accompanied by a check
or money order payable to Board of Governors of the
Federal Reserve System. Orders should be addressed
to Publications Services, Mail Stop 138, Federal Reserve Board, 20th Street and Constitution Avenue,
N.W., Washington, D.C. 20551.
@FedFRASER