Full text of Federal Reserve Bulletin : July 1993

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VOLUME 7 9 •

NUMBER 7 •

JULY 1993

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman

The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions
expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics
Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.




Table of Contents
649 PROFITS AND BALANCE SHEET

DEVELOPMENTS AT US. COMMERCIAL
BANKS IN 1992
U.S. commercial banks in 1992 continued
their recovery from the difficulties of recent
years. Bank profits were $31 Vi billion, an
increase of $14 billion over 1991, and a record
0.92 percent of average assets. Return on
equity also increased sharply, although it
remained in the range of historical experience.
Banks retained a sizable proportion of earnings, which, along with a substantial issuance
of new debt and equity, significantly bolstered
their capital. The restructuring of bank balance sheets, which began in 1990, continued
last year, with loan portfolios contracting and
securities holdings expanding.
674 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE OPERATIONS

The dollar depreciated modestly against most
major currencies during the February-April
period but declined significantly against the
Japanese yen amid concerns relating to the
growing Japanese trade surplus. The dollar's
decline over the period was 1.6 percent against
the German mark, 10.9 percent against the
Japanese yen, and 3.2 percent on a tradeweighted basis.
676 STAFF STUDIES

In The 1989-92 Credit Crunch for Real
Estate, the authors review current thinking
about the causes of this episode and summarize a variety of data on its duration and
extent. The study weighs the relative importance of the credit crunch and other factors
that also contributed to the falloff in real estate
lending; and it considers the long-run outlook
for the supply of mortgage credit.




678 INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION FOR APRIL

1993

Industrial production edged up 0.1 percent
in April, after having shown no change in
March. Total industrial capacity utilization
was unchanged at 81.4 percent.
681 STATEMENTS TO THE CONGRESS

Richard Spillenkothen, Director of the
Board's Division of Banking Supervision and
Regulation, discusses ways in which the
financial needs of individuals and businesses
located in economically underserved neighborhoods can be accommodated and says that
improving conditions in the banking system
should increase community development lending, before the Subcommittee on General
Oversight, Investigations, and the Resolution
of Failed Financial Institutions of the House
Committee on Banking, Finance and Urban
Affairs, May 18, 1993.
684 Lawrence B. Lindsey, Member, Board of Governors, offers the Board's comments on S.924,
the Home Ownership and Equity Protection
Act of 1993, legislation that requires additional disclosures to consumers who take out
"high-cost mortgages" on their homes and
restricts the terms of such mortgages, and says
that it is essential to keep the focus of this
legislation as narrow as possible to eliminate
abusive practices while minimizing adverse
consequences that were clearly not intended
by the Congress, before the Senate Committee
on Banking, Housing, and Urban Affairs,
May 19, 1993.
689 John P. LaWare, Member, Board of Governors, discusses the Federal Reserve's role in
the government's anti-money-laundering
. efforts and says that the Federal Reserve has
worked to develop and implement programs

and procedures in the bank supervision, currency, and payments system areas that
enhance the government's ability to detect and
deter money laundering activities in financial
institutions, before the House Committee on
Banking, Finance and Urban Affairs, May 26,
1993.
695 ANNOUNCEMENTS
Meeting of the Consumer Advisory Council.
Reduction in prior approval requirements for
futures commission merchant activities.
Request for comments on whether to retain,
modify, or terminate a provision in Regulation O; proposed rule to expand the definition
of "financial institution" in section 402 of
the Federal Deposit Insurance Corporation
Improvement Act.
Publication of Guide to the Flow of Funds
Accounts.
696 MINUTES OF THE FEDERAL OPEN
MARKET COMMITTEE MEETING OF
MARCH 23, 1993
At its meeting on March 23, 1993, the Committee adopted a directive that called for maintaining the existing degree of pressure on
reserve positions and that did not include a
presumption about the likely direction of any
adjustment to policy during the intermeeting
period. Accordingly, the directive indicated
that in the context of the Committee's longrun objectives for price stability and sustainable economic growth, and giving careful
consideration to economic, financial, and
monetary developments, slightly greater or
slightly lesser reserve restraint would




be acceptable during the intermeeting period.
The reserve conditions contemplated at this
meeting were expected to be consistent with a
resumption of moderate growth in M2 and
M3 over the second quarter.
705 LEGAL DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and
pending cases.
A1 FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
May 26, 1993.
A3 GUIDE TO TABULAR PRESENTATION

A4 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
A70 INDEX TO STATISTICAL TABLES
A72 BOARD OF GOVERNORS AND STAFF
A74 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A76 FEDERAL RESERVE BOARD
PUBLICATIONS

A78 MAPS OF THE FEDERAL RESERVE
SYSTEM
A80 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES

Profits and Balance Sheet Developments
at U.S. Commercial Banks in 1992
Allan D. Brunner and William B. English, of the
Board's Division of Monetary Affairs, prepared
this article. Anita C. Hartke assisted in the preparation of the data. Thomas Allard and Susan
Helfrey provided research assistance.
U.S. commercial banks in 1992 continued their
recovery from the difficulties of recent years. Bank
profits were $31V^ billion, an increase of $14 billion over 1991, and a record 0.92 percent of average assets. Return on equity also increased sharply,
although it remained in the range of historical
experience. Banks retained a sizable proportion of
earnings, which, along with a substantial issuance
of new debt and equity, significantly bolstered their
capital. The restructuring of bank balance sheets,
which began in 1990, continued last year, with
loan portfolios contracting and securities holdings
expanding.1
Commercial banks in 1992 benefited from the
improving U.S. economy. Real gross domestic
product rose 3 percent, extending the expansion
that began in the spring of 1991, and inflation
remained low. Policy easings by the Federal
Reserve pushed short-term rates down about 1 percentage point in 1992, but yields on thirty-year

Treasury bonds fell only about lA percentage point.
Apparently, stubborn expectations of inflation,
election uncertainties, and deficit fears limited the
decline in longer rates, tilting upward an already
steep yield curve.
The brightened macroeconomic picture and
lower market interest rates clearly contributed to
the improved performance of U.S. commercial
banks. Profits (chart 1) were buoyed by a decline in
loan loss provisions to their lowest level since 1988
(table 1). The drop in provisioning was matched by
a similar decline in charge-offs, and delinquency
rates improved moderately. In addition, the effect
of the reduction in market interest rates was smaller
for returns on bank assets than for rates paid on
bank liabilities. This difference is consistent with
the longer average maturity of bank assets relative
to bank liabilities. As a consequence, the spread
between interest income and interest expense (the
net interest margin) widened last year.
Financial markets responded favorably to developments in the banking industry as well as to the
improved economic outlook. Bank stock prices outperformed the broader market in 1992, and spreads
between bank debt and Treasury securities narrowed. The robustness of the financial markets
encouraged banks to issue record amounts of new
capital last year. These new issues, coupled with

1. Except where otherwise indicated, data in this article are from
the quarterly Report of Condition and Income (Call Report) for
1. Return on equity and on assets, 1970-92
insured domestic commercial banks and nondeposit trust compaPercent
nies. The data, which cover all such institutions that filed at least
one Call Report, consolidate information from foreign and domesReturn on equity
tic offices and have been adjusted to take account of mergers. Size
categories of such institutions (hereafter called banks), which refer
to assets at the start of each year, are as follows: small banks, less 1.0 —
than $300 million; medium-sized banks, $300 million to $5 billion;

Percent

1

10

large banks, $5 billion or more. The ten largest banks were selected

as of December 1991, and this category includes the same banks
for all years; mergers in 1992 reduced to eight the number of
institutions in the category. Data for the 1985-91 period have been
revised to reflect uniform definitions across time and to incorporate
updated Call Report information. Data for years preceding 1985 are
not strictly comparable to the 1985-92 data. In the tables, components may not sum to totals because of rounding.




Return on assets
0.5 —

1 1 t 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II
1970
1975
1980
1985

II \

,
—

1 11 J j
1990

5

650

Federal Reserve Bulletin • July 1993

high levels of retained profits, boosted bank capital
about $32 billion in 1992. This increase raised the
industry's capital-asset ratio Vi percentage point,
to more than 7 percent. In addition, banks supplemented their total capital positions by issuing
$ 8 3 / 4 billion of subordinated debt.
Bank balance sheets expanded slowly in 1992.
Assets increased just 2 l A percent; and, as in 1991,
total loans declined, while holdings of U.S. Treasury and federal agency securities increased substantially. Weak loan demand appeared to be the
principal cause of the decline in lending, although
continued tightness in standards and terms on new
loans probably also played a role. Along with the
lackluster rate of asset growth and the substantial
issuance of bank capital, the growth of deposits
was weak in 1992—a weakness echoed in sluggish
growth of the broader monetary aggregates.
The improvements in industry health in 1992 are
clearly reflected in measures of bank distress. The
number of banks classified by the Federal Deposit
Insurance Corporation (FDIC) as "problem banks"
fell almost one-fourth, to 787, and their assets
declined by about the same proportion over the
year. One hundred federally insured commercial
banks failed last year, compared with 108 failures
in 1991 and more than 200 in each year from 1987
through 1989.
The consolidation of the banking industry continued in 1992. The FDIC reported 428 unassisted
mergers in 1991, down from 459 the previous year.
Two of these mergers, however—Bank of America
with Security Pacific, and Chemical Bank with
Manufacturer's Hanover Trust—involved four of
the ten largest banks in the country. The number of

1. Selected income and expense items, 1989-921
Percent
Item
Net interest margin
Net noninterest margin
Loss provisions
Securities gain
Income before taxes

BALANCE SHEET DEVELOPMENTS

Bank balance sheets grew little overall in 1992
(table 2). Bank lending continued to decline as
businesses and households sought to reduce debt
burdens, as large businesses shifted toward longterm funding, and as banks' terms and standards on
loans remained relatively firm. The weakness in
lending was mirrored in a rapid accumulation of
U.S. Treasury and agency securities. On the liability side, the low volume of lending depressed bank
demand for deposit funds. Moreover, banks substituted capital for deposits. (See appendix tables A.l
and A.2 for detailed information on income,
expenses, and the composition of bank assets and
liabilities for 1985-92.)

1990

1991

1992

3.46
3.53
-1.80 -1.82
.98
.96
.01
.03
.78
.70

3.61
-1.93
1.02
.09
.75

3.90
-1.92
.77
.12
1.33

.26
.49

.27
.53

.43
.92

Assets
Total bank assets grew 2 l A percent—a small pickup
over the 1 lA percent rise in 1991. The volume of
bank loans fell 1 percent, a smaller decline than in

1989

Taxes and extraordinary items
Net income

.31
.49

Dividends

.44

.42

.43

.42

Retained income

.04

.07

.10

.51

1. As a percentage of average net consolidated assets.




commercial banks declined somewhat more rapidly
in 1992 than in 1991, falling more than 33A percent.
The more rapid decline resulted from a drop in the
number of new banks: Only fifty-one charters for
new banks were issued in 1992, the lowest number
since the early 1950s. (In addition, twenty-one new
charters were issued for bridge banks.) As a result
of industry consolidation, employment in the banking sector declined Vz percent in 1992, about onethird of the drop reported in 1991. As in 1991, the
total number of commercial bank branches
increased about Vi percent. In part, the recent
increases in branches are likely the result of banks'
acquisitions of thrifts.
Many of the trends seen in 1992 have lasted into
1993. Continued improvements in asset quality
and high net interest margins have contributed to
robust first-quarter bank profits. Loan growth has
remained weak, as the composition of banks' assets
continued to shift away from loans and toward
securities. In contrast, bank stock prices declined in
the spring, apparently as a result of investors' anticipation that higher interest rates might reduce bank
profits.

Bank Profits and Balance Sheet Developments, 1992

1991. As in 1991, bank holdings of securities
climbed sharply, rising 11 Vi percent.

borrowed less, both because of the relatively slow
pace of the expansion and because of the success of
large firms in substituting longer-term financing for
bank borrowing.
Responses to the Federal Reserve's periodic
Senior Loan Officer Opinion Survey on Bank
Lending Practices (LPS) showed that banks substantially tightened their terms and standards on
commercial and industrial loans during 1990 and
early 1991 (chart 2). The respondents attributed
this tightening primarily to the weak economy and
to industry-specific problems, although some of
them indicated that capital adequacy or regulatory
pressure was a concern. In any case, some tightening was to be expected, given the substantial losses
that banks faced as a result of the economic downturn of 1990-91, the collapse in the commercial
real estate market, and the relaxed underwriting
standards in the late 1980s. Terms and standards do
not appear to have eased until early 1993, however,

Loans
The behavior of both commercial and industrial
and consumer loans was similar to that of total
loans; both fell, but less than in 1991. In contrast,
real estate loans grew about 2 percent, somewhat
less than in 1991. Total loan growth improved in
most regions.
Commercial and industrial loans. Commercial
and industrial loans fell 4 percent, the third straight
year of decline. These loans ran off at banks of all
sizes, although they declined least at smaller banks.
On the supply side, banks apparently did not significantly ease their standards and terms on commercial and industrial loans. On the demand side, firms

2.

651

Annual rate of growth of balance sheet items, 1985-921
Percent
Item

1985

1986

1987

1988

1989

1990

1991

1992

Total assets
Interest-earning assets
Loans
Commercial and industrial
Consumer
Credit card
Installment and other
Real estate
One-four family
Other
Other loans
Securities
U.S. government
U.S. Treasury
Federal agency
State and local government
Other
Other interest-earning assets2
Non-interest-eaming assets

8.9
9.7
7.9
2.2
15.8
28.2
12.1
13.7
9.5
17.6
2.9
14.0
2.5
9.5
-3.2
33.0
32.6
13.7
3.6

7.6
8.0
7.5
4.0
8.6
17.0
5.8
17.6
12.1
22.1
-.6
10.3
16.6
7.4
25.1
-12.6
74.3
7.1
5.3

2.0
3.9
4.1
-1.9
4.6
12.0
1.8
16.6
18.5
15.1
-6.3
7.5
9.7
40.6
-14.8
-13.9
48.8
-2.8
-11.1

4.4
3.9
5.7
1.9
7.7
13.9
5.1
12.6
12.6
12.6
-.6
3.0
6.5
-5.8
22.6
-12.0
11.2
-4.7
8.4

5.4
5.8
6.5
3.1
6.3
12.2
3.6
12.9
16.4
10.1
.7
4.1
9.9
-13.7
33.6
-11.4
1.3
4.6
2.4

2.7
2.3
2.3
-.7
.5
1.9
-.1
8.8
14.1
4.4
-3.3
8.3
16.0
3.5
24.1
-11.5
-1.8
-8.3
5.7

1.3
2.0
-2.6
-9.1
-2.5
4.4
-5.9
2.8
7.8
-1.9
-9.8
14.4
21.6
32.1
15.9
-12.3
5.7
9.8
-3.5

2.3
2.5
-1.1
-4.0
-1.5
-1.9
-1.2
2.0
7.6
-3.7
-2.4
11.5
17.1
24.0
12.8
-2.0
-7.6
6.7
-.1

Total liabilities
Deposits
Foreign offices
Domestic offices
Demand
Other checkable
Savings
Large time
Small time
Subordinated notes and debentures
Other

8.8
7.9
1.9
9.7
8.9
17.8
23.9
4.3
3.0
42.3
12.7

7.6
7.8
6.0
8.4
13.2
32.8
13.6
-1.0
-1.8
16.3
6.4

2.2
2.3
-25.9
10.1
-10.8
7.8
39.9
12.1
7.9
3.8
1.5

4.1
4.1
-7.6
6.3
.6
7.6
1.1
9.3
15.4
2.4
4.3

5.5
4.8
-.3
5.7
.4
2.5
.5
5.1
17.6
14.9
8.6

2.4
3.9
—4.9
5.2
.7
6.4
6.5
-5.6
14.3
23.1
-5.3

1.0
1.6
4.0
1.3
-2.0
14.8
14.4
-19.5
-.6
3.8
-2.0

1.4
.4
-4.3
1.1
12.6
18.6
13.1
-26.2
-12.6
33.2
5.3

9.8

7.5

-.7

8.9

4.2

6.9

5.8

13.8

24.5

24.4

72.8

-6.5

15.3

3.0

-.3

-1.0

Equity capital
MEMO

Loss provisions

1. From year-end to year-end.
2. Includes trading account assets, federal funds sold, and interest-bearing balances.




652

Federal Reserve Bulletin • July 1993

2. Net percentage of selected large commercial banks
tightening credit standards, 1990-93'
Percent

Commercial and industrial loans, by size of borrower
—

—

60

Commercial real estate loans, by purpose of loan

1990

1991

1992

1993

1. Net percentage is the percentage of banks reporting tightening minus the
percentage reporting easing.
SOURCE. Federal Reserve's Senior Loan Officer Opinion Survey on Bank
Lending Practices.

despite substantial improvements in the performance of the U.S. economy and significantly higher
levels of bank capital in 1992.
Similarly, data on loan spreads from the Federal
Reserve's Survey of Terms of Bank Lending to
Business show that rates on floating-rate primebased loans rose sharply relative to the federal
funds rate in late 1990 and have remained elevated

3. Spread of rates on loans made under commitment over
federal funds rate, by size of commitment, 1986-93'
Basis points

1. Rates are for floating-rate prime-based loans.
SOURCE. Federal Reserve quarterly Survey of Terms of Bank Lending to
Business.




(chart 3). The behavior of these spreads since 1990
reflects primarily the spread of the prime rate over
the federal funds rate, although spreads over the
prime rate have declined for loans under large
commitments. Similarly, spreads over the cost of
funds for fixed-rate loans—which are primarily to
larger customers—have narrowed somewhat over
the past two years. These declines may reflect the
reduced riskiness of such loans resulting from
tighter lending standards.
The demand for bank credit in 1992 was sapped
by the efforts of firms to lock in long-term financing at nominal interest rates not seen since the early
1970s. Similar shifts to long-term finance followed
the reductions in long-term interest rates in the
mid-1970s and the early 1980s (chart 4). In addition, the robust stock market encouraged many
firms to issue equity and to use the proceeds to pay
down bank debt. The volume of bond and equity
issuance with the primary purpose of retiring bank
debt was, by one estimate, considerably more than
the decline in business lending by banks last year.
Real estate loans. The pace of expansion in real
estate loans at commercial banks was 2 percent in
1992, down about 3A percentage point from the
pace in 1991. As in 1991, most of the increase in
real estate lending was concentrated in the residential sector, with bank loans for one- to four-family
mortgages growing IV2 percent last year. Within
that sector, lending under home equity lines of
credit increased 4lA percent in 1992, less than
one-third the 14V2 percent increase in 1991. Both
the firmness in residential mortgages and the weakening in borrowing under home equity lines proba4. Share of short-term business debt in total business debt,
and long-term corporate bond yield, 1970-92'

1. Bond yield is Moody's average of yields on AAA long-term utility and
industrial bonds.

Bank Profits and Balance Sheet Developments, 1992

bly stem, in part, from the use of the proceeds of
mortgage refinancings to pay down other, highercost debts, including home equity lines. Responses
to the LPS indicate that demand for residential
mortgages increased strongly in 1992, while
demand for home equity lines of credit increased
more modestly. In addition, a few banks reported
easing their terms on residential mortgages, and
many respondents cited an increased willingness to
make general-purpose loans to consumers, including home equity loans.
In recent years, an increasing proportion of bank
financing of residential mortgages has taken the
form of mortgage-backed securities, as banks have
substituted these securities for the direct holding of
residential mortgages. The mortgage-backed securities provide banks with greater liquidity, lower
capital charges, increased diversification, and—in
the case of Government National Mortgage Association (GNMA) securities—government backing.
Mortgage-backed securities now constitute more
than one-third of total (direct plus securitized) commercial bank financing of residential mortgages.
Commercial real estate markets in 1992 continued to suffer from the effects of excess supply
created in the 1980s. Vacancy rates for industrial
space remained very high after peaking in early
1992. Vacancy rates for commercial office space
remained high in the first half of 1992 but improved
in the second half (chart 5). Commercial real estate
prices were reported to be still falling at the end of
1992, although perhaps more slowly than in 1991.
A January 1993 FDIC survey found that the number of examiners and liquidators who thought that
the real estate market was improving was about
double the number who thought it was deteriorating. Nonetheless, almost one-third of those surveyed thought that commercial real estate prices
were declining, and few reported that prices were
rising.
The substantial problems facing the commercial
real estate market in recent years explain, in part,
the tightening of standards on such loans reported
in the LPS (chart 2). In addition, the tighter standards likely reflect the realization that standards in
the 1980s were insufficiently rigorous. In contrast
to the standards on commercial and industrial
loans, banks responding to the LPS reported a
further small net tightening of standards on commercial real estate loans in 1992.




653

5. Vacancy rates for commercial real estate, 1989-92

—19.25

SOURCE. CB Commercial Real Estate Group, Inc.

Consumer loans. Consumer loans held by banks
fell IV2 percent in 1992 after dropping 2Vi percent
in 1991. The slower rate of decline in 1992 was
attributable to a smaller reduction in the holdings
of consumer loans by large banks, in part the result
of decreased securitization. Taking account of consumer loans that banks securitized and sold, consumer lending by banks increased about V2 percent
in 1992, a slightly larger increase than that in 1991.
In contrast to the pattern in recent years, both credit
card debt and installment and other consumer debt
declined in 1992. The weakness in consumer lending in part appears to have resulted from households' use of low-interest bank deposits to pay
down relatively high-cost consumer loans—
contributing thereby to the weakness in bank
deposits, especially small time deposits, and in the
broader monetary aggregates. As noted above, consumers may also have used the proceeds of mortgage refinancings to pay down some of their consumer debts.
The regional pattern of loan growth. The growth
in bank lending varied substantially across Federal
Reserve Districts. All Districts other than San Francisco showed improvement over 1991, with several

654

3.

Federal Reserve Bulletin • July 1993

Loan growth and return on assets, by Federal Reserve District, 1990-921
Percent
Loan growth

Return on assets

District
1990
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
AU banks

1991

1992

1990

1991

1992

-13.9
-1.4
4.2
2.4
3.3
3.9
4.6
5.6
1.6
3.5
-4.3
10.9

-12.4
-4.4
-1.9
2.8
-4.9
-3.3
.1
.0
-3.2
1.7
-3.1
-1.3

-1.0
-2.7
1.6
3.3
-4.3
3.9
1.2
2.9
5.2
3.3
6.2
-8.6

-.97
.07
.94
.73
.28
.49
.83
.88
1.24
.64
.37
1.00

-.13
.11
1.09
.97
.29
.61
.85
.93
1.32
.84
.67
.41

.75
.64
1.53
1.32
.81
1.04
.93
1.13
1.61
1.08
1.05
.73

2.3

-2.6

-1.1

.49

.53

.92

1. Loan growth calculated from year-end to year-end. Return on assets is net income as a percentage of average net consolidated assets.

showing a return to positive growth (table 3). In the
Northeast, lending continued to decline in the New
York and Boston Districts, while banks in the Philadelphia District posted a small increase. Loans
declined more slowly in the Boston District than
in the nation as a whole last year, a substantial
improvement in the relative performance of the
District over 1990 and 1991. In the Southeast,
lending continued to decline in the Richmond District but recovered in the Atlanta District. In the
Midwest (the Cleveland, Chicago, and St. Louis
Districts), loan growth picked up moderately. Loan
growth in the central part of the country (the Minneapolis, Kansas City, and Dallas Districts) picked
up strongly in 1992, showing the biggest improvement of any region. In the West (the San Francisco
District), lending declined more sharply than in
1991, as defense cutbacks and continued problems
with commercial real estate contributed to the
weakness in the regional economy.

Securities
Bank holdings of securities increased 11V2 percent,
only 3 percentage points below the 1991 pace.
After three years of rapid growth, securities now
account for more than 20 percent of bank assets.
Although this share is quite high by recent standards, it is similar to that reached in 1975 and
smaller than the shares reported before the mid1960s. Much of the recent growth was concentrated in mortgage-backed securities issued or guaranteed by federal agencies. Such securities




accounted for more than 60 percent of the increase
in securities holdings between March 1990 and
December 1992.
Holdings of both U.S. Treasury securities and
federal agency securities grew rapidly in 1992.
Treasury securities led the way with growth of
24 percent, while holdings of federal agency
securities—primarily mortgage-backed securities
issued by the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation or guaranteed by GNMA—grew
123A percent.
Some commentators have suggested that banks
have increased their holdings of U.S. Treasury and
agency securities as a result of the imposition of
risk-based capital standards. Because these standards assign low or zero risk weights to these
securities, poorly capitalized banks can raise their
risk-weighted capital ratios by substituting U.S.
Treasury and agency securities for loans in their
portfolios. Although such a shift has occurred,
well-capitalized banks have increased their holdings of such securities considerably more than
poorly capitalized banks, suggesting that the primary impetus to the growth in bank securities
investments arises elsewhere.
In contrast to their holdings of Treasury and
agency securities, bank holdings of municipal securities continued to run off, although at a slower
pace than that in 1991. The Tax Reform Act of
1986 removed the tax advantages to banks of new
purchases of these bonds but provided that municipal securities held by banks at the time of the
change would be treated under the old rules. As a

Bank Profits and Balance Sheet Developments, 1992

result, bank holdings of municipal securities have
been declining as those accumulated before the tax
change mature or are called.
Despite the incentives offered by the steep yield
curve, banks do not appear to have increased the
maturity of their securities holdings. In fact, available data suggest that the average maturity of bankheld securities may have shortened slightly in 1992
(table 4). The reported maturities of mortgagebacked securities likely overstate their actual
expected maturity. Banks are instructed to report
the maturity of these securities based on the stated
maturity of the underlying mortgages, but they
generally hold the shorter-maturity tranches of
these securities. Responses to questions on a recent
LPS indicate that a majority of bank-held
mortgage-backed securities have expected maturities of less than five years. More than 60 percent of
the respondents reported that the average expected
maturity of their securities had declined during
1992. Similarly, a recent survey by the American
Bankers Association indicated that the weighted
average maturity of all bank-held securities
declined more than six months in 1992, to
3V2 years. The decline in maturity was largest for
small banks, although small banks continue to have
somewhat longer average maturities than mediumsized and large banks have. About one-fourth of
the LPS respondents indicated that a further shortening of maturities was desirable. Most of them
4.

Maturity structure of selected assets and liabilities at
year-end, 1990-921
Percent
Account
and maturity range

1990

1991

1992

Loans and leases
Three months or less
Three months-one year ...
One-five years
More than five years
Total

51.2
14.3
22.5
12.1
100

49.0
15.7
23.7
11.6
100

48.5
16.0
23.9
11.7
100

Securities
Three months or less
Three months-one year ...
One-five years
More than five years
Total

11.7
14.3
34.3
39.7
100

123
13.7
34.5
39.5
100

12.6
14.0
37.0
36.3
100

Time deposits
Three months or less
Three months-one year ...
More than one year
Total

42.1
38.8
19.1
100

39.7
39.5
20.8
100

36.2
38.5
25.3
100

1. Maturity ranges of three months to one year include maturities of
exactly one year. Maturity ranges of one year to five years include maturities
of exactiy five years.




655

attributed the change in desired maturity to existing
or anticipated rules regarding the reporting of security values on financial statements.
Even if the difference between reported maturity
and expected maturity is taken into account, bank
holdings of securities have maturities that are
longer than those of bank loans. Thus, the maturity
of bank assets has increased slightly in recent years
as a result of the growing share of assets invested
in securities. The maturities of bank time deposits
have increased since 1990, perhaps as a result of
bank efforts to match the maturities of bank assets
and liabilities. The large decline in the share of
time deposits in bank liabilities, however, has more
than offset the effect of the lengthening of time
deposit maturities, leading to a fall in the average
maturity of bank liabilities.

Off-Balance-Sheet Items
In contrast to the decline in bank loans, unused
loan commitments increased to 361/2 percent of
assets, from 343/4 percent, during 1992—another
indication that the weakness in bank lending
reflects weak demand. The credit-equivalent value
of all interest rate contracts at banks (including the
value of interest rate swaps, futures contracts, forward contracts, and option contracts) increased to
1.8 percent of bank assets at the end of 1992—up
from 1.7 percent at the end of 1991 and 1.0 percent
at the end of 1990. The credit-equivalent value of
all foreign exchange contracts (including the value
of exchange rate swaps, commitments to buy foreign exchange, and option contracts) edged down
slightly, from 4.2 percent of commercial bank
assets at the end of 1991 to 4.0 percent at the end of
1992, but remains well above the year-end 1990
level of 3.6 percent. As they were in past years,
most of these instruments are held by the ten largest banks. 2
In contrast, the volume of bank letters of credit
outstanding declined for the second consecutive
year in 1992. The total amount of letters of credit
(the sum of financial standby, performance standby,
and commercial letters of credit) fell from 6lA percent of bank assets at the end of 1990 to 5V2 per-

2. See note 1 regarding the ten largest banks.

656

Federal Reserve Bulletin • July 1993

cent at the end of 1992. This decline was at least
partly the result of two factors. First, the difficulties
faced by the banking system in recent years have
likely reduced the number of U.S. commercial
banks with the high credit ratings needed to provide financial standby letters of credit for commercial paper issuers. Indeed, financial standby letters
of credit have declined more rapidly than letters of
credit of the other types since 1990. Second, the
new risk-based capital standards require capital
backing for letters of credit with maturities of more
than one year and thus increase their cost.

Liabilities
Against a backdrop of weak loan growth, banks did
not aggressively seek deposits in 1992. With asset
growth restrained and capital issuance running at a
record pace, bank liabilities grew just IV2 percent.
Within total liabilities, the composition of deposits
shifted toward savings and transaction deposits and
sharply away from time deposits.

Nontransaction Deposits
Rates on certificates of deposit fell substantially in
1991 and 1992, primarily because of the decline in
market interest rates. As is usual when market rates
fall rapidly (chart 6, top panel), rates on savings
deposits declined more slowly than rates on time
deposits (chart 6, bottom panel). With a narrowing
spread between rates on time deposits and those on
savings deposits, small time deposits fell HV2 percent while savings deposits (including money market deposit accounts) increased 13 percent. Low
interest rates on bank deposits also encouraged
outflows to stock and bond mutual funds (chart 7).
Net monthly flows into long-term bond funds averaged $91/2 billion, while flows into equity funds
averaged %llA billion.
In addition, banks continued to allow their large
time deposits, which are relatively costly, to run
off. Such deposits fell 26 percent in 1992 and
almost 20 percent in 1991.

Transaction Deposits

6. Selected market rates and retail deposit rates, 1989-93
Percent

Market rates

—12

The drop in interest rates also contributed to the
rapid growth in transaction deposits in 1992. Lower
rates on other assets reduced the opportunity cost
of holding funds in low-yielding transaction
accounts, increasing their attractiveness. In addition, lower mortgage interest rates led to a surge in
mortgage refinancings. The increase in refinancings, in turn, temporarily increased the level of
transaction deposits because mortgage servicers
hold prepayments of mortgages securitized by
GNMA or FNMA in transaction accounts for up to
7. Net flows into mutual funds, 1985-93
Billions of dollars

1. Retail deposit rates at all commercial banks; savings accounts include
money market deposit accounts.
SOURCE. Federal Reserve Monthly Survey of Selected Deposits.




SOURCE. Investment Company Institute.

Bank Profits and Balance Sheet Developments, 1992

six weeks. Over the course of the year, domestic
demand deposits rose 12V2 percent and other
checkable deposits I8V2 percent.

TRENDS IN PROFITABILITY

Profitability in the commercial banking industry
rose sharply last year, with the return on assets
jumping from 0.53 to 0.92 percent and the return
on equity moving up to 13 percent (chart 1). All
major components of bank profitability improved
(table 5). More than half of the increase in net
income was attributable to wider net interest margins. These higher margins resulted in part from
the uneven decline in market interest rates during
1991 and 1992, which trimmed the return on relatively longer-maturity bank assets by less than the
rates paid on shorter-maturity bank liabilities. Interest margins also benefited from wider spreads relative to market rates as a result of high lending rates
and unaggressive deposit pricing. In addition, the
return on assets improved because of lower provisions for future loan losses, as charge-offs and
delinquency rates edged down and as the total
dollar volume of bank loans declined. The drop in
interest rates helped banks realize higher capital
gains on sales of securities, although the share of
5.

Selected income and expense items, by size of bank,
1990-921
Percent
Year and
size of bank
1992
All banks
Small
Medium
Large, excluding
ten largest ...
Ten largest
1991
All banks
Small
Medium
Large, excluding
ten largest ...
Ten largest
1990
All banks
Small
Medium
Large, excluding
ten largest ...
Ten largest

Net
income

Net
interest
margin

Net
Loss
noninterest provisions
margin

.92
1.08
.91

3.90
4.34
4.22

-1.92
-2.51
-2.21

.77
.39
.77

1.01
.65

3.85
3.18

-1.75
-1.24

.81
1.09

.53
.80
.61

3.61
4.09
3.99

-1.93
-2.50
-2.13

1.02
.51
1.04

.50
.21

3.46
2.92

-1.73
-1.42

1.21
1.20

.49
.79
.55

3.46
4.08
3.85

-1.82
-2.46
-2.02

.96
.50
1.09

.24
.47

3.27
2.68

-1.61
-1.25




bank profits derived from securities gains declined
in 1992. Net noninterest margins were up only
slightly, as increases in fee income were largely
offset by higher noninterest expenses, which were
likely associated with industry consolidation and
increases in off-balance-sheet activity.
All size categories of banks showed improvements in earnings in 1992, with the large and ten
largest banks showing the greatest gains. At large
banks excluding the ten largest, net interest margins widened 10 basis points more than the industry average, and loss provisions fell 15 basis points
more. The ten largest banks, like other banks,
enjoyed wider interest margins and a drop in loss
provisioning last year.3 Unlike other banks, however, they significantly improved their net noninterest margins by an average of 18 basis points, in
part because of substantial gains from foreign
exchange transactions. Nonetheless, relatively low
net interest margins and high rates of provisioning
kept net income at the ten largest banks well below
the industry average. Although small banks posted
the smallest gains in net income compared with
that in 1991 (their rate of provisioning edged down
only 12 basis points), they remained the most profitable group in 1992.
Bank income varied widely by Federal Reserve
District (table 3). The largest improvements in earnings were among Districts that had returns on assets
near or below the industry average in 1991. Banks
in these Districts, which typically have higher concentrations of commercial real estate loans, benefited from reductions in loss provisions and
increases in net interest margins. The largest gain
in 1992 was recorded by banks in the Boston
District, which reversed their year-earlier losses,
posting an average increase in return on assets of
88 basis points.
Despite higher earnings in 1992, dividend payouts as a percentage of average assets were roughly
the same as in recent years. As a result, banks
retained a substantial portion of their earnings,
contributing, along with hefty issuance of equity
and subordinated debt, to a significant improvement in their capital positions.
The strong 1992 results for banks showed
through to the results for bank holding companies,

1.30
.76

1. As a percentage of average net consolidated assets.

657

3. See note 1 regarding the ten largest banks.

658

Federal Reserve Bulletin • July 1993

whose return on assets averaged 0.82 percent, more
than double the return in 1991 and the highest rate
since 1988. The return on equity for holding companies was 12 percent, also the highest since 1988.
Assets of holding companies grew 2l/i percent; the
pace of that growth and its composition was similar
to that at banks—securities at holding companies
rose 143/4 percent, and loans and leases declined
l3/4 percent.

Asset Quality and Loss

Provisions

8. Reserves for loan losses, loss provisions, and net
charge-offs as a percentage of loans, 1977-92
Percent

1978

For the industry as a whole, asset quality improved
in 1992 (table 6). Net charge-offs were VA percent
of outstanding loans, compared with 1V2 percent in
1991. Similarly, the average delinquency rate
improved, dropping to 5lA percent from 6 percent.
In light of this progress, banks reduced their rate of
loss provisioning to P/4 percent of loans, down
from more than IV2 percent in 1991. On balance,
provisions for the year slightly exceeded net
charge-offs, and loss reserves as a percentage of
loans continued to edge up (chart 8). Loan quality
improved for most size categories of banks, but the
ten largest continued to have relatively high chargeoff and delinquency rates, especially on commercial real estate loans.

1982

1986

1990

Detailed data on net charge-offs and delinquencies by type of loan are available for medium-sized
and large banks and for all banks with foreign
offices (chart 9). Seasonally adjusted charge-off
and delinquency rates for most major types of
loans moved below their 1991 highs. For commercial and industrial loans, they dropped to the lower
end of the ranges seen during the last ten years.
Although delinquencies on real estate loans moved
9. Charge-off and delinquency rates, by type of loan,
1982-921
Percent

6. Measures of loan quality, by size of bank, 1990-921
Percent
Year and size of bank
1992
All banks
Small
Medium
Large, excluding
ten largest
Ten largest
1991
All banks
Small
Medium
Large, excluding
ten largest
Ten largest
1990
All banks
Small
Medium
Large, excluding
ten largest
Ten largest

Net
charge-offs

Delinquency
rate

Loss
provisions

1.29
.58
1.20

5.24
3.82
4.55

1.31
.72
1.28

1.43
1.77

5.10
7.53

1.34
1.79

1.58
.77
1.36

5.90
4.32
5.21

1.65
.92
1.65

1.69
2.37

6.13
7.69

1.92
1.87

1.42
.70
1.16

5.23
4.20
4.38

1.64
.89
1.69

1.72
1.92

5.42
6.85

2.03
1.18

1. As a percentage of average outstanding loans. Delinquent loans are
nonaccrual loans and those that are accruing interest but are more than thirty
days past due.




— 2
1982

1984

1986

1988

1990

1992

1. For medium-sized and large banks and for all banks with foreign
offices, seasonally adjusted. Charge-off rate series begin in 1982:Q 1; rates
are annualized charge-offs, net of recoveries, divided by average outstanding loans. Delinquency rate series begin in 1982:Q4; delinquent loans are
nonaccrual loans and those accruing interest but more than thirty days past
due. The delinquency rates are the average level of delinquent loans for the
period divided by the average level of outstanding loans for the period.

Bank Profits and Balance Sheet Developments, 1992

down, charge-offs remained particularly high, in
large part because of lingering problems with commercial real estate.
Banks' experiences with commercial real estate
loans have varied markedly (table 7). 4 The proportion of loan portfolios devoted to commercial real
estate loans has tended to be lower at larger banks
than at smaller ones, but the delinquency rates at
larger banks have been much higher. Although
most large banks have made some progress in
cleaning up their holdings of commercial real estate
loans, delinquency rates remain stubbornly high for
the ten largest banks and banks in the Boston, New
York, and San Francisco Federal Reserve Districts.

Interest Income and

Expense

Although interest income as a percentage of average assets was 112 basis points lower in 1992 than
in 1991, interest expense fell more, 141 basis
points; hence, net interest margins at banks widened 29 basis points. Several factors contributed to
higher net interest margins in 1992, but the bulk of
the increase was attributable to changing interest
rate relationships, which include the results of a
steeper yield curve, relatively high lending rates,
and unaggressive deposit pricing. As a consequence, although the gross rate of return on assets
fell 125 basis points, rates paid on deposits fell
more, 180 basis points.
To a lesser extent, net interest margins were
bolstered by changes in the composition of bank
assets and liabilities. On the asset side, banks
shifted about 2Va percent of their asset portfolios
from loans to securities, which tend to have somewhat longer maturities than bank loans do. Still,
about 35 V2 percent of bank loans and leases at the
end of 1992 had maturities greater than one year, a
proportion virtually unchanged from the end of
1991 (table 4). By contrast, on the liability side,
banks decreased the average maturity of their
deposits by substituting away from time deposits
toward liquid deposits and other funding sources,
such as subordinated debt and equity.
4. Commercial real estate loans are measured as the sum of
construction and land development loans secured by real estate;
real estate loans secured by nonfarm nonresidential properties; and
loans to finance commercial real estate, construction, and land
development activities not secured by real estate.




659

Interest income and expense for the various bank
size categories differed markedly. These differences can be traced to variations in the quality and
the relative maturities of the groups' assets and
liabilities. Interest margins for small and mediumsized firms were the highest of the four groups in
1992 (chart 10). Compared with larger-sized banks,
banks in these two groups tend to have more assets
that are better quality and have longer maturities.
In addition, these banks are likely to tie their business loans more to the prime rate than to market
rates. The widening of the spread of the prime rate
over market rates (chart 3) has helped these banks
to maintain higher rates of return on their loan
portfolios. On the liability side, medium-sized
banks were also able to obtain larger reductions in
interest expenses by sharply reducing their reliance
on time deposits to fund asset growth.

Noninterest

Income and

Expense

For the banking industry as a whole, noninterest
expenses edged up 13 basis points relative to average assets while noninterest income increased by
7.

Commercial real estate loans, by size of bank and by
Federal Reserve District, 1991-921
Percent
Size of bank,
and District

As a share
of total loans

Delinquency rate

1991

1992

1991

1992

19.82
22.50

20.48
21.22

5.33
9.06

4.23
8.19

18.32
13.20

17.78
12.25

13.29
20.89

11.36
23.23

Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

22.29
14.48
13.82
14.50
24.61
24.09
17.28
18.76
10.89
18.64
17.94
22.22

19.70
12.95
13.65
14.11
23.64
23.44
17.64
18.90
11.00
18.18
17.29
22.69

18.43
21.99
9.73
8.87
11.29
7.97
5.87
5.30
5.76
6.40
7.48
10.43

13.08
22.50
8.21
7.09
9.13
6.29
5.57
4.17
4.72
5.56
5.63
12.14

All banks

18.57

17.99

11.55

10.63

Size of bank
Small
Medium
Large, excluding
ten largest
Ten largest
District
New York
Philadelphia
Cleveland
Richmond

1. See text note 4 for definition of commercial real estate loans. Delinquent loans are nonaccrual loans and those that are accruing interest but are
more than thirty days past due.

660

Federal Reserve Bulletin • July 1993

10. Interest income, interest expense, and net interest
margin as a percentage of average assets, by size of
bank, 1980-92

11. Noninterest income, noninterest expense, and net
noninterest margin as a percentage of average assets,
by size of bank, 1980-92

Percent

Gross interest income

Percent

Noninterest income

Gross interest expense

Net noninterest margin

+
— 0.5

1980

1982

1984

1986

1988

1990

1992

14 basis points. Thus, the negative spread between
noninterest income and expenses narrowed slightly
in 1992 after widening 11 basis points in 1991. An
important part of the turnaround in noninterest
margins was the increase in fee income other than
service charges on deposits. This pickup in revenues was about offset, however, by higher noninterest expenses that probably arose from industry
consolidation and increases in off-balance-sheet
activity.
Noninterest margins for the ten largest banks
increased 18 basis points, well above the industry
average (chart 11). Noninterest income at these
banks was boosted in part by larger earnings on
foreign exchange transactions. This group of banks
was also able to hold down noninterest expenses in
1992, primarily by cutting occupancy costs. In
contrast, while noninterest income increased at
medium-sized and large banks other than the ten
largest, expenses increased by more, and noninterest margins at those banks fell slightly.
Noninterest margins at small banks were
unchanged in 1992. Fee income for these banks is
more closely tied to service charges on deposits,
which were also unchanged in 1992. These banks



1980

1982

1984

1986

1988

1990

1992

were also able to keep noninterest expenses in
check. Small banks have had weaker growth in
off-balance-sheet activity and, most likely, in associated expenses. In addition, smaller-sized institutions had higher quality assets than banks in other
size categories in 1992 and may have had lower
expenses for collection and legal services related to
poor asset performance.

Changes

in

Capital

Despite the surge in net income in 1992, banks
trimmed slightly their dividend payout rates, from
0.43 percent of average assets in 1991 to 0.42 percent last year. Consequently, retained income
increased five-fold, to %\1VA billion (table 8).
Banks further augmented their capital positions
with substantial issues of new equity and subordinated debt. On an annual average basis, total equity
capital rose Vi percentage point, to more than

Bank Profits and Balance Sheet Developments, 1992

661

8. Retained income and change in total equity capital, by size of bank, 1985-921
Millions of dollars except as noted
Item and size of bank

1985

1986

1987

1988

1989

1990

1991

1992

Retained income
All banks
Small
Medium
Large, excluding ten largest ...
Ten largest

9,312
2,115
3,224
2,647
1,325

8,008
1,258
2,887
2,235
1,627

-8,122
1,459
1,611
-4,518
-6,673

11,085
1,689
2,278
2,484
4,634

1,309
2,360
2,068
1,123
-4,243

2,287
1,965
189
-1,429
1,562

3,359
2,238
853
238
31

17,386
4,043
3,622
5,985
3,736

Net change in equity capital
All banks
Small
Medium
Large, excluding ten largest ...
Ten largest

14,990
5,359
4,732
3,119
1,781

12,686
3,732
4,526
2,385
2,042

-1,235
3,933
3,273
-3,717
-4,723

16,066
4,096
3,354
3,872
4,743

8,258
4,454
3,628
2,753
-2,577

14,091
4,747
4,208
2,486
2,650

12,705
4,172
4,397
3,976
161

31,950
5,841
6,865
9,339
9,906

Change in equity capital (percent)
All banks
Small
Medium
Large, excluding ten largest ...
Ten largest

9.8
10.1
11.2
10.6
6.2

7.5
6.9
9.5
6.9
6.4

-.7
7.3
6.3
-9.0
-13.9

8.9
7.5
6.1
9.5
16.2

4.2
8.0
6.5
5.6
-7.3

6.9
8.4
7.2
4.5
8.1

5.8
7.2
7.1
6.3
.5

13.8
10.0
10.5
13.1
27.5

Change in equity capital
attributable to retained
income (percent)
All banks
Small
Medium
Large, excluding ten largest ...
Ten largest

62.1
39.5
68.1
84.9
74.4

63.1
33.7
63.8
93.7
79.7

69.0
41.2
67.9
64.2
97.7

15.9
53.0
57.0
40.8

16.2
41.4
4.5

26.4
53.6
19.4
6.0
19.3

54.4
69.2
52.8
64.1
37.7

37.1
49.2

58.9

1. Change in equity capital calculated from year-end to year-end.
. . . Not applicable.

7 percent of average assets. The increase in capital
was particularly impressive for the ten largest
banks because of the relatively sharp improvement
in their profits, a cut in dividend payments of
one-third, and a significant issuance of new capital.
Banks' issuance of capital was aided by the
strong performance of bank securities in 1992
(chart 12). Stock prices of regional and money
center banks continued the rapid growth that characterized 1991, rising about four times faster than
the S&P 500 stock index in 1992. Interest-rate
spreads on bank holding company subordinated
debt over Treasury securities, which peaked at
more than 450 basis points in 1990, continued to
decline, dropping below 100 basis points late in the
year.
The recent increases in the capitalization of U.S.
banks have been driven in part by three regulatory
changes. First, under the Basle Accord, U.S. bank
regulators imposed minimum capital adequacy
guidelines in 1990 that became fully phased in on
December 31, 1992. Under these guidelines, banks
are expected to hold tier 1 capital—mainly common equity and perpetual preferred stock—of at
least 4 percent of risk-weighted assets. They must




12. Stock price indexes, and spread of interest rates paid
on bank subordinated debt over rates on comparable
Treasury securities, 1988-93
Index, January 15, 1992 = 100

Stock prices

1988

1990

1992

1. Data in top panel are for nine money center and twenty regional
banks as defined by Salomon Brothers. Data in lower panel are secondary
market yield spreads for a subset of these banks.

662

Federal Reserve Bulletin • July 1993

also hold total capital—tier 1 plus tier 2—of at
least 8 percent of risk-weighted assets. Tier 2 capital consists primarily of subordinated debt, nontier-1 preferred stock, and the allowance for loan
losses. U.S. regulators have independently imposed
limits on leverage based on banks' supervisory
ratings. For the best-rated banks, tier 1 capital must
be at least 3 percent of unweighted assets. In practice, however, most banks are required to hold
tier 1 capital of at least 4 percent of unweighted
assets.
The second regulatory change was the Federal
Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA), enacted on December 19, 1991.
Among other things, the legislation set more stringent limits on bank capital, requiring U.S. regulators to establish five capital zones: well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. To be well capitalized, for example, a
commercial bank must have total capital of at least
10 percent of risk-weighted assets, tier 1 capital of
at least 6 percent of risk-weighted assets, and tier 1
capital of at least 5 percent of total assets. Banks
with sufficient capital but weak supervisory ratings
may, however, be assigned to a lower capital zone.
With these limits, which became effective one
year after the enactment of FDICIA, the law
imposed restrictions on the activities of banks that
are not well capitalized. For example, banks that
are only adequately capitalized must obtain a
waiver from the FDIC in order to accept brokered
deposits, and they must apply to the FDIC for
pass-through deposit insurance for pension plan
deposits. Constraints on undercapitalized institutions are more stringent.
Finally, banks' demand for capital in 1992 was
boosted by the introduction of risk-based deposit
insurance premiums on January 1, 1993. Under the
new FDIC rules, a bank's premium is determined
by a two-step evaluation of the risk the bank poses
to the Bank Insurance Fund. First, banks are
divided into well-capitalized, adequately capitalized, and undercapitalized groups. Then each group
is further divided into three subgroups based on
regulators' evaluations of the institutions. Wellcapitalized banks with strong evaluations will pay a
premium of 23 basis points, the smallest premium
currently allowed under FDICIA and the same that
all banks paid in 1992. At the other extreme, the




premiums for undercapitalized banks with poor
evaluations will be 31 basis points.
With the large increases in capital achieved in
1992, most banks appeared to have satisfactory
capital levels by year-end: The average bank had
tier 1 capital equal to nearly 10 percent of riskweighted assets and total capital of more than
12 percent of risk-weighted assets (chart 13). Capital ratios were highest for small banks; and, on
average, even the largest banks had tier 1 capital of
6Vi percent of risk-weighted assets and total capital
of 11 percent of risk-weighted assets. At year-end,
about 94 percent of all U.S. banks, accounting for
89 percent of bank assets, were either well capitalized or adequately capitalized. A large majority of
banks had substantial cushions of capital, with
almost 80 percent of banks in the well-capitalized
category. Well-capitalized banks accounted for
nearly two-thirds of bank assets.
Even though most banks were well capitalized at
the start of 1992, capital grew strongly during the
year. Apparently, banks wanted to hold considerably more capital than required by statutes. Study
of the behavior of individual banks suggests that
many have set internal capital targets that are
higher than the regulatory minimums. Banks have
found that increased capital, besides inviting less
regulatory scrutiny, lowers the rates they pay on
uninsured liabilities.

DEVELOPMENTS IN 1993
Many of the trends seen in 1992 carried through
into the first quarter of 1993. Bank profits were
13. Risk-based capital ratios, by size of bank, fourth
quarter, 1991 and 19921

1991 1992
All

Small

Medium

Large, excluding Ten largest

1. See text for explanation of capital tiers and risk weights.

Bank Profits and Balance Sheet Developments, 1992

strong in the first quarter because of high net interest margins and low charge-offs. Balance sheet
adjustments continued, with bank loans declining
further in the first quarter and securities holdings
rising rapidly. Banks continued to augment their
capital through both high retained earnings and
new capital issues. Bank stock prices declined in
the spring, however, apparently because investors
anticipated that higher interest rates might lower
bank profits.
In March the federal banking agencies
announced their intention to change regulatory
requirements that may have restricted the supply of

A.l.

663

business credit without being essential to sound
banking. Two of the changes were particularly
noteworthy: First, the regulatory agencies agreed to
allow strong and well-managed banks to establish a
limited portfolio of "character" loans—loans to
creditworthy small and medium-sized businesses
that will not be subject to examiner criticism based
on documentation. Second, the agencies proposed
raising the minimum size of real estate loans requiring formal appraisals, from $100,000 to $250,000.
The appraisal requirement had been singled out by
LPS respondents as a substantial constraint on lending to small businesses.

Report of income, all insured domestic commercial banks and nondeposit trust companies, 1985-92
Millions of dollars
Item

1985

1986

1987

1988

1989

1990

1991

1992

Operating income, total

279,102

273,603

286,602

317,966

368,059

375,729

350,140

323,366

Interest income
Loans
Balances due from depositories
Gross federal funds sold and
repurchase agreements
Securities (excluding trading account)
Tax exempt
Taxable
Trading account assets

247,836
183,462
13,767

237,477
175,480
11,209

244,740
180,368
11,963

272,323
201,542
13,497

316,389
237,319
15,012

319,968
238,491
12,573

289,288
213,879
9,067

256,356
185,900
7,411

9,556
37,709
6,269
31,440
3,341

9,115
38,339
10,708
27,631
3,334

9,012
39,441
9,199
30,243
3,956

10,352
42,005
8,132
33,873
4,926

12,999
46,631
7,236
39,394
4,429

12,530
50,977
6,282
44,694
5,398

9,120
52,552
5,378
47,174
4,670

5,907
51,818
4,658
47,160
5,319

31,266
7,370
23,896

36,125
7,972
28,154

41,862
8,734
33,128

45,643
9,453
36,190

51,670
10,236
41,434

55,761
11,419
44,342

60,852
12,812
48,040

67,010
14,116
52,894

Operating expense, total

257,426

255,342

280,306

284,688

344,170

352,812

327,726

281,594

Interest expense
Deposits
Deposits in foreign offices
Deposits in domestic offices
Transaction accounts
Savings (including MMDAs)
Large denomination certificates
of deposit
Other time deposits
Gross federal funds purchased and
repurchase agreements
Other

157,128
130,650
30,129
100,521
n.a.
n.a.

142,680
117,442
24,450
92,992
n.a.
n.a.

144,951
115,604
26,024
89,580
8,353
28,412

164,984
129,442
28,474
100,968
9,018
29,795

204,560
157,055
33,609
123,445
9,352
32,128

204,647
161,228
34,087
127,141
9,758
33,260

167,607
138,684
25,169
113,515
9,719
31,063

122,426
98,690
21,431
77,260
7,051
23,029

22,973
n.a.

19,774
n.a.

19,677
33,138

23,491
38,664

30,314
51,652

27,844
56,279

20,441
52,292

11,459
35,720

16,586
9,891

15,890
9,347

15,918
13,430

18,625
16,916

24,849
22,656

22,730
20,688

14,370
14,552

9,259
14,477

Loss provisions

17,829

22,206

37,712

17,502

31,071

31,965

34,248

26,556

Noninterest expense
Salaries, wages, and employee benefits
Occupancy expense
Other operating expenses

82,469
40,044
13,327
29,099

90,457
43,013
14,542
32,901

97,643
45,329
15,311
37,004

102,202
46,879
15,909
39,415

108,539
49,299
16,646
42,594

116,201
52,007
17,513
46,681

125,871
53,513
17,878
54,480

132,612
55,449
18,137
59,026

1,552

3,934

1,444

275

793

470

2,897

3,951

23,227
5,620
228
17,835
8,524
9,312

22,195
5,258
277
17,213
9,206
8,008

7,739
5,410
201
2,530
10,652
-8,122

33,553
10,015
812
24,351
13,266
11,085

24,682
9,616
311
15,377
14,068
1,309

23,386
7,844
651
16,194
13,906
2,287

25,311
8,279
686
17,719
14,360
3,359

45,722
14,505
412
31,630
14,244
17,386

Noninterest income
Service charges on deposits
Other operating income

Securities gains
Income before taxes
Taxes
Extraordinary items
Net income
Cash dividends declared
Retained income
n.a. Not available.




664

Federal Reserve Bulletin • July 1993

A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and
nondeposit trust companies, by size of bank, 1985-92
A. All banks
Item

1985

1986

1987

1988

1989

1990

1991

1992

Balance sheet items as a percentage of average consolidated assets including loss reserves
Interest-earning assets
Interest-bearing balances at depositories ..
Loans
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
Construction and land
development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
Booked in foreign offices
To depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
Securities
U.S. government and other debt
U.S. government securities
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage
pools
Collateralized mortgage
obligations
Other
Other debt securities
State and local government
Taxable
Tax-exempt
Equity1
Trading account assets
Gross federal funds sold and reverse
repurchase agreements
Non-interest-earning assets

86.64
5.58
59.92
21.99
17.27
4.71
10.95
2.61
8.34
15.75

87.06
5.13
59.48
20.67
16.69
3.98
11.28
2.96
8.33
16.76

87.50
5.22
59.68
19.71
16.34
3.36
11.26
3.12
8.14
18.74

88.04
4.97
60.44
19.19
16.28
2.91
11.53
3.41
8.11
20.53

87.97
4.36
61.23
18.80
16.29
2.51
11.71
3.64
8.08
22.16

87.86
3.55
61.13
18.21
15.75
2.47
11.59
3.72
7.87
23.49

88.09
3.02
60.18
17.05
14.76
2.29
11.27
3.82
7.45
24.46

88.36
2.78
57.97
15.53
13.33
2.20
10.84
3.76
7.08
24.47

3.19
.41
7.25
n.a.
n.a.
.44
4.00
.46
2.86
1.55
1.52
4.47
.83
15.49
10.66
9.56
4.54

3.48
.43
7.39
n.a.
n.a.
.49
4.41
.55
2.49
1.42
1.22
4.73
.91
16.14
10.82
9.22
4.29

3.84
.46
8.10
n.a.
n.a.
.56
5.18
.59
2.36
1.33
1.02
4.29
.96
16.76
12.43
10.02
5.72

4.00
.49
9.06
1.12
7.94
.58
5.74
.67
2.13
1.20
.97
3.83
1.05
16.89
13.26
10.32
5.51

4.09
.50
10.00
1.40
8.60
.60
6.26
.71
1.87
1.02
.94
3.64
1.09
16.88
13.53
10.85
4.91

3.94
.50
11.03
1.64
9.39
.62
6.66
.74
1.67
.77
.94
3.36
1.10
17.36
14.49
11.94
4.50

3.35
.52
12.08
1.92
10.16
.65
7.12
.75
1.48
.74
1.00
3.11
1.07
18.63
16.08
13.59
4.98

2.60
.55
12.70
2.05
10.65
.74
7.19
.68
1.27
.72
1.01
3.12
1.01
20.85
18.44
16.08
6.38

5.02

4.93

3.98

4.81

5.94

7.44

8.61

9.70

.95

1.12

2.07

2.55

3.22

4.02

4.44

4.45

n.a.
4.07
1.09
4.83
n.a.
4.83
n.a.
1.21

n.a.
3.81
1.60
5.32
n.a.
5.32
n.a.
1.55

n.a.
1.91
2.41
4.34
.06
4.28
n.a.
1.32

n.a.
2.25
2.94
3.63
.06
3.57
n.a.
1.26

n.a.
2.72
2.68
3.10
.08
3.02
.29
1.23

1.33
2.09
2.55
2.60
.08
2.52
.26
1.44

2.03
2.14
2.49
2.24
.07
2.17
.31
1.74

3.07
2.18
2.36
2.05
.08
1.96
.36
2.30

4.44
12.55

4.77
12.01

4.51
11.12

4.48
10.37

4.27
10.53

4.39
10.60

4.51
10.32

4.46
10.06

Interest-bearing liabilities
Deposit liabilities
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements
Other
Non-interest-bearing liabilities
Demand deposits

72.27
61.02
12.18
48.84
4.54
16.44
11.46
16.40

72.44
60.07
11.15
48.92
5.15
17.45
10.88
15.44

73.01
60.41
10.87
49.54
5.96
18.17
10.83
14.59

74.20
61.07
10.25
50.83
6.15
17.44
11.48
15.75

74.88
61.64
9.54
52.10
6.03
16.16
12.07
17.84

75.35
62.44
9.11
53.33
6.10
16.47
11.38
19.39

75.36
63.42
8.41
55.01
6.61
17.86
9.85
20.68

74.13
61.93
8.24
53.69
7.53
20.20
7.43
18.54

7.66
3.58
21.52
15.39

8.22
4.15
21.31
15.75

8.02
4.58
20.91
15.13

7.89
5.23
19.74
14.02

8.10
5.14
18.85
13.29

7.90
5.00
18.35
12.59

6.98
4.96
18.07
12.38

6.91
5.29
18.81
13.03

35.20
.80
6.21

34.71
.93
6.25

34.65
1.38
6.08

35.18
1.59
6.06

35.16
1.50
6.26

33.72
1.54
6.31

30.52
1.59
6.57

28.22
1.58
7.06

2,593

2,799

2,962

3,097

3,234

3,391

3,434

3,497

MEMO

Money market liabilities
Loss reserves
Total equity capital
Average consolidated assets including
loss reserves (billions of dollars)




Bank Profits and Balance Sheet Developments, 1992

665

A.2.—Continued
A. All banks
Item

1985

1986

1987

1988

1989

1990

1991

1992

Effective interest rate (percent)
Rates earned
Interest-earning assets
Taxable equivalent
Loans, gross
Net of loss provisions
Securities
Taxable equivalent
U.S. government and other debt
State and local
Equity1
Trading account assets
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements

11.13
11.49
11.98
10.81
9.44
10.67
10.44
5.09
n.a.
10.10

9.88
10.35
10.77
9.41
8.49
10.29
9.13
7.17
n.a.
7.83

9.41
9.65
10.21
8.07
7.94
8.87
8.18
7.26
n.a.
10.02

9.98
10.19
10.78
9.85
8.04
8.78
8.21
7.38
n.a.
12.63

11.10
11.26
11.98
10.41
8.56
9.11
8.83
7.44
7.72
11.11

10.65
10.77
11.45
9.92
8.66
9.12
8.91
7.38
7.23
10.20

9.52
9.63
10.33
8.68
8.26
8.64
8.44
7.25
6.07
7.52

8.27
8.37
9.17
7.86
7.14
7.46
7.21
6.83
5.15
6.41

8.27
8.17
9.48
7.85
n.a.
n.a.
8.73
n.a.

6.97
6.92
7.79
6.72
n.a.
n.a.
7.34
n.a.

6.61
6.38
7.89
6.04
4.54
5.29
6.86
6.98

7.12
6.81
8.89
6.39
4.74
5.52
7.37
7.28

8.39
7.85
10.87
7.30
4.81
6.17
8.63
8.27

7.91
7.55
10.72
7.00
4.77
5.97
8.02
7.95

6.39
6.30
8.54
5.96
4.31
5.07
6.66
6.88

4.65
4.50
7.32
4.06
2.69
3.25
4.89
5.14

7.97

6.78

6.51

7.28

9.19

7.99

5.72

3.65

Income and expenses as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse
repurchase agreements
Other
Gross interest expense
Deposits
Gross federal funds purchased and
repurchase agreements
Other
Net interest margin
Taxable equivalent
Loss provisions
Noninterest income
Service charge on deposits
Foreign related
Other
Noninterest expense
Salaries and employee benefits
Occupancy
Other
Net noninterest margin
Securities gains
Income before taxes
Taxes
Extraordinary items
Net income
Cash dividends declared
Retained income

9.75
10.06
7.22
1.48

8.70
9.11
6.43
1.41

8.43
8.64
6.22
1.36

8.98
9.17
6.65
1.39

9.99
10.13
7.49
1.47

9.60
9.72
7.16
1.53

8.59
8.69
6.35
1.56

7.47
7.56
5.42
1.51

.38
.67
6.18
5.14

.33
.53
5.23
4.30

.31
.54
4.99
3.98

.34
.60
5.44
4.27

.41
.62
6.46
4.96

.38
.53
6.14
4.84

.27
.41
4.98
4.12

.17
.37
3.57
2.88

.65
.39
3.57
3.88
.70
1.23
.29
.06
.88
3.24
1.58
.52
1.14
-2.01
.06

.58
.34
3.47
3.88
.81
1.32
.29
.06
.97
3.32
1.58
.53
1.21
-2.00
.14

.55
.46
3.44
3.65
1.30
1.44
.30
.09
1.05
3.36

.61
.56
3.54
3.73
.58
1.51
.31
.07
1.12
3.37

.78
.72
3.53
3.67
.98
1.63
.32
.07
1.24
3.43

.68
.62
3.46
3.57
.96
1.67
.34
.08
1.25
3.49

.43
.43
3.61
3.71
1.02
1.81
.38
.08
1.35
3.74

1.56

1.55

1.56

1.56

1.59

.53
1.28
-1.92
.05

.52
1.30
-1.86
.01

.53
1.34
-1.80
.03

.53
1.40
-1.82
.01

.53
1.62
-1.93
.09

.27
.42
3.90
3.99
.77
1.95
.41
.10
1.44
3.87
1.62
.53
1.72
-1.92
.12

.91
.22
.01
.70
.34
.37

.81
.19
.01
.63
.34
.29

.27
.19
.01
.09
.37
-.28

1.11
.33
.03
.80
.44
.37

.78
.30
.01
.49
.44
.04

.70
.24
.02
.49
.42
.07

.75
.25
.02
.53
.43
.10

1.33
.42
.01
.92
.42
.51

11.07

9.84

1.40

12.98

7.59

7.57

7.86

12.80

MEMO

Return on equity

i. As in the Call Report, equity securities are combined with "other debt securities" before 1989.
n.a. Not available.




666

Federal Reserve Bulletin • July 1993

A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and
nondeposit trust companies, by size of bank, 1985-92
B. Banks with less than $300 million in assets
Item

1985

1986

1987

1988

1989

1990

1991

1992

Balance sheet items as a percentage of average consolidated assets including loss reserves
Interest-earning assets
Interest-bearing balances at depositories ..
Loans
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
Construction and land
development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
Booked in foreign offices
To depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
Securities
U.S. government and other debt
U.S. government securities
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage
pools
Collateralized mortgage
obligations
Other
Other debt securities
State and local government
Taxable
Tax-exempt
Equity1
Trading account assets
Gross federal funds sold and reverse
repurchase agreements
Non-interest-earning assets
Interest-bearing liabilities
Deposit liabilities
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements
Other
Non-interest-bearing liabilities
Demand deposits

89.89
2.88
54.55
14.50
14.46

90.03
3.06
53.57
13.76
13.74

90.59
3.25
53.65
12.86
12.83

90.92
3.17
54.70
12.44
12.42

91.01
2.34
55.58
12.06
12.03

91.10
1.77
55.30
11.45
11.42

91.32
1.56
54.36
10.39
10.36

91.46
1.15
53.35
9.63
9.60

13.15
.89
12.26
20.77

12.48
.85
11.63
21.86

11.94
1.04
10.90
23.90

11.48
.94
10.55
25.94

11.56
1.04
10.53
27.25

11.18
1.08
10.10
28.21

10.58
1.37
9.21
28.81

9.57
1.00
8.57
29.79

2.25
1.22
11.08
n.a.
n.a.
.50
5.72

2.28
1.34
11.48
n.a.
n.a.
.54
6.22

2.18
1.52
12.74
n.a.
n.a.
.61
6.85

2.24
1.67
14.04
.80
13.23
.62
7.36

2.31
1.76
14.77
.97
13.80
.64
7.76

2.37
1.82
15.28
1.18
14.10
.66
8.07

2.14
1.91
15.77
1.25
14.52
.69
8.31

1.95
2.04
16.26
1.30
14.96
.76
8.78

.80

.56

.57

.68

.67

.47

.46

.19

4.15
.96
.21
26.87
18.94
18.22
3.91

3.53
1.16
.21
26.37
18.43
17.36
3.63

3.1*6
1.00
.20
27.27
20.70
18.54
9.63

3.11
.84
.20
27.64
22.05
19.28
9.68

3.17
.67
.19
27.42
22.18
19.85
8.66

3.23
.57
.18
27.92
23.07
20.92
8.65

3.43
.50
.17
29.58
25.01
22.75
9.13

3.52
.47
.17
31.85
27.16
25.14
10.18

14.31

13.73

7.56

9.60

11.19

12.27

13.62

14.96

1.51

1.35

2.60

3.17

3.73

4.52

5.53

5.46

n.a.
12.80
.72
7.93
n.a.
7.93
n.a.
.05

n.a.
12.38
1.07
7.94
n.a.
7.94
n.a.
.06

n.a.
4.%
2.15
6.57
.16
6.41
n.a.
.07

n.a.
6.43
2.77
5.59
.19
5.40
n.a.
.05

n.a.
7.46
2.33
4.90
.22
4.68
.39
.08

.95
6.80
2.15
4.50
.23
4.27
.35
.08

1.53
6.56
2.26
4.20
.23
3.97
.37
.06

2.66
6.84
2.01
4.26
.27
3.99
.43
.06

5.53
9.43

6.98
9.19

6.35
8.56

5.35
8.22

5.59
8.12

6.02
8.03

5.76
7.77

5.05
7.61

74.43
71.90

75.00
72.77

75.73
73.45

76.24
73.79

76.46
74.25

77.17
74.97

77.79
75.83

77.15
75.06

71.79
7.88
21.19
11.74
30.97

72.65
8.81
22.26
11.54
30.03

73.39
10.13
23.28
10.98
29.01

73.73
10.41
21.91
11.14
30.27

74.19
10.22
19.45
11.33
33.20

74.89
10.31
18.57
11.07
34.95

75.76
10.81
19.14
10.28
35.53

74.99
12.17
21.94
8.34
32.54

1.76
.78
17.44
15.16

1.49
.74
16.95
14.86

1.38
.90
16.11
14.12

1.57
.89
15.47
13.50

1.42
.78
15.05
12.98

1.32
.87
14.27
12.18

1.31
.66
13.64
11.58

1.35
.74
14.04
12.09

14.16
.69
8.13

13.67
.77
8.06

13.18
.85
8.16

13.53
.87
8.29

13.47
.87
8.49

13.21
.87
8.56

12.20
.92
8.57

10.40
.93
8.81

688

701

693

687

688

697

703

698

MEMO

Money market liabilities
Loss reserves
Total equity capital
Average consolidated assets including
loss reserves (billions of dollars)




Bank Profits and Balance Sheet Developments, 1992

667

A. 2.—Continued
B. Banks with less than $300 million in assets
Item

1985

1986

1987

1988

1989

1990

1991

1992

Effective interest rate (percent)
Rates earned
Interest-earning assets
Taxable equivalent
Loans, gross
Net of loss provisions
Securities
Taxable equivalent
U.S. government and other debt
State and local
Equity1
Trading account assets
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits . . .
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements

11.30
11.56
12.53
11.07
9.64
10.26
10.53
2.79
n.a.
9.59

10.22
10.74
11.54
9.90
8.70
10.29
9.23
7.47
n.a.
8.76

9.53
9.87
10.83
9.59
7.90
8.94
8.02
7.50
n.a.
9.40

9.77
10.02
11.02
10.03
7.93
8.63
8.00
7.58
n.a.
14.88

10.52
10.74
11.77
10.89
8.39
9.02
8.55
7.60
7.98
14.40

10.31
10.51
11.56
10.67
8.45
9.00
8.63
7.48
7.95
11.35

9.64
9.82
11.02
10.09
8.06
8.53
8.21
7.20
7.01
9.02

8.41
8.58
9.81
9.09
6.98
7.40
7.05
6.72
5.44
7.02

7.96
7.96

6.86
6.86

6.13
6.11

6.39
6.36

7.14
7.10

6.98
6.96

6.14
6.14

4.41
4.42

7.96
n.a.
n.a.
8.69
n.a.

6.86
n.a.
n.a.
7.35
n.a.

6.11
4.93
5.35
6.56
6.96

6.36
4.98
5.48
7.13
7.18

7.10
5.08
5.82
8.37
8.03

6.96
5.02
5.74
7.91
7.88

6.14
4.60
5.16
6.77
6.95

4.42
3.13
3.60
4.86
5.34

7.84

6.58

6.31

6.94

8.48

7.71

5.73

3.70

Income and expenses as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse
repurchase agreements
Other
Gross interest expense
Deposits
Gross federal funds purchased and
repurchase agreements
Other
Net interest margin
Taxable equivalent
Loss provisions
Noninterest income
Service charge on deposits
Foreign related
Other
Noninterest expense
Salaries and employee benefits
Occupancy
Other
Net noninterest margin
Securities gains
Income before taxes
Taxes
Extraordinary items
Net income
Cash dividends declared
Retained income

10.28
10.51
6.90
2.61

9.31
9.79
6.24
2.32

8.75
9.05
5.87
2.18

9.00
9.23
6.08
2.22

9.71
9.91
6.60
2.32

9.53
9.71
6.47
2.38

8.93
9.09
6.05
2.40

7.79
7.94
5.28
2.25

.50
.27
6.05
5.84

.50
.25
5.27
5.11

.45
.25
4.72
4.56

.44
.26
4.94
4.75

.56
.23
5.53
5.34

.53
.15
5.45
5.29

.35
.13
4.84
4.72

.18
.08
3.44
3.36

.14
.06
4.23
4.47
.81
.86
.42

.10
.06
4.04
4.52
.88
.87
.41

.09
.07
4.03
4.33
.67
.90
.40

.12
.07
4.06
4.29
.55
.92
.40

.13
.07
4.18
4.39
.49
.41

.10
.07
4.08
4.26
.50
1.02
.42

.07
.04
4.09
4.25
.51
1.12
.44

.05
.03
4.34
4.49
.39
1.14
.45

.44
3.44
1.66
.53
1.25
-2.58
.07

.46
3.47
1.63
.53
1.31
-2.60
.15

.49
3.43
1.61
.51
1.30
-2.53
.03

.51
3.43
1.62
.51
1.31
-2.51
.01

.59
3.48
1.65
.50
1.32
-2.48
.01

.60
3.48
1.64
.49
1.35
-2.46
.00

.68
3.62
1.65
.49
1.48
-2.50
.06

.70
3.65
1.69
.48
1.48
-2.51
.09

.93
.20
.01
.74
.43
.31

.72
.15
.02
.58
.40
.18

.86
.25
.02
.62
.41
.21

1.00

.30
.02
.72
.47
.25

1.22
.37
.02
.87
.52
.35

1.12
.34
.01
.79
.50
.29

1.13
.35
.01
.80
.47
.32

1.54
.48
.02
1.08
.49
.59

9.02

7.11

7.49

8.62

10.12

9.08

9.19

12.11

1.00

MEMO

Return on equity
1. See note 1, table A.2.A (all banks),
n.a. Not available.
. . . Not applicable.




668

Federal Reserve Bulletin • July 1993

A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and
nondeposit trust companies, by size of bank, 1985-92
C. Banks with $300 million to $5 billion in assets
Item

1985

1986

1987

1988

1989

1990

1991

1992

Balance sheet items as a percentage of average consolidated assets including loss reserves
Interest-earning assets
Interest-bearing balances at depositories ..
Loans
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
Construction and land
development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
Booked in foreign offices
To depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
Securities
U.S. government and other debt
U.S. government securities
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage
pools
Collateralized mortgage
obligations
Other
Other debt securities
State and local government
Taxable
Tax-exempt
Equity1
Trading account assets
Gross federal funds sold and reverse
repurchase agreements
Non-interest-earning assets

87.24
4.29
59.54
19.13
18.63
.51
13.97
3.54
10.43
17.63

87.72
3.30
60.70
18.28
17.92
.35
15.01
4.51
10.50
19.12

88.32
3.11
62.45
18.12
17.83
.29
14.91
4.46
10.46
22.15

88.96
2.85
63.65
17.63
17.44
.18
16.17
5.63
10.55
23.61

89.07
2.48
63.91
17.54
17.38
.16
15.28
4.82
10.46
25.53

88.91
1.93
63.08
16.38
16.25
.13
15.16
5.05
10.11
26.41

89.13
1.82
61.49
14.76
14.62
.14
14.66
5.31
9.35
27.47

89.21
1.38
58.75
12.89
12.71
.18
14.19
5.40
8.79
27.37

4.14
.20
7.69
n.a.
n.a.
.54
5.05
.01
2.06
.45
.66
4.82
.81
17.94
12.08
10.88
7.89

4.33
.21
8.19
n.a.
n.a.
.62
5.75
.01
1.62
.37
.57
4.92
.81
18.03
11.82
10.17
7.08

4.82
.24
9.21
n.a.
n.a.
.65
7.21
.02
1.31
.32
.46
4.38
.80
17.99
13.10
10.95
6.80

4.84
.25
10.19
1.69
8.51
.63
7.70
.01
1.13
.24
.45
3.62
.80
17.96
13.92
11.15
6.37

4.74
.27
11.30
2.07
9.23
.68
8.53
.01
1.00
.16
.43
3.14
.82
18.22
14.48
11.89
5.87

4.26
.27
12.28
2.25
10.03
.71
8.86
.03
1.17
.10
.45
2.57
.85
18.83
15.40
13.18
5.39

3.65
.28
13.19
2.50
10.69
.81
9.53
.00
.99
.06
.50
2.22
.84
20.96
17.90
15.51
6.28

2.82
.33
14.07
2.53
11.54
.91
9.21
.03
.83
.04
.55
2.08
.80
23.57
20.79
18.59
7.57

2.99

3.09

4.13

4.78

6.02

7.79

9.22

11.02

Interest-bearing liabilities
Deposit liabilities
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements
Other
Non-interest-bearing liabilities
Demand deposits

.96

1.10

2.14

2.47

3.02

3.85

4.30

4.73

n.a.
2.03
1.20
5.86
n.a.
5.86
n.a.
.31

n.a.
1.99
1.65
6.21
n.a.
6.21
n.a.
.36

n.a.
2.00
2.16
4.89
.04
4.84
n.a.
.22

n.a.
2.31
2.77
4.04
.04
4.00
n.a.
.33

n.a.
3.00
2.59
3.43
.04
3.38
.36
.38

1.90
2.04
2.23
3.11
.06
3.05
.32
.52

2.71
2.22
2.40
2.68
.07
2.62
.37
.30

3.85
2.44
2.19
2.31
.07
2.24
.46
.55

5.17
11.99

5.34
11.40

4.55
10.67

4.16
9.98

4.09
9.89

4.55
9.92

4.56
9.49

4.96
9.35

71.74
60.15
2.92
57.23
5.23
20.42
13.56
18.02

72.07
60.12
2.41
57.71
5.99
21.67
12.81
17.25

73.10
61.27
2.31
58.96
7.12
22.37
12.58
16.88

74.83
61.62
2.23
59.41
7.21
20.80
12.79
18.60

75.56
62.85
2.15
60.70
7.05
19.33
12.73
21.60

76.07
64.35
1.70
62.65
7.18
19.57
12.26
23.64

76.01
65.50
1.58
63.91
7.83
20.56
10.42
25.10

74.71
64.39
1.34
63.06
9.01
23.03
7.96
23.06

8.95
2.64
21.92
18.54

9.03
2.92
21.41
18.27

8.94
2.90
20.32
17.30

9.14
4.06
18.61
15.63

9.20
3.51
17.75
14.70

8.22
3.50
17.08
13.95

7.27
3.24
16.90
13.59

7.17
3.15
17.85
14.20

27.96
.77
6.33

27.06
.88
6.51

26.63
1.01
6.57

28.12
1.06
6.57

27.49
1.04
6.69

25.63
1.17
6.84

22.46
1.37
7.09

19.58
1.44
7.44

707

768

814

868

867

901

903

927

MEMO

Money market liabilities
Loss reserves
Total equity capital
Average consolidated assets including
loss reserves (billions of dollars)




Bank Profits and Balance Sheet Developments, 1992

669

A.2.—Continued
C. Banks with $300 million to $5 billion in assets
Item

1985

1986

1987

1988

1989

1990

1991

1992

Effective interest rate (percent)
Rates earned
Interest-earning assets
Taxable equivalent
Loans, gross
Net of loss provisions
Securities
Taxable equivalent
U.S. government and other debt
State and local
Equity1
Trading account assets
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements

10.90
11.49
11.82
10.85
9.16
10.92
10.21
6.89
n.a.
8.41

9.92
10.49
10.82
9.56
8.26
10.09
8.94
6.94
n.a.
7.28

9.43
9.79
10.23
8.97
7.73
8.85
7.98
7.04
n.a.
7.06

9.93
10.18
10.78
9.70
7.87
8.63
8.08
7.16
n.a.
6.40

10.75
10.96
11.61
10.43
8.37
9.01
8.65
7.30
7.15
7.49

10.39
10.55
11.19
9.49
8.51
9.00
8.78
7.32
6.93
9.76

9.54
9.68
10.40
8.74
8.16
8.58
8.35
7.23
5.77
7.21

8.14
8.26
9.14
7.86
6.91
7.22
6.96
6.83
4.88
4.94

7.84
7.82
8.60
7.78
n.a.
n.a.
8.61
n.a.

6.71
6.70
7.00
6.69
n.a.
n.a.
7.26
n.a.

6.20
6.10
6.75
6.07
4.63
5.31
6.78
7.14

6.66
6.50
7.55
6.47
4.77
5.54
7.48
7.45

7.64
7.36
8.97
7.30
4.86
6.13
8.72
8.31

7.18
7.04
8.12
7.01
4.75
5.97
8.03
8.02

6.03
6.04
6.29
6.03
4.28
5.11
6.57
7.08

4.15
4.17
4.25
4.17
2.69
3.33
4.75
5.35

7.86

6.61

6.42

7.41

9.01

7.85

5.58

3.42

Income and expenses as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse
repurchase agreements
Other
Gross interest expense
Deposits
Gross federal funds purchased and
repurchase agreements
Other
Net interest margin
Taxable equivalent
Loss provisions
Noninterest income
Service charge on deposits
Foreign related
Other
Noninterest expense
Salaries and employee benefits
Occupancy
Other
Net noninterest margin
Securities gains
Income before taxes
Taxes
Extraordinary items
Net income
Cash dividends declared
Retained income

9.65
10.16
7.12
1.68

8.84
9.35
6.68
1.54

8.50
8.83
6.55
1.43

8.98
9.20
7.00
1.44

9.77
9.96
7.58
1.55

9.43
9.57
7.22
1.63

8.68
8.81
6.53
1.74

7.41
7.52
5.49
1.66

.43
.42
5.82
4.87

.36
.26
5.03
4.20

.29
.23
4.65
3.84

.30
.24
5.08
4.10

.38
.26
5.90
4.72

.37
.21
5.58
4.62

.27
.14
4.69
4.05

.17
.09
3.19
2.76

.73
.22
3.82
4.34
.59
1.40
.34
.01
1.05
3.66
1.72
.57
1.36
-2.26
.04

.62
.22
3.82
4.32
.78
1.42
.34
.01
1.07
3.63
1.65
.55
1.42
-2.21
.13

.59
.23
3.85
4.17
.81
1.38
.35
.02
1.01
3.57
1.58
.53
1.46
-2.19
.04

.69
.30
3.89
4.12
.70
1.43
.35
.00
1.08
3.56
1.51
.51
1.54
-2.13
.00

.85
.32
3.87
4.06
.77
1.41
.36
.01
1.04
3.49
1.49
.50
1.50
-2.08
.01

.66
.29
3.85
3.99
1.09
1.50
.37
.01
1.12
3.52
1.48
.49
1.55
-2.02
.01

.42
.23
3.99
4.12
1.04
1.60
.41
.01
1.18
3.73
1.49
.50
1.75
-2.13
.08

.25
.18
4.22
4.33
.77
1.70
.43
.01
1.26
3.91
1.52
.50
1.89
-2.21
.10

1.02
.19
.01
.84
.37
.47

.96
.19
.01
.77
.38
.39

.89
.26
.01
.64
.43
.20

1.06
.31
.01
.75
.48
.27

1.04
.32
.00
.73
.48
.24

.75
.21
.01
.55
.53
.02

.90
.30
.00
.61
.51
.10

1.35
.45
.00
.91
.51
.40

12.96

11.50

9.45

11.18

10.65

7.83

8.39

11.90

MEMO

Return on equity
1. See note 1, table A.2.A (all banks).
n.a. Not available.




670

Federal Reserve Bulletin • July 1993

A.2.

Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and
nondeposit trust companies, by size of bank, 1985-92
D. Banks with more than $5 billion in assets, excluding ten largest
Item

1985

1986

1987

1988

1989

1990

1991

1992

Balance sheet items as a percentage of average consolidated assets including loss reserves
Interest-earning assets
Interest-bearing balances at depositories ..
Loans
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
Construction and land
development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
Booked in foreign offices
To depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
Securities
U.S. government and other debt
U.S. government securities
US. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage
pools
Collateralized mortgage
obligations
Other
Other debt securities
State and local government
Taxable
Tax-exempt
Equity1
Trading account assets
Gross federal funds sold and reverse
repurchase agreements
Non-interest-earning assets

84.97
7.93
63.50
26.59
21.96
4.63
10.30
4.29
6.01
12.50

85.62
7.06
61.75
25.14
21.56
3.58
10.69
4.26
6.43
12.79

86.30
6.67
61.77
23.62
20.83
2.79
11.39
4.68
6.71
14.86

87.19
6.32
62.28
23.24
21.06
2.18
11.15
4.35
6.80
17.26

86.93
5.35
63.05
22.08
20.67
1.41
12.74
5.72
7.02
19.01

87.01
4.67
62.22
21.37
20.11
1.26
12.26
5.46
6.80
20.27

87.03
4.19
60.94
19.96
18.80
1.16
11.76
5.07
6.69
21.39

87.88
4.46
58.83
18.54
17.50
1.04
11.16
4.79
6.37
21.83

4.26
.07
4.77
n.a.
n.a.
.34
2.89
.17
3.85
2.11
.46
6.64
1.06
9.32
6.00
5.34
3.98

4.61
.09
4.50
n.a.
n.a.
.31
3.11
.17
3.04
1.81
.33
6.73
1.22
12.36
7.57
6.52
4.47

4.86
.09
5.39
n.a.
n.a.
.37
3.92
.22
2.77
1.61
.29
5.81
1.41
13.55
9.75
7.58
4.82

4.98
.11
6.54
1.07
5.47
.43
4.93
.12
2.21
1.30
.26
5.21
1.63
13.68
10.63
7.81
4.54

5.25
.12
7.44
1.39
6.05
.44
5.58
.18
1.74
.84
.29
4.70
1.65
14.03
11.22
8.89
3.98

4.87
.12
8.51
1.68
6.83
.47
6.12
.17
1.52
.49
.29
4.42
1.59
15.01
12.83
10.62
3.43

3.90
.13
10.11
2.09
8.02
.54
6.54
.17
1.52
.37
.30
4.19
1.46
16.03
14.18
12.08
3.70

2.87
.14
11.20
2.37
8.83
.69
6.81
.12
1.39
.31
.30
3.96
1.35
18.71
17.11
14.85
6.07

1.36

2.06

2.76

3.27

4.91

7.19

8.38

8.79

.93
•• •
"»
n.a.
.43
.67
3.32
n.a.
3.32
n.a.
1.23

1.45
li '.'.'/it
n.a.
.60
1.05
4.79
n.a.
4.79
n.a.
1.50

2.05
- J f l j '.v'il
n.a.
.71
2.17
3.80
.02
3.78
n.a.
1.00

2.71

3.94

5.13

5.37

4.85

n.a.
.56
2.82
3.05
.02
3.03
n.a.
.85

n.a.
.97
2.34
2.62
.05
2.57
.21
.80

1.64
.42
2.21
2.00
.03
1.97
.18
.82

2.43
.58
2.10
1.62
.02
1.60
.23
1.11

3.45
.49
2.26
1.36
.03
1.34
.24
.97

2.98
14.11

2.95
13.34

3.30
12.12

4.06
10.92

3.70
11.57

4.28
11.40

4.76
11.23

4.91
10.38

Interest-bearing liabilities
Deposit liabilities
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements
Other
Non-interest-bearing liabilities
Demand deposits

71.35
53.21
14.99
38.22
3.02
13.06
12.14
10.00

71.19
50.82
12.62
38.19
3.44
13.83
11.51
9.41

72.27
51.85
11.58
40.27
4.03
14.99
12.45
8.81

74.12
54.48
10.70
43.79
4.39
14.88
14.12
10.39

75.26
55.94
8.43
47.51
4.62
14.43
15.19
13.28

75.83
56.71
7.46
49.25
4.79
15.50
13.64
15.33

74.90
58.47
6.40
52.08
5.37
17.70
11.54
17.46

73.48
56.65
6.33
50.32
6.34
20.19
8.40
15.39

13.09
5.05
23.25
15.89

14.81
5.56
23.33
16.92

14.27
6.15
22.53
15.95

13.08
6.55
20.96
14.56

12.90
6.42
19.36
13.58

12.84
6.28
18.60
13.07

10.61
5.82
19.15
13.42

10.82
6.00
19.77
14.19

45.50
.92
5.40

44.74
1.05
5.48

44.66
1.58
5.20

44.66
1.89
4.93

43.08
1.50
5.38

34.51
1.73
5.96

31.73
1.74
6.75

574

654

764

852

40.35
1.59
5.56
• • ^^Jiis
1,048

1,095

1,132

MEMO

Money market liabilities
Loss reserves
Total equity capital
Average consolidated assets including
loss reserves (billions of dollars)




E

959

Bank Profits and Balance Sheet Developments, 1992

671

A.2.—Continued
D. Banks with more than $5 billion in assets, excluding ten largest
Item

1985

1986

1987

1988

1989

1990

1991

1992

Effective interest rate (percent)
Rates earned
Interest-earning assets
Taxable equivalent
Loans, gross
Net of loss provisions
Securities
Taxable equivalent
U.S. government and other debt
State and local
Equity1
Trading account assets
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements

10.99
11.37
11.60
10.52
9.12
10.97
10.31
6.81
n.a.
9.60

9.65
10.15
10.38
9.07
8.21
10.45
8.99
6.96
n.a.
6.82

9.16
9.35
9.80
7.10
7.91
8.73
8.24
7.06
n.a.
6.66

9.58
9.77
10.17
9.19
8.11
8.88
8.37
7.22
n.a.
7.96

11.01
11.16
11.63
9.86
8.77
9.32
9.11
7.30
8.71
8.65

10.42
10.52
11.05
9.02
8.86
9.21
9.12
7.28
8.02
8.14

9.18
9.26
9.80
7.88
8.32
8.62
8.46
7.25
7.12
6.35

7.91
7.99
8.67
7.33
7.19
7.43
7.23
6.85
6.20
5.06

8.29
8.22
9.36
7.79
n.a.
n.a.
8.73
n.a.

6.93
6.94
7.69
6.70
n.a.
n.a.
7.50
n.a.

6.66
6.50
7.78
6.14
4.38
5.23
7.09
7.14

7.06
6.89
8.84
6.42
4.37
5.51
7.41
7.29

8.44
8.07
11.13
7.54
4.50
6.33
8.70
8.58

7.74
7.49
10.08
7.10
4.61
6.04
8.09
8.04

6.10
6.16
8.31
5.90
4.12
4.96
6.70
6.83

4.26
4.26
6.83
3.95
2.42
3.07
5.04
5.06

8.09

6.88

6.57

7.17

9.31

8.11

5.69

3.58

Income and expenses as a percent of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse
repurchase agreements
Other
Gross interest expense
Deposits
Gross federal funds purchased and
repurchase agreements
Other
Net interest margin
Taxable equivalent
Loss provisions
Noninterest income
Service charge on deposits
Foreign related
Other
Noninterest expense
Salaries and employee benefits
Occupancy
Other
Net noninterest margin
Securities gains
Income before taxes
Taxes
Extraordinary items
Net income
Cash dividends declared
Retained income

9.44
9.77
7.46
.87

8.34
8.77
6.44
1.05

8.14
8.31
6.22
1.10

8.58
8.76
6.52
1.15

9.82
9.96
7.54
1.26

9.36
9.45
7.08
1.36

8.24
8.32
6.16
1.36

7.12
7.19
5.22
1.36

.23
.88
6.16
4.55

.20
.65
5.15
3.69

.23
.59
4.98
3.49

.29
.62
5.41
3.87

.36
.66
6.53
4.63

.37
.55
6.09
4.37

.28
.44
4.79
3.74

.20
.34
3.27
2.51

1.12
.50
3.28
3.61
.69
1.32
.26
.05
1.01
3.02
1.48
.47
1.06
-1.70
.07

1.05
.40
3.19
3.62
.81
1.42
.27
.05
1.10
3.10
1.48
.49
1.13
-1.68
.17

.97
.52
3.16
3.33
1.71
1.54
.28
.07
1.18
3.24
1.47
.48
1.28
-1.70
.05

.99
.56
3.17
3.34
.62
1.60
.30
.06
1.24
3.18
1.45
.48
1.24
-1.58
.00

1.24
.65
3.29
3.43
1.15
1.87
.31
.06
1.50
3.35
1.47
.50
1.38
-1.48
.04

1.13
.59
3.27
3.36
1.30
1.85
.34
.06
1.45
3.46
1.47
.50
1.49
-1.61
.03

.67
.38
3.46
3.54
1.21
2.05
.41
.05
1.59
3.78
1.51
.50
1.78
-1.73
.14

.42
.34
3.85
3.92
.81
2.25
.46
.05
1.74
4.00
1.54
.51
1.95
-1.75
.14

.96
.23
.01
.73
.26
.48

.87
.20
.02
.68
.33
.35

-.20
.07
.00
-.27
.34
-.61

.96
.27
.02
.71
.41
.30

.71
.19
.00
.51
.39
.12

.40
.16
.01
.24
.38
-.14

.66
.19
.03
.50
.47
.02

1.43
.44
.02
1.01
.47
.54

13.19

12.05

-5.02

13.94

9.31

4.25

8.10

14.66

MEMO

Return on equity
1. See note 1, table A.2.A (all banks).
n.a. Not available.




672

Federal Reserve Bulletin • July 1993

A.2.

Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and
nondeposit trust companies, by size of bank, 1985-92
E. Ten largest banks
Item

1985

1986

1987

1988

1989

1990

1991

1992

Balance sheet items as a percentage of average consolidated assets including loss reserves
Interest-earning assets
Interest-bearing balances at depositories ..
Loans
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
Construction and land
development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
Booked in foreign offices
To depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
Securities
U.S. government and other debt
U.S. government securities
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage
pools
Collateralized mortgage
obligations
Other
Other debt securities
State and local government
Taxable
Tax-exempt
Equity1
Trading account assets
Gross federal funds sold and reverse
repurchase agreements
Non-interest-eaming assets

83.93
7.88
62.96
29.25
14.53
14.72
5.71
1.91
3.81
11.08

84.64
7.47
62.02
26.23
13.63
12.60
6.38
2.11
4.27
12.62

84.76
8.08
60.17
24.11
13.16
10.95
6.14
1.92
4.22
13.83

85.08
7.78
59.84
22.88
12.78
10.09
6.20
1.94
4.25
15.31

85.14
7.24
60.96
22.40
13.22
9.18
6.20
1.92
4.28
17.43

84.75
5.60
62.68
22.33
13.05
9.27
6.70
2.14
4.55
20.05

85.28
4.17
63.01
21.90
13.14
8.77
7.03
2.47
4.56
21.20

85.09
3.49
60.03
19.82
11.26
8.56
7.37
2.72
4.65
19.84

2.19
.07
4.80
n.a.
n.a.
.38
1.92
1.73
5.13
3.98
.54
5.93
1.34
5.84
4.19
2.41
1.97

2.66
.07
5.03
n.a.
n.a.
.48
2.27
2.10
4.94
3.69
.45
6.29
1.43
7.05
4.95
2.31
1.64

3.22
.06
5.14
n.a.
n.a.
.61
2.51
2.28
4.95
3.53
.36
5.81
1.43
8.33
6.30
3.06
1.52

3.47
.06
5.79
.78
5.01
.65
2.65
2.69
4.76
3.49
.33
5.39
1.48
8.81
6.92
3.43
1.47

3.47
.08
7.29
1.02
6.27
.66
3.00
2.93
4.23
3.24
.29
5.66
1.51
9.00
7.20
3.63
1.40

3.69
.08
9.07
1.28
7.79
.66
3.42
3.12
3.61
2.68
.30
5.45
1.56
8.99
7.70
3.91
1.06

3.35
.08
10.11
1.59
8.51
.56
3.87
3.24
3.02
2.81
.31
5.09
1.64
9.17
8.12
4.70
1.32

2.52
.07
9.94
1.67
8.27
.57
3.76
2.98
2.67
2.85
.28
5.64
1.56
10.32
9.32
6.28
1.81

Interest-bearing liabilities
Deposit liabilities
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits ...
Gross federal funds purchased and
repurchase agreements
Other
Non-interest-bearing liabilities
Demand deposits

.44

.67

1.54

1.96

2.23

2.84

3.38

4.48

.34

.57

1.47

1.85

2.02

2.18

2.21

2.54

n.a.
.10
1.78
1.65
n.a.
1.65
n.a.
3.50

n.a.
.10
2.63
2.11
n.a.
2.11
n.a.
4.50

n.a.
.07
3.23
2.03
.01
2.03
n.a.
4.23

n.a.
.10
3.49
1.89
.01
1.88
n.a.
4.15

n.a.
.21
3.57
1.62
.02
1.60
.22
3.95

.57
.10
3.79
1.06
.02
1.04
.23
4.68

1.06
.11
3.42
.76
.01
.75
.29
6.05

1.88
.05
3.04
.66
.01
.66
.34
8.63

3.75
15.21

3.59
14.33

3.95
13.12

4.51
12.33

3.98
12.22

2.80
12.69

2.89
12.43

2.61
12.79

71.31
57.21
33.41
23.80
1.47
9.80
8.16
4.36

71.41
55.80
31.11
24.70
2.04
11.19
7.39
4.08

70.98
55.77
31.01
24.77
2.53
11.62
6.82
3.81

71.49
55.86
29.96
25.90
2.75
11.92
6.93
4.30

72.07
55.74
28.97
26.77
2.69
11.53
7.81
4.74

72.07
56.47
28.88
27.58
2.68
12.11
7.42
5.38

72.92
56.36
27.81
28.55
2.94
13.57
6.23
5.80

71.55
54.52
27.51
27.01
3.10
15.02
4.40
4.49

7.73
6.38
23.98
11.59

7.90
7.71
23.77
12.69

6.68
8.52
24.63
12.67

6.22
9.42
23.93
11.85

6.76
9.57
23.14
11.49

6.72
8.89
23.34
10.66

6.65
9.92
22.17
10.12

5.84
11.19
23.01
10.67

57.04
.85
4.71

55.39
1.04
4.82

54.49
2.12
4.39

53.90
2.59
4.58

54.46
2.64
4.80

53.31
2.56
4.59

51.95
2.29
4.92

50.45
2.12
5.44

624

676

691

689

720

744

734

740

MEMO

Money market liabilities
Loss reserves
Total equity capital
Average consolidated assets including
loss reserves (billions of dollars)




Bank Profits and Balance Sheet Developments, 1992

613

A.2.—Continued
E. Ten largest banks
Item

1985

1986

1987

1988

1989

1990

1991

1992

11.61
11.68
12.24
11.06
9.20
9.59
9.53
7.52
5.78
10.82

9.91
9.95
10.45
8.58
8.95
9.18
9.25
7.60
4.21
7.84

8.83
8.87
9.42
7.63
8.12
8.37
8.32
7.41
4.03
6.74

9.92
9.03
6.80
4.33
6.20
7.95
7.75

7.54
7.09
8.76
5.46
3.93
5.09
6.49
6.07

6.12
5.43
7.66
3.20
1.90
2.95
4.71
3.70

7.93

5.97

4.17

Effective interest rate (percent)
Rates earned
Interest-earning assets
Taxable equivalent
Loans, gross
Net of loss provisions
Securities
Taxable equivalent
U.S. government and other debt
State and local
Equity1
Trading account assets
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large denomination time deposits ...
Small denomination time deposits . . .
Gross federal funds purchased and
repurchase agreements

11.30
11.51
11.95
10.79
9.84
11.42
10.91
7.09

9.69
9.94
10.37
9.10
8.81
10.60
9.45
7.29

9.55
9.58
10.07
6.73
8.69
8.96
9.07
7.50

10.78
10.91
11.38
10.73
8.64
9.49
8.90
7.68

n.a.

n.a.

n.a.

10.43

8.20

11.18

14.49

12.26
12.28
13.12
10.74
9.08
9.18
9.46
7.66
7.06
12.13

9.10
8.85
9.61
7.76

7.41
7.24
7.89
6.40

n.a.
n.a.

n.a.
n.a.

8.53
7.72
9.03
6.21
4.43
5.56
7.45
7.14

10.49
9.16
10.93
7.26
4.42
6.54
8.63
8.34

7.42

9.28

9.13

7.21

n.a.

n.a.

7.51
6.93
8.02
5.57
3.29
5.18
7.17
6.25

6.87

6.53

7.95

n.a.

11.11

Income and expenses as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse
repurchase agreements
Other
Gross interest expense
Deposits
Gross federal funds purchased and
repurchase agreements
Other
Net interest margin
Taxable equivalent
Loss provisions
Noninterest income
Service charge on deposits
Foreign related
Other
Noninterest expense
Salaries and employee benefits
Occupancy
Other
Net noninterest margin
Securities gains
Income before taxes
Taxes
Extraordinary items
Net income
Cash dividends declared
Retained income

9.55
9.73
7.46
.58

8.26
8.47
6.35
.64

8.36
8.39
6.17
.74

9.45
9.57
6.92
.78

10.76
10.77
8.19
.84

10.21
10.27
7.83
.85

8.67
8.71
6.70
.83

7.79
7.83
5.76
.85

.27

.36
1.39
6.43
4.49

.37
1.36
7.95
5.31

.25
1.28
7.53
5.33

.17
.97
5.75
4.19

.12
1.06
4.61
3.13

.31
1.20
6.75
5.19

5.49
4.17

.28
1.17
5.69
4.11

.71
.84
2.81
2.98
.72
1.37
.12
.18
1.07
2.77
1.40
.51
.86
-1.40
.06

.60
.73
2.77
2.98
.78
1.60
.13
.18
1.28
3.01
1.53
.56
.92
-1.41
.12

.50
1.07
2.67
2.70
2.05
1.96
.16
.26
1.54
3.20
1.60
.58
1.02
-1.24
.07

.57
1.37
3.03
3.14
.39
2.08
.19
.23
1.66
3.30
1.64
.61
1.06
-1.22
.03

.74
1.90
2.81
2.82
1.49
2.19
.21
.22
1.76
3.42
1.66
.62
1.14
-1.23
.03

.63
1.58
2.68
2.74
.76
2.24
.23
.28
1.73
3.49
1.71
.64
1.15
-1.25
.01

.43
1.14
2.92
2.96
1.20
2.37
.26
.26
1.85
3.79
1.77
.66
1.36
-1.42
.04

.27
1.21
3.18
3.22
1.09
2.59
.28
.34
1.96
3.83
1.79
.64
1.40
-1.24
.11

.74
.27
.00
.47
.26
.22

.69
.22
.00
.47
.23
.25

-.54
.16
.00
-.70
.28
-.98

1.44
.45
.08
1.07
.38
.69

.13
.38
.03
-.22
.39
-.60

.68
.27
.06
.47
.26
.21

.34
.16
.03
.21
.21
.00

.96
.31
.00
.65
.14
.51

9.87

9.60

-15.73

22.85

-4.39

10.14

4.25

11.87

1.00

MEMO

Return on equity
1. See note 1, table A.2.A (all banks).
n.a. Not available.




674

Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period February through April 1993, provides information on
Treasury and System foreign exchange operations.
It was presented by William J. McDonough, Executive Vice President of the Federal Reserve Bank of
New York and Manager of the System Open Market
Account. John W. Dickey was primarily responsible
for preparation of the report.1
The dollar depreciated modestly against most major
currencies during the February-April period but
declined significantly against the Japanese yen
amid concerns relating to the growing Japanese
trade surplus. Over the period, the dollar declined
1.6 percent against the German mark, 10.9 percent
against the Japanese yen, and 3.2 percent on a
trade-weighted basis.2
On April 27, the U.S. monetary authorities intervened in the foreign exchange markets, purchasing
$200 million against the yen in amounts shared
equally by the Treasury and the Federal Reserve.
DEVELOPMENTS IN DOLLAR EXCHANGE
MARKETS
The Japanese yen appreciated throughout the
period. Japanese trade data released on February 5
indicated that the 1992 Japanese current account
surplus was materially higher than in 1991. Subsequent observations about the contribution that the
exchange rate might make to correct Japan's widening trade surplus, and a perceived acquiescence
to gradual yen appreciation by Japanese officials,
contributed to the dollar's decline from its period
high of ¥125.20 on February 2.
1. The charts for the report are available from Publications
Services, Board of Governors of the Federal Reserve System, mail
stop 138, Washington, DC 20551.
2. The dollar's movements on a trade-weighted basis are measured using an index developed by the staff of the Board of
Governors of the Federal Reserve System.




The yen's appreciation was particularly pronounced in February, when many market participants expected the Group of Seven (G-7) to
announce support for a stronger yen after its meeting at the end of the month. However, the meeting
did not result in a call for yen appreciation.
The yen's rise paused temporarily throughout
most of March in response to indications that policymakers were focusing on the merits of revitalizing Japan's economy as a means both to address
Japan's current account surplus and to promote
more satisfactory economic performance globally.
Consequently, market attention shifted to the
progress the Japanese government was making in
developing a new supplementary fiscal package to
stimulate the Japanese economy as well as to the
anticipated repatriation of funds by Japanese companies ahead of the fiscal year-end.
The yen's rise resumed in late March. Comments
by Japanese officials on March 31 that yen appreciation was inevitable and acceptable if it remained
1.

Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution

Amount of
facility,
April 30, 1993

Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
Deutsche Bundesbank
Bank of Italy
Bank of Japan

250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000

Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank

700
500
250
300
4,000

Bank for International Settlements
Dollars against Swiss francs
Dollars against other authorized European
currencies
Total

600
1,250
30,100

675

2.

Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury1
Millions of dollars; drawings or repayments (-)
Central bank drawing
on the U.S. Treasury
Central Reserve Bank of Peru

Amount of
facility

Outstanding as
of January 31,
1993

February

March

470.02

...

...

470.0
-470.0

April

Outstanding as
of April 30,
1993

1. Data are on a value-date basis. Components may not add to totals
because of rounding.

2. Represents U.S. Treasury's arrangement with Peru as part of a multilateral credit facility.

gradual, along with the April 13 announcement that
the fiscal stimulus package of ¥13.2 trillion would
allocate a larger-than-expected portion to immediate economic recovery, gave continued strength to
the yen through April.
The dollar hit a historical low of ¥109.15 against
the yen on April 27. Later that day, the U.S. monetary authorities purchased $200 million against the
yen in operations coordinated with another monetary authority. U.S. officials also indicated that

The German Bundesbank reduced its official discount rate and its Lombard rate each 100 basis
points in a series of steps undertaken during the
February-April period to stimulate the weakening
German economy. After official rate reductions, the
mark depreciated slightly against many European
currencies. Tensions within the European exchange
rate mechanism diminished, although the Spanish
peseta faced repeated selling pressure.

[t]he Administration believes that exchange rates
should reflect fundamentals, and attempts to artificially influence or manipulate exchange rates
are inappropriate. Moreover, excessive volatility
is counterproductive for growth. Therefore we
are monitoring developments closely and stand
ready to cooperate in exchange markets with our
G-7 partners as conditions may warrant.
In response, the dollar stabilized and then traded
between ¥112.10 and ¥111.05 for the remaining
days of the period.
The dollar-mark exchange rate was relatively
stable. The dollar traded between DM1.6730,
reached on March 11, and DM1.5640, reached on
April 26.
3.

Net profits or losses (-) on U.S. Treasury
and Federal Reserve foreign exchange operations1
Millions of dollars
Period and item

U.S. Treasury
Exchange
Stabilization
Fund

Valuation profits and losses on
outstanding assets and liabilities
as of January 31, 1993
Realized, February 1April 30, 1993
Valuation profits and losses on
outstanding assets and liabilities
as of April 30, 1993
1. Data are on a value-date basis.




3,221.8

OTHER OPERATIONS
The Federal Reserve and the Treasury's exchange
stabilization fund (ESF) each realized profits of
$22.0 million from the sales of yen in the market.
Cumulative bookkeeping or valuation gains on outstanding foreign currency balances as of the end of
April were $4,152.0 million for the Federal
Reserve and $3,221.8 million for the ESF.
The Federal Reserve and the ESF regularly
invest their foreign currency balances in a variety
of instruments that yield market-related rates of
return and that have a high degree of liquidity and
credit quality. A portion of the balances is invested
in securities issued by foreign governments. As of
the end of April, the Federal Reserve and the ESF
held either outright or under repurchase agreements
$9,376.6 million and $9,438.9 million respectively
in foreign government securities valued at end-ofperiod exchange rates.
In other operations, the Treasury, through the
ESF, participated in a $900 million multilateral
facility to assist Peru in repaying its arrears to
international creditors. The Treasury's share of the
facility was $470 million, established by a special
arrangement with Peru on March 9. The total
amount of the facility was drawn on March 18 and
repaid in full on the same day. The facility expired
on March 31.
•

676

Staff Studies
The staff members of the Board of Governors of the
Federal Reserve System and of the Federal Reserve
Banks undertake studies that cover a wide range of
economic and financial subjects. From time to time
the studies that are of general interest are published in the Staff Studies series and summarized in
the FEDERAL RESERVE BULLETIN. The

analyses

and conclusions set forth are those of the authors

and do not necessarily indicate concurrence by the
Board of Governors, by the Federal Reserve Banks,
or by members of their staffs.
Single copies of the full text of each study are
available without charge. The titles available are
shown under "Staff Studies" in the list of Federal
Reserve Board publications at the back of each
BULLETIN.

STUDY SUMMARY

THE 1989-92

CREDIT CRUNCH FOR REAL ESTATE

James T. Fergus and John L. Goodman,

Jr.

Prepared as a staff study in winter 1992-93

Private construction declined sharply during the
late 1980s and early 1990s. Spending on both residential construction projects and nonresidential
projects fell about one-third. The decline became
especially pronounced during 1990 when financial
institutions that are the traditional sources of credit
to real estate were reducing their mortgage lending.
According to many reports, not only credit for
construction but also loans on existing properties
became more difficult to acquire during this period.
This study reviews current thinking about the
causes of the 1989-92 "credit crunch" in real
estate and summarizes a variety of data on the
duration and extent of this episode. It weighs the
relative importance of the credit crunch and other
factors that also contributed to the falloff in real
estate lending; and it considers the long-run outlook for the supply of mortgage credit.
The objective of this study is to provide a historical record that may help analysts interpret market
developments the next time real estate markets turn
down. Accordingly, it catalogs the statistical evi-




dence and hypotheses about the credit crunch but
does not undertake rigorous statistical tests.
Among the main findings are the following:
• The building boom of the 1980s generated
surplus space in many markets, almost guaranteeing that construction and lending would subsequently decline even if credit supplies had not
tightened. Credit cutbacks did, however, affect the
timing of the decline in construction and property
values.
• Surveys of various market participants confirm
that the terms and availability of credit for development and construction financing and for permanent
financing of commercial real estate tightened beginning in 1989; this tightening continued into
1992, before stabilizing in late 1992 and early
1993.
• The ready availability and concessionary pricing of mortgage credit that characterized the early
and mid-1980s is unlikely to return in the foreseeable future, although the appeal of this type of

677

credit for some lenders guarantees that some funding will remain available for projects with solid
prospects of profitability.
• The supply of home mortgage credit has not
been significantly restricted, despite the cutbacks in




most other segments of the mortgage market. The
outlook for the supply of home mortgage credit is
quite positive, absent any major adverse changes in
the role of the federally related secondary market
agencies.
•

678

Industrial Production and Capacity Utilization
for April 1993
Released for publication

March storm, and strong increases in the production of computers continued; a return to more normal temperatures led, however, to a sharp drop in
the output of utilities. At 110.0 percent of its 1987
annual average, total industrial production was

May 14

Industrial production edged up 0.1 percent in April,
after having shown no change in March. Overall
output recovered from declines caused by the

Industrial production indexes

Twelve-month percent change

Twelve-month percent change
Materials

Products

Nondurable
manufacturing

1988

1989

1990

1991

1992

1988

1993

1989

1990

1991

1992

1993

Capacity and industrial production
Ratio scale, 1987 production =100

Ratio scale, 1987 production = 100
— Total industry

— 140

Capacity

— Manufacturing

Capacity

— 140

—

120

^

"

-

— P r o d u c t i o n
1

1

1

1

1

1

1

100

120
"

\

80
1

1

1

1

1

1

"

s*
1

1

^

"

Production
1

1

1

1

80
1

Percent of capacity

1

1

1

1

Percent of capacity
Manufacturing

Total industry
90

Utilization

Utilization
"

-

90

^ ^ ^

80

^ "

70
1
1981

1
1
1983

100

1
1
1985

1
1987

1989

1991

1993

70
1981

1983

1985

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




80

1987

1989

1991

1993

679

Industrial production and capacity utilization1
Industrial production, index, 1987=100
Percentage change
Category

1993
Jan.

r

Feb.

1

19932
Mar.

r

Apr.P
110.0

Jan.

r

r

Feb/

Mar.

Apr.P

Apr. 1992
to
Apr. 1993

Total

109.3

109.9

109.9

Previous estimate

111.4

112.0

112.0

Major market groups
Products, total3
Consumer goods ...
Business equipment
Construction supplies
Materials

108.5
107.6
131.2
94.8
110.4

109.1
108.2
131.8
97.3

111.0

109.1
108.1
132.9
97.2

111.0

109.1
107.9
134.0
96.3
111.4

.3
.1
1.2
.4
.4

.5
.6
.5
2.6
.6

.1
-.1
.8
-.1
.0

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

3.6
2.4
11.1
2.9
3.2

Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities

109.9
112.9
106.4
98.3
112.8

110.5
113.9
106.4
95.6
117.4

110.6
114.0
106.4
95.4
117.3

111.0

.7
1.0
.3
.0
-3.4

.5
.9
.0
-2.7
4.0

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

.4
.4
.3
.8
-3.6

4.2
6.7
1.2
-1.3
.9

114.4
106.8
96.1
113.1

3.4

Capacity utilization, percent
1992
Average,
1967-92

Low,
1982

1993

High,
1988-89
Apr.

Jan.

Feb.

Mar.1

Apr.P

Total

81.9

71.8

84.8

79.9

81.2

81.5

81.4

81.4

1.6

Manufacturing
Advanced processing
Primary processing .
Mining
Utilities

81.2
80.7
82.2
87.4
86.7

70.0
71.4
66.8
80.6
76.2

85.1
83.3
89.1
87.0
92.6

78.8
77.3
82.3
86.5
85.7

80.3
78.9
83.5
87.9
85.4

80.5
78.9
84.4
85.5
88.8

80.5
79.1
83.9
85.4
88.6

80.7
79.2
84.1
86.1
85.4

1.8
2.2
.8
-.9
1.3

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

3.4 percent above its year-ago level. Total industrial capacity utilization was unchanged at
81.4 percent.
When analyzed by market group, the data show
that the output of consumer goods decreased
0.2 percent, after having been about unchanged in
March. The production of automotive products
declined for the second month because auto assemblies were cut back. Nonetheless, the production of
other durable consumer goods increased 0.6 percent; in particular, the output of carpeting
rebounded from a storm-related decline in March.
The output of nondurable consumer goods
decreased 0.3 percent. The residential use of electricity and the production of consumer fuels fell.
The production of business equipment moved up
again, as the production of computers continued to
increase at more than 3 percent per month. How


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

ever, the output of industrial equipment was
unchanged, remaining at about the level of last
November. The output of transit equipment
declined again because of decreases in auto and
aircraft production. The production of equipment
related to defense and space programs continued to
contract. The output of construction supplies
declined nearly 1 percent, after having changed
little in March; the output of lumber and related
products has dropped more than 1 percent in each
of the past two months. Even so, the output of
construction supplies remains more than 1 percent
higher than its fourth-quarter average. The production of both durable and nondurable materials
increased more than xh percent. Within durables,
the output of semiconductors and other computerrelated materials continued to increase, and the
production of motor vehicle parts rose. Within

680

Federal Reserve Bulletin • July 1993

nondurables, the output of both paper and chemicals posted gains. The production of energy materials dropped nearly 1 percent, with the drop in
electricity generation more than offsetting the
pickup in the production of coal.
When analyzed by industry group, the data show
that within manufacturing, output increased
0.4 percent, and capacity utilization increased
0.2 percentage point, to 80.7 percent. Capacity
utilization in advanced-processing industries was
little changed: The operating rate at manufacturers




of nonelectrical machinery rose about 1 percentage
point, whereas the operating rate in the aerospace
industry continued to decline. Factory utilization in
primary-processing industries rose 0.2 percentage
point; utilization gained at makers of textile and
paper products and weakened at lumber mills.
The output at mines, boosted by higher coal
production, increased 0.8 percent. A return to seasonal temperatures led to a decline of more than
3V2 percent in the output of utilities.
•

681

Statements to the Congress
Statement by Richard Spillenkothen,
Director,
Division of Banking Supervision and Regulation,
Board of Governors of the Federal Reserve System, before the Subcommittee on General Oversight, Investigations,
and the Resolution
of
Failed Financial Institutions of the Committee
on Banking, Finance and Urban Affairs, U.S.
House of Representatives,
May 18, 1993

Thank you for inviting me to appear before the
subcommittee today to discuss ways in which the
financial needs of individuals and businesses
located in economically underserved neighborhoods can be accommodated. More particularly,
you asked me to delineate the factors related to
the condition of the banking system and the
constraints within its legal and regulatory structure that may be inhibiting investment in these
neighborhoods.
My testimony today will be somewhat wideranging because many factors contribute to
neighborhoods being underserved in their credit
needs. But even so, I will not be able to cover all
of these factors today.
I will begin by addressing recent conditions in
the banking industry and the economy that have
inhibited lending of all types and, more particularly, lending for community development activities. Then I will discuss briefly some of the
regulatory burdens that have served to raise the
costs of providing banking services and have
restrained the availability of credit generally.
I will further highlight the incentives in place
that encourage financial institutions to engage in
community development activities, as well as
several existing mechanisms that banking institutions can use to meet the needs of financially
distressed urban and rural areas. I will also
delineate several initiatives that the Federal Reserve developed and implemented in conjunction
with its ongoing efforts to encourage community
development lending.




RECENT DEVELOPMENTS
BANKING INDUSTRY

IN THE

The Federal Reserve's support for programs
designed to foster access by all Americans to fair
and reasonable credit, particularly to those who
live in economically distressed urban and rural
areas, must be understood within the context of
another of its roles—that of ensuring the safety
and soundness of the banking system. Indeed,
the capacity of any bank to accommodate the
credit needs of its community is directly proportionate to its strength and stability. Fortunately,
after a sustained period of great financial stress,
the banking industry has been staging an encouraging recovery and appears poised to increase its
lending activities.
As you know, the availability of credit has
been constrained over the past few years as
banks sought to reverse debilitating industry
trends by improving the quality of their loan
portfolios, building loan-loss reserves, restoring
capital, and cutting expenses. As part of this
process, credit standards were tightened, and
many borrowers, who had previously found access to credit relatively easy, experienced much
greater difficulties in obtaining financing. Concurrently, many borrowers scaled back their
business activities in response to economic uncertainties and sought to strengthen their own
balance sheets by reducing their reliance on
credit. Among other adverse consequences, this
action has had a deleterious effect on community
development activities.
Conditions in the banking system are much
better now than they have been in some time
because of bank efforts and a propitious combination of lower interest rates and a somewhat
stronger economy, which has enabled banks to
offset the lingering effects of troubled loans with
strengthened earnings and increased capital. Although businesses and consumers still appear to
be wary of overextending their reliance on bank

682

Federal Reserve Bulletin • July 1993

credit, banks are generally in a much stronger
position to seek out creditworthy borrowers.
Indeed, bankers, regulators, businesses, and
consumers have learned valuable, albeit hard,
lessons regarding prudent lending and borrowing
practices that will likely contribute to a sustained
improvement in the economy.

ADDITIONAL

BARRIERS TO LENDING

It has become increasingly clear that the nation's
banking system is laboring under a heavy regulatory burden. This conclusion has been reached
by several private studies. A study completed by
the Federal Financial Institutions Examination
Council, and submitted to the Congress at the
end of last year to carry out a mandate of the
Federal Deposit Insurance Corporation Improvement Act, reached the same conclusion. To the
extent that this burden has affected the ability of
banks to lend, or has affected their pricing, it has
no doubt also affected community development
lending.
The federal financial institutions regulatory
agencies have been working to alleviate such
burdens on insured depositories for some time.
Last year, the agencies conducted reviews of
their regulations and policies to identify those
that should be changed to alleviate burdens.
Several actions resulted from this endeavor.
In particular, revisions were made to riskbased capital standards that reduced capital requirements for certain loans, additional guidelines on assessing the quality of real estate loans
were provided to examiners, and an examination
appeals process was put in place.
More recently, the Administration has asked
that the agencies conduct yet another review to
find ways to reduce burdens and streamline the
regulatory process. Again, to promote credit
availability, the federal financial institutions regulatory agencies have identified actions that can
be taken that will achieve that end without compromising safety and soundness standards.
These actions, some of which have been taken
while others are soon to be adopted, include
eliminating impediments to lending to small and
medium-sized businesses through a reduction of
documentation requirements for such loans. This




change will reduce some of the relatively high
costs associated with smaller commercial loans
that has dampened lending activity in this segment and should have a positive effect on such
lending.
Additionally, the agencies will soon be proposing revisions to the real estate appraisal requirements defined by the Financial Institutions Reform, Recovery and Enforcement Act. These
revisions will improve the climate for real estate
lending while still ensuring that real estate loans
are extended on a safe and sound basis. They will
particularly benefit the large number of small
businesses that have obtained, or are seeking,
loans secured by liens on business premises or
other real estate. Public comment will also be
sought on these proposed changes before they
are adopted, and the agencies expect that comments will assist them in identifying particular
burdens that appraisal requirements may be having on community development loans.
Although these efforts cannot be expected to
completely alleviate the shortfalls in credit availability that this subcommittee seeks to address,
they will help reduce impediments to small business lending, a result that must invariably have a
positive effect on the communities that are the
focus of your concern. Moreover, in seeking
ways to improve credit availability generally, the
agencies have been sensitive to the needs of
community development lending. For example,
in revising the risk-based capital rules to lower
capital requirements on multifamily housing
loans pursuant to a requirement of the Resolution
Trust Corporation Reform and Refinancing Act,
the agencies are being careful to include the
financing of community development for cooperative housing projects. Additionally, the agencies
are actively considering several proposals designed to promote the securitization of small
business and other community development
loans in conjunction with a Federal Financial
Institutions Examination Council study. These
proposals could both promote the liquidity of
such loans and contribute to the expansion of
community development activities.
Furthermore, after having summarized its findings of actions that might be taken to alleviate
burden within the existing legal framework, the
Federal Financial Institutions Examination

Statements

Council indicated that it would undertake the
additional project of reviewing applicable statutes to see what changes can be made, consistent
with safety and soundness considerations and
other appropriate objectives, to reduce regulatory burden. The results of that review are to be
sent to the Congress later this year. This effort
should identify several positive actions that can
be taken.

INCENTIVES TO
COMMUNITY DEVELOPMENT

ACTIVITY

There are clear incentives to financial institutions
to provide community development services.
The Community Reinvestment Act (CRA) reminds financial institutions that they have an
obligation to assist in meeting the credit needs of
their entire community and requires the federal
financial institutions regulatory agencies to encourage institutions to fulfill these needs.
Moreover, the regulatory agencies have always considered banks' performance in meeting
the needs of their communities when considering
applications by these institutions. Thus, as the
banking industry experiences an intensified period of consolidation, there are undeniable incentives to financial institutions to develop appropriate CRA programs to ensure that expansion
plans are not inhibited by adverse CRA ratings.

MECHANISMS AND STRUCTURES FOR
COMMUNITY
DEVELOPMENT

Several mechanisms are in place through which
institutions can carry out community development activities. The most common and timehonored is also the most simple: lending and
investing by banks to meet the convenience and
needs of the communities they serve. But there
are also several other mechanisms that, although
somewhat more complicated, may be used to
expand the impact of bank activity. These other
community development activities take less traditional, but nonetheless widely available, forms.
Typically, they involve a combination of public
and private financing, with banks providing the
expertise in structuring financing and govern


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683

ment programs or private grants providing some
sort of subsidy to the projects undertaken.
For example, banks and bank holding companies are permitted to form Community Development Corporations (CDCs). CDCs allow financial
organizations to make equity investments so long
as these investments are designed primarily to
promote the community welfare. Thus, banks
may go beyond the usual lending function to
provide equity capital to worthy projects.
A variation of the CDC that is experiencing
increased popularity is the multibank, or nonbank, CDC, commonly referred to as a "consortium" CDC. These entities pool the resources of
several financial institutions and invest in largescale community development projects to share
the risks and rewards of community development
lending. These consortia are generally organized
on a regional basis and are particularly attractive
to participating institutions that do not individually possess the expertise or resources necessary
to engage in larger investments. Federal Reserve
Banks have provided technical and organizational assistance to financial institutions seeking
to enter community development activities
through both individual and consortium CDCs.
An additional variation on CDCs is investment
in limited partnerships formed to invest in one or
more community development projects. Finally,
bank holding companies are able to invest directly in single-purpose community development
projects.

COMPLEXITIES OF COMMUNITY
DEVELOPMENT LENDING

As with other forms of financing, community
development lending is a specialized activity that
cannot be mastered without the foresight, dedication, and resources typically allocated to any
successful business venture. Indeed, by their
nature certain community development activities
are highly specialized and so are quite complicated.
For example, many community development
projects involve the rehabilitation of substandard
housing. To make such activities successful,
from both an economic and a social viewpoint, it
is often necessary that these ventures be of a

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Federal Reserve Bulletin • July 1993

With that in mind, the Federal Reserve has
developed several educational and informational
programs designed to encourage increased community development lending. These efforts have
included numerous Community Affairs conferences, seminars, and workshops for bankers and
others focusing on such topics as CRA and
HMD A compliance, options for bank participation in low- and moderate-income housing development, and housing finance in rural areas.
The Community Affairs staff members at the
Reserve Banks provide technical assistance and
advice to individual banks about ways to profit-

ably approach community development lending.
Indeed, before bankers are willing to devote
additional resources to these activities, they may
need help in identifying creative approaches to
business development that can lead to safe, rewarding lending opportunities within low- and
moderate-income communities.
We have also heard of instances in which bankers believe that examiners were not cognizant of
the specialized nature of community development
loans. Because of this, the Federal Reserve has
developed community development finance seminars for presentation to senior System examiners. This program complements other more-longstanding efforts designed to introduce examiners
to community development lending activities
within the current examiner training curriculum.
Despite the efforts I have described for you
today, more can be learned about community
development lending. Pursuant to a study on the
risks and returns of community development
lending required by the Housing and Community
Development Act of 1992, the Federal Reserve
has scheduled several roundtables with community development lenders to develop information
about successful lending techniques and to identify impediments to more lending. Although these
roundtables have only recently been instituted,
we believe that they will provide information from
the grassroots level that will give us an increased
appreciation of the conditions necessary to facilitate such activities.
In summary, we should all be encouraged by
improving conditions in the banking system.
These improvements should increase community
development lending. Moreover, the continuing
efforts by the regulatory agencies to reduce regulatory burden and educate both bankers and
examiners will have a positive impact on credit
availability generally—including lending to disadvantaged urban neighborhoods and rural communities.
•

Statement by Lawrence B. Lindsey,
Member,
Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, May 19,
1993

I am glad to appear before your committee today
to offer the Board's comments on S.924, the
Home Ownership and Equity Protection Act of
1993. The bill would amend the Truth in Lending
Act (TILA) to require additional disclosures to

scope sufficient to make a positive impact on an
entire neighborhood. Rehabilitating a single
building in a severely blighted area may not, in
some circumstances, prove to be a success;
however, rehabilitating several key buildings in
the same neighborhood may spark additional
development and is more likely to produce a
successful result. Given the advantages of scale
in such community development activities,
projects of this nature will typically require a
significant mobilization of resources and may
involve federal, state, and local governments,
private charitable organizations, and many different private businesses. In light of these requirements, the successful community development lender must be knowledgeable about the
low- and moderate-income neighborhoods it
seeks to serve, must be familiar with the sources
and forms of government and private support for
such lending, and must possess the experience
necessary to effectively assess and apply available resources. In other words, successful community development lending calls for skills that
go beyond traditional banking experience.

EDUCATIONAL
PROGRAMS

AND




INFORMATIONAL

Statements

consumers who take out "high-cost mortgages"
on their homes and to restrict the terms of such
mortgages.
The bill is a commendable effort to address the
complex issue generically called "reverse redlining" that has received considerable public attention over the past two years. It is clear that the
sponsors have attempted to narrowly target the
bill to areas of abuse, without overburdening the
general market. If the bill progresses further, I
think it is extremely important to maintain this
focus. As my comments will make clear, it is the
Board's view that failure to maintain a tight focus
in the drafting of this bill entails substantial risk
to many legitimate forms of consumer credit.
We can all agree that the abuses this bill seeks
to remedy involve some truly heartwrenching
personal tragedies. Some homeowners—often elderly, with substantial equity in their homes but
with little income—have been targeted by home
improvement contractors, loan brokers, finance
companies, and mortgage companies for aggressive promotion of credit. Sometimes the potential borrowers seek the credit to consolidate
other loans that are about to mature. They also
obtain this type of credit for home repairs or
other emergencies.
When the "dust settles," these borrowers may
find that they have paid a high number of loan
origination and broker points (often financed in
the borrowed amount) and have agreed to a loan
with an interest rate at the highest levels in the
market—sometimes with monthly payments that
even exceed their monthly income and often with
a balloon payment due. In some cases, it is
maintained that borrowers have been defrauded
because the terms of their credit have been
misrepresented to them. Apparently, in a substantial number of cases, borrowers are unable to
keep up the payments, and they end up losing
their homes through foreclosure.
My colleagues and I, as well as officers and
staff members throughout the Federal Reserve
System, have been closely following these issues
and have, like the members of this committee,
been actively considering how such abuses might
be prevented in the future. Board members have
met with delegations of aggrieved homeowners
and have been distressed to hear firsthand of
their plight. We talked with those who currently




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685

cannot afford to repay their loans and who risk
losing their homes through foreclosure. Given
the particular concern about these practices in
Boston, the Federal Reserve Bank of Boston has
investigated these practices there by meeting
with public officials and community groups to
work on a practical response, working with affected borrowers, and conducting workshops on
deceptive credit practices. The Bank also reviewed the activities of one large nonbank subsidiary of a bank holding company in considerable detail.
Through all of these efforts we have come to
appreciate the severity of the problems that
high-cost mortgages cause some borrowers.
However, it has also become clear that finding a
solution—that itself does not have adverse consequences—is a very difficult undertaking. The
problem is multifaceted and complicated.

GENERAL COMMENTS ON
THE LEGISLATIVE PROPOSAL

The bill would define a high-cost mortgage as one
that meets at least one of the following characteristics: (1) the annual percentage rate (APR)
exceeds the yield on U.S. Treasury securities
having maturities comparable to the transaction
by more than 10 percentage points; (2) the consumer's percentage of total monthly debt to
income exceeds 60 percent after the transaction
is consummated; or (3) all points and other fees
paid before closing exceed 8 percent of the loan
amount. We strongly support the bill's exclusion
from its coverage home purchase loans and openend home equity lines of credit.
The proposed disclosures for high-cost mortgages would be required three days before loan
consummation. The special disclosures for these
mortgages would be made earlier than the disclosures that are already required under the TILA
(required before consummation) and would provide the borrower three days before closing to
review these special disclosures and to decide
whether to close the loan.
Under the bill, consumers would receive information about the effect of the security interest in
the home, the APR, a statement of the consumer's remaining monthly income after having

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Federal Reserve Bulletin • July 1993

made the payments on the transaction, information about variable rate features, and a statement
that submitting a loan application and receiving
disclosures does not obligate the consumer to
complete the transaction. The TIL A already requires some of this information (or some form of
it) to be given before consummation of the transaction. The bill would also amend the TIL A to
restrict the terms of high-cost mortgage loans—
for example, by prohibiting prepayment penalties, balloon payments, and negative amortization in such loans. Enforcement of these
requirements is accomplished through the federal
regulatory agencies and the courts, which could
issue a judgment against a creditor for actual
damages, civil penalties of up to $1,000 per
violation (up to $500,000 in a class action), and,
under the bill, forfeiture of all interest and fees
earned.
In general, we believe that these problems
should be addressed in a way that benefits consumers without undue compliance burden on
creditors. For instance, overly restricting credit
contract terms could create the risk that the cost
of credit could increase or that it could be shut off
altogether to marginal borrowers, or to those
borrowers who happen to need credit because of
special circumstances. The bill might create a
disincentive to lending to these borrowers because a technical violation of even one of the
proposed disclosure requirements could subject
a creditor to the serious monetary penalties mentioned above. The risk of substantial litigation is
likely to deter many legitimate lenders from
entering this market. This should make us all the
more careful to avoid having unintended results
affect legitimate borrowers.
Everyone wants to protect consumers—particularly those whose age or income makes them
vulnerable to abusive lending practices—against
losing their homes, perhaps their only substantial
assets. Appealing as it is to assume that more
disclosure will cause people to act prudently, the
Board is not convinced that more TILA information—even if provided separately from and earlier than all other disclosures—will effectively
deter consumers from entering into high-cost
mortgages or ensure that they better understand
the possible consequences. For example, it is
likely that people facing default on pre-existing




loans would agree to any (even high-cost) terms
after full disclosure to fend off losing their
homes. Ordinarily, given the choice of addressing a consumer protection issue with disclosure
requirements or credit restrictions, we would opt
for informing consumers about their credit
choices, such as through TILA disclosures. We
believe the credit market works best when it is
unencumbered and when consumers have the
information they need to compare available
credit terms.
With high-cost mortgages, however, consumers are already required to receive a substantial
amount of disclosures about the terms of the
loan. They receive the APR, a disclosure of the
security interest and the payment schedule on
such loans, for example, although later than is
proposed under the bill. The benefit of the special
disclosures in advance of this information is less
than obvious because most of these homeowners
already have three days after closing to review
their existing cost disclosures and to cancel the
transaction under current law. 1
Obviously despite these protections, there are
problems today. Borrowers nevertheless enter
into these high-cost obligations. It appears that
few if any rescind these high-cost transactions
after having received cost disclosures—even
consumers who may have been misled about
their credit terms or were subjected to highpressure sales tactics. Thus, despite the good
intentions of the sponsors and our own usual
preference for disclosure rules over other restrictions, we have doubts whether simply increasing
the information given will have much positive
impact.
Thus, it may be that the more realistic way to
address these various problems is through some
of the substantive restrictions proposed in section 2 of the bill. The principal substantive restriction under the TILA now affecting these
loans—the right of rescission—could be enhanced somehow for high-cost loans—for exam-

1. More than twenty years ago, a federal "cooling-oflf"
period was established in the TILA to resolve the problems
caused homeowners by high pressure home improvement
contractors. Under the TILA, consumers have a right to
rescind most credit (except home purchase loans) secured by
the home—not just credit sales—including most refinancings.

Statements

pie, by lengthening the rescission period—as an
alternative to adopting restrictions on credit
terms. This may prove particularly efficacious in
cases in which the borrower is actively solicited
by a broker or lender, rather that having initiated
the credit shopping. We would be happy to work
with committee staff on such an alternative,
although I am not confident that high-cost mortgage borrowers who may desperately need credit
would be any more likely to rescind their loans
with greater disclosures about rescission or a
longer "cooling-off" period than they are now.

SPECIFIC COMMENTS ON
THE LEGISLATIVE PROPOSAL

We have attached, for the committee's information, detailed comments on the entire bill. 2 However, I would like to make a few comments on
the provisions. Our objective is to have the
Congress avoid the unintended consequence of
terminating legitimate credit options in the process of enacting this bill. We suggest that the
definition of a high-cost mortgage be changed to
be a transaction in which two or more of the
conditions are satisfied. Consider each point in
turn:
First, consider the criterion that high-cost
loans bear interest rates at more than 10 points
above the current rate on Treasury securities of
equal duration. I can understand that 10 percentage points may seem to be a large spread. In the
present rate environment, however, this criterion
implies an interest rate threshold of 14 percent to
15 percent. Yet many individuals, and not just
those with low and moderate incomes, currently
finance moderate-sized home repair items by
using their credit cards. The effective interest
rate on these cards may well be in the 18 percent
to 21 percent range. It does not seem appropriate
to consider extensions of credit at 14 percent or
15 percent rates as high-cost when individuals
now often assume much higher rates to accomplish the same purpose. The interest rate alone
should not be considered the basis for establish2.The attachment to this statement is available from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551.




to the Congress

687

ing a loan as "high cost" unless a substantially
higher spread is adopted.
Second, consider the 60 percent of income
criterion. I have regularly opposed the use of
such factors because income is often a poor guide
to the ability to repay a loan. Consider first what
I call the "widow situation." Let us imagine a
widow who is left with her home, a little income
(say, earnings on her husband's life insurance),
and some real estate that could be fixed up and
sold to improve her financial situation. She is
consuming the capital represented by the life
insurance proceeds. She realizes that it cannot
continue, and indeed that is the reason why she is
seeking to liquidate some of her property. But it
is easy to imagine that the financing costs on the
repairs she must undertake will exceed 60 percent of her income on a short-term basis. Would
you put at risk her ability to borrow by defining
her loan as "high c o s t " simply because of her
temporary low income? Again, I think that using
simply one of the three criterion listed as sufficient for that definition creates an overly broad
scope for this bill.
A second class of individuals who would be
unintended victims of this legislation would be
people who are starting small businesses and
using their homes as equity for fixed-term second
mortgages. Because the incomes of these individuals are temporarily depressed, use of income as
the sole criterion for the high-cost designation is
particularly ill advised. Yet these types of mortgages may be the best source of credit available
to these potential entrepreneurs.
Preliminary research at the Federal Reserve
suggests that many government-sanctioned mortgages implicitly involve loans to families that
require that more than 60 percent of their income
be used for credit purposes. In 1987, for example, roughly 10 percent to 12 percent of all
FHA-insured refinancings involved borrowers
with debt-to-income ratios greater than 60 percent. To avoid limiting the availability of credit
under government-sponsored programs, you
might consider exempting these mortgages from
coverage under the legislation.
Finally, the third criterion, an 8 percent limit
on points and fees, is unduly restrictive for small
loans. For many reasons, including the paperwork costs imposed by law and regulation, a

688

Federal Reserve Bulletin • July 1993

substantial fixed cost is involved in processing
the loan. Indeed, this cost is often cited as the
reason why many banks do not make small loans
at all. An 8 percent limit on points and fees would
make these loans even scarcer. Consider a $2,000
loan for a new roof, for example. The 8 point test
translates to a $160 threshold. By any of the cost
standards I am aware of, this amount is uncomfortably low.
Again, I am sure we all agree that we want to
avoid the unintended consequence of making
loans more difficult to get. My colleagues and I
have wrestled with the conflicting tradeoffs involved. One option is to raise the thresholds
proposed for each of the three criteria cited
above. We believe that a better option is to look
for a pattern of abusive terms by requiring that
two of the three criteria be met before designating the loan as "high cost." Absent such a
change, it would be difficult for us to conclude
that this legislation would not risk significant
impairment of loan availability in many legitimate and non-abusive instances.
Of all of the provisions in section 2 of the bill,
the substantive limitations on balloon payments,
negative amortization, and prepayment penalties
seem particularly focused on the problems associated with high-cost mortgages. Without the
bill's exclusion of home purchase loans, some
common balloon mortgage products such as the
so-called " 7 - 2 3 " loans could have been affected
by the restrictions. And, without the exclusion,
the negative amortization restrictions might well
freeze out many potential homebuyers from the
market if the rate environment of the late 1970s
should return. Further, as mentioned in our
attached technical comments, the definition of
negative amortization may have the unintended
consequence of restricting reverse annuity mortgages because the balance on these loans increases with the payouts to the elderly borrower
over the loan term. Thus, I again stress that it is
very important to keep the focus of the bill
narrow.
We also have some concern about the provision that would amend the TILA assignee liability and expose an assignee to all the claims and
defenses the consumer could assert against the
creditor from failure to comply with any TILA
requirement. The Federal Trade Commission's




rule on unfair and deceptive practices addresses
this issue to some degree already. That rule has
essentially eliminated holder-in-due-course status for assignees of consumer credit sale contracts but not of direct loans. Also, the provision
would create a second, more expansive standard
for assignee liability than is present in the TILA,
which now specifies that assignees are liable only
for TILA violations that are apparent on the face
of the documents for the loan assigned. In addition, the penalties are much more severe (loss of
all finance charges paid) than under existing law.
This potential for increased liability could discourage the purchase, and ultimately the origination, of loans—and therefore restrict the availability of credit to marginal borrowers without
alternative sources of credit.
Finally, to the extent that the Congress
chooses not to defer regulatory policy to the
states, the Board believes a clear and complete
federal preemption should be considered to clarify coverage and reduce regulatory compliance
burdens.

CONCLUSION

The committee is to be commended for attempting to resolve a complicated and important problem caused by high-cost mortgages. It is clear
that the issues raised by high-cost mortgages are
complex and that the appropriate federal response to the problems they raise is equally
complicated. Many of these issues, relating to
fraud and misrepresentation or usury, are already regulated by the states. Other issues, such
as disclosure about the cost of credit and the
ability to rescind a loan entered into through
high-pressure tactics, are already handled to a
great degree in federal law. The other issues
raised, such as the terms of the credit contract,
would be addressed in S.924 by imposing restrictions on the parties' ability to contract for those
terms. Although we do not favor federal restrictions on credit terms, we believe that these
restrictions would better address the problems
created by high-cost mortgages than the additional disclosures that have been proposed.
In crafting the final form of this legislation, it is
essential that the committee avoid the problem of

Statements

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689

unintended consequences. Given the reported
difficulties that some sectors of the economy
have in accessing credit, it would be an unfortunate outcome of well-intentioned legislation if
these sectors were cut out of the credit market
entirely. I would recommend to this committee
that during the course of their deliberations they
solicit information from creditors active in sec-

ond mortgage lending to determine how the proposed legislation might affect the availability of
credit. We need to be better informed of this
market, but absent perfect information, it is
essential to keep the focus of this legislation as
narrow as possible to eliminate abusive practices
while minimizing adverse consequences which
the Congress clearly would not have intended. •

Statement by John P. LaWare, Member, Board
of Governors of the Federal Reserve
System,
before the Committee on Banking, Finance and
Urban Affairs, U.S. House of
Representatives,
May 26, 1993

An example of the Federal Reserve's commitment in this area was the creation, in January
1990, of the Federal Reserve System Working
Group on Money Laundering Activities. Chairman Greenspan created this senior level Working
Group to review the Board's initiatives on money
laundering and identify new ways to contribute
to the federal government's anti-money-laundering efforts. The Working Group placed special
emphasis on providing assistance to domestic
and international law enforcement organizations.
It also developed internal programs and procedures for Board and Reserve Bank staffs to
implement in their normal supervision and regulation of financial institutions and provision of
services to banking organizations. The Working
Group formed three task forces, in the areas of
cash, funds transfer, and supervision. The three
task forces focused on identifying areas within
the Federal Reserve in which better procedures
would detect and deter money laundering activities. Many of the activities that I will address
today are the result of the efforts of the Working
Group and its task forces.

I am pleased to appear before the Committee on
Banking, Finance and Urban Affairs to discuss
the Federal Reserve's role in the government's
anti-money-laundering efforts. The Federal Reserve places a very high priority on supporting
efforts to attack the laundering of proceeds from
illegal activities through our nation's financial
institutions and, over the past several years, has
engaged extensively in anti-money-laundering
endeavors.
We believe that the Federal Reserve has an
important role to perform in the federal government's efforts to detect and deter money laundering activities within banking organizations, as
well as to provide assistance to law enforcement
agencies in their efforts to suppress these criminal activities and seize proceeds gained from
them. As I will describe in more detail, the
Federal Reserve has participated in, and provided assistance to, the federal government's
efforts in attempting to eliminate money laundering activities.
Currently, the Board, through the varied functions that it performs on a routine basis, such as
examinations of state member banks and the
U.S. branches and agencies of foreign banks, as
well as through special projects and various other
programs, monitors financial institutions in an
attempt to stop money laundering activities. We
have also devoted significant resources to providing technical assistance and training both to
domestic and foreign law enforcement and banking supervisory agencies.




FEDERAL RESERVE PROGRAMS FOR
CONTROLLING MONEY
LAUNDERING

During the course of each Federal Reserve examination of a state member bank or U.S. branch
or agency of a foreign bank, a Bank Secrecy Act
compliance examination is conducted. Such examinations are scheduled to occur every year.
When deemed necessary, Federal Reserve examiners may conduct special targeted examinations
of financial institutions if there is reason to
believe that violations of the Bank Secrecy Act

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Federal Reserve Bulletin • July 1993

may be occurring or other suspicious activities
are identified.
To conduct effective examinations for compliance with the Bank Secrecy Act, all Federal
Reserve examiners receive training in understanding the basics of money laundering. Examiners are also trained in the provisions of the
Bank Secrecy Act and the Treasury's rules and
regulations implementing it and in identifying
suspicious activity that may be associated with
money laundering. This training is provided during initial courses that our examiners attend upon
entering the Federal Reserve System. Additional
training regarding Bank Secrecy Act compliance
and related matters is also provided to experienced examiners during the course of supplemental training programs in which they are required to participate over their careers, as well as
training programs sponsored by the Federal Financial Institutions Examination Council and
various law enforcement agencies.
I must emphasize, however, that even with the
extensive training provided to our examiners, it is
difficult for even the most experienced bank examiners to detect sophisticated money laundering
schemes during the course of an examination.
Well-trained examiners are able to determine if
financial institutions are in compliance with the
various specific provisions of the Bank Secrecy
Act. Bank examiners are also able to determine if
financial institutions have in place systems to
identify and report to the appropriate law enforcement and supervisory agencies any suspicious
activity occurring at or through those institutions.
By identifying institutions that are not in compliance with the various requirements of the Bank
Secrecy Act or that do not have systems in place
to report suspicious activity, the Federal Reserve
provides critical data to government enforcement
agencies.
To enhance the ability of bank examiners conducting Bank Secrecy Act compliance examinations, the Board, in late 1991, created a special
committee of bank examiners with the most experience in Bank Secrecy Act compliance-related
matters. As a result, procedures for Bank Secrecy
Act compliance examinations that are better
suited to today's changing environment were developed. These procedures have been successful
during field tests throughout the Federal Reserve




System over the past year. Our staff members are
also developing better procedures to review the
operations of U.S. banks in foreign jurisdictions
that do not have laws and regulations comparable
to the Bank Secrecy Act. We have identified
several specific areas of foreign operations that
should be reviewed to determine if the U.S. bank
is susceptible to money laundering activities.
To strengthen banks' anti-money-laundering
efforts, we have been encouraging financial institutions to adopt more comprehensive "know
your customer" policies to protect them from
illegal penetration of their facilities by money
launderers. The Board believes that the best
protection is for banks to possess sufficient
knowledge to clearly identify each customer and
to have a full understanding of the type of
business engaged in by the customer.
It is certainly not sufficient to simply identify
those institutions that are not in compliance with
anti-money-laundering statutes, without taking
action to ensure future compliance. To this end,
the Board initiates appropriate enforcement actions against the domestic and foreign banking
organizations that it supervises to address instances of noncompliance. Although the Office of
Financial Enforcement of the Department of the
Treasury initiates civil money penalties against
banking organizations for specific violations of
the Bank Secrecy Act, the Board addresses such
matters as the lack of internal controls and
procedures. For this purpose, the Board may use
its cease and desist and civil money penalty
assessment authority. Recent actions to address
noncompliance in this area include the assessment of fines of $200,000 each against two foreign
banking organizations that were found to have
inadequate internal controls and systems to ensure compliance with the Bank Secrecy Act.

TRACKING OF CURRENCY BY THE
FEDERAL RESERVE

One of the initiatives proposed by the Cash Task
Force of the Board's Working Group on Money
Laundering Activities was the development of a
system whereby currency flows to and from Reserve Banks would be monitored on a regular
basis and abnormalities in the normal flows, either

Statements

surpluses or deficiencies, would be identified and
further investigated. During the development of
this project, the Federal Reserve Bank of Dallas
initiated a cash flow study to establish the normal
range of cash activities for each of the financial
institutions that used that Reserve Bank's cash
services. Once these norms had been established,
the Bank was able to identify and investigate
deviations in the normal pattern of cash transactions by their customers.
The results of the study by the Federal Reserve Bank of Dallas were discussed with various
law enforcement agencies. It was determined
that the most efficient means of gathering, analyzing, and disseminating currency flow data
from around the United States was to have each
of the Reserve Banks report all of their cash flow
data to a single federal government agency more
suited to the task of providing financial investigative assistance to the law enforcement community. This procedure resulted in the establishment of an agreement between the Federal
Reserve and the Financial Crimes Enforcement
Network of the Department of the Treasury
(FinCEN) for each Reserve Bank to provide
FinCEN, on a monthly basis, specific information on cash shipments, by denomination, to and
from the Reserve Banks by their financial institutions. Once FinCEN obtains this information,
it initiates an analysis of the information and
identifies abnormalities by geographic locale or
financial institution. This information is then
passed on to law enforcement officials, as well as
to the responsible supervisory agency for further
investigation.
Besides the provision of currency flow data to
FinCEN, each of the Reserve Banks has adopted
a "know your customer" policy similar to that
which the Federal Reserve encourages private
sector financial institutions to adopt. These policies are designed to ensure that each Reserve
Bank has an understanding of the normal business practices of its cash customers and, therefore, can identify and review inconsistencies,
should they arise.
MONEY LAUNDERING

AND FEDWIRE

Several initiatives are now under way to provide
assistance in tracking funds through the Fedwire




to the Congress

691

system. One initiative is known as the "scanning
program." Using information relating to suspected money launderers supplied by agencies
such as the Federal Bureau of Investigation
(FBI) and the U.S. Customs Service, the program enhances law enforcement's ability to track
funds transfers through the Fedwire.
Federal Reserve staff members are now meeting with law enforcement agency representatives
in Washington, D.C., and throughout the United
States to acquaint them with the potential uses of
the scanning program. The program has been
used successfully by various law enforcement
agencies to date; and, in recent weeks, several
Reserve Banks have reported an increased number of inquiries from law enforcement agencies
about how to use the program.
In an effort to further augment the ability of the
wire payment systems to track funds transfers, in
late 1992 the Federal Reserve recommended that
the Federal Financial Institutions Examination
Council adopt a policy statement encouraging
financial institutions to include complete identifying information about the originator and beneficiary of a wire transfer in the payment message.
We took this step because enforcement agencies
indicated that this information would be useful in
conducting investigations. The council's five regulatory agencies have now adopted such a policy
statement and distributed it to banking organizations in December 1992.
As you are aware, the Federal Reserve and the
Department of the Treasury are also engaged in
developing recordkeeping requirements for funds
transfer as a result of provisions of the Annunzio-Wylie Anti-Money-Laundering Act. Even
before this legislation, the Federal Reserve was
actively assisting in the development of funds
transfer recordkeeping requirements.
The design of funds transfer recordkeeping
requirements is a very complex and technical
undertaking. Although the Board agrees that it
may be beneficial to use information from funds
transfers to investigate money laundering activity, or to trace the proceeds of such activity, we
also have a continuing interest in ensuring the
efficiency and integrity of the payments system.
The impact of any funds transfer recordkeeping
requirements must be carefully weighed to ensure that they do not result in a degradation in the

692

Federal Reserve Bulletin • July 1993

efficiency and attractiveness of the large-dollar
payments system. More important, too onerous
recordkeeping requirements could have seriously
adverse consequences for the competitive position of U.S. financial institutions. We believe
that recordkeeping requirements are being developed that will meet the needs of the government's anti-money-laundering efforts and, at the
same time, protect the efficiency and the integrity
of the payments system.

COORDINATION
ENFORCEMENT

WITH FEDERAL
AGENCIES

LAW

The Federal Reserve routinely coordinates with
federal law enforcement agencies with regard to
anti-money-laundering activities. The scope of
this coordination varies from the development
and implementation of a criminal referral form
that specifically addresses money laundering offenses to specific, case-by-case assistance to law
enforcement agencies resulting from examinations of financial institutions that appear to be
engaged in violations of the Bank Secrecy Act or
related offenses.
The Board also continues to maintain a close
working relationship with the Treasury's Office
of Financial Enforcement with regard to the
enforcement of the Bank Secrecy Act. As you
are aware, the Office of Financial Enforcement
promulgates all regulations with regard to the
Bank Secrecy Act that affect financial institutions; and it is the joint responsibility of the
Federal Reserve, the other federal financial
institutions supervisory agencies, and the Office
of Financial Enforcement to ensure that financial institutions comply with these rules and
regulations. To this end, the Federal Reserve
routinely provides the Office of Financial Enforcement, on a quarterly basis, with information related to noncompliance with the Bank
Secrecy Act by the domestic and foreign financial institutions that are examined by us during
the quarter.
Over the past year, Board staff members also
began a dialogue with the Money Laundering
Section of the Department of Justice's Criminal
Division to coordinate better the review of
pertinent intelligence information. We now




work closer with Justice staff members to identify potential money laundering at or through
domestic banking organizations or foreign financial institutions doing business in the United
States.
On the international front, the Federal Reserve
is an active participant in the Financial Action
Task Force, which the Group of Seven (G-7)
countries established. Board staff members have
a significant role in the U.S. delegation to the
Financial Action Task Force and have provided
resources to the efforts of the Financial Action
Task Force to provide educational assistance to
countries that are attempting to understand the
money laundering problem and to develop programs to combat such activity. The staff members have traveled to such places as Hungary,
Poland, Austria, Singapore, the United Arab
Emirates, and Saudi Arabia to provide training
and technical assistance under the auspices of
the Task Force.

RESOURCES THE FEDERAL
HAS COMMITTED TO
ANTI-MONEY-LAUNDERING

RESERVE
INITIATIVES

As I have described, extensive resources have
been dedicated to the Federal Reserve's antimoney-laundering efforts. At a minimum, each
banking organization supervised by the Federal
Reserve receives a regular examination for
Bank Secrecy Act compliance, which is an
effort that requires significant human resources
and expense. Besides the use of our examination force to conduct Bank Secrecy Act examinations and special targeted reviews, the
Board, in late 1989, augmented the resources
dedicated to this area when it created a new
senior level staff position within the Division of
Banking Supervision and Regulation to coordinate and enhance money-laundering-related
matters. Since December 1989, the Special
Counsel appointed to this position has assumed
responsibility for coordination of matters related to money laundering and Bank Secrecy
Act compliance, including investigation, enforcement, and training. Over the past three
years, the Special Counsel, who is a recognized
expert with respect to the Bank Secrecy Act

Statements

and money laundering offenses, has traveled
widely abroad and throughout the United States
representing the Board on Bank Secrecy Actrelated training programs and other international matters pertaining to the federal government's anti-money-laundering efforts. He has
provided assistance to the Departments of State
and Treasury, and each of the many other
federal administrative and law enforcement
agencies responsible for Bank Secrecy Actrelated matters. Last month, the Board added
to the staff members of the Special Counsel's
office by hiring a Senior Special Examiner with
extensive Bank Secrecy Act experience to assist the Special Counsel's anti-money-laundering efforts.

ESTIMATES ON MONEY LAUNDERING
THE EFFECTIVENESS OF CURRENCY
TRANSACTION REPORTS

AND

You have requested that we estimate the
amount of funds laundered in the United States
annually. Although the Federal Reserve does
not develop or maintain such statistics, it does
rely on information that other government
agencies in this area provided. The Financial
Action Task Force estimated that in 1990 the
U.S. share of drug proceeds was $100 billion.
More recently, the FBI has estimated that the
amount of money laundered through the United
States on a yearly basis from narcotics trafficking, as well as other major crimes, is $300
billion.
You also requested our views on the effectiveness of the Currency Transaction Reports required to be filed by financial institutions for
most cash transactions in excess of $10,000. As I
stated previously, the Federal Reserve is required to monitor compliance by financial institutions with regulations promulgated by the Department of the Treasury. Although the Federal
Reserve continues to examine for compliance
with the currency reporting requirements, it does
not use the data contained in the Currency Transaction Reports for investigative purposes and,
therefore, has no means by which to assess their
effectiveness to the law enforcement community.




to the Congress

693

EVALUATION OF THE EFFECTIVENESS OF
THE FEDERAL RESERVE'S
ANTI-MONEYLAUNDERING EFFORTS

Our anti-money-laundering efforts have been extensive over the past several years. We conduct
regular Bank Secrecy Act examinations of all the
domestic and foreign banking organizations that
we supervise, and the Board is the only banking
agency that has created and staffed senior staff
positions dedicated to developing, coordinating,
and overseeing an anti-money-laundering program. Although it is difficult to quantify results in
this area, it is important to note that the federal
law enforcement community looks toward, and
relies on, the Federal Reserve for assistance and
guidance with respect to money laundering matters. Further, the international banking supervisory community relies on our extensive expertise
to develop and coordinate international antimoney-laundering programs.
We expect that the Federal Reserve's Bank
Secrecy Act examination program and the notable formal enforcement actions addressing
Bank Secrecy Act-related deficiencies that have
been taken by this agency have had some
deterrent effects. Our staff members have been
advised that many U.S. branches and agencies
of foreign banks have retained legal counsel and
accounting firm consultants to develop enhanced internal Bank Secrecy Act compliance
procedures for their institutions after the
Board's announcements regarding its recent
enforcement actions. Similarly, the legal profession and bankers have given increased attention to Bank Secrecy Act compliance matters
during the course of recent symposiums and
training sessions. This increased attention is
another indication that banking organizations
and their outside professionals are responding
to the anti-money-laundering efforts of the federal departments and agencies responsible for
this area.

CONCLUSION

As I have described, over the past several years
the Federal Reserve has taken significant steps
in all of its relevant areas of responsibility to

694

Federal Reserve Bulletin • July 1993

develop programs, procedures, and systems to
assist in the government's anti-money-laundering efforts. These efforts have made the Federal
Reserve a leader in the bank regulatory community's anti-money-laundering mission. The
Chairman, members of the Board, and the staff
members have worked to develop and imple-




ment programs and procedures in the bank
supervision, currency, and payments system
areas that enhance the government's ability to
detect and deter money laundering activities in
financial institutions. The continued tuning and
improvement of this effort are an established
Board policy.
•

695

Announcements
MEETING OF THE CONSUMER
COUNCIL

ADVISORY

The Federal Reserve Board announced that the
Consumer Advisory Council met on Thursday,
June 17. 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.

REDUCTION IN PRIOR APPROVAL
REQUIREMENTS FOR FUTURES COMMISSION
MERCHANT ACTIVITIES

The Federal Reserve Board announced on May 25,
1993, that it has taken two steps to reduce the prior
approval requirements for bank holding companies
proposing to engage in certain futures commission
merchant (FCM) activities.
The steps are the following:
• The Board has delegated additional authority
to the Federal Reserve Banks to approve proposals
by bank holding companies to act as an FCM.
• The Board has also modified and, in certain
cases, eliminated the prior approval requirements
for bank holding companies that seek to act as an
FCM for additional financial instruments or to act
as an FCM on additional commodities exchanges
where the bank holding company already has
approval to engage generally in FCM activities.

PROPOSED

ACTIONS

The Federal Reserve Board on May 7, 1993,
requested public comment on whether the Board




should retain, modify, or terminate a provision in
Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders of Member
Banks), which establishes procedures for smaller
banks to increase their aggregate insider lending
limit up to 200 percent of unimpaired capital and
surplus. Comments should be received by July 15,
1993.
The Federal Reserve Board on May 13, 1993,
requested public comment on a proposed rule to
expand the definition of "financial institution" in
section 402 of the Federal Deposit Insurance Corporation Improvement Act. The act validates netting contracts among financial institutions. Comments should be received by August 20, 1993.

PUBLICATION
OF G U I D E TO THE FLOW
OF F U N D S ACCOUNTS

A new Federal Reserve Board publication explains
the principles underlying the flow of funds
accounts and describes how the accounts are constructed. Guide to the Flow of Funds Accounts lists

each flow series in the Board's main flow of funds
publication, "Flow of Funds Accounts, Flows and
Outstandings" (the Z.l statistical release), and
describes how the series is derived from source
material. The Guide also explains the relationship
between the flow of funds accounts and the national
income and product accounts and discusses the
analytical uses of flow of funds data. The Guide
can be purchased, for $8.50, from Publications
Services, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
•

696

Minutes of the
Federal Open Market Committee Meeting
of March 23,1993
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors
of the Federal Reserve System in Washington,
D.C., on Tuesday, March 23, 1993, at 9:00 a.m.
Present:
Mr. Greenspan, Chairman
Mr. Corrigan, Vice Chairman
Mr. Angell
Mr. Boehne
Mr. Keehn
Mr. Kelley
Mr. LaWare
Mr. Lindsey
Mr. McTeer
Mr. Mullins
Ms. Phillips
Mr. Stern
Messrs. Broaddus, Jordan, Forrestal, and Parry,
Alternate Members of the Federal Open
Market Committee
Messrs. Hoenig, Melzer, and Syron, Presidents
of the Federal Reserve Banks of Kansas City,
St. Louis, and Boston respectively
Mr. Bernard, Deputy Secretary
Mr. Coyne, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Patrikis, Deputy General Counsel
Mr. Prell, Economist
Mr. Truman, Economist
Messrs. R. Davis, Lang, Lindsey, Rolnick,
Rosenblum, Scheld, Siegman, Simpson, and
Slifman, Associate Economists
Mr. McDonough, Manager of the System Open
Market Account
Ms. Greene, Deputy Manager for Foreign
Operations
Ms. Lovett, Deputy Manager for Domestic
Operations




Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors1
Mr. Madigan, Assistant Director, Division of
Monetary Affairs, Board of Governors
Mr. Hooper, Assistant Director, Division of
International Finance, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Messrs. Beebe, T. Davis, Dewald, Goodfriend, and
Ms. Tschinkel, Senior Vice Presidents,
Federal Reserve Banks of San Francisco,
Kansas City, St. Louis, Richmond, and
Atlanta respectively
Ms. Browne, and Mr. Sniderman, Vice Presidents,
Federal Reserve Banks of Boston and
Cleveland respectively
Ms. Krieger, Manager, Open Market Operations,
Federal Reserve Bank of New York
At the start of the meeting, the subcommittee
established to review policies relating to the release
of Committee information reported on its further
deliberations and proposed a merging of the current
"Minutes of Actions" and the "Record of Policy
Actions" into a new document to be designated
"Minutes of the Federal Open Market Committee
Meeting." Merging the two documents would put
in convenient form all the information that is
released pertaining to F O M C meetings, and the
new document would be made public on the same
schedule as its predecessor documents. The Committee members endorsed the subcommittee's proposal and by unanimous vote the Committee
approved the "Minutes of the Federal Open Market
1. Attended actions portion of meeting relating to discussion of
merging minutes of action and policy record into one document.

697

Committee Meeting" held on February 2-3, 1993;
this merged document was scheduled to be released
on March 26, 1993.
The Manager of the System Open Market
Account reported on developments in foreign
exchange markets since the previous meeting on
February 2-3, 1993. There were no System open
market transactions in foreign currencies during
this intermeeting period, and thus no vote was
required of the Committee.
The Deputy Manager for Domestic Operations
reported on developments in domestic financial
markets and on System open market transactions in
government securities and federal agency obligations during the period February 3, 1993, through
March 22, 1993. By unanimous vote, the Committee ratified these transactions.
The Committee then turned to a discussion of the
economic outlook and the implementation of monetary policy over the intermeeting period ahead. A
summary of the economic and financial information available at the time of the meeting and of the
Committee's discussion is provided below, followed by the domestic policy directive that was
approved by the Committee and issued to the Federal Reserve Bank of New York.
The information reviewed at this meeting suggested that economic activity was expanding at a
more moderate pace in the early months of 1993
after increasing substantially in the fourth quarter.
Although outlays for business equipment apparently remained on a strong upward trajectory, sales
of new homes had slackened and consumer spending was rising less rapidly. Indicators of production
activity also were mixed: Industrial output had
continued to post solid gains, but homebuilding
had been less robust since year-end. Payroll
employment had strengthened, and the unemployment rate had moved down further. Increases in
wages had remained subdued in recent months, but
advances in consumer and producer prices had
been larger than those recorded in the latter part of
1992.
Total nonfarm payroll employment rose sharply
in February, following generally small advances in
previous months, and the length of the average
workweek remained at the fourth-quarter level. The
strong job gains in construction, services, and retail
trade in February apparently reflected to some
extent a partial reversal of the special factors that




had depressed reported employment in these sectors in previous months. Since December, initial
claims for unemployment insurance had fluctuated
in a range that was consistent with further modest
growth in employment. The civilian unemployment rate edged lower again in February, to
7.0 percent.
Industrial production continued to rise at a fairly
brisk pace in January and February. Changes in
mining and utilities were about offsetting on balance over the two months, but increases in manufacturing were fairly widespread. Although motor
vehicle assemblies fell in February from a relatively high January level, the production of consumer durables and computers turned up sharply.
In addition, increases in output were recorded in
several other categories, including non-energy
materials and construction supplies. Recent surveys indicated that new orders for durable goods
increased further in February, and lean factory
inventories coupled with reports of lengthening
delivery times suggested further gains in industrial
output in coming months. Total utilization of industrial capacity rose again in February.
Retail sales advanced in February after a fourthquarter surge and a pause in January. Sales at
automotive dealers weakened in February. However, there were sharp increases in sales of building
materials and supplies, miscellaneous durable
goods, and nondurable goods other than apparel.
After registering sizable gains late last year, housing starts fell substantially in January and retraced
only part of that decline in February. The slowdown was concentrated in single-family housing
starts; multifamily starts were up in February from
a historically low level in January. Although mortgage interest rates had dropped to the lowest levels
in decades, sales of both new and existing homes
turned down in January from their high December
levels.
Incoming data on orders and shipments of nondefense capital goods suggested a further brisk
advance in outlays for business equipment in coming months. In January, a decline in shipments of
nondefense capital goods only partially reversed a
large December rise, as a surge in shipments of
computing equipment helped sustain the overall
level. Shipments of complete civilian aircraft
posted a solid gain in January. The increase
appeared to be concentrated in sales to foreign

698

Federal Reserve Bulletin • July 1993

purchasers; in the domestic airline industry, intense
competition was forcing cutbacks of unprofitable
routes and reductions in both the number of planes
in service and orders for new planes. Shipments of
durable equipment other than computers and aircraft fell in January to about the level of the fourth
quarter. On the other hand, the January reading on
new orders for these goods was well above the
average for the fourth quarter, suggesting that additional advances in shipments might lie ahead. Nonresidential construction activity was down slightly
further in January, reflecting persisting declines in
office and industrial building in an environment of
excess supply and some continuing, though perhaps lessening, downward pressure on the prices of
such structures.
Business inventories appeared to have edged
lower in January. In manufacturing, factory stocks
were drawn down further, and most industries had
relatively low stocks-to-shipments ratios. Among
wholesalers, strong January sales pulled down
inventories at many types of establishments; in
numerous cases, a large accumulation of stocks in
the fourth quarter was reversed. For the wholesale
sector as a whole, the inventories-to-sales ratio in
January was near the bottom of the range of the
past two years. Retail inventories rose somewhat
further in January after a large December increase.
Stocks at automotive dealers accounted for all of
the January accumulation. At retail stores other
than auto dealers, the ratio of inventories-to-sales
remained within the narrow range observed over
the past year.
The nominal U.S. merchandise trade deficit widened slightly in January but was little changed
from its average level in the fourth quarter. The
value of both exports and imports dropped sharply
in January from the December levels. The decline
in imports was spread widely among major trade
categories, but the decrease in exports largely
reflected a reduction in shipments of aircraft after a
strong December rise. Among the major foreign
industrialized countries, the level of real activity
contracted further in the fourth quarter in Japan,
western Germany, and France; for the first quarter,
the limited data available were generally weak for
Japan and France but somewhat more mixed for
western Germany. By contrast, economic activity
appeared to be increasing in Canada and the United
Kingdom.




Producer prices of finished goods were up in
January and February after changing little over the
fourth quarter. Producer prices of finished foods
declined over the first two months of the year, but
prices of finished energy products climbed rapidly,
and prices of other finished items rose at a faster
rate than in 1992. At the consumer level, price
increases in January and February also were on the
high side of the past year's advances. Food prices
jumped in January and rose slightly further in February, while energy prices retraced most of a sharp
January rise. Excluding food and energy items,
consumer prices advanced at a substantially faster
pace over the January-February period than in
1992. Increases in wages, as measured by average
hourly earnings of production or nonsupervisory
workers, remained subdued in recent months. The
advance in average hourly earnings slowed in February, and the rise over the twelve months ended in
February was considerably smaller than over the
previous twelve-month period.
At its meeting on February 2-3, 1993, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and that did not include a presumption about
the likely direction of any adjustments to policy
during the intermeeting period. Accordingly, the
directive indicated that in the context of the Committee's long-run objectives for price stability and
sustainable economic growth, and giving careful
consideration to economic, financial, and monetary
developments, slightly greater reserve restraint or
slightly lesser reserve restraint would be acceptable
during the intermeeting period. The reserve conditions associated with this directive were expected
to be consistent with little change in the levels of
M2 and M3 over the two-month period from January through March.
Open market operations during the intermeeting
period were directed toward maintaining the existing degree of pressure on reserve positions. Adjustment plus seasonal borrowing averaged only
slightly above expected levels in the three full
reserve maintenance periods in the intermeeting
interval. For the period as a whole, the federal
funds rate remained close to the 3 percent level that
had prevailed in previous months.
Other short-term interest rates changed little over
the intermeeting period, while long-term rates fell
appreciably on balance. Bond markets rallied over

Minutes of the Federal Open Market Committee Meeting

most of the period, reflecting market assessments
of improved prospects for significant reductions in
the federal budget deficit in coming years and the
consequences for overall spending. Prices of Treasury notes and bonds also were boosted by municipal defeasance activity and by perceptions of
heightened prepayment risks in mortgage-backed
securities. In early March, interest rates on longterm Treasury bonds and conventional fixed-rate
mortgages reached their lowest levels since 1973,
but some of the decline in bond and mortgage rates
subsequently was reversed in response to increased
apprehension about inflation. Equity prices generally responded favorably to the drop in long-term
interest rates, but concerns about future changes in
government policy toward a number of industries,
including health care, led to lower prices in some
segments of the equities market.
In foreign exchange markets, the trade-weighted
value of the dollar in terms of the other G-10
currencies fell on balance over the intermeeting
period. The dollar depreciated through late February, partly in response to declines in U.S. long-term
interest rates and incoming data that were seen as
pointing to some slowing of the expansion in the
United States. Subsequently, the dollar rebounded
in the wake of unexpectedly strong U.S. employment statistics, disappointing inflation numbers,
and further signs of weakening economic activity
abroad. Near die end of the period, the dollar again
dropped against the German mark and other European currencies, following a cut by the Bundesbank of its discount rate that apparently was less
than market participants were expecting. On balance over the period, the dollar was marginally
lower against the mark and other European currencies, but it declined substantially against the Japanese yen, reaching an all-time low.
M2 and M3 contracted in January and February.
Part of the weakness apparently reflected temporary factors, such as distortions in seasonal adjustment factors and a lull in prepayments of mortgagebacked securities that reduced deposits held in
association with this activity. More fundamentally,
relatively attractive returns on capital market
instruments continued to prompt households to
shift large amounts of liquid balances into market
investments, such as bond and stock mutual fund
shares. In addition, banks continued to issue subordinated debt and equity to improve their balance




699

sheets at a time when the expansion of bank credit
was slowing noticeably; in particular, bank lending
to businesses had been depressed by paydowns
from the proceeds of heavy bond and stock issuance by nonfinancial corporations. Total domestic
nonfinancial debt appeared to have expanded somewhat further in January.
The staff projection prepared for this meeting
suggested that economic activity would grow over
the year ahead at a pace that would foster a further
gradual reduction in margins of unemployed labor
and capital. The projection incorporated the essential elements of the fiscal proposals recently set
forth by the Administration; the effects on aggregate demand, all other things equal, were expected
to be small over the next several quarters. However, the appreciable declines in long-term interest
rates that had occurred in recent months—evidently
partly in response to anticipations of intermediateterm deficit reduction—were expected to support
substantial additional gains in business and residential investment. Consumer spending would be bolstered by the progress already achieved in reducing
debt-service burdens and by a gradual lessening of
concerns regarding job security, although the
higher personal income taxes now envisioned for
upper-income taxpayers were expected to be an
inhibiting factor. Increases in export demand would
be limited in the near term by the continuing weakness in the economies of the major industrialized
countries. The persisting slack in resource utilization was expected to be associated with a return to
more subdued price increases after a spurt earlier
this year.
In the Committee's discussion of current and
prospective economic conditions, the members
remained encouraged by recent developments that
they viewed on the whole as tending to confirm
their forecasts of sustained economic expansion,
though at a pace appreciably below that now indicated for the fourth quarter of 1992. If realized,
such economic growth would be associated over
time with a further gradual decline in unemployment. While the expansion appeared to have generated some momentum, a number of factors were
likely to limit its strength, including ongoing balance sheet and business restructuring activities, the
outlook for a more restrictive federal budget, and
continuing weakness in key foreign markets. At the
same time, greatly reduced interest rates and much

700

Federal Reserve Bulletin • July 1993

improved, if still vulnerable, business and consumer confidence were positive factors in the
outlook. Some members cautioned that even
though a moderate rate of economic growth could
be viewed as the most likely outcome over the
forecast horizon, the current expansion differed in
important respects from earlier cyclical recoveries,
and in light of the attendant uncertainties a considerably different result—in either direction—could
not be ruled out. With regard to the outlook for
inflation, the faster increases in consumer prices in
recent months and a sharp upturn in the prices of
certain producer materials tended to raise concerns,
or at least a degree of unease, with regard to
underlying inflation trends. While these developments might well prove to be an aberration rather
than a signal of intensifying inflation, they did
suggest the need to reassess the likelihood of a
further decline in inflation and to be alert to further
signs of a sustained upturn. For now, however, the
favorable trends in underlying unit labor costs,
which were associated in turn with ongoing gains
in productivity and the absence of any firming in
wage pressures, led many members to conclude
that recent price developments did not provide
persuasive evidence of a change in the inflation
outlook.
Members continued to report somewhat uneven
business conditions across the nation. Steady economic growth characterized many parts of the
country, but business activity remained depressed
in some areas and industries, notably those related
to defense, aerospace, and nonresidential construction. While business sentiment was generally positive, many business contacts were uncertain about
the outlook for demand in their own industries or
the potential strength of the overall expansion, and
recent fiscal policy developments appeared to have
introduced a further note of caution. This uncertainty helped to account for the continuing reliance
of numerous firms on overtime work to meet growing demand rather than incurring the considerable
costs of adding new workers. Even so, an increasing number of contacts were reporting worker
recalls or new hires. One member commented that
job growth could be viewed both as a measure of
business sentiment and as a necessary element in
building or maintaining consumer confidence and
thus helping to ensure an enduring economic
expansion.




The quickening recovery during 1992, especially
in the second half of the year, had received considerable impetus from consumer spending, and while
growth in such spending could be expected to
moderate from its pace in recent quarters, the consumer sector was viewed as likely to play a key
role in sustaining the expansion this year. Many
consumers had taken advantage of steep declines in
interest rates to strengthen their balance sheets and
reduce their debt-service burdens, and they were
now in a much improved position to finance further
growth in their expenditures. The members took
note of recent indications of a decline in consumer
confidence and of some softening in retail sales
since early in the year. However, the latter appeared
to be in part the result of recently adverse weather
conditions in some major parts of the country, and
consumer confidence was still much improved on
balance since earlier in the recovery. Accordingly,
recent developments were not seen in themselves
as harbingers of a weakening consumer spending
trend over the next several quarters.
Business spending on producers' durable equipment also was believed likely to continue to provide appreciable stimulus to the expansion, assuming that the much reduced interest rates and
currently favorable business attitudes would be sustained and that proposed investment tax credit legislation eventually would be enacted. At the same
time, business spending for nonresidential structures probably would continue to be held back by
weakness in office construction stemming from
widespread overcapacity. While office building
activity was likely to be restrained for an extended
period, members saw some positive signs that
pointed to a degree of stabilization in this sector,
including the leveling out or even a marginal
pickup in rents and occupancy rates in some markets that previously had been severely depressed. A
slow turnaround in other building activity was
reported in some regions, notably for industrial and
retail structures.
While the available data on starts of singlefamily houses in January and February were somewhat disappointing, the members felt that housing
construction activity had held up relatively well
thus far this year, after allowing for the adverse
weather conditions that had retarded construction
in some areas. The greatly reduced cost of mortgage financing pointed to continuing gains in hous-

Minutes of the Federal Open Market Committee Meeting

ing construction despite a rise in costs associated
with the sharp jump in lumber prices and a scarcity
of finished building lots in some areas.
The members agreed that the prospects for overall spending on business capital goods and housing
were vulnerable to shifts in attitudes that might be
triggered, for example, by increases in market interest rates associated with an absence of progress in
reducing the federal budget deficit. The outlook for
a significant contraction in the federal deficit was
subject to considerable uncertainty, especially in
light of the still pending decisions to be made with
regard to health care programs and their financing.
The members recognized that the direct effects of
appreciable deficit reduction would tend to constrain economic activity, as evidenced by the
impact in many areas of the defense cutbacks that
were already being implemented. Business contacts had expressed concerns about the potential
effects on their industries and local markets of
various provisions in the proposed legislation. Even
so, a more encompassing assessment of the effects
of deficit reduction needed to take account of its
favorable implications for domestic interest rates.
Moreover, insofar as the nearer-term outlook was
concerned, the fiscal legislation now under consideration included new spending initiatives and
an investment tax credit that were intended to provide some temporary stimulus to an economic
expansion that, in the view of many observers,
might still be in the process of gathering sustainable momentum. On balance, substantial deficit
reduction in line with the currently proposed legislation was seen as likely to have a positive effect
on business and consumer confidence, financial
markets, and the longer-term health of the
economy.
Several members observed that the outlook for
exports had worsened as a result of weakening
economic trends in a number of major industrialized nations. Members also commented on the
uncertainties in the outlook for foreign trade associated with a variety of political risks abroad and the
persisting protectionism that currently was highlighted by strong opposition to key trade agreements now under negotiation or under consideration for ratification. Anecdotal information from
business contacts involved in export markets continued to suggest lagging foreign demand for many
U.S. goods; however, backlogs for other products,




701

such as labor-saving capital equipment, remained
sizable.
The members devoted considerable attention to
the discussion of various factors underlying the
outlook for inflation. The consumer and producer
price indexes had been less favorable in January
and February than in the latter part of 1992. Also,
prices of various industrial and construction materials had firmed since the start of the year in apparent
response to rising production and, in some industries, to import or environmental restrictions. Anecdotal reports of increasing costs and prices had
begun to appear with somewhat greater frequency
in some areas, and pressures to widen profit margins reportedly were strong in a number of industries. In their evaluation of recent inflation developments, however, the members generally gave more
weight to the behavior of unit labor costs, which
indicated that much of the economy's underlying
cost structure did not reflect any signs of a pickup
in inflationary pressures. Moreover, from a financial perspective, extensions of credit and growth in
overall nonfinancial sector debt were not consistent
with an economy that was generating significant
inflationary pressures, and the recent behavior of
long-term debt markets suggested expectations of
more subdued inflation. Against this background,
the recent upturn in consumer and certain commodity prices might well represent a temporary development such as had occurred previously during the
current cyclical upswing. In support of this view,
members cited various fundamentals that seemed
inconsistent with accelerating inflation, including
the considerable slack in the utilization of labor
and capital resources, strong competitive conditions in many markets, the absence of significant
lengthening in supplier delivery schedules, and an
extended period of weak expansion in the broader
monetary aggregates that now encompassed some
recent deceleration in M l . Nonetheless, the members acknowledged that recent price developments
had raised a degree of unease in their minds, and
their concerns would rise if the recent pace of price
advances were sustained in the months immediately ahead. One member observed that a somewhat faster economic expansion than currently was
expected by most members might well serve to
intensify inflation pressures. While price developments were notably difficult to predict, most of the
members concluded that the evidence at this point

702

Federal Reserve Bulletin • July 1993

did not confirm a resurgence in inflationary pressures, and some commented that further modest
disinflation remained a reasonable expectation for
the next several quarters.
In the Committee's discussion of policy for the
intermeeting period ahead, most of the members
endorsed a proposal to maintain an unchanged
degree of pressure on reserve positions, while two
members supported an immediate move to tighten
reserve conditions. In the majority view, the current degree of reserve pressure continued to represent a policy stance that was appropriately balanced in light of the opposing risks of a faltering
economic expansion and a resurgence of inflation.
Conditions in credit markets did not provide confirming evidence of the emergence of greater inflationary pressures and the need to restrain the
growth in credit. Indeed, the continuation of balance sheet restructuring activities by financial institutions and the associated caution on the part of
these institutions with regard to extending loans
still appeared to be exerting a significantly inhibiting effect on the overall growth in spending and
economic activity. Several members acknowledged
that a policy of maintaining unchanged reserve
conditions and an associated federal funds rate
around current levels, which implied that real shortterm rates were near zero or even slightly negative,
could have inflationary consequences in the event
of a strengthening of the expansion and a sustained
pickup in credit demands. The Committee would
need to remain alert to such a development. In
present circumstances, however, an unchanged policy stance seemed most consistent with achieving
sustained economic expansion in an environment
of subdued inflation. The members who favored a
prompt move toward restraint were persuaded that
a steady policy incurred an unacceptable risk of
halting the progress toward price stability and
indeed of intensifying inflation as the current
expansion matured. In this view, a policy tightening move at this point was likely to counter the
need for more substantial and potentially disruptive
tightening actions later.
In the course of the Committee discussion, the
members took account of a staff analysis that
pointed to a resumption of M2 and M3 growth over
the months ahead. This analysis suggested that the
temporary factors depressing the broader monetary
aggregates likely would be reversing, but that the




other influences causing a rechanneling of credit
flows away from depository institutions and boosting the velocity of money undoubtedly would persist, though probably with diminishing force.
Accordingly, the staff foresaw moderate growth of
M2 and M3 that at midyear would leave these
aggregates below the lower ends of the Committee's ranges for 1993. Under prevailing circumstances, such continuing weakness in the broader
aggregates was not viewed as indicating inadequate
monetary stimulus. Indeed, a number of members
commented that other indicators suggested that current monetary policy was in fact quite accommodative as evidenced for example by low short-term
interest rates, especially on an inflation-adjusted
basis. Moreover, M l , reserves, and the monetary
base had continued to expand in the first quarter,
though at much reduced rates. One member commented that the slowdown in these narrower
monetary measures, which he viewed as important
indicators of the thrust of monetary policy, had
favorable implications with regard to bringing
inflation under control. The members agreed that
the considerable uncertainty that continued to surround the outlook for broad money relative to
spending implied that forming precise expectations
for monetary growth over the months ahead was
not feasible.
In the Committee's discussion of possible intermeeting adjustments to the degree of reserve pressure, members who favored an unchanged policy
stance also expressed a preference for retaining the
symmetry of the existing directive. Some observed
that a policy change during the intermeeting period,
if any, might well be in the direction of a tightening
move. However, because there was no compelling
case in the view of most members for such a move
at this time and any intermeeting adjustment would
be made in the light of emerging developments, a
symmetric directive was warranted. In this connection, one member commented that, given the Committee's assessment of current economic and financial conditions, a tilt in the directive toward
restraint would give a misleading indication of the
Committee's current intentions. Members also
noted that a change in policy, should one be called
for by intermeeting developments, would represent
a shift in the direction of policy and would be
likely to have an especially pronounced impact on
financial markets.

Minutes of the Federal Open Market Committee Meeting

At the conclusion of the Committee's discussion,
a majority of the members indicated that they
favored a directive that called for maintaining the
existing degree of pressure on reserve positions.
These members also expressed a preference for a
directive that did not include a presumption about
the likely direction of any adjustment to policy
during the intermeeting period. Accordingly, in the
context of the Committee's long-run objectives for
price stability and sustainable economic growth,
and giving careful consideration to economic,
financial, and monetary developments, the Committee decided that slightly greater or slightly lesser
reserve restraint would be acceptable during the
intermeeting period. The reserve conditions contemplated at this meeting were expected to be
consistent with a resumption of moderate growth in
M2 and M3 over the second quarter.
At the conclusion of the meeting, the Federal
Reserve Bank of New York was authorized and
directed, until instructed otherwise by the Committee, to execute transactions in the System account
in accordance with the following domestic policy
directive:
The information reviewed at this meeting suggests
that economic activity has increased at a more moderate
pace in the early months of 1993 after expanding
robustly in the fourth quarter. Total nonfarm payroll
employment registered a sharp increase in February following generally small advances in previous months,
and the civilian unemployment rate edged down further
to 7.0 percent. Industrial production continued to post
solid gains in January and February. Retail sales
increased somewhat further over the first two months of
the year after a fourth-quarter surge. Housing starts
slipped in early 1993 after registering sizable gains late
last year. Incoming data on orders and shipments of
nondefense capital goods suggest a further brisk advance
in outlays for business equipment, while nonresidential
construction has remained soft. The nominal U.S. merchandise trade deficit was essentially unchanged in January from its average level in the fourth quarter, but both
exports and imports were substantially lower. Increases
in wages have remained subdued, but recent advances in
consumer and producer prices have been larger than
those recorded in the latter part of 1992.
Short-term interest rates have changed little since the
Committee meeting in early February while bond yields
have fallen appreciably on balance. In foreign exchange
markets, the trade-weighted value of the dollar in terms
of the other G-10 currencies declined on balance over
the intermeeting period.
M2 and M3 contracted in January and February,
apparently reflecting transitory factors and further shifts



703

into market investments. Total domestic nonfinancial
debt appears to have expanded somewhat further in
January.
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability
and promote sustainable growth in output. In furtherance
of these objectives, the Committee at its meeting in
February established ranges for growth of M2 and M3 of
2 to 6 percent and V2 to AVi percent respectively, measured from the fourth quarter of 1992 to the fourth
quarter of 1993. The Committee expects that developments contributing to unusual velocity increases are
likely to persist during the year. The monitoring range
for growth of total domestic nonfinancial debt was set at
AVi to 8V2 percent for the year. The behavior of the
monetary aggregates will continue to be evaluated in the
light of progress toward price level stability, movements
in their velocities, and developments in the economy and
financial markets.
In the implementation of policy for the immediate
future, the Committee seeks to maintain the existing
degree of pressure on reserve positions. In the context of
the Committee's long-run objectives for price stability
and sustainable economic growth, and giving careful
consideration to economic, financial, and monetary
developments, slightly greater reserve restraint or
slightly lesser reserve restraint would be acceptable in
the intermeeting period. The contemplated reserve conditions are expected to be consistent with a resumption
of moderate growth in the broader monetary aggregates
over the second quarter.
Votes for this action: Messrs. Greenspan, Corrigan,
Boehne, Keehn, Kelley, LaWare, McTeer, Mullins,
Ms. Phillips, and Mr. Stern. Votes against this action:
Messrs. Angell and Lindsey.
Messrs. Angell and Lindsey indicated that their
concerns about the outlook for inflation prompted
them to favor an immediate move to tighten reserve
conditions. In their view, such an action was desirable not only to arrest the possible emergence of
greater inflation but especially to promote further
disinflation. They were persuaded that monetary
policy currently was overly accommodative as suggested by various indicators such as recent data on
consumer and producer prices, the upswing in commodity prices, the low level of real short-term
interest rates, and what in their judgment was a
relatively depressed foreign exchange value of the
dollar given the comparative strength of the U.S.
economy and international interest rate trends.
They noted that the current federal funds rate was
probably not sustainable in the long term and that a
tightening move at this time might well avoid the

704

Federal Reserve Bulletin • July 1993

need for more sizable and potentially disruptive
policy actions later.
Mr. Angell also emphasized the risks associated
with any policy that did not firmly maintain a
disinflationary trend. As he interpreted historical
precedents, the typical result of a policy that tolerated some inflation was an eventual rise in inflation
leading to permanently higher interest rates with
adverse effects on economic activity. Indeed, he
supported unpegging the federal funds rate to
counter incipient price pressures showing through
in commodity and finished goods prices. He
believed that a clear signal of the Committee's
commitment to price level stability would stabilize
the price of gold along with the exchange value of
the dollar and thereby provide a climate for further
reductions in long- and intermediate-term interest
rates. Such an approach to policy not only would
assure a continuing disinflationary trend and eventual price stability, with very favorable implica-




tions for financial markets and economic growth,
but it would in his view preclude an unsettling
tendency for the debt markets to weaken every
time newly available data appeared to suggest that
economic growth was strengthening and that further monetary policy tightening actions therefore
might be in the offing. In sum, such a policy would
provide for the achievement of the Committee's
objective of sustaining progress toward price stability, which he believed was necessary for maintaining recent higher labor productivity, a permanently
higher saving rate, and a prolonged period of economic expansion.
It was agreed that the next meeting of the Committee would be held on Tuesday, May 18, 1993.
The meeting adjourned.

Normand Bernard
Deputy Secretary

705

Legal Developments
ORDERS ISSUED UNDER BANK HOLDING
COMPANY ACT

Orders Issued Under Section 3 of the Bank
Holding Company Act
Community Bankshares, Inc.
Orangeburg, South Carolina
Order Approving the Formation of a Bank Holding
Company
Community Bankshares, Inc., Orangeburg, South
Carolina ("Community"), has applied under section
3(a)(1) of the Bank Holding Company Act (12 U.S.C.
§ 1842 et seq.), to become a bank holding company by
acquiring all the voting shares of Orangeburg National
Bank, Orangeburg, South Carolina ("Bank"). 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 13,265 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
Community is a nonoperating company formed for
the purpose of acquiring Bank. Bank controls deposits
of approximately $49.3 million and is the 42d largest
commercial banking organization in South Carolina,
representing less than 1 percent of total deposits in
commercial banking organizations in the state. 2 Bank
operates in the Orangeburg, South Carolina, banking
market,3 where it controls 9.3 percent of the total
deposits in commercial banking organizations. Bank
and its principals are not affiliated with any other
depository institution. Based on all the facts of record,
the Board believes that consummation of the proposal
would not result in any significantly adverse effects on
competition or the concentration of banking resources

1. Community proposes to merge Bank with Interim Orangeburg
National Bank, a newly chartered national bank and wholly owned
subsidiary of Community. On March 11, 1993, Bank's primary regulator, the Office of the Comptroller of the Currency ("OCC"),
approved this proposal ("March 11 approval").
2. Market and deposit data are as of June 30, 1992.
3. The Orangeburg, South Carolina, banking market is approximated by Orangeburg County, South Carolina.




in any relevant banking market. Accordingly, the
Board concludes that competitive considerations are
consistent with approval.
In considering this application under section 3 of the
BHC Act, the Board is also required to take into
account the financial and managerial resources and
future prospects of Community and Bank. In this
regard, the Board has carefully reviewed comments
received from several Bank shareholders ("Protestants") opposing the formation of Community. Protestants allege that the proposal will have a negative
impact on Bank's financial condition and that the
proposed officers of Community lack banking experience. 4
Community will be formed by an exchange of shares
and will incur only a small amount of debt for organizational purposes. Bank is currently in satisfactory
condition, and Community's debt-service projections
appear reasonable and indicate that the debt-to-equity
ratio would decline in a manner consistent with the
Board's guidelines. 5
Community's proposed officers currently occupy
similar positions in Bank. The Board has carefully
reviewed the performance of these officers in light of
all information of record, including the assessment of
their managerial performance at Bank contained in
reports of examination by Bank's primary regulator,
the OCC. On this basis, the Board concludes that
Protestants' comments regarding the experience and

4. Protestants also maintain that formation of Community is unnecessary and not in the best interest of Bank's shareholders. For
example, Protestants believe that the proposal represents an attempt
by the largest shareholder to control Bank, eliminate cumulative
voting rights of the existing shareholders, and provide unnecessary
positions for Bank's management at the holding company level. These
considerations, however, relate to matters that were properly resolved by Bank's shareholders at the April 13, 1993, shareholders'
meeting held to vote on the proposal. Based on all the facts of record,
the Board concludes that these comments do not reflect adversely on
the factors that the Board is required to consider under section 3 of the
BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480
F.2d 749 (10th Cir. 1973).
5. Protestants argue that Bank's capital could be impaired by
Community's redemption of shares from dissenting shareholders. The
OCC's March 11 approval limits borrowings for the purchase of these
shares, and Community has obtained a line of credit in this amount to
be used only if Community needs to finance such purchases.

706

Federal Reserve Bulletin • July 1993

background of these individuals do not warrant denial
of the application.6
For the reasons discussed above, and in light of all
facts of record, the Board concludes that the financial
and managerial resources and future prospects of
Community and Bank and the other supervisory factors that the Board must consider under section 3 of
the BHC Act are consistent with approval. Considerations relating to the convenience and needs of the
community to be served are also consistent with
approval.7
Based on the foregoing and all the facts of record,
the Board has determined that this application should
be, and hereby is, approved. The Board's approval is
specifically conditioned upon compliance by Community with all the commitments made in connection with
this application. The commitments and conditions
relied on by the Board in reaching this decision are
both conditions imposed in writing by the Board in
connection with its findings and decision, and as such
may be enforced in proceedings under applicable law.
This transaction should 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 Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 10, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Lindsey, and Phillips. Absent and not voting:
Chairman Greenspan and Governors Kelley and LaWare.
WILLIAM W . WILES

Secretary of the Board

First Colonial Bankshares Corporation
Chicago, Illinois
Order Denying the Acquisition of Bank Holding
Companies
First Colonial Bankshares Corporation, Chicago, Illinois ("First Colonial"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied under section 3 of the BHC
Act (12 U.S.C. § 1842) to acquire all of the voting
shares of:
(1) Hi-Bancorp, Inc. ("Hi-Bancorp"), and thereby
indirectly acquire Hi-Bancorp's subsidiary bank,
the Bank of Highwood, both of Highwood, Illinois;
and
(2) GNP Bancorp, Inc., ("GNP"), and thereby
indirectly acquire GNP's subsidiary bank, New
Century Bank, both of Mundelein, Illinois.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 62,346 (1992)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
First Colonial is the 15th largest commercial banking organization in Illinois, controlling deposits of
$1.2 billion, representing 1 percent of the total deposits
in commercial banking organizations in the state.1
Hi-Bancorp is the 236th largest commercial banking
organization in Illinois, controlling deposits of
$79.4 million, representing less than 1 percent of the
total deposits in commercial banking organizations in
the state. GNP is the 281st largest commercial banking
organization in Illinois, controlling deposits of
$66.5 million, representing less than 1 percent of the
total deposits in commercial banking organizations in
the state.
Convenience and Needs Considerations

6. Protestants also allege that Community's proposed management,
while serving on Bank's board of directors, has in the past authorized
excessive directors fees. Bank's directors' fees have been increased
each year from 1988 to 1991. After adverse shareholder comments,
Bank's directors reduced their fees to their 1990 level. Community has
stated that it does not intend to pay additional directors's fees or any
other fees to Bank's directors for acting as directors of Community for
several years. Moreover, directors' fees are subject to examination by
the OCC and the Board, and approval of this application does not
preclude the Board and the OCC from taking appropriate supervisory
action to address the payment of excessive directors' fees.
7. In this regard, Community does not intend to change Bank's
focus as a local community banking organization.




In acting on an application under section 3 of the BHC
Act, the Board must consider the convenience and
needs of the communities to be served and take into
account the records of the relevant depository institutions under the Community Reinvestment Act
(12 U.S.C. § 2109 et seq.) ("CRA"). The CRA requires federal financial supervisory agencies to encourage financial institutions to help meet the credit
needs of the local communities in which they operate

1. Deposit data are as of June 30, 1992.

Legal Developments

consistent with the safe and sound operation of such
institutions. To accomplish this end, the CRA requires
the appropriate supervisory authority to "assess the
institution's record of meeting the credit needs of its
entire community, including low- and moderateincome neighborhoods, consistent with the safe and
sound operation of such institution," and to take this
record into account in its evaluation of bank holding
company applications.2
The Board has carefully reviewed the CRA performance of First Colonial, Hi-Bancorp, GNP, and their
subsidiary banks, in light of the CRA, the Board's
regulations, and the jointly issued Statement of the
Federal Financial Supervisory Agencies Regarding the
Community Reinvestment Act ("Agency CRA Statement").3 The Board also has reviewed comments from
three individuals ("Protestants") alleging that First
Colonial's subsidiary bank, The Avenue Bank of Oak
Park, Oak Park, Illinois ("Avenue Bank"), previously
has engaged in and continues to engage in discriminatory lending practices, and that the bank is not adequately addressing the credit needs of its entire delineated community.4

Record of Performance

Under the CRA

A. CRA Performance Examinations
The Board has stated that a CRA examination is an
important and often controlling factor in determining
whether convenience and needs factors are consistent
with approval of an expansionary proposal.5 First
Colonial controls 16 subsidiary banks including Avenue Bank. Avenue Bank, First Colonial's third largest
subsidiary bank with approximately $162 million in

2. 12 U.S.C. § 2903.
3. 54 Federal Register 13,742 (1989). The Agency CRA Statement
provides guidance regarding the types of policies and procedures that
the supervisory agencies believe financial institutions should have in
place in order to fulfill their responsibilities under the CRA on an
ongoing basis and the procedures that the supervisory agencies will
use during the application process to review an institution's CRA
compliance and performance.
The Agency CRA Statement indicates that decisions by agencies to
allow financial institutions to expand will be made pursuant to an
analysis of the institution's overall CRA performance and will be
based on the actual record of performance of the institution.
4. The Board received additional comments raising similar CRA
issues regarding Avenue Bank from several other organizations. After
meeting with First Colonial, these protests were withdrawn and these
organizations have submitted comments supporting steps taken by
First Colonial to improve its CRA performance record.
5. See Gore-Bronson Bancorp, Inc., 78 Federal Reserve Bulletin
784 (1992); First Interstate BancSystem of Montana, Inc., 77 Federal
Reserve Bulletin 1007 (1991) ("First Interstate of Montana"); Continental Bank Corporation , 75 Federal Reserve Bulletin 304 (1989);
Agency CRA Statement, 54 Federal Register 13,743 (1989).




1QH

assets,6 has received two consecutive "needs to improve" ratings of its CRA performance from its primary federal supervisor, the Federal Deposit Insurance Corporation ("FDIC").7 First Colonial's
remaining subsidiary banks received at least a "satisfactory" rating from their primary federal supervisors.

B. CRA Performance Record of Avenue Bank
Lending Activities. The 1993 examination of Avenue
Bank's CRA performance noted low levels of lending
in low- to moderate-income and minority portions of
the bank's delineated community.8 In particular, a
review of the bank's 1991 Home Mortgage Disclosure
Act ("HMDA") data indicates that less than half of
Avenue Bank's loans were made inside its delineated
community. These data also indicate that of all the
HMDA-related loans that were made in the delineated
community, only two of these loans were made in
minority or low- to moderate-income census tracts
within the delineated community. Moreover, the 1992
HMDA data indicate that Avenue Bank made no
HMDA-related loans in minority or low- and moderate-income census tracts in the delineated community.
In addition, the 1991 and 1993 examinations found that
Avenue Bank does not participate actively in federal
lending programs, such as FHA or SBA, even though
the 1993 examination found that there appears to be
demand for such programs in certain areas in its
delineated community.
Ascertainment and Marketing. The 1991 examination recommended that Avenue Bank develop ascertainment programs for the bank's entire delineated
community, especially the low- to moderate-income
areas of its community. In the 1993 examination,
examiners found that little progress had been made in
Avenue Bank's ascertainment efforts and that the
bank still had not fully implemented a program to
ascertain the credit needs of its entire community. In
this regard, the examination noted that Avenue Bank
concentrates its efforts in the relatively affluent areas
and does not conduct significant ascertainment efforts

6. Avenue Bank's assets represent approximately 10 percent of
First Colonial's consolidated assets of approximately $1.6 billion.
7. Avenue Bank's CRA performance was rated "needs to improve"
as of December 31, 1991 ("the 1991 examination"), and again as of
January 15, 1993 ("the 1993 examination").
8. Avenue Bank's delineated community approximately encompasses a two-mile radius from its main office in Oak Park, Illinois,
which is located approximately five miles west of downtown Chicago.
This service area covers Oak Park, Elmwood Park, and River Forest
to the north and west; the Chicago neighborhoods comprising Austin
to the north and east; and parts of Cicero, Berwyn, and Forest Park to
the south. Avenue Bank's service area differs from the service areas
of other First Colonial subsidiary banks in that relatively affluent
suburbs (such as Oak Park and River Forest) are commingled with
large areas of low- and moderate-income and minority neighborhoods.

708

Federal Reserve Bulletin • July 1993

in most of the low- and moderate-income neighborhoods in the bank's delineated community.9
The 1991 examination found that Avenue Bank
markets its banking products primarily in the relatively
affluent sections of its community. The 1993 examination again found that Avenue Bank does not adequately market all of its banking products to its entire
delineated service area. In this regard, the 1993 examination states that the majority of bank's advertising is
general in nature, is related to Avenue Bank's mortgage program, and has resulted only in a limited
number of applicants from the east and northeast
sections of the delineated community. Although noting
some increase in overall marketing activities, the 1993
examination criticized the bank for not marketing
specific programs that would benefit low- and moderate-income individuals. For example, while contacts
with community groups and individuals in the Austin
area indicated a need for home improvement and small
business credit, those types of credit are not marketed
actively in low- and moderate-income neighborhoods,
even though Avenue Bank's CRA Statement indicates
such credit is available.

C. Additional CRA Considerations
First Colonial maintains that the issues raised by the
CRA performance record of Avenue Bank have been
addressed by steps that Avenue Bank recently has
initiated or committed to initiate in order to improve
its CRA-related activities. These initiatives include a
commitment to establish an annual investment target
of $8 million to stimulate growth and development in
the low- and moderate-income neighborhoods of its
delineated community; establish a youth service program; locate a branch in a low- to moderate-income
neighborhood; implement affirmative marketing programs to encourage minority applicants; and require
additional training for all staff to ensure that Avenue
Bank's personnel are attuned to the particular and
specialized credit needs of low- to moderate-income
communities.
The Board previously has stated that when a banking organization files an application to expand its
deposit-taking facilities, the organization should address its CRA responsibilities and have the necessary
policies in place and working well.10 In addition, the
Board has found that commitments for future action to

9. Although the 1993 examination found weaknesses in Avenue
Bank's overall efforts in the low- and moderate-income and minority
neighborhoods in its delineated community, the examination noted
improvement in the bank's ascertainment efforts in some areas of the
delineated community, especially in the Austin neighborhood.
10. First Interstate of Montana, 77 Federal Reserve Bulletin at 1009.




address CRA concerns are appropriate considerations
in the context of an application to expand deposittaking facilities only where the applicant otherwise has
a satisfactory CRA record, where the problems identified at the bank do not indicate chronic institutional
deficiencies or a pattern of CRA deficiencies, and
where the applicant takes immediate and effective
action to address identified deficiencies in the CRA
performance of its banks.
The record in this application indicates that Avenue
Bank does not have a satisfactory record of performance in place and has had deficiencies in CRA
performance for some time. Over time, the steps that
First Colonial proposes to implement have the potential to remedy many of the deficiencies in the Avenue
Bank's CRA performance. Given the facts of this case,
however, the Board does not believe that it is appropriate to rely on the future expectations or commitments for future action by First Colonial.
Conclusion
Accordingly, based on the foregoing, the CRA performance examinations of First Colonial's subsidiary
banks, and other facts of record, the Board concludes
that considerations relating to the convenience and
needs factor are not consistent with approval of this
expansion proposal. Considerations relating to competitive, financial resources, managerial resources,
and other supervisory factors required by the Board to
be considered under the BHC Act do not lend sufficient weight to warrant approval of these applications.11 Accordingly, the Board has determined that
these applications should be, and hereby are, denied.
The Board notes that this denial is without prejudice to
future applications at such time as Avenue Bank's
CRA record of performance is in place and its policies
and programs are working well.

11. Protestants have requested a public hearing or meeting on the
issues raised in its comments. Section 3(b) of the BHC Act does not
require the Board to hold a hearing or meeting on an application unless
the appropriate supervisory authority of the bank to be acquired
makes a timely written recommendation of denial of the application.
In this case, the Board has not received such a recommendation.
Generally, under the Board's rules, the Board may, in its discretion,
hold a public hearing or meeting on an application to clarify factual
issues related to the application and to provide an opportunity for
testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered this request. In the Board's view,
Protestants have had ample opportunity to present written submissions, and Protestants have submitted substantial written comments
that have been considered by the Board. In light of these facts, and the
Board's decision on this application, the Board has determined that a
public hearing or meeting is not necessary to clarify the factual record
in this application, or otherwise warranted in this case. Accordingly,
Protestants' request for a public hearing or meeting on this application
is denied.

Legal Developments

709

By order of the Board of Governors, effective
May 17, 1993.

2.9 percent of the deposits in commercial banks in the
state.4

Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.

Competitive Effects

JENNIFER J. JOHNSON

Associate Secretary of the Board

First Union Corporation
Charlotte, North Carolina
Order Approving Acquisition of a Bank Holding
Company
First Union Corporation, Charlotte, North Carolina
("First Union"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 3(a)(3) of the BHC
Act (12 U.S.C. § 1842(a)(3)) to acquire First American Metro Corp., McLean, Virginia ("First American"), and thereby indirectly acquire its two subsidiary banks, First American Bank of Virginia, McLean,
Virginia, and First American Bank of Maryland, Silver
Spring, Maryland.1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 18,396 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
First Union has consolidated assets of approximately $63.2 billion, and controls 12 banks in Virginia,
Maryland, the District of Columbia, Florida, Georgia,
South Carolina, North Carolina, and Tennessee.2
Upon consummation of this proposal, First Union
would become the third largest commercial banking
organization in Virginia, controlling deposits of
$7.7 billion, representing approximately 13.9 percent
of the deposits in commercial banks in the state.3 First
Union also would become the ninth largest commercial banking organization in Maryland, controlling
deposits of $1.2 billion, representing approximately

1. Prior to consummation of this transaction, First American Bank,
N.A., Washington, D.C., will be merged with First Union's subsidiary
bank, Dominion Bank of Washington, N.A., Washington, D.C. First
Union also will indirectly acquire First American Bank of Georgia,
N.A. (In Liquidation), Marietta, Georgia, a subsidiary of First American Bank of Virginia.
2. Asset data are as of March 31, 1993, and reflect First Union's
recent acquisition of Dominion Bankshares Corporation, Roanoke,
Virginia.
3. Market deposit data are as of June 30, 1992.




First Union and First American compete directly in
seven banking markets.5 In six of these banking markets, consummation of the proposal would result in
relatively small increases in the market concentration,
as measured by the Herfindahl-Hirschman Index
("HHI"), that would not exceed the threshold standards in the Department of Justice's revised guidelines6 after considering the competition offered by
thrift institutions.7
In the Rockbridge-Lexington banking market,8 First
Union is the second largest depository institution,9
controlling deposits of $80.1 million, representing
22.7 percent of total deposits in depository institutions
in the market ("market deposits"). First American is
the sixth largest depository institution in the market,
controlling deposits of $25.2 million, representing
7.2 percent of market deposits. Upon consummation
of this proposal, First Union would become the largest
depository institution in the Rockbridge-Lexington

4. The Board previously has determined that the interstate banking
statutes of Maryland and Virginia permit a North Carolina bank
holding company to acquire banking organizations in those jurisdictions. See First Union Corporation, 79 Federal Reserve Bulletin 232
(1993); NCNB Corporation, 78 Federal Reserve Bulletin 141 (1992).
Thus, consummation of this transaction is not barred by the Douglas
Amendment to the BHC Act.
5. These are: The Washington D.C. banking market; the NorfolkPortsmouth banking market; the Newport News-Hampton banking
market; the Rockingham-Harrisonburg banking market; the Augusta
County banking market; the Rockbridge-Lexington banking market;
and the Winchester banking market.
6. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anti-competitive effects) unless the post-merger HHI is at
least 1800 and the merger or acquisition increases the HHI by at least
200 points. The Justice Department has stated that the higher than
normal threshold for an increase in the HHI when screening bank
mergers and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other
non-depository financial entities.
7. The Board previously has indicated that thrift institutions have
become, or have the potential to become, major competitors of
commercial banks. See Midwest Financial Group, 75 Federal Reserve
Bulletin 386 (1989); National City Corporation, 70 Federal Reserve
Bulletin 1AI (1984). Thus, the Board has regularly included thrift
deposits in the calculation of market share on a 50 percent weighted
basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52
(1991). In considering the competition offered by thrifts in all banking
markets in this case, thrift deposits are weighted at 50 percent.
8. The Rockbridge-Lexington banking market is approximated by
Rockbridge County, Virginia.
9. In this context, depository institutions include commercial banks,
savings banks, and savings associations.

710

Federal Reserve Bulletin • July 1993

banking market, controlling deposits of $105.3 million,
representing 29.9 percent of market deposits. The HHI
would increase by 325 points to 2103.
In order to mitigate the anticompetitive effects that
would result from consummation of this proposal in
the Rockbridge-Lexington banking market, First
Union has committed to divest two branches in this
market.10 Accounting for these divestitures, the HHI
would increase by 120 points to 1898.11
The Board has sought comments from the United
States Attorney General on the competitive effects of
the proposal. The Attorney General has indicated that,
subject to the fulfillment by First Union of the divestiture commitments it has made to the Board in connection with this proposal, there would be no significantly adverse effects on competition in any relevant
banking market.
After considering the proposed divestitures in the
Rockbridge-Lexington banking market, the relatively
small increases in market concentration in each relevant banking market, the number of depository institution competitors that would remain in each of the
markets, the attractiveness of entry of the relevant
banking markets, and all the other facts of record, the
Board concludes that consummation of this proposal,
with the proposed divestitures, would not have a
significantly adverse effect on competition or on the
concentration of resources in any relevant banking
market.

institutions. To accomplish this end, the CRA requires
the appropriate federal supervisory authority to "assess the institution's record of meeting the credit
needs of its entire community, including low- and
moderate-income neighborhoods, consistent with the
safe and sound operation of such institutions," and to
take that record into account in its evaluation of bank
holding company applications.12
In this regard, the Board has received comments
from two organizations ("Protestants"). One Protestant expressed concern about First Union's branch
closing policies.13 The other Protestant alleges that
First Union discriminates against minorities when
approving loan applications.14 The Board has carefully
reviewed the CRA performance record of First Union
and its subsidiary banks, as well as all comments
received regarding this application, the responses to
those comments, and all the other relevant facts of
record in light of the CRA, the Board's regulations,
and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement").1* The Board
also notes that First Union's CRA performance record
was extensively reviewed by the Board this year in
connection with another acquisition proposal. In its
consideration of this proposal, the Board has taken
into account the record of First Union's CRA performance assembled in that application.16

Record of Performance

Under the CRA

Convenience and Needs Considerations

A. CRA Performance Examinations
In considering an application under the BHC Act, the
Board is required to consider the convenience and
needs of the communities to be served, and take into
account the records of the relevant depository institutions under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to
encourage financial institutions to help meet the credit
needs of the local communities in which they operate,
consistent with the safe and sound operation of such

10. First Union has committed to execute final sales agreements to
effect these divestitures prior to the consummation of the acquisition
of First American, and to consummate these divestitures within 180
days of consummation of the acquisition of First American. First
Union also has committed that, in the event it is unsuccessful in
completing the divestiture within 180 days of consummation of the
proposal, First Union will transfer the relevant office or offices to an
independent trustee that has been instructed to sell the office
promptly. See, e.g., BankAmerica Corporation, 78 Federal Reserve
Bulletin 338, 340 (1992); United New Mexico Financial Corporation,
77 Federal Reserve Bulletin 484, 485 (1991).
11. First Union would become the second largest depository institution in the Rockbridge-Lexington banking market, controlling approximately $76.1 million in deposits, representing approximately
21.6 percent of market deposits.




The Agency CRA Statement provides that a CRA
examination is an important, and often controlling,
factor in the consideration of an institution's CRA

12. 12 U.S.C. § 2903.
13. This Protestant also expressed concern about the number of
workers who will potentially lose their jobs as a result of this proposal.
First Union has stated in response that it will implement a transition
plan that will include re-employment assistance information meetings,
career management sessions, career transition centers, job update
listings, and a flexible hiring policy that will require that displaced
employees be considered for vacancies prior to external hiring.
14. This Protestant also contends that it was denied a right to bid for
First American. The record indicates that Protestant was not denied
an opportunity to bid for First American. In light of all of the facts of
the case, the Board concludes that Protestant's comments regarding
the bidding process do not reflect adversely on the factors that the
Board is required to consider under section 3 of the BHC Act. See
Western Bancshares, Inc., v. Board of Governors 480 F.2d 749 (10th
Cir. 1973).
In addition, this Protestant noted that there were no minorities on
First Union's board of directors. In response, First Union has stated
that First Union's shareholders recently elected a minority director at
their April 20, 1993, annual meeting.
15. 54 Federal Register 13,742 (1989).
16. See First Union Corporation, 79 Federal Reserve Bulletin 232
(1993) ("First Union Order").

Legal Developments

record and that these reports will be given great weight
in the applications process.17 In this case, the Board
notes that all of First Union's subsidiary banks have
been examined for CRA performance and have received "outstanding" or "satisfactory" ratings during
the most recent examinations of their CRA performance. In particular, First Union's lead subsidiary
bank, First Union National Bank of North Carolina,
Charlotte, North Carolina ("First Union Bank-NC"),
received an "outstanding" rating for CRA performance from the Office of Comptroller of the Currency
("OCC") in a public examination in May, 1992. In
addition, all of First American's subsidiary banks have
received "outstanding" or "satisfactory" ratings during the most recent examinations of their CRA performance.
The Board recently reviewed allegations regarding
the lending practices of First Union that are substantially similar to those raised in this case. 18 In that case,
and in this case, the Board reviewed the CRA examination reports of the subsidiary banks of First Union.
The Board notes that certain of these examinations
took into account preliminary data for 1991 filed under
the Home Mortgage Disclosure Act, as well as reviewed the loan documentation of the banks. These
examinations found no evidence of illegal discrimination or other illegal credit practices at any First Union
subsidiary bank. The Board also has considered steps
by First Union to improve its lending to minorities and
in low- and moderate-income neighborhoods. These
efforts include an ongoing Fair Lending Program designed to ensure that all applicants, regardless of race,
have equal access to credit. The Board expects First
Union to implement these programs fully and in a
manner that assures equal access to credit.

B. Branch Closings
First Union has in place the types of procedures to
assess the potential impact of an office closing on the
local community, and to ensure that branch closings
will not deprive low- and moderate-income communities of banking services. First Union has committed to
implement these policies in the First American banks.
In this regard, First Union's branch closing policy
requires review by a First Union state CRA Coordinator and the Director of Community Reinvestment to
assess any impact on low- and moderate-income communities. If there is an impact on these communities,
special consultation with leaders of the affected communities is required, and customers are provided

17. 54 Federal Register 13,745 (1989).
18. See First Union Order.




711

assistance in obtaining financial services at alternative
branches and other financial institutions.19 In this
proposal, First Union has stated that branches with
overlapping service areas may be consolidated, but
that these consolidations will not result in a withdrawal from any existing service area.

C. Additional Elements of CRA Performance
For the reasons more fully stated in the First Union
Order, the Board believes that First Union has in place
the corporate policies, ascertainment and marketing,
lending and other activities that assist in meeting the
credit needs of minorities and low- and moderateincome neighborhoods. First Union's overall compliance with its CRA plan is supervised and monitored
through a corporate CRA steering committee. First
Union also ascertains community credit needs through
a variety of community outreach programs. To assist
in meeting the credit needs of its communities, First
Union offers several programs such as the affordable
home mortgage loan, the special home improvement
loan, and the special first advance, all of which are
sold exclusively to individuals earning 80 percent or
less of the median income of the county where they
reside. In addition, First Union Mortgage Corporation
provides government-insured mortgage loans to customers. First Union also participates in various loan
programs including the Small Business Administration
loan program, the HUD/Farmers Home Administration loan program, and the FHA/VA loan programs.
First Union has policies, procedures and training
programs developed to guard against discrimination in
lending and credit activities. Forms, disclosures and
contracts are reviewed by the legal division for potential discriminatory factors. In addition, the State CRA
coordinators, the regulatory compliance division, and
the corporate auditors review bank lending areas to
ensure that no discriminatory practices are present.

Conclusion Regarding Convenience and Needs
Factors
The Board has carefully considered all the facts of
record, including the comments filed in this case, in
reviewing the convenience and needs factor under the
BHC Act. Based on a review of the entire record of
this application, including the most recent CRA performance examinations of the institutions involved in
this case and the record compiled in the First Union

19. The Federal Deposit Insurance Corporation Improvement Act
of 1991 also requires a bank to provide its customers at least 30 days'
notice prior to closing any branch, and provide to the bank's primary
regulator 90 days' prior notice. 12 U.S.C. § 1831p.

712

Federal Reserve Bulletin • July 1993

Order, the Board believes that the efforts of First
Union to help meet the credit needs of all segments of
the communities served, including low- and moderateincome neighborhoods, and all other convenience and
needs considerations, are consistent with approval of
this application.
Other Considerations
The financial and managerial resources, and future
prospects of First Union, its subsidiaries, and First
American, and other supervisory factors that the
Board must consider under section 3 of the BHC Act
also are consistent with approval of this proposal.
Based on the foregoing and all the facts of record,
the Board has determined that the application should
be, and hereby is, approved. The Board's approval of
this proposal is expressly conditioned on compliance
with the commitments made by First Union in connection with this application, including the divestiture
commitments, and with the conditions referenced in
this Order. For purposes of this action, these commitments and conditions relied on in reaching this decision are deemed to be conditions imposed in writing by
the Board in connection with its findings and decision,
and, as such, may be enforced in proceedings under
applicable law.
This transaction shall not be consummated before
the thirtieth day following the effective date of this
Order, or later than three months after the effective
date of this Order, unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 20, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, and Kelley. Absent and not voting: Governors LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Rio Blanco Holding Company
Rangely, Colorado
Rio Blanco State Bank
Rangely, Colorado
Order Approving the Formation of a Bank Holding
Company and Bank Merger
Rio Blanco Holding Company, Rangely, Colorado
("Rio Blanco"), has applied pursuant to section



3(a)(1) of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1)) ("BHC Act") to become a bank holding
company by acquiring 91.1 percent of the voting
shares of Rio Blanco State Bank, Rangely, Colorado
("Bank"), a state member bank.1 In connection with
this transaction, Bank also has applied, pursuant to the
Bank Merger Act (12 U.S.C. § 1828(c)), to acquire
certain assets and assume certain liabilities of Bank of
Rangely, Rangely, Colorado ("Bank of Rangely"),
also a state member bank.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 21,657 (1992)). As
required by the Bank Merger Act, reports on the
competitive effects of the merger were requested from
the United States Attorney General, the Office of the
Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corporation ("FDIC"). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in the BHC Act
and the Bank Merger Act. 2
Bank is the 200th largest banking organization in
Colorado, controlling deposits of $8.9 million, and
Bank of Rangely is the 194th largest banking organization in Colorado, controlling deposits of $10.3 million.
Upon consummation of the transaction, Rio Blanco
would become the 153rd largest banking organization in
Colorado, controlling deposits of $20.6 million, representing less than 1 percent of the deposits in commercial banking organizations in the state.3
Definition of the Relevant Banking Market
The BHC Act and the Bank Merger Act provide that
the Board may not approve a proposal submitted
under these statutes if the proposal would result in a
monopoly or the effect of the proposal may be
substantially to lessen competition in any relevant
banking market, unless the Board finds "that the
anticompetitive effects of the proposed transaction
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." 4 In evaluating the competitive factors in
this case, the Board has carefully considered the
comments of a number of residents in the Town of
Rangely ("Rangely"), including customers and
shareholders of the Bank of Rangely ("Protes-

1. This formation represents a reorganization of interests held by
the principal shareholders of Bank.
2. See 12 U.S.C. §§ 1842(c), 1828(c)(5).
3. Deposit data are as of December 31, 1992.
4. 12 U.S.C. §§ 1842(c) and 1828(c)(5).

Legal Developments

tants"), who assert that the proposal would result in
significantly adverse competitive effects in the market for banking services in Rangely.5
The Board and the courts have found that the
relevant banking market for analyzing the competitive effects of a proposal must reflect commercial and
banking realities and must consist of the local area
where the banks involved offer their services and
where local customers can practicably turn for alternatives.6 The Board has considered all the facts in
this case, including the comments from the Protestants, information provided by the applicant, and an
on-site study conducted by the Federal Reserve
Bank of Kansas City ("Reserve Bank") and Board
staff. On this basis, the Board concludes that the
relevant geographic market within which to evaluate
the competitive effects of this proposal is the Vernal,
Utah banking market ("Vernal banking market"),
which is defined as including: all of Uintah County,
Utah (including Vernal); the western half of Rio
Blanco County, Colorado (including Rangely); and
the southwestern portion of Moffat County, Colorado (including the town of Dinosaur).
Bank and Bank of Rangely are the only two banking
organizations in Rangely, a small community located
in the northwestern corner of Colorado with a population of 2,278 residents.7 Vernal, with a population of
over 8,000 residents, is located approximately 52 miles
northwest of Rangely and is connected by means of a
two-lane highway. It is the closest town having a
population larger than the sparsely populated Rangely,
and Rangely residents must travel twice as far (approximately 100 miles) to reach another town comparable in size to Vernal.8
The Reserve Bank's investigation indicated that
Rangely residents commute to Vernal on a regular
basis throughout the year because Vernal has a wider
range of goods and services than are available local-

5. Protestants assert that the anticompetitive effects of this proposal:
(1) Will result in higher loan interest rates and more expensive
banking services; and
(2) Will force residents of Rangely to seek alternative banking
services from competitors located 50 miles from Rangely, causing
general inconvenience and undue burden for senior citizens.
6. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674
(1982).
7. Population data are based on 1990 U.S. Census data.
8. The nearest towns in Colorado that could provide commercial
and banking services to Rangely residents are Meeker and Grand
Junction. Meeker, located approximately 58 miles east of Rangely, is
comparable in size to Rangely and offers only slightly more commercial services. Grand Junction, located approximately 100 miles south
of Rangely, is an economic center for western Colorado but is
accessible only by means of a road that features a slow, winding
mountain passage.




713

ly. 9 Interviews with Vernal retailers confirmed that
Rangely residents shop in Vernal on a fairly frequent
basis, and that a number of Vernal retailers advertise
in publications with a wide circulation in Rangely,
including weekly shoppers guides and the Rangely
newspaper. According to a one-week study of checks
cleared by Bank, 16 percent were made payable to
Vernal residents or businesses.
Rangely residents surveyed by the Reserve Bank
indicated that they considered Vernal to provide
reasonable alternative banking services, and more
than half of the residents surveyed stated that they
would consider moving their banking business to
Vernal if they were dissatisfied with the banking
services available in Rangely. The Reserve Bank's
survey of businesses in Rangely produced very similar results.
After review of these data and the other facts of
record, the Board believes that the record demonstrates that customers in Rangely reasonably can and,
to some extent, do turn to providers of banking
services in Vernal.10 Based on all the facts of record,
the Board finds that the relevant geographic market in
this case is the Vernal banking market as defined
above.
Competitive Effects in the Vernal Banking Market
Applicant would become the smallest of three commercial banking organizations in this market upon
consummation, controlling approximately 14.3 percent of the commercial banking deposits in the market.
The Herfindahl-Hirschman Index ("HHI") would increase by 102 points to 3877.11
Two other banks would continue to operate in this
market, and the slight increase in concentration in
this highly concentrated banking market is mitigated
by the relatively small size of the banks to be merged
as a result of this proposal. In addition, credit unions

9. Vernal has three large discount supermarkets, two large discount
stores, several restaurants, and cinemas. Rangely, on the other hand,
has one moderate size and one small grocery store. Recreational
facilities in Rangely consist primarily of the municipal recreation
center.
10. For example, some business owners in Rangely stated that they
either had already opened personal or business accounts with Vernal
banks or planned to after consummation of this proposal.
11. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered highly concentrated. In
such markets, the Justice Department has informed the Board that a
bank merger or acquisition generally will not be challenged (in the
absence of other factors indicating anticompetitive effects), unless the
post-merger HHI is at least 1800 points and the merger increases the
HHI by 200 points. The Justice Department has stated that the higher
than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedpurpose lenders and other non-depository financial entities.

714

Federal Reserve Bulletin • July 1993

provide substantial consumer finance and account
services to some Rangely residents, and recent
changes in Colorado law permit de novo entry by
banking firms outside the market.12
The Attorney General has indicated that the proposal would not have significantly adverse effects on
competition in any relevant market. Neither the OCC
nor the FDIC has objected to consummation of this
proposal or indicated that the proposal would have
any significantly adverse competitive effects. Based
on all the facts of record in this case, the Board
concludes that consummation of this proposal would
not have a significantly adverse effect on competition
and the concentration of banking resources in the
Vernal banking market or any other relevant banking
market.
Other Considerations
The Board is also required under section 3 of the BHC
Act and the Bank Merger Act to consider the financial
and managerial resources of the companies and banks
involved and the effect of the proposed acquisition on
the future prospects of the bank and applicant organization. The Board has stated that it expects banking
organizations to serve as a source of strength for their
subsidiary banks. When an applicant intends to incur
debt to finance the acquisition of a small bank, the
Board will take into account a full range of financial
and managerial information to evaluate the applicant's
ability to serve as a source of strength and maintain
adequate capital levels.13
The Board has carefully analyzed the pro forma
capital position and the risk profile of Rio Blanco and
Bank and concludes that the financial condition of the
resultant organization would be generally satisfactory.
In this regard, economies of scale should be realized
through more efficient use of Bank's personnel and
increased earnings on assets relative to overhead
costs. In addition, the projected debt retirement period
and the pro forma capital levels are consistent with the
Board's guidelines on the formation of small one-bank
holding companies.14 In June 1992, Bank employed a
new president with substantial experience in improving loan administration and resolving problem loans in
banks with financial difficulties. The Board has considered new senior management's record of improving

12. Effective January 1, 1993, any bank in Colorado may establish
one de novo branch anywhere in Colorado. Colo. Rev. Stat.
§ 11—25—103(8)(a).
13. Capital Adequacy Guidelines, 12 C.F.R. Part 225, Appendix C.
14. See 12 C.F.R. Part 225, Appendix C.




the financial condition of banks prior to serving at
Bank.15
In evaluating the managerial resources of an applicant under section 3 of the BHC Act, the Board also
considers the competence, experience and integrity of
the senior management and principal shareholders of
the holding company or bank.16 The Board has carefully reviewed the comments of Protestants regarding
the senior management and principal shareholders of
Rio Blanco and Bank.17 On the basis of all the facts of
record, including a review of relevant examination
reports, the Board concludes that these comments do
not warrant denial of these applications.18
For these reasons, and in light of all the facts of
record, the Board concludes that the financial and
managerial resources and future prospects of Rio
Blanco and Bank are consistent with approval. The
Board also believes that considerations relating to the
convenience and needs of the communities to be
served19 and other factors the Board is required to
consider under the BHC Act and the Bank Merger Act
are consistent with approval.
Accordingly, based on the foregoing and all other
facts of record, including the commitments made by
Rio Blanco and Bank in these applications, the Board
has found that these applications should be, and
hereby are, approved. The Board's decision is specifically conditioned on compliance with all of the
commitments made in these applications, including

15. Protestants maintain that Bank has a history of poor earnings
and that the proposal would jeopardize the safety of depositors in
Bank of Rangely. In addition, Protestants allege that Bank could not
adequately insure or collateralize funds of governmental agencies.
The Board has carefully considered these comments and, for the
reasons discussed above, concludes that these objections do not
warrant denial of these applications.
16. 12 U.S.C. § 1842(c)(5).
17. Protestants have alleged generally that management of Bank is
untrustworthy and have speculated that, because several customers of
Bank of Rangely own businesses that compete directly with Bank's
principal shareholders, these customers will not be treated equitably.
In addition, Protestants have provided accounts of their satisfactory
experiences with management of Bank of Rangely and unsatisfactory
experiences, including individual loan transactions and disputes over
charges to individual accounts, with Bank.
18. The board of directors of Bank has committed to monitor the
cooperation of management and staff and to resolve any issues that
might arise by taking into account the best interests of the bank and
the community.
19. Protestants maintain that the proposal will result in a reduction
of available banking services and otherwise adversely affect the
economy of Rangely. The Board believes that the improvement in
financial and managerial resources resulting from the proposal should
benefit the community. For example, Bank's improved financial
condition will enhance its ability to ascertain and assist in meeting the
credit needs of its community. In addition, Bank's lending limit will be
increased significantly as a result of the proposal.
The Board also notes that Bank received a "satisfactory" rating in
its most recent examination for performance under the Community
Reinvestment Act ("CRA") from the Reserve Bank as of October 28,
1991. Bank of Rangely also received a "satisfactory" CRA rating from
the Reserve Bank as of December 7, 1992.

Legal Developments

the commitments and conditions discussed in this
Order. For purposes of this action, the commitments
and conditions relied upon by the Board in reaching
this decision are both conditions imposed in writing
by the Board in connection with its findings and
decision and, as such, may be enforced in proceedings under applicable law.
The acquisition of Bank, and the subsequent
merger of Bank and Bank of Rangely, shall not be
consummated before the thirtieth calendar day following the effective date of this Order, and neither
transaction may be consummated later than three
months following the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Reserve Bank, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
May 26, 1993.
Voting for this action: Vice Chairman Mullins and Governors Kelley, Lindsey, and Phillips. Voting against this action:
Governor Angell. Absent and not voting: Chairman
Greenspan and Governor LaWare.
JENNIFER J. JOHNSON

Associate Secretary of the Board
Dissenting Statement of Governor Angell
The law requires the Board to analyze the effects that
a bank merger or acquisition proposal would have on
competition in the appropriate geographic market. I do
not agree with the Board's delineation of the appropriate banking market for purposes of analyzing the
competitive effects of this proposal.
The record in this case does not provide evidence
to justify a market delineation that would extend
beyond Rangely, Colorado to include Vernal, Utah.
In particular, Rangely and Vernal are over 50 miles
apart, and few residents of Rangely have deposit
accounts with or receive credit from financial institutions in Vernal. The record also indicates that
financial institutions in Vernal do not actively solicit
deposits or banking business from residents of
Rangely.
For these and other reasons, I believe that the
appropriate banking market for analyzing the competitive effects of this proposal is the Town of Rangely.
Because this merger would eliminate the only other
competitor in the Rangely banking market, I am constrained under the relevant statutes to vote to deny
this proposal.




May 26, 1993

715

Rockhold BanCorp.
Platte City, Missouri
Order Approving Formation of a Bank Holding
Company
Rockhold BanCorp., Platte City, Missouri ("Rockhold"), has applied 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 by
acquiring at least 62 percent of the voting shares of
Bank of Kirksville, Kirksville, Missouri ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 12,038 (1993)). The time
for filing comments has expired, and the Board has
considered the application and all comments received
in light of the factors set forth in section 3(c) of the BHC
Act.
Rockhold is a nonoperating corporation formed for
the purpose of becoming a bank holding company
through the acquisition of Bank.1 Bank is the 44th
largest commercial banking organization in Missouri,
controlling deposits of $117.9 million, representing less
than 1 percent of the total deposits in commercial banks
in the state.2
Rockhold and Bank do not compete directly in any
banking market. Accordingly, consummation of this
proposal would not have a significantly adverse effect
on competition or the concentration of banking resources in any relevant banking market.
In reviewing an application under section 3(c) of the
BHC Act, the Board also must consider the financial
and managerial resources and future prospects of the
companies and banks involved in the proposal.3 The
Board has carefully reviewed the application and all
information of record, including relevant reports of
examination by Bank's primary Federal supervisor, the
Federal Deposit Insurance Corporation. On the basis of
this review, the Board concludes that the financial and
managerial resources and future prospects of Rockhold
and Bank are consistent with approval. The Board also
concludes on the basis of all the facts of record that

1. The proposal represents a reorganization of certain existing
ownership interests.
2. State deposit data are as of June 30, 1992.
3. The Board has carefully considered comments from several
shareholders of Bank ("Protestants") who maintain that Bank will
pay management fees to Rockhold from funds that otherwise would be
used for dividend payments to Bank's shareholders, and have requested that any approval be conditioned on prohibiting the payment
of management fees by Bank to Rockhold. Rockhold has represented
that it does not currently plan to charge Bank management fees. The
reasonableness of any management fees would be subject to review by
Federal bank supervisory agencies as part of the examination of both
Bank and Rockhold.

716

Federal Reserve Bulletin • July 1993

convenience and needs considerations, the factor relating to access to information,4 as well as all other
supervisory factors the Board is required to consider
under section 3(c) of the BHC Act, are consistent with
approval of this application.
Based on the foregoing and all other facts of record,
the Board has determined that the application should
be, and hereby is, approved. The Board's approval is
specifically conditioned on Rockhold's compliance
with the commitments made in connection with this
application. All of the commitments and conditions
relied upon by the Board in reaching its decision are
considered conditions imposed in writing in connection with the Board's findings and decision and, as
such, may be enforced in proceedings under applicable
law. The transaction approved in this Order shall not
be consummated before the thirtieth calendar day
following the effective date of this Order, or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of St. Louis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 24, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Mullins.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Orders Issued Under Section 4 of the Bank
Holding Company Act

Bank South Corporation
Atlanta, Georgia
Order Approving Application to Engage De Novo in
Underwriting and Dealing in Certain Bank-Ineligible
Securities on a Limited Basis, and Other
Securities-Related Activities
4. The Board has considered whether the applicant has provided
adequate assurances that Rockhold will make available to the Board
information that the Board determines to be appropriate to assure
compliance with various banking laws. In this regard, Protestants
have objected to this proposal on the grounds that Bank has refused to
provide them access to certain financial records of Bank. The Board
has obtained from Rockhold all information that it has deemed
appropriate to determine compliance with applicable banking laws.
Additionally, there is no evidence in the record to indicate that
Rockhold will, in the future, refuse to make information on the
operations and activities of Rockhold and Bank available to the Board
as appropriate, or that the Board will be unable to obtain appropriate
information through the examination process. In light of all the facts of
record, the Board believes that Rockhold has adequately assured the
Board that information will be made available and that considerations
relating to access to information are consistent with approval.




Bank South Corporation, Atlanta, Georgia ("Applicant"), has applied, pursuant to section 4(c)(8) of the
Bank Holding Company Act (12 U.S.C. § 1843(c)(8))
("BHC Act") and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), to acquire Bank South
Securities Corporation, Atlanta, Georgia ("Company"), through a corporate reorganization1 and engage
de novo in the following activities:
(1) Underwriting and dealing in revenue obligations
of states and their political subdivisions, authorities
and agencies ("municipal revenue bonds") that are
rated as investment quality by a nationally recognized rating agency;
(2) Buying and selling municipal revenue bonds on
the order of investors as a "riskless principal";
(3) Acting as agent in the private placement of
municipal revenue bonds, and general obligations of
states, their political subdivisions, authorities and
agencies;
(4) Providing discount securities brokerage services
pursuant to section 225.25(b)(15) of the Board's
Regulation Y (12 C.F.R. 225.25(b)(15));
(5) Providing financial advisory services to states,
their political subdivisions, authorities and agencies
pursuant to section 225.25(b)(4)(v) of the Board's
Regulation Y (12 C.F.R. 225.25(b)(4)(v)); and
(6) Underwriting and dealing in government obligations and money market instruments pursuant to
section 225.25(b)(16) of the Board's Regulation Y
(12 C.F.R. 225.25(b)(16)) ("bank-eligible securities").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 6798 (1993)). The time
for filing comments has expired, and the Board has
considered the application and all comments received
in light of the public interest factors set forth in section
4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of
$4.3 billion, is the fourth largest commercial banking
organization in Georgia.2 Applicant operates banking
subsidiaries in Georgia and Florida, and engages in
nonbanking activities through one nonbanking subsidiary.
The Board previously has determined by regulation
that providing financial advisory services, providing

1. Applicant proposes that Bank South, N.A., Atlanta, Georgia
("Bank"), transfer its securities underwriting, dealing, and discount
brokerage activities to Bank's existing broker-dealer subsidiary, Lex
Jolley & Co., Atlanta, Georgia ("Lex Jolley"). Applicant will then
purchase all of the outstanding shares of Lex Jolley, and change the
name of the subsidiary to Bank South Securities Corporation, Atlanta,
Georgia ("Company").
2. Data are as of March 31, 1993.

Legal Developments

discount securities brokerage services, and underwriting and dealing in bank-eligible securities are activities
that are closely related to banking for purposes of
section 4(c)(8) of the BHC Act. 3 Applicant proposes to
conduct these activities through Company in accordance with the Board's regulations.
Underwriting and Dealing in Municipal Revenue
Bonds
Applicant proposes to underwrite and deal in municipal revenue bonds that are rated as investment quality
by a nationally recognized rating agency. The Board
previously has determined that, subject to the prudential framework of limitations established in previous
decisions to address potential conflicts of interests,
unsound banking practices, or other adverse effects,
the proposed underwriting and dealing activities are so
closely related to banking as to be proper incidents
thereto within the meaning of section 4(c)(8) of the
BHC Act. The Board also has determined that the
conduct of these securities underwriting and dealing
activities is consistent with section 20 of the GlassSteagall Act, provided that the underwriting and dealing subsidiary derives no more than 10 percent of its
total gross revenue over any two-year period from
underwriting and dealing in securities that a bank may
not underwrite or deal in directly ("bank-ineligible
securities").4 Applicant has committed that Company
will conduct its underwriting and dealing activities
with respect to municipal revenue bonds subject to the
10 percent revenue test established by the Board in
previous Orders.5

3. See 12 C.F.R. 225.25(b)(4), (b)(15), (b)(16).
4. See Citicorp, J.P. Morgan & Company Incorporated, and
Bankers Trust New York Corporation, 73 Federal Reserve Bulletin 473
(1987) ("Citicorp!Morgan!Bankers Trust Order"), ajfd sub nom.
Securities Industry Association v. Board of Governors of the Federal
Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S.
1059 (1988), as modified by Order Approving Modifications to Section
20 Orders, 75 Federal Reserve Bulletin 751 (1989) ("Modification
Order"). Company also may provide services that are necessary
incidents to the approved activities. Any activity conducted as a
necessary incident to the bank-ineligible securities activity must be
treated as part of the bank-ineligible securities activity unless Company has received specific approval under section 4(c)(8) of the BHC
Act to conduct the activity independently. Until such approval is
obtained, any revenues from the incidental activity must be treated as
ineligible revenue subject to the 10 percent gross revenue limit set
forth in the CiticorplMorganlBankers
Trust Order and the
Modification Order.
5. Company will calculate compliance with the 10 percent revenue
limitation in accordance with the original method set forth in J.P.
Morgan & Company Incorporated, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, and Security
Pacific Corporation, 75 Federal Reserve Bulletin 192, 196 (1989), as
opposed to the alternative indexed method set forth in Modification
Order, 79 Federal Reserve Bulletin 226 (1993).




717

Private Placement and "Riskless Principal"
Activities
Private placement involves the placement of new
securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a private placement transaction acts solely as an
agent for the issuer in soliciting purchasers, and does
not purchase the securities and attempt to resell them.
Securities that are privately placed are not subject to
the registration requirements of the Securities Act of
1933, and are offered only to financially sophisticated
institutions and individuals and not the public. Applicant will not privately place registered securities and
will only place securities with customers who qualify
as accredited investors.
"Riskless principal" is the term used in the securities business to refer to a transaction in which a
broker-dealer, after receiving an order to buy (or sell)
a security from a customer, purchases (or sells) the
security for its own account to offset a contemporaneous sale to (or purchase from) the customer.6 "Riskless principal" transactions are understood in the
industry to include only transactions in the secondary
market. Thus, Applicant proposes that Company
would not act as a "riskless principal" in selling
securities at the order of a customer that is the issuer
of the securities to be sold or in any transaction where
Company has a contractual agreement to place the
securities as agent of the issuer. Company also would
not act as a "riskless principal" in any transaction
involving a security for which it makes a market.
The Board previously has determined by Order that,
subject to prudential limitations that address the potential for conflicts of interests, unsound banking
practices, or other adverse effects, the proposed private placement and riskless principal activities are so
closely related to banking as to be a proper incident
thereto within the meaning of section 4(c)(8) of the
BHC Act. 7 The Board also previously has determined
that acting as agent in the private placement of securities and purchasing and selling securities on the order
of investors as a "riskless principal" does not constitute underwriting and dealing in securities for purposes of section 20 of the Glass-Steagall Act, and that
revenue derived from these activities is not subject to
the 10 percent revenue limitation on bank-ineligible
securities underwriting and dealing.8 Applicant has
committed that Company will conduct its private

6. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R.
249.10b-10(a)(8)(i).
7. See Bankers Trust New York Corporation, 75 Federal Reserve
Bulletin 829 (1989) ("Bankers Trust II Order").
8. See Bankers II Order.

718

Federal Reserve Bulletin • July 1993

placement and "riskless principal" activities using the
same methods and procedures, and subject to the
same prudential limitations established by the Board in
the Bankers II Order and the J.P. Morgan II Order,9
including the comprehensive framework of restrictions
designed to avoid potential conflicts of interests, unsound banking practices, and other adverse effects
imposed by the Board in connection with underwriting
and dealing in securities.
Director Interlocks
Applicant has requested that the Board permit director
interlocks between Company and its affiliated banks.
Applicant proposes that less than a majority, but in
any case no more than two, of the directors of its
subsidiary banks be permitted to serve on Company's
board of directors. These directors will not be officers
of the affiliated banks, nor will they have authority to
conduct the day-to-day business of the banks or handle individual bank transactions. No officers of Company will be employed by the banks.
The Board previously has permitted interlocks between a banking organization and its affiliated section
20 company.10 In addition, the Board has requested
comment on modifying the section 20 prudential
framework to permit interlocks with affiliated banks so
long as a majority of the board is not comprised of
bank officers or directors. Applicant has agreed to
abide by the results of the Board's review. Accordingly, the Board finds that these limited interlocks
should be permitted, since it appears that Company
would be operationally distinct from its affiliated
banks. The Board expects that Applicant will ensure

9. See J.P. Morgan & Company Incorporated, 76 Federal Reserve
Bulletin 26 (1990) ("7. P. Morgan II Order"); Bankers Trust II Order,
75 Federal Reserve Bulletin at 829. Among the prudential limitations
detailed more fully in those Orders are that Company will maintain
specific records that will clearly identify all "riskless principal"
transactions, and Company will not engage in any "riskless principal"
transactions for any securities carried in its inventory. When acting as
a "riskless principal," Company will engage only in transactions in
the secondary market, and not at the order of a customer that is the
issuer of the securities to be sold, will not act as "riskless principal"
in any transaction involving a security for which it makes a market,
nor hold itself out as making a market in the securities that it buys and
sells as a "riskless principal." Moreover, Company will not engage in
"riskless principal" transactions on behalf of any foreign affiliates. In
addition, Company will not act as a "riskless principal" with respect
to any securities of investment companies that are advised by Applicant or any of its affiliates. Among the restrictions governing private
placement activities are that Company will not privately place registered investment company securities, and will not privately place any
securities of investment companies that are advised by Applicant or
any of its affiliates.
10. Synovus Financial Corp., 11 Federal Reserve Bulletin 954, 955
(1991); Banc One Corporation, 76 Federal Reserve Bulletin 756, 758
(1990); Canadian Imperial Bank of Commerce, The Royal Bank of
Canada, Barclays PLC and Barclays Bank PLC, 76 Federal Reserve
Bulletin 158 (1990).




that the framework established pursuant to Citicorp!
Morgan/Bankers Trust will be maintained in all other
respects.11
Financial Factors, Managerial Resources, and Other
Considerations
In every case involving a nonbanking acquisition by a
bank holding company under section 4 of the BHC
Act, the Board considers the financial condition and
resources of Applicant and its subsidiaries and the
effect of the transaction on these resources.12 Based
on the facts of this case, the Board concludes that
financial considerations are consistent with approval
of this application. The managerial resources of Applicant also are consistent with approval.
In order to approve this application, the Board is
required to determine that the performance of the
proposed activities by Applicant can reasonably be
expected to produce public benefits that outweigh
adverse effects under the proper incident to banking
standard of section (4)(c)(8) of the BHC Act. Under
the framework established in this order and prior
decisions, consummation of this proposal is not likely
to result in any significant adverse effects, such as
undue concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound banking
practices. Consummation of the proposal would provide added convenience to Company's customers.
Accordingly, the Board has determined that the performance of the proposed activities by Applicant can
reasonably be expected to produce public benefits that
would outweigh possible adverse effects under the
proper incident to banking standard of section 4(c)(8)
of the BHC Act.
Based on all the facts of record, and subject to the
commitments made by Applicant, as well as all the
terms and conditions set forth in this order and in the
above-noted Board Orders, the Board has determined
that the application should be, and hereby is, approved. Approval of this proposal is specifically conditioned on compliance by Applicant and Company
with the commitments made in connection with its
application, as supplemented, and with the conditions
referenced in this and the other referenced Orders.
The Board's determination also is subject to all of the
conditions set forth in Regulation Y, including those in

11. The Board's approval of the proposed underwriting and dealing
activities extends only to Company. These activities may not be
conducted by Applicant in any other subsidiary without prior Board
review. Pursuant to Regulation Y, no corporate reorganization of
Company, such as the establishment of subsidiaries of Company to
conduct the activities, may be consummated without prior Board
approval.
12. See 12 C.F.R. 225.25.

Legal Developments

sections 225.4(d) and 225.23(b), and to the Board's
authority to require modification or termination of the
activities of a bank holding company or any of its
subsidiaries as the Board finds necessary to assure
compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations
and Orders issued thereunder. In approving this transaction, the Board has relied upon all the facts of record
and all the representations and commitments made by
Applicant. For the purpose of this action, these commitments and conditions shall be deemed conditions
imposed in writing and, as such, may be enforced in
proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Atlanta pursuant to delegated authority.
By order of the Board of Governors, effective
May 20, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, and Kelley. Absent and not voting: Governors LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Chemical Banking Corporation
New York, New York
Order Approving an Application to Engage De Novo
in Underwriting and Dealing in Certain
Bank-Ineligible Securities on a Limited Basis
Chemical Banking Corporation, New York, New York
("Chemical"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 4(c)(8) of the BHC
Act (12 U.S.C. § 1843(c)(8)), and section 225.23 of the
Board's Regulation Y (12 C.F.R. 225.23), to engage
de novo through its wholly owned subsidiary, Chemical Securities Inc., New York, New York ("Company"), in underwriting and dealing in, to a limited
extent, all types of debt securities, including without
limitation sovereign debt securities, corporate debt
securities, debt securities convertible into equity securities, and securities issued by a trust or other
vehicle secured by or representing interests in debt
obligations ("bank-ineligible securities"). Chemical
proposes to conduct these activities throughout the
United States.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (58 Federal Register 16,834



719

(1993)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the BHC Act.
Chemical, with total consolidated assets of
$147.5 billion, operates bank subsidiaries in New
York, Texas, New Jersey, and Delaware.1 Chemical
has received approval from the Federal Reserve System to engage directly and through subsidiaries in a
broad range of permissible nonbanking activities.
Company is currently engaged in limited bankineligible securities underwriting and dealing activities
permissible under section 20 of the Glass-Steagall Act
(12 U.S.C. § 377).2 Company also is, and will continue
to be, a broker-dealer registered with the Securities
and Exchange Commission ("SEC"), and a member
of the National Association of Securities Dealers, Inc.
("NASD"). Accordingly, Company is subject to the
record-keeping, reporting, fiduciary standards, and
other requirements of the Securities Exchange Act of
1934 (15 U.S.C. § 78a et seq.), the SEC, and the
NASD. 3
The Board has determined that, subject to the
prudential framework of limitations established in previous decisions to address the potential for conflicts of
interests, unsound banking practices, or other adverse
effects, the proposed underwriting and dealing activities in bank-ineligible securities are so closely related
to banking as to be proper incidents thereto within the
meaning of section 4(c)(8) of the BHC Act. 4 The Board
1. Asset data are as of March 31, 1993.
2. Company may underwrite and deal in municipal revenue bonds,
1-4 family mortgage-backed securities, commercial paper, and consumer-receivable-related securities.
3. Company is currently engaged in a variety of securities-related
activities:
(1) Underwriting and dealing in obligations that state member banks
are authorized to underwrite and deal in under sections 5(c) and 16
of the Glass-Steagall Act (12 U.S.C. §§ 335 and 24(7)) pursuant to
section 225.25(b)(16) of Regulation Y (12 C.F.R. 225.25(b)(16));
(2) Furnishing general economic information and advice to customers pursuant to section 225.25(b)(4)(iv) of Regulation Y (12 C.F.R.
225.25(b)(4)(iv));
(3) Providing full-service brokerage services to institutional and
retail customers pursuant to sections 225.25(b)(4) and (b)(15) of
Regulation Y (12 C.F.R. 225.25(b)(4) and (b)(15));
(4) Acting as agent in the private placement of all types of securities,
including providing related advisory services;
(5) Buying and selling all types of securities on the order of investors
as a "riskless principal"; and
(6) Providing financial advisory services of the type described in
section 225.25(b)(4)(vi) of Regulation Y (12 C.F.R. 225.25(b)(4)(vi)).
4. See Canadian Imperial Bank of Commerce, 76 Federal Reserve
Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., 75
Federal Reserve Bulletin 192 (1989), ajf d sub nom. Securities Industries Ass'n v. Board of Governors of the Federal Reserve System, 900
F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve Bulletin
473 (1987), aff d sub nom. Securities Industry Ass'n v. Board of
Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), cert,
denied, 486 U.S. 1059 (1988) (collectively, "Section 20 Orders").
Applicant has committed to conduct the proposed underwriting and
dealing activities using the same methods and procedures, and subject

720

Federal Reserve Bulletin • July 1993

also has determined that the conduct of these securities underwriting and dealing activities is consistent
with section 20 of the Glass-Steagall Act (12 U.S.C.
§ 377), provided that the company engaged in the
underwriting and dealing activities derives no more
than 10 percent of its total gross revenue from underwriting and dealing in bank-ineligible securities over
any two-year period.5 Applicant has committed that
Company will conduct its underwriting and dealing
activities with respect to bank-ineligible securities
subject to the 10 percent revenue test, and the prudential limitations established by the Board in previous
Orders.6
The Board has reviewed the capitalization of Chemical and Company in accordance with the standards set
forth in the Section 20 Orders, and finds the capitalization of each to be consistent with approval. With
respect to the capitalization of Company, approval of
the requested activities is limited to a level consistent
with the projections of position size and types of
securities contained in the application. The Federal
Reserve Bank of New York has reviewed the operational and managerial infrastructure of Company, including its computer, audit, and accounting systems,
and internal risk management procedures and controls. The Reserve Bank has determined that Company has established an adequate operational and
managerial infrastructure for the underwriting and
dealing of corporate debt securities to ensure compliance with the requirements of the Section 20 Orders.
to the same prudential limitations established by the Board in the
Section 20 Orders.
5. See id. Compliance with the 10 percent revenue limitation shall be
calculated in accordance with the method stated in the Section 20
Orders, as modified by the Order Approving Modifications to the
Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989); the Order
Approving Modifications to the Section 20 Orders, 79 Federal Reserve
Bulletin 226 (1993); and the Supplement to Order Approving Modifications to Section 20 Orders, 79 Federal Reserve Bulletin 360 (1993)
(collectively, "Modification Orders"). In this regard, the Board notes
that Chemical has not adopted the Board's alternative indexed revenue test to measure compliance with the 10 percent limitation on
bank-ineligible securities activities, and, absent such election, will
continue to employ the Board's original 10 percent revenue standard.
6. Chemical also proposes to provide services to customers and
engage in other activities that are incidental to the foregoing activities.
E.g., providing custodial services and securities clearance services,
lending securities to and purchasing securities from other dealers and
third parties, engaging in repurchase and reverse repurchase activities, engaging in hedging transactions for risk-reduction purposes, and
engaging in foreign exchange transactions to facilitate purchases and
sales of debt securities denominated in currencies other than U.S.
dollars. Company may provide services that are necessary incidents
to the proposed underwriting and dealing activities, provided that any
activities conducted as a necessary incident to the bank-ineligible
securities activities must be treated as part of the bank-ineligible
securities activities unless Company has received specific approval
under section 4(c)(8) of the BHC Act to conduct the activities
independently. Until such approval is obtained, any revenues from the
incidental activities must be counted as ineligible revenues subject to
the 10 percent revenue limitations set forth in the Section 20 Orders,
as modified by the Modification Orders.




On the basis of the Reserve Bank's review and all the
facts of record, the Board has determined that Company has in place the managerial and operational
infrastructure and other policies and procedures necessary to comply with the requirements of the Section
20 Orders and this order. Accordingly, the Board
concludes that the financial and managerial considerations are consistent with approval of this application.
In order to approve this application, the Board also
must determine that the performance of the proposed
activities by Chemical can reasonably be expected to
produce public benefits that would outweigh possible
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act. Under the
framework established in this and prior decisions,
consummation of this proposal is not likely to result in
any significant adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices.
The Board expects that the de novo entry of Applicant
into the market for the proposed services in the United
States would provide added convenience to Chemical's customers, and would increase the level of competition among existing providers of these services.
Accordingly, the Board has determined that the performance of the proposed activities by Chemical could
reasonably be expected to produce public benefits that
would outweigh possible adverse effects under the
proper incident to banking standard of section 4(c)(8)
of the BHC Act.
Accordingly, and for the reasons set forth in the
Section 20 Orders, the Board concludes that Chemical's proposal to engage through Company in the
proposed activities is consistent with the GlassSteagall Act, and is so closely related to banking as to
be a proper incident thereto within the meaning of
section 4(c)(8) of the BHC Act, provided Chemical
limits Company's activities as provided in the Section
20 Orders, as modified by the Modification Orders.
The application is hereby approved subject to all the
terms and conditions of those Orders and this order.
The Board's approval of this proposal extends only to
activities conducted within the limitations of those
Orders and this order, including the Board's reservation of authority to establish additional limitations to
ensure that Company's activities are consistent with
safety and soundness, conflict of interest, and other
relevant considerations under the BHC Act. Underwriting and dealing in any manner other than as
approved in the Section 20 Orders is not within the
scope of the Board's approval and is not authorized for
Company.
The Board's determination is also subject to all the
terms and conditions set forth in Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the

Legal Developments

Board's authority to require modification or termination of the activities of a bank holding company or any
of its subsidiaries as the Board finds necessary to
assure compliance with, and to prevent evasion of, the
provisions of the BHC Act, and the Board's regulations and Orders issued thereunder. The Board's decision is specifically conditioned on compliance with
all the commitments made in connection with this
application, including the commitments discussed in
this order and the conditions set forth in the abovenoted Board regulations and Orders. These commitments and conditions shall be deemed to be conditions
imposed in writing by the Board in connection with its
findings and decisions, and may be enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this order
unless such period is extended for good cause by the
Board, or by the Federal Reserve Bank of New York
acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 17, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

First Union Corporation
Charlotte, North Carolina
Order Approving Application to Acquire a Savings
Bank
First Union Corporation, Charlotte, North Carolina
("First Union"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied for the Board's approval under
section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), to acquire Georgia Federal Bank, FSB, Atlanta, Georgia ("Savings Bank"), a
federal savings bank.1 First Union also has applied to
engage in credit reinsurance, real estate appraisal, data
processing, and management consulting activities

1. First Union has proposed a two-step transaction to acquire
Savings Bank. First Union Corporation of Georgia, Atlanta, Georgia
("FU-GA"), a wholly owned subsidiary of First Union, will acquire
Savings Bank. Upon consummation of the acquisition, FU-GA proposes to merge Savings Bank with and into FU-GA's subsidiary bank,
First Union National Bank of Georgia, Atlanta, Georgia ("Bank").
The merger of Savings Bank into Bank is subject to approval by the
Office of the Comptroller of the Currency ("OCC") under the Federal
Deposit Insurance Act ("FDI Act") and the Bank Merger Act.
12 U.S.C. §§ 15(d)(3)(A)(i) and 1828(c).




721

through the acquisition of the nonbanking subsidiaries
of Savings Bank.2 In addition, First Union has requested Board approval pursuant to section 5(d)(3) of
the FDI Act, 12 U.S.C. § 1815(d)(3)(A)(ii), as
amended by the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. No. 102-242,
§ 501, 105 Stat. 2236, 2388 (1991), to merge Savings
Bank with and into Bank. Section 5(d)(3) of the FDI
Act requires the Board to review any proposed merger
between a bank owned by a bank holding company
and a savings association in which the resulting institution is insured by the Bank Insurance Fund, and, in
reviewing these proposals, to follow the procedures
and consider the factors set forth in the Bank Merger
Act, 12 U.S.C. § 1828(c).3
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 15,147 (1993)). As
required by the Bank Merger Act, reports on the
competitive effects of the mergers were requested
from the United States Attorney General, the OCC,
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
4(c)(8) of the BHC Act and in the Bank Merger Act.
The Board has determined that the operation of a
savings association by a bank holding company is
closely related to banking for purposes of section
4(c)(8) of the BHC Act. 4 In making this determination,
the Board required that savings associations acquired
by bank holding companies conform their direct and
indirect activities to those permissible for bank holding
companies under section 4(c)(8) of the BHC Act. First
Union has committed that it will not, as a result of this
transaction, engage in any activities not permitted for
bank holding companies under section 4(c)(8) of the
BHC Act and the Board's Regulation Y. 5 The Board

2. These nonbanking subsidiaries are: Associated Life Insurance
Company (credit life reinsurance activities pursuant to 12 C.F.R.
225.25(b)(8)(i)); Colonial Mortgage Company (real estate appraisal
activities pursuant to 12 C.F.R. 225.25(b)(13)); and Southeast Switch,
Inc. (data processing and management consulting activities pursuant
to 12 C.F.R. 225.25(b)(7) and 225.25(b)(ll)). The Board previously
approved the application of First Union to acquire up to 15 percent of
Southeast Switch, and First Union currently owns 13.5 percent.
Acquisition of the additional shares of Southeast Switch will increase
First Union's holdings to 16.7 percent. First Union has stated that it
will divest the shares in excess of 15 percent within one year of the
acquisition.
3. These factors include considerations relating to competition,
financial and managerial resources, future prospects of the existing
and proposed institutions, and the convenience and needs of the
communities to be served. 12 U.S.C. § 1828(c).
4. See 12 C.F.R. 225.25(b)(9).
5. Savings Bank engages through subsidiaries in insurance agency
activities and real estate activities that would not be permissible for a
bank holding company under the BHC Act. First Union has commit-

722

Federal Reserve Bulletin • July 1993

previously has determined by regulation that the credit
life reinsurance, real estate appraisal, data processing,
and management consulting activities that First Union
proposes to conduct are closely related to banking for
purposes of section 4(c)(8) of the BHC Act. 6 First
Union proposes to conduct these activities through
subsidiaries of FU-GA in accordance with the Board's
regulations.
First Union operates banks in Georgia, North Carolina, South Carolina, Virginia, Florida, and Tennessee, controlling deposits of $37 billion. First Union is
the fourth largest commercial banking organization in
Georgia, controlling $5.4 billion in deposits in Georgia
commercial banks, representing 9.5 percent of the
total deposits in commercial banks in the state.7 Savings Bank is the largest thrift organization in Georgia,
controlling $2.8 billion in deposits. Upon consummation of this transaction, First Union would become the
second largest commercial banking organization in
Georgia, controlling $8.2 billion in deposits, representing 13.8 percent of the total deposits in commercial
banking organizations in the state.
Competitive

Considerations

Under section 4(c)(8) of the BHC Act and under the
Bank Merger Act, the Board is required to consider
the competitive effects of this transaction. First Union
and Savings Bank compete directly in the following
banking markets in Georgia: Augusta, Atlanta, Macon, and Savannah. Upon consummation of this proposal, First Union would become the largest depository institution8 in the Augusta9 banking market,

ted to terminate all impermissible insurance activities within two years
of consummation of the proposal, and to limit its insurance activities
to servicing existing policies at the time of consummation, but not
renewing these policies, during this two-year period. First Union also
has committed to terminate all impermissible real estate activities
within two years of consummation and to refrain from undertaking
any new impermissible projects or investments during this period.
6. See 12 C.F.R. 225.25(b)(7), 225.25(b)(8)(i), 225.25(b)(ll), and
225.25(b)(13).
7. State deposit data are as of June 30,1992, and market deposit data
are as of June 30, 1991, unless otherwise indicated.
8. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market share data before
consummation are based on calculations in which the deposits of thrift
institutions are included at 50 percent. The Board previously has
indicated that thrift institutions have become, or have the potential to
become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of
Savings Bank will be transferred to a commercial bank under this
proposal, those deposits are included at 100 percent in the calculation
of pro forma market share. See Norwest Corporation, 78 Federal
Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve
Bulletin 669, 670 n.9 (1990).
9. The Augusta banking market is approximated by Richmond and
Columbia Counties in Georgia and Aiken County in South Carolina.
Augusta market deposit data are as of June 30, 1992.




controlling deposits of approximately $754.6 million,
representing approximately 28.9 percent of total deposits in depository institutions in the market ("market deposits"). The Herfindahl-Hirschman Index
("HHI") for the market would increase 245 points to
1850.10
The record indicates that the increase in the HHI
may overstate the competitive effects of this proposal
in the Augusta banking market. After the proposed
acquisition, 13 depository institutions would remain in
the market, ten of which are commercial banking
organizations, including four large regional bank holding companies. The Augusta banking market also has a
number of features that make it attractive to entry11
and Georgia allows regional interstate banking on a
reciprocal basis thereby providing a large number of
potential entrants into the market. In light of the
number and size of the banks remaining in the market,
the market's attractiveness to entry, the number of
potential entrants into the market, and other facts of
record in this case, the Board concludes that consummation of this proposal would not result in any significantly adverse effect on competition or the concentration of banking resources in the Augusta banking
market that would not be outweighed by the likely
public benefits of this transaction. The Board also
concludes that consummation of this proposal would
not have a significantly adverse effect on competition
in any of the other relevant banking markets.12

10. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by more than 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effects of limited-purpose lenders
and other non-depository financial entities.
11. Augusta's size makes it a significant urban area, and the Augusta
banking market is the largest among the 123 non-MSA markets in
Georgia. In addition, the rate of growth in deposits between 1988 and
1991 was substantially greater in the Augusta banking market than in
other markets in Georgia, including non-MSA and MSA markets. The
Augusta banking market also exceeded other non-MSA markets with
respect to population per banking office, total deposits per banking
office, population growth rate, and per capita income.
12. First Union would become the second largest depository institution in the Atlanta banking market, controlling approximately
$5 billion in deposits, representing 15.9 percent of market deposits,
and the HHI would increase 92 points to 1173. In the Macon banking
market, First Union would become the fourth largest depository
institution, controlling $254.1 million in deposits, representing
11.2 percent of market deposits, and the HHI would decrease 3 points
to 1118. First Union would become the second largest depository
institution in the Savannah banking market, controlling approximately
$614.6 million in deposits, representing 25.9 percent of market deposits, and the HHI would increase 155 points to 1925.

Legal Developments

Other Considerations
First Union has applied, pursuant to section 4(c)(8) of
the BHC Act, to acquire a savings association and to
engage in credit reinsurance, real estate appraisal, data
processing, and management consulting activities. As
noted above, these activities are permissible for bank
holding companies under the Board's Regulation Y,
and First Union proposes to conduct these activities in
accordance with the Board's regulations. There also are
numerous providers of these nonbanking services, and
this proposal would not significantly affect competition
in any relevant market. Furthermore, there is no evidence in the record to indicate that consummation of
this proposal is likely to result in any significantly
adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices that are not
likely to be outweighed by the public benefits of this
proposal. Accordingly, the Board has determined that
the balance of public interest factors under section
4(c)(8) of the BHC Act are favorable and consistent
with approval of First Union's application to acquire
Savings Bank and to engage in the nonbanking activities.
The Board also concludes that the financial and
managerial resources, future prospects of First Union
and Savings Bank, and convenience and needs considerations are consistent with approval. Moreover, the
record in this case shows that:
(1) The transaction will not result in the transfer of
any federally insured depository institution's federal
deposit insurance from one federal deposit insurance fund to another;
(2) First Union, FU-GA, and Bank currently meet,
and upon consummation of the proposed transaction
will continue to meet, all applicable capital standards; and
(3) The proposed transaction would comply with the
Douglas Amendment if Savings Bank were a state
bank that First Union was applying to acquire
directly.13 See 12 U.S.C. § 1815(d)(3).
Based on the foregoing and all the facts of record,
the Board has determined that the applications should
be, and hereby are, approved. This approval is subject
to First Union obtaining the required approval of the
appropriate Federal banking agency for the proposed
merger under the Bank Merger Act. The Board's
approval of this proposal is expressly conditioned on
compliance with the commitments made by First
13. The Board has previously determined that the interstate banking
statutes of Georgia permit a North Carolina holding company to
acquire banking organizations in Georgia. See NCNB Corporation,
72 Federal Reserve Bulletin 61 (1986).




723

Union in connection with this application. In addition,
The Board's determination is subject to all of the
conditions set forth in Regulation Y, including those in
sections 225.4(d) and 225.23(b)(3), and to the Board's
authority to require modification or termination of the
activities of a bank holding company or any of its
subsidiaries as the Board finds necessary to assure
compliance with, and to prevent evasion of, the provisions and purposes of the BHC Act and the Board's
regulations and orders issued thereunder. For purposes of this action, the commitments and conditions
relied on in reaching this decision are both conditions
imposed in writing by the Board in connection with its
findings and decision, and, as such, may be enforced in
proceedings under applicable law.
The merger of Savings Bank with and into Bank
shall not be consummated before the thirtieth calendar
day following the effective date of this Order, and the
acquisition of Savings Bank and the nonbanking companies of Savings Bank shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 10, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Lindsey, and Phillips. Absent and not voting:
Chairman Greenspan and Governors Kelley and LaWare.
WILLIAM W . WILES

Secretary of the Board

Northern Trust Corporation
Chicago, Illinois
Order Approving an Application to Engage in
Futures Commission Merchant Activities
Northern Trust Corporation, Chicago, Illinois ("Applicant"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), has
applied under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)), and section 225.23(a)(3) of
the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), to
engage de novo through its wholly owned subsidiary,
Northern Futures Corporation, Chicago, Illinois
("Company"), in the following futures commission
merchant ("FCM") activities:
(1) Executing and clearing, executing without clearing, and clearing without executing, as agent for
institutional customers, the futures contracts and
options on futures contracts set forth in Appendix A;

724

Federal Reserve Bulletin • July 1993

(2) Executing and clearing as agent for institutional
customers, through omnibus trading accounts with
unaffiliated FCMs, the futures contracts and options
on futures contracts set forth in Appendix B; and
(3) Providing related investment advisory services.
Applicant proposes to conduct the foregoing activities
throughout the United States.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (58 Federal Register 13,602
(1993)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of
$15.0 billion, is the fourth largest banking organization
in Illinois.1 In addition to Illinois, Applicant operates
subsidiary banks in Arizona, California, Florida, and
Texas.2 Company is an FCM registered with the
Commodity Futures Trading Commission ("CFTC"),
and is therefore subject to the record-keeping, reporting, fiduciary, and other requirements of the Commodity Exchange Act (7 U.S.C. § 1 et seq.) and the
CFTC.3
Applicant seeks authority to conduct, through Company, both execution and clearing activities on the
Chicago Mercantile Exchange ("CME") and the Chicago Board of Trade ("CBOT"). Company also proposes to conduct FCM activities through omnibus
customer trading accounts established in its own name
with clearing members of the exchanges on which
Company would not itself be a clearing member.4

1. Asset and ranking data are as of December 31, 1992. In Illinois,
Applicant controls four financial institutions: Northern Trust Company, Chicago, Illinois; Northern Trust Bank/DuPage, Oak Brook
Terrace, Illinois; Northern Trust Bank/Lake Forest, N.A., Lake
Forest, Illinois; and Northern Trust Bank/O'Hare, N.A., Chicago,
Illinois.
2. These banks are Northern Trust Bank of Arizona, N.A., Phoenix, Arizona; Northern Trust of California, N.A., Santa Barbara,
California; Northern Trust Bank of Florida, N.A., Miami, Florida;
Northern Trust Bank of Florida/Sarasota, N.A., Sarasota, Florida;
and Northern Trust Bank of Texas, N.A., Dallas, Texas.
3. Company currently engages in FCM execution and clearing
activities, and investment advisory activities permissible for bank
holding companies under sections 225.25(b)(18) and (b)(19) of Regulation Y (12 C.F.R. 225.25(b)(18) and (b)(19)), and in the execution
and clearance on major commodities exchanges of futures contracts
and options on futures contracts on certain broad-based stock and
bond indices. See Northern Trust Corporation, 74 Federal Reserve
Bulletin 333 (1988). Applicant proposes to provide these services to
major financial institutions and large institutional investors such as
pension plans. Company will not execute, clear, or broker contracts
for individuals. Applicant has committed that it will provide the
Federal Reserve System with prior notice of any significant change in
the characteristics of Company's customer base.
4. An omnibus account is an arrangement between a member
clearing firm of an exchange and a nonmember FCM that seeks to
conduct business on that exchange. Under such an arrangement, the




Using these omnibus accounts, Company, as agent for
its customers, could purchase and sell any of the
contracts described in section 225.25(b)(18) of Regulation Y or listed in Appendix B through a clearing
member of the relevant exchange. Alternatively, Company's customers could place orders directly with the
clearing firms with which Company maintains omnibus
accounts.5
In addition, Applicant seeks authority for Company
to clear trades on the CME and the CBOT that have
been executed by unaffiliated brokers pursuant to
so-called "give-up agreements."6 Company would not
be the primary clearing member for any non-clearing
member on the CBOT, and would not qualify any
non-clearing member on the CME.7 Company also
proposes to execute trades that will be given-up, at a
customer's request, to an unaffiliated FCM for clearance.8

member clearing firm executes and clears transactions for the nonmember FCM and its customers. The omnibus account reflects all
positions of the FCM's customers, but is divided into separate
segments for each customer for purposes of calculating margin requirements, reporting current holdings, and other matters. Applicant
has stated that this service would be provided as an accommodation to
institutional customers—the customer would not need to open its own
account with a clearing member, Company could broker contracts for
which customer trading activity is minimal, and Company would be
able to provide each customer with a single statement describing the
customer's overall futures position. Company would be financially
responsible to the clearing member with which it establishes an
omnibus account with respect to all trades properly made by the
clearing member through the account, but would not hold an ownership interest in the traded contracts. Company would not become a
member of any exchange of which it is not currently a member without
prior notice to, and, if required, approval of the Federal Reserve
System.
5. In general, Company would accept orders from customers and
act as agent in the purchase and sale of contracts. With respect to its
omnibus account customers, Company would employ the same credit
approval and risk management procedures developed for its own
executing and clearing activities. In particular, Company's omnibus
account activities would be conducted only pursuant to agreements
that impose duties on clearing firms to comply with Company's
instructions as to customer trading and other parameters. In addition,
Company would open omnibus accounts only with clearing firms that
satisfied Company's financial, managerial, and operational standards.
6. Under a give-up agreement, the executing floor broker (or give-in
broker), pursuant to a customer's instructions, gives up an executed
order for clearance to a clearing member other than the executing
broker's primary clearing member (or qualifying clearing member).
7. See generally CBOT Rules 333.00(a) and 350.06; CME Rules 511
and 524.
8. In such cases, Company, which serves as its own primary
clearing firm, would be obligated to clear any trade that it executes and
that has been rejected by the designated clearing firm pursuant to a
give-up agreement. Because Company is ultimately liable to clear all
trades that it executes but gives-up to another FCM, Company will, in
conducting the proposed execution-only activities, observe all the
same risk-management procedures used when Company both executes and clears trades. In particular, Company may refuse to execute
any trade that is outside the credit parameters established by Company for each customer. Moreover, Company will comply with all
customer trading limits conveyed to Company by a customer's
clearing FCM pursuant to a give-up agreement. On the basis of these
procedures, the Board has determined that Company has adequately
addressed the possible adverse effects of executing without clearing

Legal Developments

The Board previously has determined, by regulation
and order, that, with two exceptions, acting as an
FCM in executing and clearing all of the proposed
financial futures contracts and options on futures
contracts, and providing investment advisory services
with respect to such contracts, are activities closely
related to banking under section 4(c)(8) of the BHC
Act. 9 In order to approve this application, the Board
must determine that the performance of the proposed
activities by Applicant can reasonably be expected to
produce public benefits that would outweigh possible
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act. In this
regard, in every case under section 4 of the BHC Act,
the Board considers the financial condition and resources of the applicant and its subsidiaries, and the
effect of the proposed transaction on these resources. 10 Based on the facts of this case, the Board
concludes that the financial considerations are consistent with approval of this application. The managerial
resources of Applicant also are consistent with approval.
The Board previously has denied a proposal in
which a nonbank subsidiary of a bank holding company would have primarily cleared, but not executed,
trades for professional floor traders (primarily locals,
market makers, and specialists) trading for their own
accounts on major securities and commodities exchanges. See Stichting Prioriteit ABN AMRO Holding, et al., 11 Federal Reserve Bulletin 189 (1991)
("Amro"). The Board determined in Amro that the
potential adverse effects of the clearing only proposal,
including the attendant financial risks, outweighed the
potential public benefits of the activity, and, conse-

trades, and that approval of this activity is consistent with the BHC
Act.
9. See 12 C.F.R. 225.25(b)(18) and (b)(19); National Westminster
Bank PLC, 78 Federal Reserve Bulletin 953 (1992); The Sanwa Bank,
Limited, 77 Federal Reserve Bulletin 64 (1991); Morgan Guaranty
International Finance Corporation, 76 Federal Reserve Bulletin 881
(1990); The Long-Term Credit Bank of Japan, 76 Federal Reserve
Bulletin 554 (1990). The two exceptions are the Deutsche Aktienindex
30 Stock Index (DAX) futures, and German Government Bond Index
futures contracts traded on the Deutsche Terminborse GmbH
("DTB"). The Board has approved FCM activities with respect to
these two contracts on the DTB pursuant to the Board's Regulation K
(12 C.F.R. Part 211). See Morgan Guaranty International Finance
Corporation, 76 Federal Reserve Bulletin 881 (1990). These contracts
have essentially the same terms and serve the same functions as the
futures contracts for which FCM services previously have been
approved under section 4(c)(8) of the BHC Act. In addition, the Board
believes that the skills necessary to engage in providing FCM services
with respect to these contracts are virtually indistinguishable from
those employed in providing such services with respect to contracts
that have been approved previously. Hence, the Board has concluded
that FCM activities with respect to such contracts on the DTB are
closely related to banking under section 4(cX8) of the BHC Act.
10. See 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal
Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal
Reserve Bulletin 155 (1987).




725

quently, that the proposal did not meet the requirement of section 4(c)(8) of the BHC Act that the activity
be a "proper incident to banking."11
In particular, the Board was concerned that, by not
engaging in both the execution and clearance of a
trade, a bank-affiliated FCM would not be able to
decline transactions that presented unacceptable risk.
In this regard, the clearing FCM would have been
obligated to settle each trade entered into by its
customers, even if the customer did not have the
financial resources to honor its obligations. Moreover,
the Board noted that no mechanism existed by which
the clearing FCM could monitor, on a contemporaneous basis, the intra-day trading activities of the floor
traders who were to be its primary customers.12 On the
basis of this inability of the FCM to control the risks it
would undertake, together with the fact that clearing
agents must guarantee the financial performance of
their customers to the clearing houses of the exchanges on which they operate, the Board concluded
that the proposed activity in Amro presented substantial credit risk exposure to the parent bank holding
company, and that public benefit considerations precluded approval of the application under section 4 of
the BHC Act.13
Applicant's proposal differs from the situation presented in Amro in a number of respects. For example,
in Amro, the bank-affiliated FCM would have been the
primary clearing firm for customers (locals, market
makers, and other professional floor traders trading for
their own accounts) who executed their own trades.
As a primary clearing firm, the FCM would have been
obligated to clear all trades executed by these customers regardless of the risk to the FCM or the ability of
the customer to meet its financial obligations. In this
case, by contrast, Company would not serve as the
primary or qualifying clearing firm for any unaffiliated
customers. Company would clear only those trades
that Company itself executes, or that other executing
brokers execute and Company accepts for clearance
pursuant to a customer give-up agreement. The executing brokers would be independent from the customers, and would have the opportunity to evaluate the
trade before it is executed.14

11. See Amro, 77 Federal Reserve Bulletin at 191.
12. See id.
13. Id.
14. An executing FCM has an incentive to review ail trades that it
gives up for clearance by an unaffiliated FCM because the designated
clearing FCM, pursuant to the give-up agreement, may refuse to
accept the trade for clearance if the trade exceeds the customer's
trading limits or otherwise poses unacceptable risk to the clearing
FCM. In such a case, the executing FCM or its primary or qualifying
clearing firm would have to clear the trade. Thus, the executing FCM
has an interest in determining whether a customer's trade poses any

726

Federal Reserve Bulletin • July 1993

In this regard, all of Company's clearing-only
activities would be conducted pursuant to give-up
agreements. Applicant has represented to the Board
that, under these give-up agreements and its other
customer agreements, Company has the right to
refuse to accept for clearance any customer trade
that Company reasonably deems unsuitable in light
of market conditions or a customer's financial situation or objectives. Company also may restrict the
number and types of positions held by a customer as
Company deems reasonable. Accordingly, Company
could decline to accept those trades that Company
has determined present unacceptable risks.15 Under
the rules of the CBOT and the CME, Company has a
specified period of time in which to examine an
executed trade. During this period, Company is able
to determine whether the trade is within Company's
established risk parameters and otherwise properly
authorized, and, if the trade is not within such
parameters and properly authorized, to decide
whether to reject the trade for clearance.16
Moreover, Company would review the creditworthiness and other characteristics of each potential
customer, and, based on such review, would approve
or reject the customer and establish appropriate
trading, credit, margin, and exposure limits for the
customer.17 The Board notes that Company's customer base consists solely of institutional investors.18 As noted above, Company will not conduct
clearing-only activities for locals, market makers,

risk to the executing FCM even if the trade is to be given up to another
FCM for clearance.
15. In such an event, the executing broker's primary or qualifying
clearing firm would be obligated to clear the trade.
16. Under the rules of the CBOT, the pertinent executing brokers
are required to deliver trading cards to Company within 15 minutes
after the half-hour interval during which an order is executed or
15 minutes after the close of the relevant market; because CBOT rules
require that trades be submitted to the CBOT Clearing Corporation for
matching within one hour after the end of any such half-hour interval
or market close, Company has at least 45 minutes to review a trade
before it is required to submit the trade to the CBOT Clearing
Corporation for matching. See Memorandum of CBOT dated May 3,
1990; CBOT Clearing Corporation Submission Deadlines dated November 1991. Under the comparable rules of the CME, Company has
at least one hour to review a trade before submitting it to the
exchange's clearing house. See CME Clearing Member Transfer
Agreement Procedures Guide dated May 1989; Memorandum of CME
Clearing House Division dated February 26, 1990.
17. Client margin limits are initially approved by Company's credit
committee, and are administered by Company's compliance officer.
Customer margin limits are periodically reviewed and adjusted by
Company's credit committee to ensure that the limits are appropriate
to each client's trading activity, the overall risk parameters established for each customer, and the specific margin requirements set by
each exchange.
18. Company's institutional customers include major financial institutions and large institutional investors such as pension plans. Company's customers do not, and will not, include individuals.




specialists, or other professional floor traders that
are trading for their own accounts.
Company has in place procedures to monitor the
intra-day trading activities and risk exposure of its
customers. Company compares client positions with
margin limits each morning, maintains watch lists for
all accounts that have positions approaching the
margin limit, and employs client activity tally sheets
to monitor customer trading on a real-time basis.
In the event a trade would cause a customer's
trading position to exceed the margin limit, Company
states that it has several options. Company may
decline to accept the trade, may accept the trade but
notify the client and executing brokers that it will not
accept any additional trades except liquidating
trades, may ask the client to liquidate or transfer
other contracts to reduce the customer's trading
position below the margin limit, may liquidate a
customer's position, or may consider a request by
the customer to increase the margin limit.19 Applicant has stated that Company will employ these
procedures when Company clears trades pursuant to
a give-up agreement. Company also will use these
procedures when it both executes and clears trades,
and when it executes trades as a give-in broker.
On the basis of this framework for limiting
risk from the clearing-only activities, as well as all of
the commitments made by Applicant, and other
facts of record, the Board has determined that credit
and other risk considerations associated with the
proposed clearing-only activities on the CME and
the CBOT are consistent with approval of this
application.
There is no evidence in the record to indicate that
consummation of this proposal, subject to the commitments and conditions noted in the application or
in this Order, would result in any significant adverse
effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interests, or unsound banking practices that are not
outweighed by the public benefits that the Board
expects to result from the consummation of this
proposal. Moreover, Applicant has committed to
conduct its proposed FCM activities in accordance
with the conditions and restrictions on FCM activities set forth in Regulation Y. 20

19. Company consults regularly with its clients as to the anticipated
positions which client expects to carry with Company, and whether
such positions are consistent with the margin limits established for
that customer. Company has indicated that this consultation procedure is effective in avoiding unexpected trading activity which would
cause customers to exceed their margin limits.
20. See 12 C.F.R.225.25(b)(18) and (b)(19).

Legal Developments

The Board has taken into account and has relied
upon these commitments, the limitations in Regulation Y, and the regulatory framework established
pursuant to law by the CFTC for the trading of
futures and options on futures contracts. In addition,
the Board expects that the de novo entry of Applicant
into the market for the proposed FCM services in the
United States would provide added convenience to
Applicant's customers, and would increase the level
of competition among existing providers of these
services. Accordingly, the Board has determined
that the performance of the proposed activities by
Applicant could reasonably be expected to produce
public benefits that would outweigh possible adverse
effects under the proper incident to banking standard
of section 4(c)(8) of the BHC Act.
Based on the foregoing and all the facts of record,
the Board has determined to, and hereby does, approve the application subject to all the commitments
made by Applicant in connection with this application,
and the terms and conditions set forth in this Order,
and in the above-noted Board Orders that relate to
these activities. The Board's determination is also
subject to all the terms and conditions set forth in
Regulation Y, including those in sections 225.4(d) and
225.23(b), and to the Board's authority to require
modification or termination of the activities of a bank
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, and
to prevent evasion of, the provisions of the BHC Act,
and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned
on compliance with all the commitments made in
connection with this application, including the commitments discussed in this Order and the conditions
set forth in the above-noted Board regulations and
orders. These commitments and conditions shall be
deemed to be conditions imposed in writing by the
Board in connection with its findings and decision, and
may be enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this Order
unless such period is extended for good cause by the
Board, or by the Federal Reserve Bank of Chicago
acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 6, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Kelley.




JENNIFER J. JOHNSON

Associate Secretary of the Board

727

Appendix A

Contracts to be Executed and Cleared by
Company
Chicago Mercantile Exchange
Standard & Poor's 100 Stock Price Index futures
Standard & Poor's Over-the-Counter 250 Stock Index
futures
Chicago Board of Trade
The Bond Buyer Long-Term Municipal Bond Index
futures
Options on The Bond Buyer Long-Term Municipal
Bond Index futures
The Major Market Index futures
Appendix B

Contracts to Be Executed and Cleared Through
Omnibus Trading Accounts with Unaffiliated
FCMs
Deutsche Terminborse GmbH
Deutsche Aktienindex 30 Stock Index (DAX) futures
German Government Bond Index futures
Financiele Termijnmarkt Amsterdam NV
Dutch Government Bond Index futures
Hong Kong Futures Exchange Limited
Hang Seng Stock Index futures
Kansas City Board of Trade
Value Line Index futures
Mini Value Line futures
London International Financial Futures Exchange
The Financial Times-Stock Exchange 100 Equity
Index futures
Options on The Financial Times-Stock Exchange 100
Equity Index futures
Options on Eurodollar futures
U.K. Bond futures
Options on U.S. Treasury Bond futures

728

Federal Reserve Bulletin • July 1993

Marche a Terme d'Instruments Financiers
French Government Bond Index futures
New York Futures Exchange
New York Stock Exchange Composite Index futures
Options on New York Stock Exchange Composite
Index futures
Philadelphia Board of Trade
National Over-the-Counter Index futures
Singapore International Monetary Exchange
Nikkei 225 Stock Average futures
Sydney Futures Exchange
All Ordinaries Share Index futures
Australian Government Bond futures
Tokyo Stock Exchange
Tokyo Stock Price Index (TOPIX) futures
Japanese Government Bond futures

Sakura Bank, Limited
Tokyo,Japan
Order Approving an Application to Engage in
Futures Commission Merchant Activities
The Sakura Bank, Limited, Tokyo, Japan ("Applicant"), a foreign bank subject to the provisions of the
Bank Holding Company Act ("BHC Act"), has applied under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)), and section 225.23(a)(3) of the Board's
Regulation Y (12 C.F.R. 225.23(a)(3)), to acquire
60 percent of the outstanding shares of Dellsher Investment Company, Inc., Chicago, Illinois ("Company"),1 and, through Company, to engage in the following futures commission merchant ("FCM") activities:
(1) Executing and clearing, executing without clearing, and clearing without executing, as agent for
institutional investors and other sophisticated customers, the futures contracts and options on futures
contracts set forth in Appendix A;
(2) Executing and clearing, as agent for institutional
investors and other sophisticated customers,
1. All of the remaining shares of the Company would be owned by
a single individual, who would serve as an officer of the Company.




through omnibus trading accounts with unaffiliated
FCMs, the futures contracts and options on futures
contracts set forth in Appendix B; and
(3) Providing related investment advisory services.
Applicant proposes to conduct the foregoing activities
throughout the United States.
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (58 Federal Register 3283 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the public interest factors set forth in
section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets equivalent
to approximately U.S. $464 billion, is the third largest
bank in the world, and provides a full range of retail
and wholesale banking services worldwide.2 Applicant
is a registered bank holding company by virtue of its
ownership of Manufacturers Bank, Los Angeles, California, a state-chartered bank, the deposits of which
are insured by the Federal Deposit Insurance Corporation. In addition, Applicant operates branches in
Chicago, Illinois; New York, New York; and Seattle,
Washington; agencies in Los Angeles and San Francisco, California; Atlanta, Georgia; and Houston,
Texas; and representative offices in Lexington, Kentucky; and Detroit, Michigan. Applicant also has received prior approval by the Federal Reserve System
to operate a variety of nonbanking subsidiaries under
section 4(c)(8) of the BHC Act.
Company is a privately held corporation, and is
registered with the Commodity Futures Trading Commission ("CFTC") as an FCM and a commodity
trading advisor ("CTA"). Company therefore is subject to the recordkeeping, reporting, fiduciary, and
other requirements of the Commodity Exchange Act
(7 U.S.C. § 1 et seq.) and the CFTC.
Applicant seeks authority to conduct, through Company, both execution and clearing activities on the
Chicago Board of Trade ("CBOT") and the Chicago
Mercantile Exchange ("CME").3 Company also pro-

2. Asset data are as of September 30, 1992.
3. Company currently engages in FCM execution and clearing
activities and investment advisory activities permissible for bank
holding companies under section 225.25(b)(18) and (19) of Regulation Y (12 C.F.R. 225.25(b)(18) and (19)), and prior Board orders.
Company also engages in certain FCM activities that have not been
approved for bank holding companies, including executing and clearing futures contracts and options on futures contracts on non-financial
commodities, providing investment advisory services with respect to
such contracts, clearing (without executing) trades for professional
floor traders, and certain other activities. Applicant has committed
that, upon consummation of this proposal, Company will terminate all
of its activities with respect to non-financial commodity futures
contracts and options thereon. Applicant also has committed that,
upon consummation of this proposal, Company will terminate its

Legal Developments

poses to conduct FCM activities through omnibus
customer trading accounts established in its own name
with clearing members of exchanges on which Company would not itself be a clearing member.4 Using
these omnibus accounts, Company, as agent for its
customers, could purchase and sell any of the contracts described in section 225.25(b)(18) of Regulation Y or listed in Appendix B through a clearing
member of the relevant exchange. Alternatively, Company's customers could place orders directly with the
clearing firms with which Company maintains omnibus
accounts.5
In addition, Applicant seeks authority for Company
to clear trades on the CBOT and the CME that have
been executed by unaffiliated brokers pursuant to
so-called "give-up agreements."6 Company would not
be the primary clearing member for any non-clearing
member on the CBOT, and would not qualify any

clearing (without executing) activities for professional floor traders,
locals, market makers, or specialists that trade for their own accounts.
Applicant also has committed that Company will not engage in any
proprietary trading. Company has stated that its customers will
consist solely of banks and other financial institutions, companies,
other clearing and brokerage firms, professionally managed funds
such as pension funds and commodity pools, and high-net-worth
individuals with sophisticated business experience and extensive prior
professional experience with financial futures instruments. Applicant
will provide the Federal Reserve System with prior notice of any
significant change in the characteristics of Company's customer base.
4. An omnibus account is an arrangement between a member
clearing firm of an exchange and a nonmember FCM that seeks to
conduct business on that exchange. Under such an arrangement, the
member clearing firm executes and clears transactions for the nonmember FCM and its customers. The omnibus account reflects all
positions of the FCM's customers, but is divided into separate
segments for each customer for purposes of calculating margin requirements, reporting current holdings, and other matters. Applicant
has stated that this service would be provided as an accommodation to
its customers: The customer would not need to open its own account
with a clearing member (an undertaking that might not be economically justified by the customer's anticipated trading activity on that
exchange), and Company would be able to provide each customer
with a single statement describing the customer's overall futures
position. Company would be financially responsible to the clearing
member with which it establishes an omnibus account for all trades
properly made by the clearing member through the account, but would
not hold an ownership interest in the traded contracts. Company
would not become a member of any exchange of which it is not
currently a member without prior notice to, and, if required, approval
of the Federal Reserve System.
5. In general, Company would accept orders from customers and
act as agent in the purchase and sale of contracts. With respect to its
omnibus account customers, Company would employ the same credit
approval and risk management procedures developed for its own
executing and clearing activities. In particular, Company's omnibus
account activities would be conducted only pursuant to agreements
that impose duties on clearing firms to comply with Company's
instructions as to customer trading and other parameters. In addition,
Company would open omnibus accounts only with clearing firms that
satisfied Company's financial, managerial, and operational standards.
6. Under a give-up agreement, the executing floor broker (or
"give-in broker"), pursuant to a customer's instructions, gives up an
executed order for clearance to a clearing member other than the
executing broker's primary clearing member (or qualifying clearing
member).




729

non-clearing member on the CME.7 Company also
proposes to execute trades that would be given up, at
a customer's request, to an unaffiliated FCM for
clearance.8
The Board previously has determined, by regulation
and order, that, with four exceptions, acting as an
FCM in executing and clearing all the futures contracts
and options on futures contracts proposed in this case
on the indicated exchanges, and providing investment
advisory services with respect to such contracts, are
activities closely related to banking under section
4(c)(8) of the BHC Act. 9 In order to approve this
application, the Board must determine that the performance of the proposed activities by Applicant "can
reasonably be expected to produce benefits to the
public . . . that outweigh possible adverse effects, such
as undue concentration of resources, decreased or

7. See generally CBOT Rules 333.00(a) and 350.06; CME Rules 511
and 524.
8. In such cases, Company, which serves as its own primary
clearing firm, would be obligated to clear any trade that it executes and
that has been rejected by the designated clearing firm pursuant to a
give-up agreement. Because Company is ultimately liable to clear all
trades that it executes but gives up to another FCM, Company would,
in conducting the proposed execution-only activities, observe all the
same risk-management procedures it uses when both executing and
clearing trades. On the basis of these procedures, the Board has
determined that Company has adequately addressed the possible
adverse effects of executing without clearing trades, and that approval
of this activity is consistent with the BHC Act.
9. See, e.g., 12 C.F.R. 225.25(b)(18) and (19); The Long-Term
Credit Bank of Japan, Limited, 79 Federal Reserve Bulletin 347 (1993)
("Long-Term Credit Bank //"); National Westminster Bank PLC, 78
Federal Reserve Bulletin 953 (1992); Swiss Bank Corporation, 77
Federal Reserve Bulletin 759 (1991); Morgan Guaranty International
Finance Corporation, 77 Federal Reserve Bulletin 499 (1991); The
Sanwa Bank, Limited, 77 Federal Reserve Bulletin 64 (1991); Morgan
Guaranty International Finance Corporation, 76 Federal Reserve
Bulletin 881 (1990); The HongKong and Shanghai Banking Corporation, 76 Federal Reserve Bulletin 770 (1990); Citicorp, 76 Federal
Reserve Bulletin 664 (1990); The Long-Term Credit Bank of Japan, 76
Federal Reserve Bulletin 554 (1990). Two of the exceptions are the
Deutsche Aktienindex 30 Stock Index (DAX) futures and German
Government Bond Index futures contracts traded on the Deutsche
Terminborse GmbH ("DTB"). The Board has approved FCM activities with respect to these contracts on the DTB pursuant to Regulation K (12 C.F.R. Part 211). See Morgan Guaranty International
Finance Corporation, 76 Federal Reserve Bulletin 881 (1990). The
other two exceptions are the trading on the CBOT of Tokyo Stock
Price Index (TOPIX) futures contracts and options on TOPIX futures
contracts. Each of these contracts has previously been approved for
trading on another exchange, and the execution and clearance of these
contracts would be governed by the same operations and procedures
applicable to other contracts previously approved on the CBOT. See
Long-Term Credit Bank II. Each of these four instruments are related
to financial instruments that are broad based, widely traded, and
comparable to the contracts previously approved by the Board. These
contracts have essentially the same terms and serve the same functions as the futures contracts for which FCM services previously have
been approved under section 4(c)(8) of the BHC Act. In addition, the
Board believes that the skills necessary to engage in providing FCM
services with respect to these contracts are virtually indistinguishable
from those employed in providing such services with respect to
contracts previously approved. Hence, the Board has concluded that
FCM activities with respect to such contracts on the DTB are closely
related to banking under section 4(c)(8) of the BHC Act.

730

Federal Reserve Bulletin • July 1993

unfair competition, conflicts of interests, or unsound
banking practices." 12 U.S.C. § 1843(c)(8). In this
regard, the Board must consider the financial condition and resources of the applicant and its subsidiaries
and the effect of the proposal on these resources.10
Based on the facts of this case, the Board concludes
that the financial considerations are consistent with
approval of this application. The managerial resources
of Applicant also are consistent with approval.
The Board previously has denied a proposal in
which a nonbank subsidiary of a bank holding company would have primarily cleared, but not executed,
trades for professional floor traders (primarily locals,
market makers, and specialists) trading for their own
accounts on major securities and commodities exchanges.11 The Board determined in that case that the
potential adverse effects of the clearing-only proposal,
including the attendant financial risks, outweighed the
potential public benefits of the activity, and, consequently, that the proposal did not meet the requirement of section 4(c)(8) of the BHC Act that the activity
be a "proper incident to banking."12
In particular, the Board was concerned that, by not
engaging in both the execution and clearance of a
trade, a bank-affiliated FCM would not be able to
decline transactions that presented unacceptable risk.
In this regard, the clearing FCM would have been
obligated to settle each trade entered into by its
customers, even if the customer did not have the
financial resources to honor its obligations. Moreover,
the Board noted that no mechanism existed by which
the clearing FCM could monitor, on a contemporaneous basis, the intra-day trading activities of the professional floor traders who were to be its primary
customers.13 On the basis of this inability of the FCM
to control the risks it would undertake, together with
the fact that clearing agents must guarantee the financial performance of their customers to the clearing
houses of the exchanges on which they operate, the
Board concluded that the proposed activity presented
substantial credit risk exposure to the parent bank
holding company, and that public benefit considerations precluded approval of the application under
section 4 of the BHC Act.14
Applicant's proposal differs from the situation presented in the AMRO Order in a number of respects.
For example, in AMRO, the bank-affiliated FCM

10. See 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal
Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal
Reserve Bulletin 155 (1987).
11. See Stichting Prioriteit ABN AMRO Holding, et al., 77 Federal
Reserve Bulletin 189 (1991) ("AMRO Order").
12. See AMRO Order at 191.
13. Id.
14. Id.




would have been the primary clearing firm for professional floor traders, who traded for their own accounts
and executed their own trades. As a primary clearing
firm, the FCM would have been obligated to clear all
trades executed by these customers regardless of the
risk to the FCM or the ability of the customer to meet
its financial obligations. In this case, by contrast,
Company would not serve as the primary or qualifying
clearing firm for any unaffiliated customers, and Applicant has committed that, upon consummation of
this proposal, Company will terminate all existing
clearing-only activities for professional floor traders.
Company would clear only those trades that Company
itself executes, or that another executing broker executes and Company accepts for clearance pursuant to
a customer give-up agreement. The executing brokers
would be independent from the customers, and would
have the opportunity to evaluate the trades before they
were executed.15
In this regard, all of Company's clearing-only activities would be conducted pursuant to give-up agreements. Applicant has represented to the Board that,
under these give-up agreements and its other customer
agreements, Company could decline to accept those
trades that Company determines present unacceptable
risks.16 Under its agreements, Company also has the
right to cancel or liquidate any of its customers'
outstanding trades whenever Company deems it necessary for its own protection. In addition, under the
rules of the CBOT and the CME, Company has a
specified period of time in which to examine an executed trade. During this period, Company is able to
determine whether the trade is within Company's risk
parameters for the customer and otherwise properly
authorized17 and, if the trade is not within such param15. An executing FCM has an incentive to review all trades that it
gives up for clearance by an unaffiliated FCM, because the designated
clearing FCM, pursuant to the give-up agreement, may refuse to
accept the trade for clearance if the trade exceeds the customer's
trading limits or otherwise poses unacceptable risk to the clearing
FCM. In such a case, the executing FCM or its primary or qualifying
clearing firm would have to clear the trade. Thus, the executing FCM
has an interest in determining whether a customer's trade poses any
risk to the executing FCM, even if the trade is to be given up to
another FCM for clearance.
16. In such an event, the executing broker's primary or qualifying
clearing firm would be obligated to clear the trade.
17. Under the rules of the CBOT, the pertinent executing brokers
are required to deliver trading cards to Company within 15 minutes
after the half-hour interval during which an order is executed or
15 minutes after the close of the relevant market; because the CBOT
rules require that trades be submitted to the CBOT Clearing Corporation for matching within one hour after the end of any such half-hour
interval or market close, Company has at least 45 minutes to review a
trade before it is required to submit the trade to the CBOT Clearing
Corporation for matching. See Memorandum of the CBOT dated May
3, 1990; CBOT Clearing Corporation Submission Deadlines dated
November 1991. Under the comparable rules of the CME, Company
has at least one hour to review a trade before submitting it to the
exchange's clearing house. See CME Clearing Member Transfer

Legal Developments

731

eters and properly authorized, to decide whether to
reject the trade for clearance.18
Moreover, Company's compliance and operations
director and chief operating officer will review the
creditworthiness and other characteristics of each potential customer, and, based on such review, will approve or reject the potential customer and establish
appropriate trading, credit, margin, and exposure limits
for each customer. The Board notes that Company's
customer base will consist solely of institutional investors and high-net-worth individuals with sophisticated
business experience and extensive prior professional
experience with financial futures instruments. As noted
above, Company will not conduct clearing-only activities for locals, market makers, specialists, or other
professional floor traders that are trading for their own
accounts.
Company also has in place procedures to monitor the
intra-day trading activities and risk exposure of its
customers. First, each customer is assigned a margin
limit at the time a trading account is opened. All
managers of Company's various trading desks on the
floor of the CBOT and the CME are advised of the
anticipated trading volume for new customers, review
customers' outstanding trading positions with Company's compliance and operations director before the
start of each trading day, and gain familiarity with
customers' trading patterns as a result of the daily
handling of customers' trades. Moreover, executing
brokers are required by the rules of the CBOT and the
CME to deliver tickets for trades to be cleared by
Company to Company's trading desks within 15 minutes of the execution of the trades. At the trading desks,
all intra-day trades to be cleared by Company on behalf
of a customer are recorded.
Company's senior officers make inquiries during the
trading day among the desk managers in order to
identify potential problems that may not be apparent to
individual desk managers. Upon being notified of or
otherwise identifying a potential problem, Company's
compliance and operations director may take a number
of measures to resolve the situation, including contacting the customer for clarification, making a margin call
on the customer, requesting the customer to liquidate
certain contracts or transfer certain contracts to other
clearing brokers to reduce the customer's trading position below the margin limit, liquidating the customer's

position, or considering the customer's request to increase the margin limit.
On the basis of this framework for limiting risk from
clearing-only activities, as well as all the commitments
made by Applicant, and other facts of record, the
Board has determined that credit and other risk considerations associated with the proposed clearing-only
activities on the CBOT and the CME are consistent
with approval of this application.
The record does not indicate that consummation of
this proposal, subject to the commitments and conditions noted in the application or in this Order, would
result in any significantly adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices, that are not outweighed by the public benefits that
the Board expects to result from the consummation of
this proposal. Moreover, Applicant has committed to
conduct its proposed FCM and CTA activities in accordance with the conditions and restrictions on such
activities set forth in Regulation Y and in this Order.19
The Board has taken into account and has relied upon
these commitments, the limitations in Regulation Y, and the regulatory framework established pursuant to law by the CFTC for the trading of futures
contracts and options on futures contracts, and the
rules of the CBOT and the CME governing the proposed activities of Applicant. In addition, the Board
expects that the de novo entry of Applicant into the
market for the proposed FCM services in the United
States would provide added convenience to Applicant's
customers and would increase the level of competition
among existing providers of these services. Accordingly, based on consideration of all of the facts of
record, including the commitments made by Applicant
regarding the conduct of the proposed activities and
other matters, the Board has determined that the performance of the proposed activities by Applicant can
reasonably be expected to produce public benefits that
would outweigh possible adverse effects that the Board
is required to consider under section 4(c)(8) of the BHC
Act.
Based on the foregoing and all the facts of record,
the Board has determined to, and hereby does, approve the application, subject to all the commitments
made by Applicant in connection with this application
and all the terms and conditions set forth in this Order

Agreement Procedures Guide dated May 1989; Memorandum of CME
Clearing House Division dated February 26, 1990.
18. Senior officers of Company have the authority to accept trades
not properly authorized or outside the parameters agreed to by
Company. Customers' risk parameters are reviewed and adjusted by
Company's senior officers as required to ensure that the limits are
appropriate to the customer's trading activity and financial condition.

19. See 12 C.F.R. 225.25(b)(18) and (19). Company would not trade
for its own account except for the purpose of hedging a cash position
in the related financial instrument as permitted by Regulation Y (see
12 C.F.R. 225.25(b)(18)(ii)) or to offset or liquidate a clearing error
arising in the normal course of business. The Board considers such
trading for the purpose of correcting clearing errors to be incidental to
the permissible FCM activities under Regulation Y and the Board's
previous orders, and to be consistent with approval of this application.




732

Federal Reserve Bulletin • July 1993

and in the above noted Board Orders that relate to
these activities. The Board's determination also is
subject to all the conditions set forth in Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder. The
Board's decision is specifically conditioned on compliance with all the commitments made in connection
with this application, including the commitments discussed in this Order and the conditions set forth in the
Board regulations and orders noted above. For purposes of this action, the commitments and conditions
relied on in reaching this decision shall be deemed to
be conditions imposed in writing by the Board in
connection with its findings and decision, and may be
enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of San
Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 10, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Lindsey, and Phillips. Absent and not voting:
Chairman Greenspan and Governors Kelley and LaWare.
WILLIAM W . WILES

Secretary of the Board

Appendix A

Contracts to Be Executed and Cleared by
Company
Chicago Board of Trade
U.S. Treasury Bond Futures
Options on U.S. Treasury Bond Futures
10-Year U.S. Treasury Note Futures
Options on 10-Year U.S. Treasury Note Futures
5-Year U.S. Treasury Note Futures
Options on 5-Year U.S. Treasury Note Futures
2-Year U.S. Treasury Note Futures
2-Year Cash-Settled U.S. Treasury Note Futures
30-Day Interest Rate Futures
Major Market Index Maxi Stock Index Futures
The Bond Buyer Long-Term Municipal Bond Index
Futures
Options on The Bond Buyer Long-Term Municipal
Bond Index Futures



Tokyo Stock Price Index (TOPIX) Futures
Options on Tokyo Stock Price Index (TOPIX) Futures
5-Year Interest Rate Swap Futures
Options on 5-Year Interest Rate Swap Futures
3-Year Interest Rate Swap Futures
Options on 3-Year Interest Rate Swap Futures
Chicago Mercantile Exchange
Australian Dollar Futures
Options on Australian Dollar Futures
British Pound Futures
Options on British Pound Futures
Canadian Dollar Futures
Options on Canadian Dollar Futures
Deutsche Mark Futures
Options on Deutsche Mark Futures
Japanese Yen Futures
Options on Japanese Yen Futures
Swiss Franc Futures
Options on Swiss Franc Futures
British Pound/Deutsche Mark Currency Cross-Rate
Futures
Options on British Pound/Deutsche Mark Currency
Cross-Rate Futures
Deutsche Mark/Japanese Yen Currency Cross-Rate
Futures
Options on Deutsche Mark/Japanese Yen Currency
Cross-Rate Futures
Deutsche Mark/Swiss Franc Currency Cross-Rate
Futures
Options on Deutsche Mark/Swiss Franc Currency
Cross-Rate Futures
Eurodollar Futures
Options on Eurodollar Futures
13-Week U.S. Treasury Bill Futures
Options on 13-Week U.S. Treasury Bill Futures
30-Day LIBOR Futures
Options on 30-Day LIBOR Futures
Standard & Poor's 500 Stock Price Index Futures
Options on Standard & Poor's 500 Stock Price Index
Futures
Nikkei 225 Stock Average Futures
Options on Nikkei 225 Stock Average Futures

Appendix B

Contracts to Be Executed and Cleared by
Company through Omnibus Trading Accounts
with Unaffiliated FCMs
Deutsche Terminborse GmbH
Deutsche Aktienindex 30 Stock Index (DAX) Futures
German Government Bond Index Futures

Legal Developments

Hong Kong Futures Exchange Limited

Osaka Securities Exchange

Hang Seng Stock Index Futures
Kansas City Board of Trade

Nikkei 225 Stock Average Futures
Options on Nikkei 225 Stock Average Futures
Osaka 50 Stock Index Futures

Value Line Index Futures

Singapore International Monetary Exchange

London International Financial Futures Exchange

733

3-Month Euro-Yen CD Futures
Nikkei 225 Stock Average Futures

The Financial Times-Stock Exchange 100 Equity
Index Futures
Options on The Financial Times-Stock Exchange 100
Equity Index Futures
ECU-CD Interest Rate Futures
ECU Bond Futures
Eurotrak 100 Stock Index Futures
3-Month Euro-Swiss Franc CD Futures
Options on 3-Month Euro-Swiss Franc CD Futures
3-Month Euro-Sterling CD Futures
Options on 3-Month Euro-Sterling CD Futures
3-Month Euro-Deutschemark CD Futures
Options on 3-Month Euro-Deutschemark CD Futures
10-Year Japanese Government Bond Index Futures
Options on 10-Year Japanese Government Bond Index
Futures
10-Year German Government Bond Index Futures
Options on 10-Year German Government Bond Index
Futures
Long UK Government Bond Futures
Options on Long UK Government Bond Futures
Marche a Terme d'Instruments Financiers
French Government Bond Index Futures
French Franc PIBOR-CD Futures
ECU Bond Futures
French Stock Index (CAC-40) Futures
3-Month Euro-Deutschemark CD Futures
Options on 3-Month Euro-Deutschemark CD Futures
10-Year French Government Bond Futures
Options on 10-Year French Government Bond Futures

Sydney Futures Exchange
10-Year Australian Government Bond Futures
Options on 10-Year Australian Government Bond
Futures
3-Year Australian Government Bond Futures
Options on 3-Year Australian Government Bond
Futures
3-Month Australian Government Bill Futures
Options on 3-Month Australian Government Bill
Futures
All Ordinaries Share Index Futures
Options on All Ordinaries Share Index Futures
Tokyo International Financial Futures Exchange
Euroyen Futures
Eurodollar Futures
Tokyo Stock Exchange
Tokyo Stock Price Index (TOPIX) Futures
10-Year Japanese Government Bond Futures
20-Year Japanese Government Bond Futures
Options on 10-Year Japanese Government Bond
Futures

Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
Huntington Bancshares, Incorporated
Columbus, Ohio

Montreal Stock Exchange
Canadian Government Bond Futures
New York Financial Exchange
New York Stock Exchange Composite Index Futures
Options on New York Stock Exchange Composite
Index Futures
Commodity Research Bureau Index Futures
Options on Commodity Research Bureau Index
Futures



Order Approving the Acquisition of a Bank Holding
Company
Huntington Bancshares, Incorporated, and Huntington Bancshares West Virginia, Inc., both of Columbus, Ohio (together, "Huntington"), and both bank
holding companies within the meaning of the Bank
Holding Company Act ("BHC Act"), have applied
under section 3 of the BHC Act (12 U.S.C.
§ 1842(a)(3)) to acquire all the voting shares of CB&T
Financial Corp. and CB&T Clarksburg Corp., both of

734

Federal Reserve Bulletin • July 1993

Fairmont, West Virginia (together, "CB&T"), and
thereby indirectly acquire: Community Bank & Trust,
N.A., Fairmont; Community Bank & Trust of Ritchie
County, Harris ville; Bank of Hundred, Inc., Hundred;
CBT-Westover Bank, Inc., Westover; Community
Bank & Trust of Harrison County, Clarksburg; and
Community Bank & Trust of Randolph County, Elkins, all in West Virginia.1
Huntington also has applied under section 4(c)(8) of
the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire
CB&T Capital Investment Company, Fairmont, West
Virginia, and thereby engage in making and servicing
loans pursuant to section 225.25(b)(1) of the Board's
Regulation Y (12 C.F.R. 225.25(b)(1)).
Notice of these applications, affording interested
persons an opportunity to submit comments, has been
published (58 Federal Register 18,098 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in sections 3 and
4 of the BHC Act.
Huntington, with total consolidated assets of approximately $14.0 billion, controls eight subsidiary
banks in Ohio, West Virginia, Indiana, Kentucky,
Michigan, and Pennsylvania, as well as one thrift
organization in Florida.2 Huntington is the tenth largest commercial banking organization in West Virginia,
controlling deposits of approximately $406.2 million,
representing 2.5 percent of total deposits in commercial banking organizations in the state.3 CB&T is the
sixth largest commercial banking organization in
West Virginia, controlling deposits of approximately
$661.5 million, representing 4.1 percent of total deposits in commercial banking organizations in the state.
Upon consummation of this proposal, Huntington
would become the third largest commercial banking
organization in West Virginia, controlling deposits of
approximately $1.07 billion, representing 6.6 percent
of total deposits in commercial banking organizations
in the state.4

1. In connection with Huntington's proposed acquisition of CB&T,
Huntington has requested Board approval under section 3 of the BHC
Act to acquire an option to purchase up to 24.9 percent of the voting
shares of CB&T. This option will become moot upon consummation
of Huntington's proposal to acquire CB&T.
2. Asset data are as of March 31, 1993.
3. State deposit data are as of December 31, 1992.
4. The Board previously has determined that the interstate banking
statute of West Virginia permits an Ohio bank holding company to
acquire banking organizations in West Virginia. See Banc One Corporation, 79 Federal Reserve Bulletin 519 (1993). Thus, consummation of this transaction is not barred by section 3(d) of the BHC Act
(12 U.S.C. § 1842(d)).




Competitive Considerations
Huntington and CB&T compete directly in the Morgantown, West Virginia ("Morgantown"), banking
market.5 In this market, Huntington is the largest
banking or thrift organization ("depository institution"), controlling deposits of approximately $292 million, representing 41.8 percent of total deposits in
depository institutions in the market ("market deposits").6 CB&T is the third largest depository institution
in the market, controlling deposits of approximately
$99.6 million, representing 14.3 percent of market
deposits. Upon consummation of this proposal, Huntington would remain the largest depository institution
in the Morgantown banking market, controlling deposits of approximately $391.6 million, representing
56.1 percent of market deposits. The HerfindahlHirschman Index ("HHI") would increase by 1194
points to 3917.7
In order to mitigate the potential anti-competitive
effects that would result from consummation of this
proposal in the Morgantown banking market, Huntington has committed to divest four branches in this
market that hold, in the aggregate, $77.7 million in
deposits to out-of-market competitors.8 Accounting
for these divestitures, the share of the Morgantown

5. The Morgantown RMA banking market consists of Monongalia
County, West Virginia, and Springhill Township of Fayette County,
Pennsylvania.
6. Market data are as of June 30, 1992. Market share data are based
on calculations in which the deposits of thrift institutions are included
at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal
Reserve Bulletin 386 (1989); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984). Thus, the Board has regularly included
thrift deposits in the calculation of market share on a 50 percent
weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve
Bulletin 52 (1991).
7. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anti-competitive effects) unless the post-merger HHI is at
least 1800 and the merger or acquisition increases the HHI by at least
200 points. The Justice Department has stated that the higher than
normal threshold for an increase in the HHI when screening bank
mergers and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other
non-depository financial entities.
8. Huntington has executed final sales agreements with two out-ofmarket competitors that will effect these divestitures within 180 days
of consummation of the acquisition of CB&T. Huntington also has
committed that, in the event it is unsuccessful in completing the
divestitures within 180 days of consummation of this proposal, Huntington will transfer the relevant office or offices to an independent
trustee with instructions to sell the office or offices promptly. See e.g.,
BankAmerica Corporation, 78 Federal Reserve Bulletin 338, 340
(1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484, 485 (1991).

Legal Developments

banking market controlled by Huntington would increase by three percentage points, and the HHI would
increase 148 points to 2872.9
Upon consummation of this proposal, and after
giving effect to the proposed divestitures, the number
of depository institutions remaining in the market
would increase from nine to ten. The Morgantown
banking market also has a number of features that
make it attractive for entry.10 West Virginia law permits West Virginia banks to branch into this market
and permits interstate entry from Pennsylvania.11
The Board also sought comments from the United
States Attorney General, the Office of the Comptroller
of the Currency ("OCC"), and the Federal Deposit
Insurance Corporation ("FDIC") on the competitive
effects of this proposal. The Attorney General has
indicated that, subject to Huntington's divestitures in
the Morgantown banking market, consummation of
this proposal would not have a significantly adverse
effect on competition in any relevant banking market.
Neither the OCC nor the FDIC objected to consummation of the proposal or indicated that the proposal
would have any significantly adverse competitive effects.
In light of all the facts of record, including the
proposed divestitures in the Morgantown banking
market, the number and size of competitors remaining
in the market, the market's attractiveness for entry,
and the number of potential entrants into the market,
the Board concludes that the proposal would not have
a significantly adverse effect on competition or the
concentration of banking resources in the Morgantown
banking market or in any other relevant banking
market.

735

to the convenience and needs of the communities to be
served and the other supervisory factors that the
Board must consider under section 3 of the BHC Act
are consistent with approval of this proposal.12
Huntington also has applied, pursuant to section 4 of
the BHC Act, to engage in making and servicing loans.
As noted above, these activities are permissible for
bank holding companies under section 4(c)(8) of the
BHC Act, and the Board's Regulation Y, and Huntington proposes to conduct these activities in accordance with the Board's regulations. There are numerous providers of these nonbanking services, and there
is no evidence in the record to indicate that consummation of this proposal is likely to result in any
significantly adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices
that are not likely to be outweighed by the public
benefits of this proposal. Accordingly, the Board has
determined that the balance of public interest factors it
must consider under section 4(c)(8) of the BHC Act is
favorable and consistent with approval of Huntington's application to acquire CB&T's nonbanking subsidiary.
Conclusion
Based on the foregoing, including the conditions and
commitments described in this order and those made
in these applications, and all the facts of record, the
Board has determined that these applications should
be, and hereby are, approved. The Board's approval is
specifically conditioned upon compliance by Huntington with all the commitments made in connection with

Other Considerations
The Board concludes that the financial and managerial
resources and future prospects of Huntington, its
subsidiaries, and CB&T, are consistent with approval.
The Board also concludes that considerations relating

9. Huntington would remain the largest depository institution in the
Morgantown banking market, controlling deposits of approximately
$314 million, representing 45 percent of market deposits.
10. Compared to other areas in West Virginia, the Morgantown
banking market features a relatively large population, a high rate of
population growth, and a higher than average amount of deposits. In
addition, the average per capita income exceeds that of other markets
in these areas. Four banking organizations have entered the market
since 1988, including two de novo entries in 1989 and 1990.
11. West Virginia banking law permits intrastate branching. See W.
Va. Code § 31A-8-12 (Supp. 1992). In addition, commercial banking
organizations in 45 states, including Pennsylvania, are authorized to
acquire West Virginia banks that have been in operation for at least
two years. See id. § 31A-8A-7. Moreover, Pennsylvania banking law
permits interstate banking on a reciprocal basis. See Pa. Cons. Stat.
Ann. § 116 (Supp. 1992).




12. The Board notes that Huntington Federal Savings Bank, Sebring, Florida ("HFSB"), a thrift subsidiary representing approximately 2 percent of Huntington's consolidated assets, received a less
than satisfactory rating in its most recent examination for performance
under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). HFSB has taken steps to address the deficiencies in its
CRA performance and to improve performance, and has adopted a
comprehensive CRA program that contains the elements of an effective CRA policy as outlined in the Statement of the Federal Financial
Supervisory Agencies Regarding the Community Reinvestment Act
(54 Federal Register 13,742 (1989)) ("Agency CRA Statement").
These steps include the hiring of a CRA compliance officer to
administer HFSB's overall CRA program, and the establishment of a
CRA committee to oversee the planning and implementation of this
program. This program includes increased activities designed to
ascertain and meet the credit needs of low- and moderate-income
communities.
The record does not show that the problems identified at HFSB
indicate chronic institutional deficiencies or a pattern of CRA deficiencies at other Huntington bank subsidiaries. In this regard, all of
Huntington's other banking subsidiaries have received "outstanding"
or "satisfactory" ratings during the most recent examinations of their
CRA performance. In light of these and the other facts of record, the
Board believes that it is appropriate in this case to give weight to the
corrective measures undertaken by Huntington to improve the CRA
performance of HFSB.

736

Federal Reserve Bulletin • July 1993

these applications, including Huntington's divestiture
commitments.
The determinations as to the nonbanking activities
are subject to all of the conditions in the Board's
Regulation Y, including those in sections 225.4(d) and
225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), and
to the Board's authority to require such modification
or termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with, or to prevent evasions of, the
provisions and purposes of the BHC Act and the
Board's regulations and orders issued thereunder. The
commitments and conditions relied on by the Board in
reaching its decision regarding these applications are
both deemed to be conditions imposed in writing by
the Board in connection with its findings and decision,
and as such may be enforced in proceedings under
applicable law.
The banking acquisitions may not be consummated
before the thirtieth calendar day following the effective
date of this Order, and the banking and nonbanking
acquisitions shall not be consummated later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
the Federal Reserve Bank of Cleveland acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 24, 1993.

given in accordance with the Bank Merger Act and the
Board's Rules of Procedure (12 C.F.R. 262.3(b)). As
required by the Bank Merger Act, reports on the
competitive effects of the proposal were requested
from the United States Attorney General, the Office of
the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation. The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in the Bank Merger Act.
Competitive, Financial, and Managerial
Considerations
This proposal represents a reorganization of existing
offices of depository institutions already controlled by
the same bank holding company. The merger of
TCB-DEL into Bank is the final step in the overall
consolidation of the credit card operations of CBC
after the merger of CBC with Manufacturers Hanover
Corporation, New York, New York ("MHC").2 On
the basis of all the facts of record, the Board concludes
that consummation of this proposal would not result in
significantly adverse effects on competition in any
relevant banking market. The financial and managerial
factors and future prospects of Bank and TCB-DEL
also are consistent with approval of this application.
Convenience and Needs Considerations

Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, and Lindsey. Absent and not voting: Governors Mullins and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Orders Issued Under Bank Merger Act

Chemical Bank
New York, New York
Order Approving Merger of Banks
Chemical Bank, New York, New York ("Bank"), a
state member bank, has applied pursuant to section
18(c) of the Federal Deposit Insurance Act (12 U.S.C.
§ 1828(c)) ("Bank Merger Act"), to merge with its
affiliate, Texas Commerce Banks, Newark, Delaware
("TCB-DEL"), a Federal Deposit Insurance Corporation insured, special-purpose credit card bank.1
Notice of this application, affording interested persons an opportunity to submit comments, has been

1. Both Bank and TCB-DEL are subsidiaries of Chemical Banking
Corporation, New York, New York ("CBC").




In considering an application under the Bank Merger
Act, the Board is required to consider the convenience
and needs of the communities to be served, and take
into account the records of the relevant depository
institutions under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to
encourage financial institutions to help meet the credit
needs of the local communities in which they operate,
consistent with safe and sound operation of such
institutions. To accomplish this end, the CRA requires
the appropriate federal supervisory authority to "assess the institution's record of meeting the credit
needs of its entire community, including low- and
moderate-income neighborhoods, consistent with the
safe and sound operation of such institutions," and to
take that record into account in its evaluation of bank
merger applications.3

2. The Board notes that competitive considerations were reviewed
when CBC merged with MHC, and the Board found that consolidation
would have no significantly adverse effects. See Chemical Banking
Corporation, 78 Federal Reserve Bulletin 74 (1992).
3. 12 U.S.C. § 2903.

Legal Developments

In this regard, the Board has received comments
from the United Paperworkers International Union
("Protestant") alleging that 1991 Home Mortgage Disclosure Act ("HMDA") data indicate that Bank illegally discriminates against minorities in New York
state.4 The Board has carefully reviewed the CRA
performance record of Bank, as well as all comments
received, the responses to those comments, and all of
the other relevant facts of record in light of the CRA,
the Board's regulations, and the Statement of the
Federal Financial Supervisory Agencies Regarding the
Community Reinvestment Act ("Agency CRA Statement").5

Record of Performance

Under the CRA

A. CRA Performance Examinations
The Agency CRA Statement provides that a CRA
examination is an important, and often controlling,
factor in the consideration of an institution's CRA
record and that these reports will be given great weight
in the applications process.6 In this case, the Board
notes that Bank received an overall "outstanding"
rating in its most recent examination of CRA performance conducted by the Federal Reserve Bank of
New York as of July, 1991. In addition, TCB-DEL
received a "satisfactory" rating in its most recent
examination of CRA performance as of October 1992.

B. Analysis of HMDA Data
The Board has carefully reviewed the 1991 HMDA data
reported by Bank in light of the Protestant's comments.
These data indicate that, as a general matter, Bank has
extended a significant number and percentage of home
mortgage loans in low- and moderate-income neighborhoods. In certain neighborhoods, however, the data
reflect disparities between the loan rejection rates for
minority applicants when compared to white applicants.
The Board is concerned when the record of an
institution indicates disparities in lending to minority
applicants and believes that all banks are obligated to
ensure that their lending practices are based on criteria
that assure not only safe and sound lending, but also
assure equal access to credit by creditworthy appli-

4. The HMDA requires banks to report certain information regarding loan applications, approvals, and denials to the various banking
agencies and the public. This information includes data on the race,
gender, and income of individual loan applicants, as well as the
location of the property securing the potential loan, and a description
of the application.
5. 54 Federal Register 13,742 (1989).
6. Id. at 13,745.




737

cants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete
measure of an institution's lending in its community.
The Board also recognizes that HMDA data have
limitations that make the data an inadequate basis,
absent other information, for concluding that an institution has engaged in illegal discrimination in making
lending decisions.
The Board notes that Bank's most recent CRA
examination found no evidence of illegal discrimination or other illegal credit practices at Bank. In this
regard, examiners randomly selected and reviewed
Bank's loan documentation, including files for rejected
loans.
The Board also notes that Bank has taken a number
of steps to address the disparities in its HMDA data.
For example, Bank has created two new targeted
mortgage programs for lower-income and minority
borrowers in New York state. The Neighborhood
Homebuyers Mortgage offers favorable terms and
competitive rates for creditworthy borrowers who
might otherwise have trouble qualifying for a mortgage.7 Bank made 341 mortgages totalling $33.8 million through this program in 1992. Bank also created a
$10 million Affirmative Mortgage Pool to hold mortgages in portfolios that do not meet the underwriting
criteria required by the secondary market.8 Bank
closed 42 loans totalling $4.6 million to minority borrowers through this program in 1992. Bank also increased its mortgage originations to minorities in New
York in 1992 by more than $65 million, an 80 percent
increase over 1991.
In 1992, Bank expanded its special review process in
the Residential Mortgage Department to re-evaluate
internally declined applications for conventional mortgages from minority applicants. In addition, Bank
established the Homeownership and Mortgage Counseling Program to assist potential homebuyers who are
having difficulty clearing up poor credit histories or
finding solutions to their high debt-to-income ratios. In
1992, Bank committed over $300,000 to provide funds
for five not-for-profit organizations in the New York
metropolitan area offering this counseling. Bank also
helped form the New York Mortgage Coalition, comprised of twelve major New York banks and savings
institutions, to help minorities and lower-income residents become qualified mortgage applicants. The Coalition will pool resources to provide mortgage coun-

7. The features of this program include a reduced application fee, a
lower required downpayment, fewer points and higher permissible
debt-to-income ratios.
8. Chemical recently increased this pool to $20 million. This
program was developed for minorities or other applicants with incomes of $53,000 or less seeking to purchase property in a low- or
moderate-income community.

738

Federal Reserve Bulletin • July 1993

seling in communities served by its member
institutions to increase the accessibility of mortgages
to first-time, low-income borrowers.
This year Bank established two committees to ensure that the retail bank's underwriting standards do
not discriminate against minority applicants. These
committees, comprised of senior management, community development, compliance, underwriting and
legal staff, will review underwriting decisions and
procedures to ensure that all applicants are receiving
equal treatment.

C. Additional Elements of CRA Performance
The Board also has considered other elements of the
CRA performance of Bank. The record indicates that
Bank has in place the types of policies outlined in the
Agency CRA Statement that contribute to an effective
CRA program. For example, Chemical Bank has a
CRA Coordinating Committee, which includes representatives from all the consumer-related departments
of Bank. The CRA Coordinating Committee collects
and analyzes data from Bank's various ascertainment
efforts and reports on these efforts to two committees
comprised of senior-level officials.
Bank ascertains the credit needs of its community
through officer call programs, demographic and market research, customer database profiles, and surveys.
Bank has full-time "Streetbanker" employees assigned to ascertain the credit needs of the community
and provide advice and information about bank products and services. Bank also has special programs that
ascertain the credit needs of specific portions of the
population that Bank serves. For example, Chemical
Community Development, Inc. ("CCDI") is a bank
subsidiary that provides financing for affordable housing initiatives.
Bank markets its CRA-related products through a
wide variety of media. For example, Bank advertises
its credit products through local newspapers, television and radio, as well as minority-oriented newspapers. Bank also uses telemarketing campaigns, direct
mail, press releases, branch posters and product brochures in English and Spanish to promote its products.
Bank meets the credit needs of its communities
through programs such as CCDI, which helps finance
and construct affordable housing in low- and moderateincome communities. CCDI has expanded its focus to
include special commercial loan programs, including
SBA-guaranteed loans and loans to community-based,
not-for-profit organizations. Bank also participates in
various loan programs including the Small Business
Administration loan program, the Guaranteed Student
Loan program, the New York State Energy Investment
loan program, the New York City Home Improvement



Program, and the Federal National Mortgage Association's Home Buyer's Program.9

D. Conclusion Regarding Convenience and
Needs Factors
The Board has carefully considered all of the facts of
record, including the comments filed in this case, in
reviewing the convenience and needs factor under the
Bank Merger Act. Based on a review of the entire
record of this application, including the most recent
CRA performance examinations of the institutions
involved in this case, the Board believes that the
efforts of Bank to help meet the credit needs of all
segments of the communities served, including lowand moderate-income neighborhoods, and all other
convenience and needs considerations, are consistent
with approval of this application.10
Based on the foregoing and all of the facts of record,
the Board has determined that these applications
should be, and hereby are, approved. The Board's
approval is specifically conditioned upon compliance
by Bank with all the commitments made in its application. For purposes of this action, the commitments
are considered conditions imposed in writing by the
Board in connection with its findings and decisions,
and, as such, may be enforced in proceedings under
applicable law.
This transaction shall not be consummated before
the thirtieth calendar day after the effective date of this
Order, or later than three months after the effective
date of this Order, unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of New York, acting pursuant to delegated
authority.
By order of the Board of Governors, effective
May 17, 1993.

9. The Board recently reviewed Bank's CRA record in detail and
concluded that its policies and lending programs assisted in meeting
the credit needs of the communities served. See Chemical Banking
Corporation, 78 Federal Reserve Bulletin 74 (1992).
10. Protestant has requested the Board hold public hearings on this
application. The Board is not required under the Bank Merger Act to
hold a public hearing in this case. Under the Board's rules, the Board
may, in its discretion, hold a public hearing or meeting on an
application to clarify factual issues related to the application and to
provide an opportunity for testimony, if appropriate. 12 C.F.R.
262.3(e) and 262.25(d).
The Board has carefully considered this request. In the Board's
view, interested parties have had a sufficient opportunity to present
written submissions, and have submitted substantial written comments that have been considered by the Board. In light of this, the
Board has determined that a public hearing or public meeting is not
necessary to clarify the factual record in this application, or otherwise
warranted in this case. Accordingly, the request for a public hearing or
public meeting on this application is hereby denied.

Legal

Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate

Secretary of the Board

ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT
INSURANCE CORPORATION IMPROVEMENT ACT

By the Board

CBT Corporation
Paducah, Kentucky
Order Approving Application
a Savings Bank

to Acquire Branches of

CBT Corporation, Paducah, Kentucky ("CBT"), a
bank holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), and its wholly
owned subsidiary, Citizens Bank and Trust Company,
Paducah, Kentucky ("Bank"), have applied for the
Board's approval under section 5(d)(3) of the Federal
Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI
Act")), as amended by the Federal Deposit Insurance
Corporation Improvement Act of 1991 (Pub. L. No.
102-242, § 501, 105 Stat. 2236, 2388-92 (1991)), to
purchase certain assets and assume certain liabilities
of three branch offices ("Branches") of Security Trust
Federal Savings & Loan Association, Knoxville, Tennessee ("Savings Bank"). 1 Section 5(d)(3) of the FDI
Act requires the Board to review any proposed merger
between a bank owned by a bank holding company
and a savings association, or branches of a savings
association, in which the resulting institution is insured by the Bank Insurance Fund, and, in reviewing
these proposals, to follow the procedures and consider
the factors set forth in the Bank Merger Act,
12 U.S.C. § 1828(c). 2
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with the Bank Merger Act and the
Board's Rules of Procedure (12 C.F.R. 262.3(b)). As
required by the Bank Merger Act, reports on the
competitive effects of the mergers were requested
from the United States Attorney General, the Office of
the Comptroller of the Currency ("OCC"), and the

1. This transaction also is subject to approval by the Federal
Deposit Insurance Corporation ("FDIC") under the FDI Act and the
Bank Merger Act. 12 U.S.C. §§ 1815(d)(3)(A)(i), 1828(c).
2. These factors include considerations relating to competition,
financial and managerial resources, future prospects of the existing
and proposed institutions, and the convenience and needs of the
communities to be served. 12 U.S.C. § 1828(c).




Developments

739

FDIC. The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the factors set forth in
the Bank Merger Act and section 5(d)(3) of the FDI
Act.
CBT is the 14th largest banking organization in
Kentucky, controlling deposits of $404.7 million, representing 1.3 percent of total deposits in commercial
banks in the state. 3 Upon acquiring Branches, CBT
would become the ninth largest banking organization
in Kentucky, controlling deposits of $473.5 million,
representing 1.5 percent of total deposits in commercial banks in the state.
CBT and Branches compete in the Paducah, Kentucky, banking market.4 CBT is the second largest
depository institution5 in the banking market, controlling deposits of $389.3 million, representing approximately 28.9 percent of total deposits in depository
institutions in the market ("market deposits"). 6 The
Branches to be acquired would constitute the fifth
largest depository institution in the market, controlling
deposits of $68.8 million, representing approximately
5.1 percent of market deposits. 7 Upon consummation
of the proposed transaction, CBT would become the
largest depository institution in the market, controlling
deposits of $458.1 million, representing approximately
34 percent of market deposits. The HerfindahlHirschman Index ("HHI") for the market would increase 295 points to 2427.8

3. Data for state ranking of banking organizations are as of June 30,
1991.
4. The Paducah, Kentucky, banking market is approximated by
McCracken County, the LaCenter census division of Ballard County,
Livingston County south of the Cumberland River, and the northern
one-third of Marshall County, all in Kentucky, and Massac County
and the Jefferson Number Four Precinct of Pope County in Illinois.
5. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market share data before
consummation are based on calculations in which the deposits of thrift
institutions are included at 50 percent. The Board previously has
indicated that thrift institutions have become, or have the potential to
become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the assumed
deposits would be controlled by a commercial banking organization
under CBT's proposal, those deposits are included at 100 percent in
the calculation of pro forma market share. See Norwest Corporation,
78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal
Reserve Bulletin 669, 670 n.9 (1990).
6. Market data are as of December 31, 1992.
7. The deposits of Branches are weighted at 100 percent because the
branches are currently owned by a commercial banking organization.
8. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by more than 200 points.
The Justice Department has stated that the higher than normal HHI

740

Federal Reserve Bulletin • July 1993

The Board believes that a number of factors indicate
that the increased level of concentration in the Paducah banking market, as measured by the HHI, overstates the competitive effects of this proposal. For
example, 12 other depository institutions, including
11 commercial banks and one thrift institution, with a
total of $888.7 million in deposits representing
66 percent of the market deposits, would remain in the
market. The Paducah banking market also has a number of features that make it attractive to entry. For
example, McCracken County, Kentucky, where the
city of Paducah is located and which is the primary
population center of the banking market, ranks second
in population and first in total deposits among nonMSA counties in Kentucky.9 Kentucky and Illinois
allow interstate banking on a reciprocal basis, thereby
providing a large number of potential entrants into the
market. In addition, credit unions actively compete in
the market and control 7.7 percent of the deposits in
commercial banks, savings associations, and credit
unions, which is greater than the national average of
approximately 5 percent.10
In light of the number of competitors remaining in
the market, the number of potential entrants into the
market, and other facts of record in this case, the
Board concludes that consummation of this proposal
would not result in any significantly adverse effect on
competition or the concentration of banking resources
in the Paducah banking market.
The Board also sought comments from the United
States Attorney General, the OCC, the FDIC, and the
Office of Thrift Supervision ("OTS") on the competitive effects of this proposal. Neither the Attorney
General, the OCC, the FDIC, or the OTS has provided
any objection to consummation of the proposal or
indicated that the proposal would have any significantly adverse competitive effects.
The Board also concludes that the financial and
managerial resources, future prospects of CBT and
Bank, and convenience and needs considerations are
consistent with approval. Moreover, the record in this
case shows that:
(1) The transaction will not result in the transfer of
any federally insured depository institution's federal

deposit insurance from one federal deposit insurance fund to another;
(2) CBT and Bank currently meet, and upon consummation of the proposed transaction will continue
to meet, all applicable capital standards; and
(3) Since Bank is located in Kentucky and is acquiring certain assets and assuming certain liabilities of
three Kentucky branch offices of a federal savings
bank, the proposed transaction would comply with
the Douglas Amendment if Savings Bank were a
state bank that CBT was applying to acquire directly. See 12 U.S.C. § 1815(d)(3).
Based on the foregoing and all the facts of record,
the Board has determined that the application should
be, and hereby is, approved. This approval is subject
to CBT obtaining the required approval of the appropriate Federal banking agency for the proposed merger
under the Bank Merger Act. The Board's approval of
this proposal is expressly conditioned on compliance
with the commitments made by CBT in connection
with this application. For purposes of this action,
these commitments and conditions relied on in reaching this decision are both conditions imposed in writing by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings under applicable law.
The acquisition shall not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of St. Louis, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
May 21, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, and Kelley. Absent and not voting: Governors LaWare, Lindsey, and Phillips.
WILLIAM W. WILES

Secretary of the Board

First Tennessee National Corporation
Memphis, Tennessee
thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effects of limited-purpose lenders
and other non-depository financial entities.
9. In addition, the total deposits per banking office and per capita
income in McCracken County are much higher than other non-MSA
counties in Kentucky. The population of McCracken County also has
increased somewhat in recent years compared with an absolute
decline for the average non-MSA county in Kentucky.
10. In the case of one credit union, employees of more than
50 percent of all employers in the Paducah market are eligible for
membership.




Order Approving Merger of a Savings Association
With a Commercial Bank
First Tennessee National Corporation, Memphis, Tennessee ("First Tennessee"), has applied for the
Board's approval to merge its savings association
subsidiary, Home Federal Bank, FSB, Johnson City,
Tennessee ("Home Federal"), with and into its bank

Legal Developments

subsidiary, First Tennessee Bank National Association, Memphis, Tennessee ("Bank"), pursuant to section 5(d)(3) of the Federal Deposit Insurance Act
(12 U.S.C. § 1815(d)(3) ("FDI Act")), as amended by
the Federal Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. No. 102-242, § 501, 105
Stat. 2236, 2388-92 (1991)).1 Section 5(d)(3) of the FDI
Act requires the Board to review any proposed merger
between a Savings Association Insurance Fund member and any Bank Insurance Fund ("BIF") member if
the acquiring or resulting institution is a BIF member
subsidiary of a bank holding company, and, in reviewing these proposals, to follow the procedures and
consider the factors set forth in the Bank Merger Act
(12 U.S.C. § 1828(c)). 12 U.S.C. § 1815(d)(3)(E).2 The
proposed merger is also subject to the review of the
Office of the Comptroller of the Currency (the
"OCC") under the Bank Merger Act, and has been
reviewed and approved by the Office of Thrift Supervision (the "OTS").
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with the Bank Merger Act and the
Board's Rules of Procedure (12 C.F.R. 262.3(b)). In
addition, reports on the competitive effects of the
merger were requested from the United States Attorney General, the OCC, the Federal Deposit Insurance
Corporation, and the OTS. The time for filing comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in the Bank Merger Act and section
5(d)(3) of the FDI Act.
First Tennessee is the largest bank or savings association ("depository institution") in Tennessee, controlling total deposits of $6.6 billion, representing
approximately 11.8 percent of total deposits in depository institutions in the state.3 First Tennessee currently owns and controls both Bank and Home Federal, and the proposed transaction represents a
reorganization of First Tennessee's corporate structure. The Federal Reserve Bank of St. Louis reviewed
the competitive effects of the affiliation of Home
Federal and Bank at the time that Home Federal was
acquired by First Tennessee, and determined that the
competitive effects were not significantly adverse in
any relevant market.4 Consummation of the proposed
merger transaction also would have no adverse effect

1. First Tennessee acquired Home Federal on December 14, 1992.
See 79 Federal Reserve Bulletin 157 (1993)
2. These factors include considerations relating to competition,
financial and managerial resources, future prospects of the existing
and proposed institutions, and the convenience and needs of the
communities to be served. 12 U.S.C. § 1828(c).
3. State deposit data are as of June 30, 1992.
4. 79 Federal Reserve Bulletin 157 (1993).




741

on competition or the concentration of banking resources in any relevant banking market.
Convenience and Needs Considerations
In evaluating the convenience and needs of the communities to be served, the Board has carefully considered comments submitted to the Board by Mid-South
Peace and Justice Center, Memphis, Tennessee
("Protestant"). Protestant alleges that Bank is not
satisfactorily meeting the convenience and needs of
the communities it serves because:
(1) Bank's lending practices illegally discriminate
against African-Americans in the Memphis area;5
(2) Bank's efforts at marketing its loan products to
minority communities are inadequate;
(3) Bank's loan products are not flexible enough to
meet the credit needs of low- and moderate-income
individuals and minorities;6 and
(4) Bank's Community Reinvestment Act ("CRA")
program does not fully comply with the letter and
spirit of that statute.7
In assessing the impact of this proposal on the
convenience and needs of the community, the Board
has considered the programs that Bank has in place to
serve its communities and Bank's proposal to implement these programs in the branches of Home Federal
to be acquired by Bank. In addition, the Board has
taken into account the past record of performance of
the First Tennessee organization under the CRA.

5. Protestant's allegations are based on data Bank is required to file
under the Home Mortgage Disclosure Act ("HMDA"). 12 U.S.C.
§ 2801 et seq. In particular, Protestant asserts that there are significant
disparities between Bank's volume of lending and denial rates for
white applicants and African-American applicants for home-purchase
financing and refinancing, and home-improvement financing in the
Memphis area. Protestant also notes that Bank makes significantly
more loans, as measured by dollar volume of loans, to Bank's
directors, officers and affiliated companies, as reported in Bank's
annual report, than mortgage loans to African-Americans.
6. In particular, Protestant alleges that:
(1) Bank's reliance on poor credit histories and unsatisfactory
debt-to-income ratios as primary reasons for rejecting loan applications from African-Americans demonstrates the need for Bank to
develop a loan product with more flexible underwriting criteria;
(2) Bank's underwriting criteria for the financing of HUD foreclosure property are too stringent, and Bank therefore fails to serve an
essential part of the low-income housing market; and
(3) Bank's failure to offer its low-interest Visa Gold card to
applicants with incomes below $35,000 discriminates against lowand moderate-income customers whose income qualifies them only
for Bank's higher interest rate credit card.
7. 12 U.S.C. § 2901 et seq. For example, Protestant alleges that
Bank's charitable donations to community organizations engaged in
low-income housing and small business development are inadequate.
Protestant further believes that, in the spirit of compliance with the
CRA, Bank should refuse to do business with mortgage companies
that have not provided complete and accurate HMDA data or whose
HMDA data indicate a racial disparity in the denial rates for loan
applications.

742

Federal Reserve Bulletin • July 1993

The Board notes that Bank received a "satisfactory" rating from its primary regulator, the OCC, in the
November 1991 examination of its CRA performance.
All of First Tennessee's other subsidiaries have received at least a "satisfactory" rating from their
primary regulators in the most recent examinations of
their CRA performance.
The record in this case indicates that Bank has in
place many of the elements of an effective CRA
program. Bank has a CRA Manager and a CRA
Action Committee consisting of senior executive
officers of Bank. The CRA Action Committee meets
regularly to review and monitor the CRA program
and to make adjustments when necessary, and reports directly to the board of directors and its executive committee. Bank management develops, and
the board of directors approves, an annual CRA
Assessment and a CRA Marketing Plan containing
specific goals and objectives for the coming year. As
part of Bank's CRA program, Bank's board of directors and senior management have developed written
policies, procedures and training programs to ensure
that Bank does not illegally discourage or pre-screen
loan applicants, and the board and senior management exercise active policy oversight of CRA activities and performance.
Bank actively participates in projects that support
community development activities. In this regard, in
1991, Bank took the lead in the formation of a Community Development Corporation ("CDC") in Memphis,
Tennessee, which was established to provide funding
for the renovation, improvement, and construction of
housing for low- and moderate-income families.8 Bank
also co-sponsors and participates in the Dyer County
Housing Development Corporation ("DCHDC")
which was established to promote and advance safe and
sanitary housing for low- and moderate-income families.9 Bank participates in several other projects targeted at low- and moderate-income communities, including the Home Buyers Acquisition/Rehab Program
designed to provide affordable housing by offering loans
with more flexible lending criteria, and Chattanooga
Neighborhood Enterprises, established to provide res-

8. Bank provided $200,000 of the initial $400,000 equity to capitalize
CDC. In 1992, CDC provided $1.1 million in mortgages to 18 housing
projects in the Greenlaw District of Memphis, which is a downtown
residential community in need of rehabilitation. Under this program,
qualified borrowers may receive down payment assistance in the form
of grants and/or a below-market rate of interest.
9. Bank provided $9,000 of the initial $64,750 equity to capitalize
DCHDC, which is based in Dyersburg, Tennessee. In 1992, DCHDC
issued 19 grants totaling $51,250. Under this program, funds may be
used for down-payment and/or repair assistance, or rehabilitation or
construction of affordable housing.




idential mortgages at below-market rates to homeowners in Chattanooga, Tennessee.10
The record indicates that Bank has been responsive
to the credit needs of its communities. For example, in
1988, Bank developed a 10-year Neighborhood Revitalization Program to address housing and small business loan needs. Under this program, Bank offers
loans using more flexible underwriting criteria to provide home-purchase, home-improvement and small
business loans to low- and moderate-income people in
all of Bank's delineated communities.11 Through December 1992, Bank has loaned over $25 million under
this program. Bank also participates in the Tennessee
Housing Development Agency's Homeownership Program, which is designed to provide mortgages at
below-market rates to certain low-income households.
In addition, Bank makes mortgage loans under FHA
Section 221 and 203 programs,12 and Bank is an
approved Small Business Administration ("SBA")
lender, with $3.2 million of SBA loans outstanding as
of December 31, 1992.
The Board has carefully reviewed available 1990 and
1991 HMDA data of Bank in light of Protestant's
comments. While these data show denial rates that
vary according to race, the CRA performance examinations of Bank found no evidence of illegal discrimination or other illegal credit practices.13 In addition,
the Board notes that Bank has taken steps to address
the racial disparity in loan denial rates and improve its
HMDA-related lending. In 1992, Bank management
ordered the audit department to conduct a thorough
review of Bank's loan approval process to ensure that
Bank was not engaging in discriminatory practices.
The audit department review indicated that the primary reasons for rejection of loan applications were
applicants' high debt-to-income ratios and poor credit
histories. To address this, Bank has started offering

10. Under the Home Buyers Acquisition/Rehab Program, qualified
borrowers can obtain loans with high loan-to-value ratios and with
interest rate discounts of up to 1 percent. Bank has agreed to provide
$1 million of the $6.5 million needed to fund this program. Bank
provided $250,000 of the $1 million line of credit that was extended to
Chattanooga Neighborhood Enterprises by several financial institutions.
11. Bank has committed to lend $100 million at the rate of up to
$10 million per year for ten years to eligible borrowers.
12. These loans offer up to 30-year terms, 97 percent loan-to-value
financing and reduced closing costs. In certain of these cases, Bank
offers an interest rate discount of up to 1 percent to eligible borrowers
who would not otherwise qualify for the requested loan.
13. While the Board is concerned when the record of an institution
indicates disparities in lending to minority applicants, the Board
recognizes that HMDA data alone provide a limited measure of any
given institution's lending in the communities that the institution
serves. The Board also recognizes that HMDA data have limitations
that make the data an inadequate basis, absent other information, for
conclusively demonstrating whether an institution has engaged in
illegal discrimination on the basis of race or ethnicity in making
lending decisions.

Legal Developments

budget and credit education and counseling programs
to rejected loan applicants, and has joined with minority realtors in sponsoring home-buying seminars.
The marketing activity directed by Bank to the
African-American community in Memphis shows that
Bank is actively seeking to offer its products and
services to this sector of the community. For example,
Bank uses a minority advertising consultant to help
promote its products, particularly those offered in its
Neighborhood Revitalization Program, and advertises
its products in minority newspapers, on bus cards, and
in publications that are free to the public. Bank also
communicates the availability of its products to minority realtors in the Memphis area through advertising
and personal contacts. The record shows that Bank's
efforts to market its products to the African-American
community have been effective in the past. In 1991, for
example, Bank made approximately $23 million in first
mortgage loans to African-Americans, which represented 37.7 percent of its first mortgage loans for that
year. In addition, as of February 1, 1993, 41.4 percent
of Bank's outstanding consumer loans (totalling
$255 million) in Memphis had been made in predominantly African-American, low- and moderate-income
census tracts. Moreover, the OCC found that Bank
affirmatively solicits credit applications from all segments of its local communities, with a strong focus on
low- and moderate-income neighborhoods.
For the foregoing reasons, and based on all the facts
of the record in this case, including Protestant's comments and First Tennessee's responses to these comments, the Board concludes that convenience and
needs considerations, including the record of First
Tennessee and Bank under the CRA, are consistent
with approval of this application.

743

with a savings institution located in Tennessee, the
proposed transaction would comply with the interstate banking provisions of the Bank Holding Company Act (12 U.S.C. § 1842(d)) if Home Federal
were a state bank that First Tennessee was applying
to acquire directly. See 12 U.S.C. § 1815(d)(3).
Based on the foregoing and all other facts of record,
the Board has determined that this application should
be, and hereby is, approved.14 This approval is subject
to Bank obtaining the OCC's approval for the proposed merger under the Bank Merger Act. The
Board's approval of this application also is conditioned upon First Tennessee's compliance with the
commitments made in connection with this application. For purposes of this action, the commitments and
conditions relied on in reaching this decision are
conditions imposed in writing by the Board and, as
such, may be enforced in proceedings under applicable
law.
This transaction may not be consummated before
the thirtieth calendar day after the effective date of this
Order, or later than three months after the effective
date of this Order, unless such period is extended by
the Board or the Federal Reserve Bank of St. Louis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
May 24, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Mullins.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Other Considerations
The Board also concludes that the financial and managerial resources and future prospects of First Tennessee, Bank and Home Federal are consistent with
approval of this application. Moreover, the record in
this case shows that:
(1) The transaction will not result in the transfer of
any federally insured depository institution's federal
deposit insurance from one federal deposit insurance fund to the other;
(2) First Tennessee and Bank currently meet, and
upon consummation of the proposed transaction will
continue to meet, all applicable capital standards;
and
(3) Because Bank is in Tennessee and is merging




14. Protestant has commented on the absence of African-Americans
in upper level positions at Bank, and the failure of Bank to use
African-American appraisers, closing attorneys and other professionals to perform contract services for Bank. Bank states that Protestant's allegations that there are no African-American managers in
Bank's Memphis area branches is incorrect, and further states that a
number of African-Americans are employed in Bank's mortgage
lending department, including the underwriting area, where credit
decisions are made. Because Bank employs more than 50 people and
acts as an agent to sell or redeem U.S. savings bonds and notes, it is
required by Treasury Department regulations to:
(1) File annual reports with the Equal Employment Opportunity
Commission; and
(2) Have in place a written affirmative action compliance program
which states its efforts and plans to achieve equal opportunity in the
employment, hiring, promotion and separation of personnel.

744

Federal R e s e r v e Bulletin • July 1993

ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
1991

By the Director of the Division of Banking Supervision and Regulation and the General Counsel of
the Board
Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.

Bank Holding Company
BB&T Financial Corporation,
Wilson, North Carolina

CCB Financial Corporation,
Durham, North Carolina

FirsTier Financial, Inc.,
Omaha, Nebraska
Southern BancShares (N.C.),
Inc.,
Mount Olive, North Carolina

Acquired
Thrift

Surviving
Bank(s)

1st Home Federal Savings
and Loan Association
of the Carolinas, F.A.,
Greensboro, North
Carolina
1st Home Federal Savings
and Loan Association
of the Carolinas, F.A.,
Greensboro, North
Carolina
FirsTier Savings Bank,
F.S.B.,
Omaha, Nebraska
Citizens Savings Bank,
Inc.,
Rocky Mount, North
Carolina

Approval
Date

Branch Banking and
Trust Company,
Wilson, North
Carolina

May 18, 1993

Central Carolina
Bank and Trust
Company,
Raleigh, North
Carolina
FirsTier Bank, N.A.,
Omaha, Nebraska

May 18, 1993

Southern Bank and
Trust Company,
Mount Olive, North
Carolina

April 26, 1993

April 30, 1993

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT

By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon
request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.

Section 3

Applicant(s)
Mobile National Corporation,
Mobile, Alabama




Bank(s)
South Alabama Bancorporation, Inc.
Brewton, Alabama

Effective
^
May 27, 1993

Legal

Developments

745

Section 4

Chase Manhattan Corporation,
New York, New York

Effective
Date

Bank(s)

Applicant(s)

Government Pricing Information
System, Inc.,
New York, New York

May 5, 1993

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT

By Federal Reserve

Banks

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

Section 3

Applicant(s)
Associated Banc-Corp,
Green Bay, Wisconsin
Bank Corporation of Georgia,
Macon, Georgia
Cardinal Bancshares, Inc.,
Lexington, Kentucky
Central Bankshares, Inc.,
Cordele, Georgia
Commerce Bancshares, Inc.,
Kansas City, Missouri
CBI-Central Kansas, Inc.,
Kansas City, Missouri
CTC Bancorp Inc.,
Fayette, Missouri
Farmers & Traders Bancshares,
Inc.,
Shabbona, Illinois
First Alabama Bancshares, Inc.,
Birmingham, Alabama
First Alabama Bancshares, Inc.,
Birmingham, Alabama
First Interstate BancSystem of
Montana, Inc.,
Billings, Montana
First National Bancorp,
Gainesville, Georgia




Reserve
Bank

Bank(s)
Wausau Financial
Corporation,
Wausau, Wisconsin
Americorp, Inc.,
Savannah, Georgia
F & P Bancshares, Inc.,
Somerset, Kentucky
Central Bank and Trust,
Cordele, Georgia
Midwest Bancorporation,
Inc.,
Hays, Kansas
Commercial Trust
Company of Fayette,
Fayette, Missouri
Farmers & Traders Bank,
Shabbona, Illinois
Peoples Bank,
Vanleer, Tennessee
Republic Bancshares,
Inc.,
Nashville, Tennessee
Commerce BancShares of
Wyoming, Inc.,
Sheridan, Wyoming
Villa Rica Bancorp, Inc.,
Villa Rica, Georgia

Effective
Date

Chicago

May 19, 1993

Atlanta

May 14, 1993

Cleveland

May 14,1993

Atlanta

May 7, 1993

Kansas City

April 30, 1993

Kansas City

May 13, 1993

Chicago

May 19, 1993

Atlanta

May 14, 1993

Atlanta

May 14, 1993

Minneapolis

May 3, 1993

Atlanta

April 30, 1993

746

Federal Reserve Bulletin • July 1993

Section 3—Continued
Applicant(s)
F & M Bancorporation,
Birmingham, Alabama
Fourth Financial Corporation,
Wichita, Kansas
Fourth Financial Corporation,
Wichita, Kansas
GFH Corp.,
Elmhurst, Illinois
HNB Holding Company, Inc.,
Headland, Alabama
International Bancorporation,
Bemidji, Minnesota
Lenawee Bancorp., Inc.,
Adrian, Michigan
The Merchants Holding
Company,
Winona, Minnesota
Minowa Bancshares, Inc.,
Decorah, Iowa
Nashville Holding Company,
Nashville, Georgia
NJIC, Inc.,
Naperville, Illinois

The Stuart Kansas City Limited
Partnership,
Lincoln, Nebraska
T R Financial Corp.,
Garden City, New York
Valley Financial Corp.,
Caro, Michigan

Reserve
Bank

Bank(s)
The Farmers and
Merchants Bank,
Centre, Alabama
Bancshares of Woodward,
Inc.,
Woodward, Oklahoma
F&M Bank Services,
Inc.,
Derby, Kansas
Community Bank of
Elmhurst,
Elmhurst, Illinois
Headland National Bank,
Headland, Alabama
First National Agency of
Baudette, Inc.,
Baudette, Minnesota
Bank of Lenawee,
Adrian, Michigan
Houston Investments,
Incorporated,
Minneapolis, Minnesota
Minnesota Bank, National
Association,
Caledonia, Minnesota
Citizens Bank and Trust,
Evans, Georgia
Westbank/Naperville,
Naperville, Illinois
Westbank/Will County,
Joliet, Illinois
Standard Bancorporation,
Inc.,
Independence, Missouri
Roosevelt Savings Bank,
Garden City, New York
Community Bank,
Caro, Michigan

Effective
Date

Atlanta

April 28, 1993

Kansas City

April 26, 1993

Kansas City

April 27, 1993

Chicago

May 14, 1993

Atlanta

May 4, 1993

Minneapolis

May 10, 1993

Chicago

May 7, 1993

Minneapolis

May 10, 1993

Chicago

April 26, 1993

Atlanta

April 29, 1993

Chicago

April 27, 1993

Kansas City

May 11, 1993

New York

April 26, 1993

Chicago

April 21, 1993

Section 4
.

..

.

pp

Bankers Trust New York
Corporation,
New York, New York




Nonbanking
Activity/Company
Government Pricing
Information System,
Inc.,
New York, New York

Reserve
Bank
New York

Effective
Date
May 4, 1993

Legal Developments

Section 4—Continued
Applicant(s)
Caisse Nationale de Credit
Agricole,
Paris, France
Chemical Banking Corporation,
New York, New York

Citizens Bancorp Investment,
Inc.,
Lafayette, Tennessee
Citicorp,
New York, New York

First Chicago Corporation,
Chicago, Illinois

Gaylord Bancorporation, Ltd.,
Gaylord, Minnesota
The Industrial Bank of Japan,
Ltd.,
Tokyo,Japan
J.P. Morgan & Co. Incorporated,
New York, New York

Norwest Corporation,
Minneapolis, Minnesota

The Royal Bank of Scotland
Group, pic,
Edinburgh, Scotland
The Royal Bank of Scotland,
pic,
Edinburgh, Scotland




Nonbanking
Activity/Company
LCA Holding
Corporation,
New York, New York
Government Pricing
Information System,
Inc.,
New York, New York
Town and Country
Finance Company,
Lafayette, Tennessee
Government Pricing
Information System,
Inc.,
New York, New York
Government Pricing
Information System,
Inc.,
New York, New York
Sterling Capital Advisors,
Inc.,
Gaylord, Minnesota
IBJ Capital Management
USA Ltd.,
New York, New York
Government Pricing
Information System,
Inc.,
New York, New York
Personal Investments
Unit of Citicorp Agency
Services, Inc.,
Phoenix, Arizona
Citicorp Agency
Services, Inc.,
Phoenix, Arizona
Blue Spirit Insurance,
Inc.,
Phoenix, Arizona
Standard Chartered
Equitor Asset
Management NA, Inc.,
Boston, Massachusetts
Union Investors Asset
Management Company,
Inc.,
Boston, Massachusetts

Reserve
Bank

Effective
Date

Chicago

April 22, 1993

New York

May 4, 1993

Atlanta

May 12, 1993

New York

May 4, 1993

Chicago

May 4, 1993

Minneapolis

May 3, 1993

New York

May 3, 1993

New York

May 4, 1993

Minneapolis

May 14, 1993

Boston

April 27, 1993

102

748

Federal R e s e r v e Bulletin • July 1993

Sections 3 and 4
Nonbanking
Activity/Company

Applicant(s)
CNB Bancshares, Inc.,
Evansville, Indiana

Guaranty Financial, M.H.C.,
Milwaukee, Wisconsin

KeyCorp,
Albany, New York

First Corporation,
Henderson, Kentucky
Peoples Security
Finance Company,
Inc.,
Madisonville, Kentucky
Guaranty Bank, S.S.B.,
Milwaukee, Wisconsin
Guaranty Bank, S.S.B.,
Milwaukee, Wisconsin
Key Bank of Colorado,
Fort Collins, Colorado
Home Federal Savings
Bank,
Fort Collins, Colorado

Reserve
Bank

Effective
Date

St. Louis

April 27, 1993

Chicago

April 26, 1993

New York

May 19, 1993

APPLICATIONS APPROVED UNDER BANK MERGER ACT

By Federal Reserve

Banks

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

Applicant(s)
Banco Popular de Puerto Rico,
Hato Rey, Puerto Rico

California Center Bank,
Los Angeles, California
Union Colony Bank,
Greeley, Colorado




Bank(s)
Bank Leumi Trust
Company of New York,
New York, New York
North Side Savings
Bank,
Bronx, New York
Wilshire Center Bank,
N.A.,
Los Angeles, California
Union Colony Bank of
Loveland, N.A.,
Loveland, Colorado

Reserve
Bank

Effective
Date

New York

April 30, 1993

San Francisco

May 7, 1993

Kansas City

April 30, 1993

Legal

Developments

749

PENDING CASES INVOLVING THE BOARD OF GOVERNORS

This list of pending cases does not include suits
against the Federal Reserve Banks in which the Board
of Governors is not named a party.
Ezell v. Federal Reserve Board, No. 93-0361
(D. D.C., filed February 19, 1993). Action seeking
damages for personal injuries arising from motor
vehicle collision.
Amann v. Prudential Home Mortgage Co., et al., No.
93-10320 WD (D. Massachusetts, filed February 12,
1993). Action for fraud and breach of contract
arising out of a home mortgage. On April 17, 1993,
the Board filed a motion to dismiss.
Adams v. Greenspan, No. 93-0167 (D. D.C., filed
January 27,1993). Action by former employee under
the Civil Rights Act of 1964 and the Rehabilitation
Act of 1973 concerning termination of employment.
Sisti v. Board of Governors, No. 93-0033 (D. D.C.,
filed January 6, 1993). Challenge to Board staff
interpretation with respect to margin accounts. The
Board's motion to dismiss was granted on May 13,
1993.
U.S. Check v. Board of Governors, No. 92-2892
(D. D.C., filed December 30, 1992). Challenge to
partial denial of request for information under the
Freedom of Information Act.
CBC, Inc. v. Board of Governors, No. 92-9572 (10th
Cir., filed December 2, 1992). Petition for review of
civil money penalty assessment against a bank holding company and three of its officers and directors
for failure to comply with reporting requirements.
The Board's brief was filed on March 19, 1993.
DLG Financial Corporation v. Board of Governors,
No. 392 Civ. 2086-G (N.D. Texas, filed October 9,
1992). Action to enjoin the Board and the Federal
Reserve Bank of Dallas from taking certain enforcement actions, and seeking money damages on
a variety of tort and contract theories. On October
9, 1992, the court denied plaintiffs' motion for a
temporary restraining order. On March 30, 1993,
the court granted the Board's motion to dismiss as
to it, and also dismissed certain claims against the
Reserve Bank. On April 29, the plaintiffs filed an
amended complaint. The Board's motion to dismiss the amended complaint was filed on May 17.
Zemel v. Board of Governors, No. 92-1056 (D. D.C.,
filed May 4, 1992). Age Discrimination in Employment Act case. The parties' cross-motions for summary judgment are pending.
State of Idaho, Department of Finance v. Board of




Governors, No. 92-70107 (9th Cir., filed February 24,
1992). Petition for review of Board order returning
without action a bank holding company application to
relocate its subsidiary bank from Washington to
Idaho. The Board's brief was filed on June 29, 1992.
Oral argument was held October 6, 1992.
In re Subpoena Served on the Board of Governors,
Nos. 91-5427, 91-5428 (D.C. Cir., filed December 27, 1991). Appeal of order of district court,
dated December 3, 1991, requiring the Board and
the Office of the Comptroller of the Currency to
produce confidential examination material to a
private litigant. On June 26, 1992, the court of
appeals affirmed the district court order in part, but
held that the bank examination privilege was not
waived by the agencies' provision of examination
materials to the examined institution, and remanded for further consideration of the privilege
issue. On August 6, 1992, the district court ordered
the matter held in abeyance pending settlement of
the underlying action.
Board of Governors v. Kemal Shoaib, No. CV 91-5152
(C.D. California, filed September 24, 1991). Action
to freeze assets of individual pending administrative
adjudication of civil money penalty assessment by
the Board. On October 15, 1991, the court issued a
preliminary injunction restraining the transfer or
disposition of the individual's assets.
Board of Governors v. Ghaith R. Pharaon, No.
91-CIV-6250 (S.D. New York, filed September 17,
1991). Action to freeze assets of individual pending
administrative adjudication of civil money penalty
assessment by the Board. On September 17, 1991,
the court issued an order temporarily restraining
the transfer or disposition of the individual's assets.

FINAL ENFORCEMENT ORDERS ISSUED BY THE
BOARD OF GOVERNORS

Country Hill Bank
Lenexa, Kansas

The Federal Reserve Board announced on May 19,
1993, the issuance of a Cease and Desist Order issued
jointly by the Board of Governors and the Office of the
State Bank Commissioner of the State of Kansas
against Country Hill Bank, Lenexa, Kansas.

750

Federal R e s e r v e Bulletin • July 1993

Purdy Bancshares, Inc.
Monett, Missouri

affiliated parties of First Pacific Bancorp, Inc., Beverly
Hills, California.

The Federal Reserve Board announced on May 7,
1993, the issuance of a Cease and Desist Order against
Purdy Bancshares, Inc., Monett, Missouri, and Glen
Garrett, an institution-affiliated party of Purdy Bancshares, Inc.

Kenneth G. Walker and Charles W . Hagan, Jr.
L o n g B e a c h , California

Frank P. LeMaster
West Chester, Pennsylvania
The Federal Reserve Board announced on May 7,
1993, the issuance of an Order of Assessment of a Civil
Money Penalty against Frank P. LeMaster, an institution-affiliated party of the Freedom Valley Bank, West
Chester, Pennsylvania.
L e o n a r d S. a n d A d a P . S a n d s
B e v e r l y Hills, C a l i f o r n i a
The Federal Reserve Board announced on May 27,
1993, the issuance of an Order of Asessment of a Civil
Money Penalty against Leonard S. Sands and a Cease
and Desist Order against Ada P. Sands, institution-




The Federal Reserve Board announced on May 3,
1993, the issuance of a consent Order against Kenneth
G. Walker and Charles W. Hagan, Jr., institutionaffiliated parties of the Farmers and Merchants Bank
of Long Beach, Long Beach, California, in which
Messrs. Walker and Hagan have agreed to pay a total
of $30,000 in fines in settlement of contested claims.

WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS
Maryland Bankcorp, Inc.
Lexington Park, Maryland
The Federal Reserve Board announced on May 26,
1993, the execution of a Written Agreement between
the Federal Reserve Bank of Richmond, the Bank
Commissioner of the State of Maryland, and Maryland
Bankcorp, Inc., Lexington Park, Maryland.

A1

Financial and Business Statistics
CONTENTS

WEEKLY REPORTING COMMERCIAL BANKS

A3 Guide to Tabular Presentation

Assets and liabilities
A22 Large reporting banks
A24 Branches and agencies of foreign banks

Domestic Financial Statistics

MONEY STOCK AND BANK CREDIT
A4
A5
A6
A7

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

FINANCIAL MARKETS
A25 Commercial paper and bankers dollar
acceptances outstanding
A25 Prime rate charged by banks on short-term
business loans
A26 Interest rates—money and capital markets
A27 Stock market—Selected statistics
A28 Selected financial institutions—Selected assets
and liabilities

POLICY INSTRUMENTS

FEDERAL FINANCE

A8 Federal Reserve Bank interest rates
A9 Reserve requirements of depository institutions
A10 Federal Reserve open market transactions

A28
A29
A30
A30

FEDERAL RESERVE BANKS
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings

Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types
and ownership
A31 U.S. government securities
dealers—Transactions
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding

MONETARY AND CREDIT AGGREGATES
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A17 Bank debits and deposit turnover
A18 Loans and securities—All commercial banks

COMMERCIAL BANKING INSTITUTIONS
A19 Major nondeposit funds
A20 Assets and liabilities, Wednesday figures




SECURITIES MARKETS AND
CORPORATE FINANCE
A34 New security issues—Tax-exempt state and local
governments and corporations
A35 Open-end investment companies—Net sales
and assets
A35 Corporate profits and their distribution
A35 Nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit

2

Federal Reserve Bulletin • July 1993

Domestic Financial Statistics—Continued
REAL ESTATE
A37 Mortgage markets
A3 8 Mortgage debt outstanding
CONSUMER INSTALLMENT CREDIT
A39 Total outstanding
A39 Terms
FLOW OF FUNDS
A40
A42
A43
A44

Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities

Domestic Nonfinancial Statistics

A54 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
REPORTED BY BANKS
IN THE UNITED STATES
A57
A58
A60
A61

Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING BUSINESS
ENTERPRISES IN THE UNITED STATES

SELECTED MEASURES
A45 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross domestic product and income
A52 Personal income and saving

International Statistics
SUMMARY STATISTICS
A53 U.S. international transactions—Summary
A54 U.S. foreign trade
A54 U.S. reserve assets




A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST AND EXCHANGE RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates

A69 Guide to Statistical Releases and
Special Tables

A3

Guide to Tabular Presentation
SYMBOLS AND ABBREVIATIONS
c
e
n.a.
n.e.c.
P
r
*

0
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7

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

G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
SMSA
VA

Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Savings Association Insurance Fund
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Standard metropolitan statistical area
Veterans Administration

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




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

A4

Domestic Financial Statistics • July 1993

1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES
Percent annual rate of change, seasonally adjusted1
1992

1993

1992

Q1

Dec.

1993

Monetary and credit aggregate
Q2

Q3

Q4

Jan.

Feb.

Mar.r

Apr.

5.3
3.0
4.3
8.9

.8
3.3
1.2
7.6

1
2
3
4

Reserves of depository institutions2
Total
Required
Nonborrowed
Monetary base

14.8
15.3
14.6
7.8

9.3
9.9
8.4
10.5

25.8
25.3
27.1
12.6

9.3
8.7
9.5
9.1

12.0
9.6
11.6
10.2

6.9
4.7
6.0
8.3

5.6
9.3
8.3
8.5

5
6
7
8
9

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

10.6
.3
-.6
1.3
5.7

11.7
.8
.1
1.1
4.9

16.8
2.7
- . 21
2.0
4.4

6.6r
-2.ff
-3.9
-1.9
4.6

8.8
-.3
-3.4
-.9
6.2

7.8r
-3.4 r
-7.4 r
-5.2
2.T

— ,2r
-4.r
- I ^r
-1.6 r
4.3

2.7
-1.0
-1.7
.2
6.6

8.9
.1
1.9
n.a.
n.a.

-3.4
-4.9

-3.2 r
-3.5

-2.8
-14.4

-5.5
-13.6 r

-4.1
-19.2

-8.1
—28.0r

—5.6rr
9.5

-2.6
-5.3

-3.7
11.3

12.6
-13.4
-13.3

10.9
-17.4
-18.6

12.9
-17.1
-18.4

1.6r
-7.6 r
-M.SF

5.7
-11.5
-10.7

-3.2
-10.2 r
-26.9

2.5r
3.1
-12.3 r

-2.9
-2.9
-20.9

3.0
-9.1
8.7

18.1
-29.8
-31.9

9.2
-18.6
-14.9

8.7
-21.7
-11.3

-,2r
-19.2
-17.3

5.6
-21.7
-21.0

.8r
-16.5
-3.6

-10.0
-24.1
-28.6

-5.1
-12.6
-18.3

2.3
-9.3
13.0

-6.6
23.9

-7.4
32.9

-4.2
-19.4

-10.1 r
-14.1

-4.9
-39.6

-9.5
-27.3

-21.2
25.5

-1.8
-5.9

-5.0
-3.0

14.4
2.8

10.7
2.9

6.0
3.8

8.7
3.2

16.3
2.7

2.9r
2.7

5.3
1.9

15.0
3.7

n.a.
n.a.

Nonlransaction components
10 In M2 . . . f
11 In M3 only6
Time and savings deposits
Commercial banks
Savings, iqcluding MMDAs
Small time
Large time8'9
Thrift institutions
15 Savings, iqcluding MMDAs
16 Small time
17 Large time

12
13
14

Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
Debt components4
20
21 Nonfederal

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




offices in the United Kingdom and Canada, and (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money
market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding creditmarket debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial
sectors are monthly averages, derived by averaging adjacent month-end levels.
Growth rates for debt reflect adjustments for discontinuities over time in the levels
of debt presented in other tables.
5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances
(general purpose and broker-dealer), (3) savings deposits (including MMDAs),
and (4) small time deposits.
6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market ftind balances (institution-only), less (5) a
consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market funds. This sum is
seasonally adjusted as a whole.
7. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRA and Keogh account balances at commercial banks and
thrift institutions are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market
funds, depository institutions, and foreign banks and official institutions.

Money Stock and Bank Credit

A5

1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures
1993

Factor

Feb.

Average of daily figures for week ending on date indicated

1993

Mar.

Apr.

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Apr. 28

SUPPLYING RESERVE F U N D S

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

334,905r

337,743r

344,233

337,930r

336,716r

339,623"

341,046

344,936

347,060

344,087

297,289
1,358

298,823
1,984

303,316
3,293

298,672
1,628

300,087
0

299,897
2,213

301,502
2,826

300,124
6,742

305,346
3,920

305,711
625

5,271
73
0

5,173
112
0

5,106
25
0

5,165
37
0

5,165
0
0

5,123
164
0

5,123
36
0

5,111
73
0

5,095
0
0

5,095
0
0

22
18
0
732r
30,142r

69
26
0
l,153 r
30,404r

29
40
0
629
31,795

137
25
0
2,218r
30,049*^

13
31
0
731r
30,689"

120
32
0
974"
31,100"

9
29
0
504
31,017

6
32
0
1,322
31,525

38
41
0
246
32,373

65
52
1
436
32,102

11,055
8,018
21,510

11,055
8,018
21,556r

11,054
8,018
21,615

11,055
8,018
21,553r

11,055
8,018
21,565r

11,054
8,018
21,578"

11,054
8,018
21,592

11,054
8,018
21,606

11,054
8,018
21,620

11,054
8,018
21,634

329,470
467

331,646r
509

335,303
514

331,890"
512

332,039"
512

332,168"
512

333,788
515

335,975
515

336,097
517

335,155
512

6,018
243

5,472
290

6,062
241

5,563
375

5,026
238

5,243
370

5,723
268

5,348
230

8,135
246

4,770
227

6,289
302

6,498r
347

6,391
317

6,304
344

6,290"
334

6,899"
362

6,443
325

6,532
311

6,213
322

6,473
316

ABSORBING RESERVE F U N D S

15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and
adjustments
20 Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks

9,006

9,091

9,148

9,093

9,064

9,069

8,967

9,161

9,172

9,195

23,692r

24,520r

26,944

24,476r

23,851"

25,649"

25,682

27,540

27,050

28,145

Apr. 14

Apr. 21

Apr. 28

Wednesday figures

End-of-month figures
Feb.

Mar.

Apr.

Mar. 17

Mar. 24

Mar. 31

Apr. 7

SUPPLYING RESERVE F U N D S

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

337,481"

343,481r

343,760

333,959"

338,071"

343,481"

342,442

348,681

347,315

342,938

298,835
2,655

298,461
6,756

305,381
0

297,015
50

299,440
0

298,461
6,756

300,383
5,299

302,476
8,526

305,525
3,920

305,477
0

5,225
275
0

5,123
567
0

5,095
0
0

5,165
0
0

5,165
0
0

5,123
567
0

5,123
50
0

5,095
57
0

5,095
0
0

5,095
0
0

40
17
0
596r
29,838"

720
32
0
337r
31,484r

20
63
2
683
32,517

894
29
0
752r
30,055r

16
28
0
2,522"
30,900"

720
32
0
337"
31,484"

6
30
0
285
31,266

7
37
0
781
31,702

9
43
0
204
32,519

29
59
2
93
32,183

11,055
8,018
21,528

11,054
8,018
21,578r

11,054
8,018
21,648

11,055
8,018
21,553r

11,055
8,018
21,565"

11,054
8,018
21,578"

11,054
8,018
21,592

11,054
8,018
21,606

11,054
8,018
21,620

11,054
8,018
21,634

329,621
463

332,822r
515

335,926
505

332,118r
512

332,027"
512

332,822"
515

334,983
515

336,544
517

335,623
513

335,572
505

5,350
296

6,752
318

7,273
221

6,930
707

5,216
288

6,752
318

6,128
166

4,793
589

13,052
198

5,291
229

6,413
302

6,899r
314

6,049
291

6,304
352

6,290"
327

6,899"
314

6,443
303

6,532
352

6,213
311

6,473
324

ABSORBING RESERVE F U N D S

15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and
adjustments
20 Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3

9,180

8,844

9,847

8,922

8,953

8,844

8,897

9,099

9,052

9,032

26,456r

27,668"

24,368

18,738r

25,096"

27,668"

25,670

30,932

23,045

26,219

1. For amounts of cash held as reserves, see table 1.12.
2. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions.




3. Excludes required clearing balances and adjustments to compensate for
float.

A6

Domestic Financial Statistics • July 1993

1.12 RESERVES A N D BORROWINGS

Depository Institutions1

Millions of dollars
Prorated monthly averages of biweekly averages
1990

1
2
3
4
5
6
7
8
9
10

2

Reserve balances with Reserve Banks
Total vault cash3
Applied vault cash
Surplus vault cash
Total reserves6
Required reserves
Excess reserve balances at Reseiye Banks . . .
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9

1991

1992

Dec.

Reserve classification

1992

1993

Dec.

Dec.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.r

Apr.

30,237
31,789
28,884
2,905
59,120
57,456
1,664
326
76
23

26,659
32,510
28,872
3,638
55,532
54,553
979
192
38
1

25,368
34,535
31,172
3,364
56,540
55,385
1,155
124
18
1

23,626
32,987
29,510
3,477
53,136
52,062
1,074
143
114
0

25,462
32,457
29,205
3,252
54,666
53,624
1,043
104
40
0

25,368
34,535
31,172
3,364
56,540
55,385
1,155
124
18
1

23,636
35,991
32,368
3,623
56,004
54,744
1,260
165
11
1

23,515
33,914
30,368
3,546
53,882
52,778
1,104
45
18
0

24,383
33,293
29,912
3,381
54,296
53,083
1,213
91
26
0

26,978
32,721
29,567
3,154
56,545
55,445
1,101
73
41
0

Biweekly averages of daily figures for weeks ending
1993
Jan. 6
1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks2
Total vault cash 3 ...
Applied vault cash 5
Surplus vault cash
Total reserves6
Required reserves
i ...
Excess reserve balances at Reseiye Banks7 . . .
Total borrowings at Reserve Banks
Seasonal borrowings
Extended credit9

Jan. 20

Feb. 3

Feb. 17

Mar. 3

Mar. 17

Mar. 31r

Apr. 14

Apr. 28

May 12

26,569
34,374
31,105
3,269
57,674
56,289
1,385
269
12
0

24,057
36,388
32,829
3,559
56,886
55,657
1,229
202
11
1

21,500
36,368
32,470
3,898
53,970
52,740
1,230
64
11
3

23,301
34,764
31,069
3,695
54,370
52,875
1,495
33
18
0

24,335
32,163
28,902
3,261
53,237
52,666
571
56
20
0

24,029
34,487
30,944
3,543
54,973
53,683
1,290
93
22
0

24,747
32,343
29,098
3,245
53,845
52,572
1,273
98
32
0

26,612
33,218
29,995
3,223
56,607
55,763
844
38
31
0

27,584
32,010
28,961
3,049
56,545
55,161
1,384
99
47
1

25,296
34,225
30,817
3,408
56,113
55,201
912
142
71
1

1. Data in this table also appear in the Board's H.3 (502) weekly statistical
release. For ordering address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for float
and includes other off-balance-sheet "as-of" adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash
can be used to satisfy reserve requirements. The maintenance period for weekly
reporters ends sixteen days after the lagged computation period during which the
vault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days
after the lagged computation period.
4. All vault cash held during the lagged computation period by "bound"
institutions (that is, those whose required reserves exceed their vault cash) plus
the amount of vault cash applied during the maintenance period by "nonbound"




institutions (that is, those whose vault cash exceeds their required reserves) to
satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions
deal with sustained liquidity pressures. Because there is not the same need to
repay such borrowing promptly as there is with traditional short-term adjustment
credit, the money market impact of extended credit is similar to that of
nonborrowed reserves.

Money Stock and Bank Credit
1.13

SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS

A7

Large Banks 1

Millions of dollars, averages of daily figures
1993, week ending Monday
Source and maturity
Mar. 1

1
2
3
4

5
6
7
8

Mar. 8

Mar. 15

Mar. 22

Mar. 29

Apr. 5

Apr. 12

Apr. 19

Apr. 26

Federal funds purchased, repurchase agreements, and
other selected borrowings
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
official institutions, and U.S. government agencies
For one day or under continuing contract
For all other maturities

73,756
13,878

76,546
13,082

74,820
12,724

68,674
12,628

67,004
12,622

73,835
11,799

76,974
14,364

72,059
12,260

66,142
12,981

20,773
22,559

20,274
22,854

19,845
22,566

18,756
20,987

19,490
21,078

19,121
18,665

17,641
18,429

18,236
19,311

19,437
19,603

Repurchase agreements on U.S. government and federal
agency securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities

10,996
23,039

11,907
23,866

13,512
24,484

13,502
25,667

14,045
26,253

14,302
26,122

13,274
27,696

14,332
27,039

13,356
26,549

24,422
13,269

23,907
13,805

24,127
14,063

23,280
14,529

23,705
14,955

23,168
14,470

22,301
15,269

23,085
13,573

23,077
14,061

41,563
19,567

40,318
22,238

39,016
22,375

38,031
21,153

36,793
19,795

43,155
21,654

38,319
21,849

37,897
23,093

37,289
21,827

MEMO

Federal funds loans and resale agreements in
immediately available funds in maturities of one day or
under continuing contract
9 To commercial banks in the United States
10 To all other specified customers

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




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

A8

Domestic Financial Statistics • July 1993

1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank

Seasonal credit2

Extended credit3

Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .

Effective date

Previous rate

On
6/1/93

Effective date

Previous rate

On
6/1/93

Effective date

Previous rate

3

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta

On
6/1/93

7/2/92
7/2/92
7/2/92
7/6/92
7/2/92
7/2/92

3.5

3.10

5/27/93
5/27/93
5/27/93
5/27/93
5/27/93
5/27/93

3.00

3.60

5/27/93
5/27/93
5/27/93
5/27/93
5/27/93
5/27/93

3.50

7/2/92
7/7/92
7/2/92
7/2/92
7/2/92
7/2/92

3

3.5

3.10

5/27/93
5/27/93
5/27/93
5/27/93
5/27/93
5/27/93

3.00

Range of rates for adjustment credit in recent years

Effective date

In effect Dec. 31, 1977
1978—Jan.

Range (or
level)—
All F.R.
Banks
6

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

6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5

1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10

10
10-10.5
10.5
10.5-11
11
11-12
12

1980—Feb. 15
19
May 29
30
June 13
16
29
July 28
Sept. 26
Nov. 17
Dec. 5

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

May
July
Aug.
Sept.
Oct.
Nov.

F.R.
Bank
of
N.Y.
6
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10.5
10.5
11
11
12
12
13
13
13
12
11
11
10
10
11
12
13

Effective

Effective date

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

1986—Aug. 21
22

5.5-6
5.5

5.5
5.5

1987—Sept. 4
11

5.5-6
6

6
6

11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5

11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5

1988—Aug. 9
11

6-6.5

6.5

1989—Feb. 24
27

6.5-7
7

7
7

Nov. 71
76
Dec. 74

8.5-9
9
8.5-9
8.5
8

9
9
8.5
8.5
8

1985-—May 70
74

7.5-8
7.5

7.5
7.5

1986--Mar. 7
10
Apr. ?1
July 11

7-7.5
7
6.5-7
6

7
7
6.5
6

5

Nov. 7
6
Dec. 4
1982--July 70
?3
Aug. 7
H
16
71
30
Oct. 17

n

Nov. 77
76
Dec. 14

15
17

1984-—Apr.

9

n

13-14
14
13-14
13
12

F.R.
Bank
of
N.Y.

3.50

4

14
14
13
13
12

1981-—May

1. Available on a short-term basis to help depository institutions meet temporary needs for funds that cannot be met through reasonable alternative sources.
The highest rate established for loans to depository institutions may be charged on
adjustment-credit loans of unusual size that result from a major operating problem
at the borrower's facility.
2. Available to help relatively small depository institutions meet regular
seasonal needs for funds that arise from a clear pattern of intrayearly movements
in their deposits and loans and that cannot be met through special industry
lenders. The discount rate on seasonal credit takes into account rates on market
sources of funds and ordinarily is reestablished on the first business day of each
two-week reserve maintenance period; however, it is never less than the discount
rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is
not reasonably available from other sources, including special industry lenders.
Such credit may be provided when exceptional circumstances (including sustained deposit drains, impaired access to money market funds, or sudden
deterioration in loan repayment performance) or practices involve only a particular institution, or to meet the needs of institutions experiencing difficulties
adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). The discount rate applicable to adjustment credit




Range (or
level)—
All F.R.
Banks

3.60

5/27/93
5/27/93
5/27/93
5/27/93
5/27/93
5/27/93

1990—Dec. 19
1991—Feb.
Apr.
May
Sept.
Sept.
Nov.
Dec.
1992—July

6.5

6.5

1
4
30
2
13
17
6
7
20
24

6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-4.5
3.5

6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5

2
7

3-3.5
3

3
3

3

3

In effect June 1, 1993

ordinarily is charged on extended-credit loans outstanding less than thirty days;
however, at the discretion of the Federal Reserve Bank, this time period may be
shortened. Beyond this initial period, a flexible rate somewhat above rates on
market sources of funds is charged. The rate ordinarily is reestablished on the first
business day of each two-week reserve maintenance period, but it is never less
than the discount rate applicable to adjustment credit plus SO basis points.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual
Statistical Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment-credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge
was subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5,
1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2
percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period.
The surcharge was eliminated on Nov. 17, 1981.

Policy Instruments

A9

1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1

Type of deposit2

Net transaction accounts3
1 $0 million-$46.8 million...
2 More than $46.8 million4..

12/15/92
12/15/92

3 Nonpersonal time deposits1

12/27/90

4 Eurocurrency liabilities6. .

12/27/90

1. Required reserves must be held in the form of deposits with Federal Reserve
Banks or vault cash. Nonmember institutions may maintain reserve balances with
a Federal Reserve Bank indirectly on a pass-through basis with certain approved
institutions. For previous reserve requirements, see earlier editions of the Annual
Report or the Federal Reserve Bulletin. Under provisions of the Monetary
Control Act, depository institutions include commercial banks, mutual savings
banks, savings and loan associations, credit unions, agencies and branches of
foreign banks, and Edge corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6
million to $3.8 million. The exemption applies in the following order: (1) net
negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable
deductions); and (2) net other transaction accounts. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement.
3. Include all deposits against which the account holder is permitted to make
withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of three per month
for the purpose of making payments to third persons or others. However, money
market deposit accounts (MMDAs) and similar accounts subject to the rules that




permit no more than six preauthorized, automatic, or other transfers per month,
of which no more than three may be checks, are not transaction accounts (such
accounts are savings deposits).
The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage change in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 15,
1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions
reporting weekly, the amount was increased from $42.2 million to $46.8 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on Apr.
2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions
that report quarterly.
5. For institutions that report weekly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1V2 years was reduced from 3
percent to IVi percent for the maintenance period that began Dec. 13, 1990, and
to zero for the maintenance period that began Dec. 27, 1990. The reserve
requirement on nonpersonal time deposits with an original maturity of lVi years
or more has been zero since Oct. 6, 1983.
For institutions that report quarterly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to zero on Jan. 17, 1991.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3
percent to zero in the same manner and on the same dates as were the reserve
requirement on nonpersonal time deposits with an original maturity of less than
1 Vi years (see note 4).

A10
1.17

Domestic Financial Statistics • July 1993
FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1993

1992
Type of transaction

1990

1992

1991

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

U . S . TREASURY SECURITIES

Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases

24,739
7,291
241,086
4,400

20,158
120
277,314
1,000

14,714
1,628
308,699
1,600

595
0
22,277
0

4,072
0
28,907
0

1,064
0
25,468
0

3,669
0
29,562
0

0
0
24,542
0

0
0
19,832
0

0
0
23,7%
0

425
0
25,638
-27,424
0

3,043
0
24,454
-28,090
1,000

1,096
0
36,662
-30,543
0

350
0
2,753
-1,905
0

0
0
2,010
-982
0

461
0
7,160
-4,615
0

0
0
2,777
-1,570
0

0
0
561
-1,202
0

0
0
2,892
-6,044
0

279
0
4,303
-2,602
0

250
200
-21,770
25,410

6,583
0
-21,211
24,594

13,118
0
-34,478
25,811

3,500
0
-2,753
1,905

200
0
-1,762
884

4,172
0
-6,800
3,415

200
0
-2,777
1,570

0
0
-64
882

0
0
-2,617
4,564

1,441
0
-4,303
2,602

14
15
16
17

Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges

0
100
-2,186
789

1,280
0
-2,037
2,894

2,818
0
-1,915
3,532

750
0
0
0

0
0
-248
97

1,176
0
-187
800

100
0
0
0

0
0
-497
0

0
0
-98
1,000

716
0
0
0

18
19
70
21

More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges

0
0
-1,681
1,226

375
0
-1,209
600

2,333
0
-269
1,200

731
0
0
0

0
0
0
0

947
0
-173
400

0
0
0
0

0
0
0
0

0
0
-177
480

705
0
0
0

??
n
24

All maturities
Gross purchases
Gross sales
Redemptions

25,414
7,591
4,400

31,439
120
1,000

34,079
1,628
1,600

5,927
0
0

4,272
0
0

7,820
0
0

3,969
0
0

0
0
0

0
0
0

3,141
0
0

1,369,052 1,570,456 1,482,467
1,363,434 1,571,534 1,480,140

116,331
115,579

116,024
114,917

115,020
117,020

144,232
142,578

114,543
116,510

111,491
113,349

146,563
143,049

1
?
3
4
a
6
7
8
9
10
11
1?
13

Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Exchanges
Redemptions
One to five years
Gross purchases
Exchanges

Matched transactions
?5
26 Gross purchases
Repurchase agreements1
77
28 Gross sales

219,632
202,551

310,084
311,752

378,374
386,257

68,697
59,628

18,698
35,383

42,373
39,117

48,904
44,697

34,768
42,231

28,544
25,889

37,815
33,714

24,886

29,729

20,642

14,244

-13,520

13,075

6,521

-5,497

4,513

3,728

0
0
183

0
5
292

0
0
632

0
0
37

0
0
0

0
0
0

0
0
121

0
0
103

0
0
85

0
0
101

41,836
40,461

22,807
23,595

14,565
14,486

3,222
1,800

1,778
3,253

2,760
2,506

1,601
1,224

2,237
2,868

1,107
832

1,811
1,519

35 Net change in federal agency obligations

1,192

-1,085

-554

1,385

-1,475

254

256

-734

190

191

36 Total net change in System Open Market
Account

26,078

28,644

20,089

15,629

-14,995

13,329

6,777

-6,231

4,703

3,918

29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS

Outright transactions
30 Gross purchases
31
32 Redemptions
Repurchase agreements2
V>
34 Gross sales

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




2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements.

Federal Reserve Banks
1.18

FEDERAL RESERVE BANKS

All

Condition and Federal Reserve Note Statements 1

Millions of dollars
Wednesday
1993

Account
Mar. 31

Apr. 7

End of month
1993

Apr. 14

Apr. 21

Apr. 28

Feb. 28

Mar. 31

Apr. 30

Consolidated condition statement
ASSETS

11,054
8,018
503

11,054
8,018
501

11,054
8,018
502

11,054
8,018
497

11,054
8,018
485

11,055
8,018
525

11,054
8,018
503

11,054
8,018
487

753
0
0

36
0
0

45
0
0

52
0
0

89
0
0

57
0
0

753
0
0

84
0
0

5,123
567

5,123
50

5,095
57

5,095
0

5,095
0

5,225
275

5,123
567

5,095
0

305,217

305,682

311,002

309,445

305,477

301,490

305,217

305,381

10 Bought outright
11 Bills
1? Notes
Bonds
N
14 Held under repurchase agreements

298,461
142,104
120,211
36,146
6,756

300,383
144,026
120,211
36,146
5,299

302,476
146,119
120,211
36,146
8,526

305,525
144,178
123,936
37,411
3,920

305,477
144,130
123,936
37,411
0

298,835
145,618
117,955
35,261
2,655

298,461
142,104
120,211
36,146
6,756

305,381
144,034
123,936
37,411
0

15 Total loans and securities

311,660

310,891

316,199

314,592

310,661

307,046

311,660

310,560

5,338
1,031

5,841
1,031

6,174
1,033

5,646
1,035

5,298
1,035

4,937
1,026

5,338
1,031

5,359
1,034

22,328
8,092

22,352
7,910

22,372
8,478

22,391
9,064

22,411
8,718

22,263
6,577

22,328
8,092

23,043
8,550

368,024

367,599

373,828

372,298

367,681

361,446

368,024

368,106

315,270

1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4 To depository institutions
5
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
9 Total U.S. Treasury securities
2

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

312,263

314,408

315,957

315,014

314,928

309,080

312,263

22 Total deposits

41,917

38,879

43,465

43,013

38,760

39,034

41,917

38,365

73 Depository institutions
24 U.S. Treasury—General account
25 Foreign—Official accounts
26

34,533
6,752
318
314

32,281
6,128
166
303

37,731
4,793
589
352

29,442
13,052
198
311

32,919
5,291
229
324

33,085
5,350
296
302

34,533
6,752
318
314

30,579
7,273
221
291

5,001
2,251

5,415
2,215

5,306
2,302

5,219
2,214

4,961
2,189

4,152
2,323

5,001
2,251

4,624
2,220

361,430

360,916

367,031

365,460

360,838

354,589

361,430

360,479

3,187
3,054
353

3,204
3,054
425

3,251
3,054
493

3,257
3,054
527

3,259
3,054
529

3,116
3,054
687

3,187
3,054
353

3,260
3,054
1,313

368,024

367,599

373,828

372,298

367,681

361,446

368,024

368,106

304,825

312,114

311,432

312,480

304,784

306,378

304,825

310,903

21 Federal Reserve notes

^
27 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL ACCOUNTS

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

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

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

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

42 Total collateral

—

373,886
61,624
312,263

375,482
61,074
314,408

376,725
60,768
315,957

377,987
62,973
315,014

378,128
63,200
314,928

370,756
61,676
309,080

373,886
61,624
312,263

378,585
63,315
315,270

11,054
8,018
0
293,190

11,054
8,018
0
295,336

11,054
8,018
0
296,885

11,054
8,018
0
295,941

11,054
8,018
0
295,856

11,055
8,018
0
290,007

11,054
8,018
0
293,190

11,054
8,018
0
296,198

312,263

314,408

315,957

315,014

314,928

309,080

312,263

315,270

1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly
statistical release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.




3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign exchange commitments.

A12

Domestic Financial Statistics • July 1993

1.19 FEDERAL RESERVE BANKS

Maturity Distribution of Loan and Security Holding 1

Millions of dollars
Wednesday
1993

Type and maturity grouping
Mar. 31

Apr. 7

End of month
1993

Apr. 14

Apr. 21

Apr. 28

Feb. 28

753

1 Total loans
2
3
4

Mar. 31

Within fifteen days
Sixteen days to ninety days .
Ninety-one days to one year

741
12

741
12

0

0

5 Total acceptances
6
7
8

0
0
0

Within fifteen days
Sixteen days to ninety days .
Ninety-one days to one year

9 Total U.S. Treasury securities..

305,217

305,682

311,002

309,445

305,477

301,490

305,217

Within fifteen days 2
Sixteen days to ninety days .
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years

17,889
67,037
99,880
71,255
20,344
28,813

19,853
71,635
93,783
71,255
20,344
28,813

21,048
72,810
96,733
71,255
20,344
28,813

19,287
68,058
97,082
73,624
21,471
29,922

15,052
68,275
97,132
73,624
21,471
29,922

13,331
72,699
97,433
70,291
19,628
28,108

17,889
67,037
99,880
71,255
20,344
28,813

16 Total federal agency obligations

5,690

5,173

5,152

5,095

5,095

5,500

5,690

108
722
1,072
2,419
711
142

85
709
1,172
2,334
711
142

143
594
1,175
2,330
711
142

115
643
1,177
2,307
711
142

723
513
1,022
2,389
711
142

855
507
1,057
2,419
711
142

10
11
12
13
14
15

17
18
19
20
21
22

2

Within fifteen days
Sixteen days to ninety days.
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years

855
507
1,057
2,419
711
142

1. Holdings under repurchase agreements are classified as maturing within
fifteen days in accordance with maximum maturity of the agreements.




Monetary and Credit Aggregates

A13

1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1992
Item

1989
Dec.

1990
Dec.

1991
Dec.

Sept.

Total reserves3
Nonborrowed reserves4
^
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Seasonally adjusted

ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2

1
2
3
4
5

1993

1992
Dec.

40.49
40.23
40.25
39.57
267.73

41.77
41.44
41.46
40.10
293.19

45.53
45.34
45.34
44.56
317.17

54.35
54.23
54.23
53.20
350.80

51.27
50.99
50.99
50.28
341.59

52.84
52.69
52.69
51.76
344.85

53.82
53.71
53.71
52.77
347.83

54.35
54.23
54.23
53.20
350.80

54.67 54.92
55.17r
54.50 54.88
55.07
54.50 54.88 55.07r
53.41 53.82 r 53.95r
353.22 355.73 358.37

55.20
55.13
55.13
54.10
360.65

Not seasonally adjusted
6
7
8
9
10

Total reserves
Nonborrowed reserves
.
Nonborrowed reserves plus extended credit ..
Required reserves8
Monetary base9

41.77
41.51
41.53
40.85
271.18

43.07
42.74
42.77
41.40
296.68

46.98
46.78
46.78
46.00
321.07

56.06
55.93
55.93
54.90
354.55

51.07
50.78
50.78
50.08
340.08

52.62
52.47
52.47
51.54
343.63

54.08
53.97
53.97
53.04
347.89

56.06
55.93
55.93
54.90
354.55

55.97
55.80
55.80
54.71
354.41

53.81 54.18
53.77 54.09
53.77 54.09 r
52.71 52.96
353.18 356.00

56.37
56.30
56.30
55.27
361.65

62.81
62.54
62.56
61.89
292.55
.92
.27

59.12
58.80
58.82
57.46
313.70
1.66
.33

55.53
55.34
55.34
54.55
333.61
.98
.19

56.54
56.42
56.42
55.39
360.90
1.16
.12

51.52
51.23
51.23
50.53
346.21
.99
.29

53.14
52.99
52.99
52.06
349.81
1.07
.14

54.67
54.56
54.56
53.62
354.25
1.04
.10

56.54
56.42
56.42
55.39
360.90
1.16
.12

56.00
55.84
55.84
54.74
360.88
1.26
.17

53.88 54.30
53.84 54.20r
53.84 54.20r
52.78 53.08
359.56 362.59
1.10
1.21
.05
.09

56.55
56.47
56.47
55.45
368.19
1.10
.07

N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS

11
12
13
14
15
16
17

Total reserves11
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5 ..
Required reserves
Monetary base
Excess reserves
Borrowings from the Federal Reserve

1. Latest monthly and biweekly figures are available from the Board's H.3 (502)
weekly statistical release. Historical data and estimates of the impact on required
reserves of changes in reserve requirements are available from the Monetary and
Reserves Projections Section, Division of Monetary Affairs, Board of Governors
of the Federal Reserve System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.10)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally
adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally
adjusted, break-adjusted total reserves (line 1) less total borrowings of depository
institutions from the Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under
the terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9)
plus excess reserves Oine 16).
8. To adjust required reserves for discontinuities that are due to regulatory
changes in reserve requirements, a multiplicative procedure is used to estimate




what required reserves would have been in past periods had current reserve
requirements been in effect. Break-adjusted required reserves include required
reserves against transactions deposits and nonpersonal time and savings deposits
(but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves
(line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3)
(for all quarterly reporters on the "Report of Transaction Accounts, Other
Deposits and Vault Cash" and for all weekly reporters whose vault cash exceeds
their required reserves) the break-adjusted difference between current vault cash
and the amount applied to satisfy current reserve requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated
with changes in reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to
satisfy reserve requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted,
consists of (l) total reserves (line 11), plus (2) required clearing balances and
adjustments to compensate for float at Federal Reserve Banks, plus (3) the
currency component of the money stock, plus (4) (for all quarterly reporters on
the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current
reserve requirements. Since the introduction of changes in reserve requirements
(CRR), currency and vault cash figures have been measured over the computation
periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).

A14
1.21

Domestic Financial Statistics • July 1993
MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
1993
Item

1989
Dec.

1990
Dec.

1991
Dec.

1992
Dec.

Jan. r

Feb/

Mar.r

Apr.

Seasonally adjusted
Measures2
1 Ml
?, M2
3 M3
4 L
5 Debt

794.6
3,233.3
4,056.1
4,886.1
10,076.7

827.2
3,345.5
4,116.7
4,965.2
10,751.3

899.3
3,445.8
4,168.1
4,982.2
11,192.7

1,026.6
3,497.0
4,166.5 r
5,052. l
11,768.2

1,033.3
3,487.0
4,140.9
5,030.4
11,795.1

1,033.1
3,475.2
4,134.4
5,023.8
11,837.1

1,035.4
3,472.2
4,128.5
5,024.6
11,902.6

1,043.1
3,472.5
4,135.0
n.a.
n.a.

222.7
6.9
279.8
285.3

246.7
7.8
278.2
294.5

267.2
7.8
290.5
333.8

292.3
8.1
340.9
385.2

294.7
8.0
341.9
388.6

296.8
8.0
341.9
386.4

299.0
8.0
342.0
386.4

301.4
8.1
347.3
386.3

2,438.7
822.8

2,518.3
771.2

2,546.6
722.3

2,470.3rr
669.6

2,453.6
654.0

2,442.1
659.2

2,436.9
656.3

2,429.4
662.5

Commercial banks
12 Savings deposits, iiuluding MMDAs
13 Small time deposits®. 11
14 Large time deposits10,

541.4
534.9
387.7

582.2
610.3
368.7

666.2
601.5
341.3

756.1
507.0
290.2

754.1
502.7
283.7

755.7
504.0
280.8

753.9
502.8
275.9

755.8
499.0
277.9

Thrift institutions
15 Savings deposits, iircluding MMDAs
16 Small time deposits' 10
17 Large time deposits

349.6
617.8
161.1

338.6
562.0
120.9

376.3
463.2
83.4

429.9
363.2
67.3

430.2
358.2
67.1

426.6
351.0
65.5

424.8
347.3
64.5

425.6
344.6
65.2

Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only

317.4
108.8

350.5
135.9

363.9
182.1

342.3
202.3

339.6
197.7

333.6
201.9

333.1
200.9

331.7
200.4

2,249.5
7,827.2

2,493.4
8,257.9

2,764.8
8,428.0

3,068.8
8,699.4

3,076.3
8,718.8

3,090.0
8,747.1

3,128.5
8,774.2

6
7
8
9

Ml components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6

Nontransaction components
10 In M2j
11 In M3

Debt components
7,0 Federal debt
21 Nonfederal debt

n.a.
n.a.

Not seasonally adjusted
Measures2
Ml

811.5
3,245.1
4,066.4
4,906.0
10,063.6

843.7
3,357.0
4,126.3
4,986.5
10,739.9

916.4
3,457.9
4,178.1
5,004.2
11,182.8

l,045.8r
3,511.2r
4,178.6r
5,077.0
11,760.6

1,040.3
3,492.7
4,143.6
5,047.3
11,782.3

1,022.3
3,469.2
4,131.8
5,024.1
11,805.9

1,030.8
3,479.1
4,138.5
5,038.3
11,864.7

1,058.3
3,496.0
4,154.1
n.a.
n.a.

225.3
6.5
291.5
288.1

249.5
7.4
289.9
296.9

269.9
7.4
302.9
336.3

295.0
7.8
355.3
387.7

293.6
7.8
346.2
392.7

295.3
7.7
334.3
384.9

297.9
7.8
336.3
388.9

301.3
7.8
350.7
398.6

2,433.6
821.4

2,513.2
769.3

2,541.5
720.1

2,465.4r
667.4

2,452.5
650.8

2,447.0
662.5

2,448.2
659.4

2,437.7
658.1

Commercial banks
33 Savings deposits, iiuluding MMDAs
34 Small time deposits
35 Large time deposits '

543.0
533.8
386.9

580.1
610.5
367.7

663.3
602.0
340.1

752.3
507.8
289.1

749.5
504.5
281.7

753.1
504.6
280.3

757.5
502.1
276.7

760.6
497.8
277.1

Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits®.
38 Large time deposits10

347.4
616.2
162.0

337.3
562.1
120.6

374.7
463.6
83.1

427.8
363.8
67.1

427.6
359.5
66.6

425.1
351.4
65.4

426.8
346.8
64.7

428.3
343.8
65.0

Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only

315.7
109.1

348.4
136.2

361.5
182.4

340.0
202.4

339.2
202.3

339.8
210.3

342.2
203.6

337.9
199.5

Repurchase agreements and eurodollars
41 Overnight
42

77.5
178.4

74.7
158.3

76.3
130.1

73.9
126.3r

72.3
123.3

72.9
128.4

72.8
134.4

69.2
136.8

2,247.5
7,816.2

2,491.3
8,248.5

2,765.0
8,417.9

3,069.8
8,690.8

3,076.2
8,706.2

3,087.3
8,718.6

3,121.4
8,743.3

72
7.3
74
75
26
7.7
28
79
30

M3
L
Debt
Ml components
Currency3
Travelers checks4
Demand deposits
Other checkable deposits6

Nontransaction components
31 In M2;
32 In M38

Debt components
43 Federal debt
44 Nonfederal debt
For notes see following page.




n.a.
n.a.

Monetary

NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
weekly statistical release. Historical data are available from the Money and
Reserves Projection Section, Division of Monetary Affairs, Board of Governors of
the Federal Reserve System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the
vaults of depository institutions; (2) travelers checks of nonbank issuers; (3)
demand deposits at all commercial banks other than those due to depository
institutions, the U.S. government, and foreign banks and official institutions, less
cash items in the process of collection and Federal Reserve float; and (4), other
checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW)
and automatic transfer service (ATS) accounts at depository institutions, credit
union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in
amounts of less than $100,000), and (3) balances in both taxable and tax-exempt
general purpose and broker-dealer money market funds. Excludes individual
retirement accounts (IRAs) and Keogh balances at depository institutions and
money market funds. Also excludes ail balances held by U.S. commercial banks,
money market funds (general purpose and broker-dealer), foreign governments
and commercial banks, and the U.S. government. Seasonally adjusted M2 is
computed by adjusting its non-Mi component as a whole and then adding this
result to seasonally adjusted Ml.
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) term Eurodollars held
by U.S. residents at foreign branches of U.S. banks worldwide and at all banking
offices in the United Kingdom and Canada, and (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money




and Credit Aggregates

A15

market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Debt data are based on monthly
averages. This sum is seasonally adjusted as a whole.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those owed to depository institutions, the U.S. government, and foreign
banks and official institutions, less cash items in the process of collection and
Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions,
credit union share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) savings deposits (including
MMDAs), and (4) small time deposits.
8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market 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.
9. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift
institutions are subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market
funds, depository institutions, U.S. government, and foreign banks and official
institutions.

A16

Domestic Financial Statistics • July 1993

1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1
1992
Item

1990

1993

1991
Aug.

Sept.

Oct.

Nov.

Jan.

Dec.

Feb.

Mar.

Apr.

Interest rates (annual effective yields)
INSURED COMMERCIAL BANKS

1 Negotiable order of withdrawal accounts . . .
2 Savings deposits

4.89
5.84

3.76
4.30

2.60
3.14

2.45
3.00

2.39
2.94

2.36
2.90

2.33
2.88

2.32
2.85

2.27
2.80

2.21
2.73

2.16
2.68

Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2n years

6.94
7.19
7.33
7.42
7.53

4.18
4.41
4.59
4.95
5.52

3.13
3.36
3.58
4.09
4.87

2.95
3.16
3.37
3.86
4.62

2.89
3.11
3.30
3.78
4.60

2.91
3.14
3.34
3.83
4.70

2.90
3.16
3.37
3.88
4.77

2.86
3.13
3.34
3.88
4.72

2.81
3.08
3.29
3.83
4.59

2.75
3.03
3.22
3.74
4.52

2.72
2.99
3.19
3.67
4.47

8 Negotiable order of withdrawal accounts . . .
9 Savings deposits2

5.38
6.01

4.44
4.97

2.85
3.53

2.71
3.39

2.57
3.29

2.52
3.22

2.45
3.20

2.41
3.17

2.37
3.14

2.32
3.06

2.25
2.99

Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More tiian 1 year to 2Vi years
More than 2 n years

7.64
7.69
7.85
7.91
7.99

4.68
4.92
4.99
5.23
5.98

3.31
3.62
3.79
4.13
5.12

3.17
3.47
3.60
3.95
4.91

3.08
3.41
3.56
3.90
4.84

3.10
3.42
3.59
3.93
4.88

3.13
3.44
3.61
4.02
5.00

3.06
3.38
3.58
3.94
5.02

3.01
3.35
3.57
3.89
4.98

2.98
3.31
3.54
3.84
4.89

2.94
3.27
3.50
3.86
4.84

3
4
5
6
7

BIF-INSURED SAVINGS BANKS 3

10
11
12
13
14

Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS

244,637
652,058
508,191
143,867

257,362
718,560
559,566
158,994

261,946
725,256
565,385
159,871

267,709
736,057
570,532
165,525

275,465
740,841
575,399
165,442

286,541
738,253
578,757
159,496

277,226
733,833
579,715
154,118

279,904
742,966
585,309
157,657

288,426
748,427
591,879
156,547

281,213
745,519
587,239
158,281

50,189
168,044
221,007
150,188
139,420

47,094
158,605
209,672
171,721
158,078

40,025
133,661
181,527
159,737
163,095

38,363
129,988
177,387
157,912
167,382

39,472
128,683
171,263
155,668
168,556

38,985
127,636
166,995
153,784
168,586

38,474
127,831
163,098
152,977
169,708

38,257
128,050
160,786
151,637
169,351

36,739
128,214
159,569
151,536
172,312

35,748
125,914
158,388
148,037
177,789

34,903
122,429
157,121
146,923
177,969

131,006

147,266

147,291

148,391

147,664

147,319

147,350

147,039

146,859

146,686

145,472

25 Negotiable order of withdrawal accounts....
26 Savings deposits
27 Personal
28 Nonpersonal

8,404
64,456
n.a.
n.a.

9,624
71,215
68,638
2,577

10,200
81,916
78,813
3,103

10,388
81,922
78,752
3,170

10,126
81,022
77,798
3,224

10,642
82,919
79,667
3,252

10,871
81,786
78,695
3,091

9,981
79,775
76,799
2,976

9,919
80,061
77,039
3,022

10,412
80,480
77,371
3,109

10,090
80,025
76,962
3,064

Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2Vi years

5,724
25,864
37,929
26,103
20,243

4,146
21,686
29,715
25,379
18,665

3,829
18,219
24,930
21,085
19,773

3,819
17,928
24,376
20,491
19,929

3,695
17,298
23,085
19,330
19,128

3,895
17,632
22,888
19,258
19,543

3,867
17,345
21,780
18,442
18,845

3,562
16,248
20,848
17,717
18,633

3,479
15,959
20,436
17,533
18,902

3,551
15,468
20,164
17,207
19,261

3,513
15,306
19,893
16,703
19,363

23,535

23,007

22,835

23,484

22,069

22,265

21,713

21,491

21,418

21,252

21,117

15 Negotiable order2 of withdrawal accounts . . . 209,855
570,270
16 Savings deposits
n.a.
17 Personal
n.a.
18 Nonpersonal

19
20
21
22
23

Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 Vi years
More than 2 Vi years

24 IRA/Keogh Plan deposits
BIF-INSURED SAVINGS BANKS 3

29
30
31
32
33

34 IRA/Keogh Plan accounts

1. Data in this table also appear in the Board's H.6 (508) Special Supplementary
Table monthly statistical release. For ordering address, see inside front cover.
Estimates are based on data collected by the Federal Reserve System from a
stratified random sample of about 460 commercial banks and 80 savings banks on
the last Wednesday of each period. Data are not seasonally adjusted and include




IRA/Keogh deposits and foriegn currency denominated deposits. Data exclude
retail repurchase agreements and deposits held in U.S. branches and agencies of
foreign banks.
2. Includes personal and nonpersonal money market deposits.
3. BIF-insured savings banks include both mutual and federal savings banks.

Monetary
1.23

and Credit Aggregates

A17

BANK DEBITS A N D DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1993

1992
Bank group, or type of customer

1990 2

19912

19922
Sept.

4 Other checkable deposits4
^
5 Savings deposits including MMDAs

Nov.

Dec.

Jan.

Feb.

Seasonally adjusted

DEBITS TO

Demand deposits
1 All insured banks
2 Major New York City banks
3 Other banks

Oct.

r

277,157.5
131,699.1
145,458.4

277,758.0
137,352.3
140,405.7

315,806.1
165,572.7
150,233.5

346,658.3
184,740.9
161,917.4

326,893.0
176,372.6
150,520.4

322,187.1
173,393.4
148,793.7

331,038.8
176,089.1
154,949.8

300,658.5
159,192.5
141,466.0

331,183.4
176,683.5
154,499.9

3,349.0
3,483.3

3,645.5
3,266.1

3,788.1
3,331.3

3,942.1
3,559.1

3,700.5
3,468.2

3,610.0
3,497.2

3,683.9
3,407.3

3,292.2
3,032.3

3,601.1
3,363.3

797.8
3,819.8
464.9

803.5
4,270.8
447.9

832.4
4,797.9
435.9

892.4
5,254.5
458.3

818.9
4,855.5
414.8

796.1
4,624.0
405.2

830.5
4,693.3
429.1

746.7
4,154.7
388.3

817.5
4,525.8
422.0

16.5
6.2

16.2
5.3

14.4
4.7

14.7
4.9

13.5
4.7

12.9
4.7

13.1
4.6

11.6
4.1

12.6
4.5

DEPOSIT TURNOVER

Demand deposits3
6 All insured banks
7 Major New York City banks
8 Other banks
9 Other checkable deposits4
^
10 Savings deposits including MMDAs

Not seasonally adjusted

DEBITS TO
3

Demand deposits
11 All insured banks
12 Major New York City banks
13 Other banks
14 Other checkable deposits4
15 Savings deposits including MMDAs3

277,290.5
131,784.7
145,505.8

277,715.4
137,307.2
140,408.3

315,808.2
165,595.0
150,213.3

334,831.5
178,998.2
155,833.4

335,289.0
182,584.2
152,704.8

308,015.6
167,578.4
140,437.2

340,982.1
179,987.6
160,994.5

304,817.2
159,198.8
145,618.3

303,672.2
161,174.1
142,498.1

3,346.7
3,483.0

3,645.6
3,267.7

3,788.1
3,329.0

3,945.7
3,374.3

3,689.7
3,403.2

3,351.3
3,240.4

3,849.3
3,588.0

3,595.9
3,248.8

3,296.5
3,080.3

798.2
3,825.9
465.0

803.4
4,274.3
447.9

832.5
4,803.5
436.0

864.2
5,180.1
441.6

839.2
5,025.6
420.5

754.3
4,494.4
378.5

815.2
4,418.1
426.5

738.3
3,936.3
391.0

771.9
4,213.4
401.2

16.4
6.2

16.2
5.3

14.4
4.7

14.9
4.6

13.7
4.6

12.1
4.4

13.5
4.8

12.4
4.4

11.6
4.1

DEPOSIT TURNOVER

Demand deposits3
16 All insured banks
17 Major New York City banks
18 Other banks
19 Other checkable deposits4
20 Savings deposits including MMDAs3

1. Historical tables containing revised data for earlier periods can be obtained
from the Banking and Money Market Statistics Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, DC
20551.
Data in this table also appear on the Board's G.6 (406) monthly statistical
release. For ordering address, see inside front cover.




2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOWs) and
accounts authorized for automatic transfer to demand deposits (ATSs).
5. Money market deposit accounts.

A18

Domestic Financial Statistics • July 1993

1.24 LOANS A N D SECURITIES

All Commercial Banks 1

Billions of dollars, averages of Wednesday figures
1992
May

June

July

Aug.

1993
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Seasonally adjusted
1

1 Total loans and securities

2 U.S. government securities
3 Other securities
4 Total loans and leases1
5 Commercial and industrial . .2. . .
6
Bankers acceptances held ...
7
Other commercial and
industrial
8
U.S. addressees3
i
9
Non-U.S. addressees
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease-financing receivables
19 All other loans

2,875.3

2,882.8

2,886.9

2,902.2

2,917.4

2,926.0

2,932.4

2,937.6

2,932.7

2,936.6

2,950.4

2,962.8

600.2
176.9
2,098.2
607.6
6.7

610.7
175.8
2,096.2
604.6
6.3

619.2
177.9
2,089.8
602.5
6.5

632.6
178.2
2,091.4
601.4
6.5

640.6
178.2
2,098.6
601.2
6.3

647.3
178.8
2,099.8
600.8
7.5

651.4
177.3
2,103.8
600.5
7.9

657.1
176.0
2,104.5
597.6
7.8

656.9
174.0
2,101.7
598.2
7.7

667.3
175.2
2,094.1 r
596. l
8.9

681.7r
rn.o"
2,091.8r
592.5
9.1

691.6
178.3
2,093.0
589.7
9.2

600.9
590.8
10.1
883.3
359.2
60.9

598.4
588.3
10.1
881.8
359.0
63.3

596.0
585.3
10.7
881.5
358.6
60.5

594.9
584.3
10.6
883.1
357.4
61.6

594.9
583.6
11.3
886.8
357.0
64.0

593.3
582.6
10.7
890.7
355.8
64.7

592.6
582.3
10.3
892.5
355.4
64.2

589.9
580.2
9.7
892.4
355.5
64.8

590.5
580.8
9.7
889.0"
358.2
63.0

587.2
577.4
9.8
886.9
360.3
61.7

583.4
573.3
10.1
887.5
360.9"
62.5

580.5
570.8
9.7
887.2
364.4
60.8

43.3
34.3

42.4
34.6

41.5
34.9

42.0
35.3

44.0
35.2

43.9
35.1

44.7
35.2

43.6
35.0

44.9
34.5

44.7
34.3

44.5
33.9

45.3
34.0

27.3
7.0
2.0
30.9
42.4

26.8
7.5
2.0
31.0
43.3

26.2
7.7
2.2
30.8
43.2

25.9
7.2
2.3
30.8
44.3

25.8
7.9
2.5
31.0
43.2

25.4
7.6
2.4
30.8
42.6

25.1
7.5
2.8
30.9
45.0

24.8
7.7
2.8
30.9
49.5

24.2
7.7
2.8
30.3
48.8

23.6
8.5
3.0
30.3
44.5

23.4
8.1
2.9
30.3
45.3

23.1
8.0
2.9
30.3
47.4

Not seasonally adjusted
20 Total loans and securities1

2,870.7

2,882.9

2,876.1

2,894.5

2,914.9

2,925.2

2,939.0

2,947.3

2,934.7

2,939.4

2,954.2r

2,964.4

21 U.S. government securities
22 Other securities
23 Total loans and leases'
24 Commercial and industrial.....
25
Bankers acceptances held . . .
26
Other commercial and
industrial
27
U.S. addressees3
28
Non-U.S. addressees
29 Real estate
30 Individual
31 Security
32 Nonbank financial
institutions
33 Agricultural
34 State and political
subdivisions
35 Foreign banks
36 Foreign official institutions
37 Lease-financing receivables . . . .
38 All other loans

599.4
176.5
2,094.8
609.4
6.6

608.9
175.4
2,098.7
606.5
6.2

615.3
176.8
2,084.0
601.5
6.3

631.3
178.1
2,085.0
597.6
6.3

638.7
177.9
2,098.3
597.6
6.2

645.1
179.2
2,100.9
598.4
7.4

654.1
178.3
2,106.6
600.8
8.2

655.8
176.2
2,115.4
600.6
8.0

657.3
174.6
2,102.8
596.6
7.9

670.9 r
175.4
2,093.1
595.3
9.3

687.4r
176.7"
2,090.1"
595.7
9.2

693.3
177.7
2,093.4
592.7
9.1

602.7
592.7
10.0
883.4
357.4
58.4

600.3
589.5
10.8
882.0
357.2
63.5

595.2
584.2
11.0
881.6
356.4
58.0

591.4
580.5
10.8
883.7
356.9
59.4

591.4
580.3
11.1
887.6
358.6
62.5

591.0
580.7
10.3
891.5
356.2
64.2

592.6
582.8
9.8
893.9
356.3
63.5

592.5
583.0
9.5
893.6
360.0
65.5

588.8
579.1
9.6
888.8
362.3
64.5

586.0
576.2
9.8
885.1r
360.4
64.6

586.5
576.5
10.0
884.9
358.4
64.6

583.6
573.9
9.8
886.1
361.7
64.1

42.8
34.0

42.9
35.1

41.3
35.8

41.8
36.5

43.5
36.7

43.5
36.1

45.0
35.2

45.6
34.8

45.1
33.7

44.6
33.0

44.1
32.6

44.7
33.2

27.3
6.8
2.0
30.9
42.5

26.8
7.3
2.0
31.0
44.4

26.1
7.8
2.2
30.6
42.6

25.9
7.0
2.3
30.6
43.2

25.9
8.1
2.5
30.8
44.6

25.5
7.8
2.4
30.8
44.4

25.2
7.8
2.8
30.8
45.4

24.8
8.2
2.8
30.9
48.6

24.0
7.7
2.8
30.7
46.6

23.5
8.3
3.0
30.6
44.6

23.4
7.8
2.9
30.5
45.0

23.1
7.7
2.9
30.4
46.9

1. Adjusted to exclude loans to commercial banks in the United States.
2. Includes nonfinancial commercial paper held.




3. United States includes the fifty states and the District of Columbia.

Commercial

Banking Institutions

A19

1.25 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Billions of dollars, monthly averages
1992

1993

Source of funds
May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Seasonally adjusted
1 Total nondeposit funds 2
2 Net balances due to related foreign offices . . .
3 Borrowings from other than commercial banks
in United States
4 Domestically chartered banks
5 Foreign-related banks

292.4
53.7

295.9
61.2

297.0
61.7

302.5
61.4

309.5
64.0

304.6
63.8

308.4
68.1

312.0
71.8

310.7
74.1

309.7
73.3

319.7
79.2

328.2
88.3

238.7
151.8
86.9

234.7
147.6
87.2

235.3
147.2
88.1

241.1
151.6
89.6

245.6
153.5
92.1

240.9
154.7
86.2

240.2
153.9
86.3

240.2
154.7
85.5

236.6
155.1
81.5

236.4
155.6
80.8

240.5
159.8
80.7

239.9
164.3
75.6

Not seasonally adjusted
6 Total nondeposit funds 2
297.1
7 Net balances due to related foreign offices . . . 55.9
8 Domestically chartered banks
-4.5
9 Foreign-related banks
60.4
10 Borrowings from other than commercial banks
in United States
241.2
11 Domestically chartered banks
153.3
12
Federal funds and security RP
borrowings
149.4
13
Other
,
3.9
14 Foreign-related banks6
87.9

295.2
59.2
-6.3
65.6

291.5
58.4
-7.0
65.4

297.6
57.6
-9.3
66.9

304.1
61.6
-11.0
72.6

306.9
64.9
-13.4
78.3

313.7
69.8
-12.6
82.4

311.9
75.9
-15.1
91.0

309.6
76.6
-15.9
92.6

314.0
75.2
-10.6
85.8

324.6
80.0
-7.0
87.0

324.4
85.4
-9.5
94.9

236.0
147.4

233.1
144.1

239.9
150.5

242.5
152.3

242.0
155.8

243.8
158.4

236.0
153.7

232.9
152.1

238.8
157.3

244.6
162.7

239.0
162.3

143.3
4.1
88.6

140.0
4.2
89.0

146.6
3.9
89.5

148.5
3.8
90.1

152.3
3.6
86.1

154.3
4.1
85.5

149.7
4.0
82.3

148.5
3.6
80.8

154.1
3.2
81.5

159.3
3.3
81.9

158.9
3.5
76.7

397.5
399.4

393.3
394.9

387.7
387.4

385.8
387.1

383.2
383.6

375.7
374.9

371.3
371.1

366.5
365.5

359.9
358.0

358.4
358.0

355.7
356.5

355.lr
354.3r

19.2
21.0

24.7
25.2

23.1
19.6

28.0
22.4

24.1
28.6

21.5
21.9

20.7
16.5

20.4
19.5

25.6
33.1

23.6
29.5

18.8
17.4

24.2r
20.3r

MEMO

Gross large time deposits
15 Seasonally adjusted
16 Not seasonally adjusted
U.S. Treasury demand balances at
commercial banks
17 Seasonally adjusted
18 Not seasonally adjusted

1. Commercial banks are nationally and state-chartered banks in the fifty states
and the District of Columbia, agencies and branches of foreign banks, New York
investment companies majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks.
Data in this table also appear in the Board's G.10 (411) release. For ordering
address, see inside front cover.
2. Includes federal funds, repurchase agreements (RPs), and other borrowing
from nonbanks and net balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own International Banking Facilities (IBFs).
4. Borrowings through any instrument, such as a promissory note or due bill,
given for the purpose of borrowing money for the banking business. This includes




borrowings from Federal Reserve Banks and from foreign banks, term federal
funds, loan RPs, and sales of participations in pooled loans.
5. Figures are based on averages of daily data reported weekly by approximately 120 large banks and quarterly or annual data reported by other banks.
6. Figures are partly averages of daily data and partly averages of Wednesday
data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax and loan notes at commercial banks. Averages of daily data.

A20

DomesticNonfinancialStatistics • July 1993

1.26 ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1

Wednesday figures

Millions of dollars
1993
Account
Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Apr. 28

14
15
16
17
All other
18 Total cash assets
19 Balances with Federal Reserve Banks
70
Cash in vault
71
Demand balances at U.S. depository institutions..
7?
Cash items
73
24 Other assets

3,122,606
816,876
654,509
162,366
38,522
23,788
1,958
12,775
2,267,209
167,068
2,100,141
597,563
886,175
73,703
812,472
358,792
257,612
212,389
28,508
29,494
31,407
81,426
41,554
282,128

3,111,087
821,117
657,829
163,288
39,093
25,346
2,041
11,707
2,250,878
160,401
2,090,477
595,279
886,628
73,647
812,981
357,945
250,625
196,943
23,865
30,749
29,129
71,164
42,036
278,338

3,121,803
825,205
663,204
162,001
40,207
26,084
2,093
12,030
2,256,391
158,822
2,097,569
598,018
884,024
73,641
810,382
358,459
257,069
201,487
21,660
30,717
30,2%
75,637
43,177
272,406

3,093,303
828,284
665,548
162,735
36,846
22,821
2,249
11,776
2,228,173
143,298
2,084,875
594,734
883,388
73,620
809,768
358,188
248,565
199,601
27,820
31,245
29,464
68,873
42,199
274,759

3,116,755
833,190
669,%9
163,221
36,272
22,217
2,460
11,595
2,247,294
164,479
2,082,815
593,960
885,045
73,724
811,321
358,724
245,086
214,369
30,284
31,373
29,092
82,091
41,529
277,892

3,118,893
832,672
669,597
163,075
39,174
25,351
2,369
11,454
2,247,047
156,405
2,090,642
592,576
884,493
73,580
810,914
358,874
254,699
206,284
28,418
29,652
29,546
77,114
41,554
275,986

3,121,616
832,503
667,914
164,589
39,447
25,269
2,248
11,930
2,249,665
157,090
2,092,575
590,299
886,498
73,855
812,642
360,527
255,252
217,359
32,641
32,285
30,917
81,806
39,711
274,236

3,105,428
832,234
668,315
163,919
38,120
24,855
2,334
10,930
2,235,075
141,505
2,093,570
593,724
884,637
74,255
810,382
362,321
252,887
203,342
25,756
32,033
29,391
75,373
40,789
270,067

3,106,323
827,827
663,706
164,121
41,506
27,436
2,573
11,498
2,236,989
143,494
2,093,495
593,660
886,956
74,423
812,533
364,625
248,255
212,975
29,083
32,149
31,345
80,114
40,284
262,458

25 Total assets

3,617,123

3,586,367

3,595,696

3,567,663

3,609,017

3,601,162

3,613,211

3,578,837

3,581,756

33 Time deposits over $100,000
34
35 Treasury tax and loan notes
36 Other
37 Other liabilities

2,500,133
758,628
3,448
39,288
715,892
750,950
633,339
357,217
501,256
5,636
495,620
339,517

2,479,112
738,109
3,027
36,025
699,057
754,210
632,197
354,596
491,330
8,032
483,298
338,986

2,478,484
742,787
2,944
38,460
701,384
752,251
630,485
352,961
502,973
21,068
481,905
337,348

2,458,830
728,635
3,318
37,019
688,298
749,951
628,855
351,389
489,740
15,814
473,926
340,712

2,489,002
761,819
3,937
35,887
721,9%
751,715
627,%1
347,507
492,238
14,852
477,386
346,159

2,504,551
769,062
3,267
38,143
727,653
762,153
627,340
345,995
483,387
3,880
479,507
333,077

2,513,903
783,340
4,843
38,340
740,157
759,168
625,620
345,775
479,341
6,057
473,284
338,415

2,467,896
746,871
4,768
37,386
704,717
748,214
623,069
349,743
494,388
32,990
461,398
334,715

2,476,065
755,137
3,852
39,304
711,982
748,817
622,279
349,832
491,589
24,743
466,846
334,854

38 Total liabilities

3,340,906

3,309,428

3,318,805

3,289,282

3,327,399

3,321,015

3,331,659

3,297,000

3,302,508

276,216

276,939

276,892

278,381

281,617

280,147

281,552

281,837

279,248

ALL COMMERCIAL BANKING INSTITUTIONS 2

Assets
1
?
4
5

6
7
8
9
10
11
1?
N

76
77
78
79
30
31
37

Investment securities
U.S. government securities
Other
Trading account assets
U.S. government securities
Other securities
Other trading account assets
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Revolving home equity
Other

Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)

39 Residual (assets less liabilities)3
Footnotes appear on the following page.




Commercial
1.26 ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1

Banking Institutions

A21

Wednesday figures—Continued

Millions of dollars
1993
Account
Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Apr. 28

2,767,833
749,540
609,251
140,289
38,522
23,788
1,958
12,775
1.979.772
142,958
1,836,814
441,105
835,799
73,703
762,0%
358,792

2,758,207
751,970
611.291
140,680
39,093
25,346
2,041
11,707
1,967,144
134,990
1,832,154
439,745
836,434
73,647
762,787
357,945
198,030
169,556
23,520
30,718
27,807
68,868
18,643
171.292

2,766,947
754,706
614,977
139,729
40,207
26,084
2,093
12,030
1,972,034
136,740
1,835,295
441,275
833,557
73,641
759,915
358,459
202,003
173,040
20,892
30,687
28,944
73,477
19,041
169,437

2,744,266
758,719

2,249
11,776
1,948,702
123,468
1,825,234
439,065
833,083
73,620
759,463
358,188
194,898
171,628
27,468
31,214
28,039
66,476
18,431
170,051

2,762,634
761,397
620,050
141,347
36,272
22,217
2,460
11,595
1,964,966
136,996
1,827,970
440,523
835,974
73,724
762,250
358,724
192,749
184,774
29,221
31,343
27,616
78,809
17,786
180,966

2,777,278
761,633
621,431
140,202
39,174
25,351
2,369
11,454
1,976,471
138,811
1,837,660
438,302
836,309
73,580
762,729
358,874
204,175
179,152
28,024
29,621
28,194
74,349
18,964
177,874

2,776,456
762,683
621,490
141,192
39,447
25,269
2,248
11,930
1,974,326
135,469
1,838,857
436,957
837,923
73,855
764,067
360,527
203,451
191,644
31,944
32,255
29,515
79,294
18,637

2,761,674
757,960
616,771
141,189
41,506
27,436
2,573
11,498
1,962,209
124,985
1,837,224
439,806
838,010
74,423
763,587
364,625
194,783
185,287
28,418
32,119
29,859
76,918
17,974

180,120

2,762,329
762,469
621,988
140,481
38,120
24.855
2,334
10,930
1,961,740
124,475
1,837,265
439,434
835,899
74,255
761,644
362,321
199,611
176,809
25,384
32,003
27,992
72,574
18.856
172,350

3,134,304

3,148,220

3,111,488

3,115,582

DOMESTICALLY CHARTERED COMMERCIAL BANKS 4

Assets
40 Loans and securities
41 Investment securities
42
U.S. government securities
43
Other
44 Trading account assets
45
U.S. government securities
46
Other securities
47
Other trading account assets
48 Total loans
49
Interbank loans
50
Loans excluding interbank
51
Commercial and industrial
52
Real estate
53
Revolving home equity
54
Other
55
Individual
56
All other
57 Total cash assets
58 Balances with Federal Reserve Banks
59 Cash in vault
60 Demand balances at U.S. depository institutions
61 Cash items
62 Other cash assets
63 Other assets

77 Total liabilities

168,621

3

3,099,055

3,109,424

3,085,946

3,128,375

2,347,263
747,302
3,447
36,342
707,513
746,707
631,080
222,174
369,750
5,636
364,114
136,761

2,328,552
727,407
3,027
33,268
691,112
749,958
629,965
221,223
358,889
8,032
350,857
137,893

2,328,676
731,663
2,943
35,450
693,270
748,178
628,285
220,549
371,219

2,334,517
748,864
3,936
32,931
711,997
747,515
625,769
212,370
370,839
14,852
355,987
144,620

2,358,380
757,739
3,267
35,266
719,207
757,971
625,186
217,483
364,118
3,880
360,238
134,876

2,367,692
772,223
4,842
35,445
731,936
755,039
623,475
216,955
367,006
6,057
360,949
135,188

2,318,656
735,983
4,768
34,675
6%,540
744,084
620,959
217,630
381,752
32,990
348,762
132,460

2,323,647
742,095
3,851
36,449
701,795
744,756
620,169

350,151
135,855

2,309,187
717,966
3,318
34,365
680,283
745,833
626,664
218,724
366,923
15,814
351,109
134,672

2,825,333

2,835,750

2,810,782

2,849,976

2,857,374

2,869,886

2,832,868

2,839,552

275,163

278,400

276,930

278,334

278,620

276,031

272,999

273,722

1. Excludes assets and liabilities of International Banking Facilities.
2. Includes insured domestically chartered commercial banks, agencies and
branches of foreign banks, Edge Act and Agreement corporations, and New York
State foreign investment corporations. Data are estimates for the last Wednesday
of the month based on a sample of weekly reporting foreign-related and domestic
institutions and quarter-end condition reports.




22,821

2,853,774

Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities

78 Residual (assets less liabilities)

184,088
27,794
29,463
30,045
79,295
17,491
174,851

140,511
36,846

3.126.773

64 Total assets
65
66
67
68
69
70
71
72
73
74
75
76

201,118

618,208

21,068

273,674

216,628

381,349
24,743
356,606
134,555

3. This balancing item is not intended as a measure of equity capital for use in
capital adequacy analysis.
4. Includes all member banks and insured nonmember banks. Loans and
securities data are estimates for the last Wednesday of the month based on a
sample of weekly reporting banks and quarter-end condition reports.

A22
1.27

DomesticNonfinancialStatistics • July 1993
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
1993
Account
Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Apr. 28

ASSETS

1 Cash and balances due from depository institutions
2 U.S. Treasury and government securities
3 Trading account
4 Investment account
5
Mortgage-backed securities
All others, by maturity
6
One year or less
7
One year through five years
8
More than five years
9 Other securities
10 Trading account
11 Investment account
12
State and political subdivisions, by maturity .
13
One year or less
14
More than one year
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44

Federal funds sold2
To commercial banks in the United States
To nonbank brokers and dealers
To others3
Other loans and leases, gross
Commercial and industrial
Bankers acceptances and commercial paper ..
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other loans4
Lease-financing receivables
LESS: Unearned income
<
Loan and lease reserve
Other loans and leases, net
Other assets

45 Total assets
Footnotes appear on the following page.




105,080
281,716
21,932
259,784
80,494

96,357
282,633
23,026
259,607
80,642

98,967
286,014
23,132
262,881
82,748

98,936
284,788
20,521
264,266
83,113

105,691
283,598
19,009
264,588
83,452

103,823
288,392
22,606
265,786
83,719

112,024
288,955
22,858
266,097
83,618

101,677
289,093
22,570
266,524
83,947

108,570
288,364
23,902
264,462
84,199

37,827
77,536
63,927
56,148
1,777
54,371
19,986
3,381
16,604
34,385
12,655

37,240
76,333
65,392
56,595
1,860
54,736
20,009
3,378
16,631
34,726
11,586

38,213
76,841
65,080
55,892
1,913
53,980
19,986
3,361
16,625
33,993
11,910

38,894
77,235
65,024
56,523
2,069
54,455
19,995
3,363
16,632
34,459
11,656

41,195
74,358
65,584
57,073
2,276
54,797
20,026
3,392
16,634
34,771
11,471

41,062
74,397
66,608
55,847
2,187
53,660
19,861
3,375
16,486
33,799
11,331

40,838
74,691
66,949
55,899
2,063
53,837
19,880
3,402
16,478
33,957
11,805

41,560
74,542
66,474
55,726
2,151
53,575
19,879
3,394
16,484
33,696
10,808

40,625
73,801
65,837
56,033
2,369
53,663
19,928
3,426
16,503
33,735
11,376

89,680
60,491
24,797
4,391
980,701
279,114
2,924
276,190
274,571
1,619
397,549
43,465
354,084
183,753
34,826
12,481
3,306
19,040
16,066
5,502
14,221
1,712
23,299
24,658
2,203
37,119
941,379
160,935

80,916
52,051
24,169
4,696
976,701
277,978
2,952
275,025
273,396
1,630
398,109
43,410
354,700
183,288
33,269
12,431
2,233
18,606
15,784
5,500
14,186
1,555
22,500
24,532
2,213
37,038
937,450
159,194

85,559
56,247
24,877
4,435
979,405
278,504
3,141
275,363
273,786
1,577
395,208
43,437
351,771
183,576
34,054
12,860
2,636
18,557
18,135
5,568
14,177
1,463
24,204
24,516
2,201
37,012
940,193
157,282

75,957
47,358
24,460
4,138
970,180
275,852
2,670
273,182
271,632
1,550
394,208
43,400
350,808
183,351
33,325
12,822
2,461
18,041
15,741
5,504
14,145
1,403
22,337
24,315
2,189
36,886
931,105
157,917

81,565
58,381
19,473
3,711
975,601
277,576
2,705
274,871
273,302
1,569
395,405
43,472
351,933
183,751
33,743
12,529
2,108
19,106
15,587
5,535
14,033
1,412
24,087
24,473
2,153
36,308
937,140
164,889

85,507
54,169
24,815
6,524
974,222
275,123
2,730
272,393
270,836
1,557
395,818
43,415
352,403
183,138
35,028
12,622
2,623
19,783
15,382
5,576
13,881
1,472
24,373
24,430
2,134
36,158
935,930
163,966

86,530
54,724
26,113
5,693
974,080
273,847
2,587
271,260
269,687
1,574
396,912
43,549
353,363
183,854
33,832
12,203
2,309
19,320
17,349
5,632
13,848
1,412
23,027
24,368
2,142
36,199
935,740
167,427

83,943
52,351
26,806
4,786
971,651
275,229
2,626
272,602
271,028
1,574
394,458
43,816
350,642
183,979
33,272
12,029
2,242
19,001
16,511
5,545
13,800
1,386
23,115
24,355
2,132
35,954
933,565
161,419

81,028
54,691
21,965
4,372
975,216
275,662
3,079
272,583
271,028
1,555
395,663
43,887
351,776
185,058
34,761
12,292
2,850
19,619
15,627
5,599
13,798
1,452
23,119
24,477
2,074
35,946
937,196
157,383

1,647,593

1,624,732

1,635,817

1,616,882

1,641,428

1,644,796

1,658,381

1,636,232

1,639,949

Weekly Reporting Commercial Banks
1.27

A23

ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1993
Account
Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

1,115,325
265,665

1,102,172
254,792
209,423
45,369
8,576
1,835
20,511
4,742
858
8,847

1,105,409
261,522

1,091,129
253,854
205,103
48,751
8,805
2,138
20,554
6,014
810
10,429
116,245
721,031
695,940
25,091
20,475
2,082
2,192
342

1,102,700
268,676
221,836
46,840
8,890
2,348
20,344
5,083
712
9,463
119,216
714,808
692,253
22,555
20,135
487
1,597
336

1,118,197
269,672
221,314
48,358
8,371
2,048

4,929
1,177
9,772
122,088
726,437
703,150
23,287
20,505
492
1,959
332

1,126,046
279,815
230,135
49,680
8,727
3,343
21,916
4,962
687
10,046
122,233
723,997
700,939
23,059
20,244
495
1,984
336

1,095,332
260,009
211,735
48,274
8,997
3,590
21,536
4,884
646
8,622
118,945
716,378
691,496
24,882
20,342
2,199
2,008
333

278,849

281,319
707
11,624
268,988

277,492

281,962

2,830
274,662

4,370
277,593

Apr. 28

292,386
0
28,877
263,508

LIABILITIES

46 Deposits
47 Demand deposits
48
Individuals, partnerships, and corporations
49
Other holders
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States
53
Banks in foreign countries
54
Foreign governments and official institutions
55
Certified and officers' checks
56 Transaction balances other than demand deposits4
57 Nontransaction balances
58
Individuals, partnerships, and corporations
59
Other holders
60
States and political subdivisions
61
U.S. government
62
Depository institutions in the United States
63
Foreign governments, official institutions, and banks

216,112

49,553
8,847
2,094
22,182

5,811
556

10,062

121,220
728,441
702,551
25,890
21,415
2,040
2,103
332
283,979
35
4,476
279,467

64 Liabilities for borrowed money 5
65 Borrowings from Federal Reserve Banks
66 Treasury tax and loan notes
67 Other liabilities for borrowed money
68 Other liabilities (including subordinated notes and
debentures)

2,218

332
273,186

0

6,461
266,725

48,841
8,759
1,694
21,394
5,715
739
10,540
117,506
726,381
701,123
25,258
20,694
2,026
2,198
340
282,774
860
17,789
264,126

0

12,658
266,191

22,061

0

0

105,653

106,525

104,691

103,273

112,270

103,767

103,842

101,553

1,504,958

1,481,883

1,492,875

1,473,251

1,496,290

1,499,455

1,511,850

1,489,271

142,635

142,849

142,942

143,630

145,138

145,341

146,531

146,961

Total loans and leases, gross, adjusted, plus securities .. 1,347,927
113,729
Time deposits in amounts of $100,000 or more
898
Loans sold outright to affiliates
453
Commercial and industrial
446
Other
23,407
Foreign branch credit extended to U.S. residents'"
-8,870
Net due to related institutions abroad

1,343,950
112,598
897
452
445
23,846
-10,560

1,349,673
111,983
896
451
445
23,850
-8,945

1,338,923
110,167
893
449
444
23,150
-10,070

1,338,398
104,128
869
447
422
23,225
-12,328

1,348,509
108,678
876
447
429
23,227
-13,221

1,350,343
108,431
875
447
429
23,321
-16,158

1,346,841
109,441
875
447
429
23,464
-12,016

69 Total liabilities
70 Residual (total assets less total liabilities)7
MEMO

71
72
73
74
75
76
77

118,168

729,212
703,570
25,642
21,067
2,026

212,680

8

1. Includes certificates of participation, issued or guaranteed by agencies of the
U.S. government, in pools of residential mortgages.
2. Includes securities purchased under agreements to resell.
3. Includes allocated transfer risk reserve.
4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits.
5. Includes borrowings only from other than directly related institutions.
6. Includes federal funds purchased and securities sold under agreements to
repurchase.
7. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
8. Excludes loans to and federal funds transactions with commercial banks in
the United States.




9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank
affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
10. Credit extended by foreign branches of domestically chartered weekly
reporting banks to nonbank U.S. residents. Consists mainly of commercial and
industrial loans, but includes an unknown amount of credit extended to other than
nonfinancial businesses.
NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large
Weekly Reporting Commercial Banks in New York City, can be obtained from the
Board's H.4.2 (504) weekly statistical release. For ordering address, see inside
front cover.

A24

DomesticNonfinancialStatistics • July 1993

1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Liabilities1

Assets and

Millions of dollars, Wednesday figures

Account
Mar. 3
1 Cash and balances due from depositoryinstitutions
2 U.S. Treasury and government agency
securities
3 Other securities.
4 Federal funds sold
5 To commercial banks in the United States ..
6 Toothers 2
7 Other loans and leases, gross
8 Commercial and industrial
9
Bankers acceptances and commercial
paper
10
All other
11
U.S. addressees
12
Non-U.S. addressees
13 Loans secured by real estate
14 To financial institutions
15
Commercial banks in the United States.
16
Banks in foreign countries
17
Nonbank financial institutions
18 For purchasing and carrying securities . . .
19 To foreign governments and official
institutions
20 All other
21 Other assets (claims on nonrelated parties) .
22 Total assets3
23 Deposits or credit balances due to other
than directly related institutions
24 Demand deposits
25 Individuals, partnerships, and
corporations
26 Other
27 Nontransaction accounts
28 Individuals, partnerships, and
corporations
29 Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased
32 From commercial banks in the
United States
33 From others
34 Other liabilities for borrowed money
35 To commercial banks in the

United States

36 To others
37 Other liabilities to nonrelated parties
38 Total liabilities6
MEMO

39 Total loans (gross) and securities, adjusted .
40 Net due to related institutions abroad

Mar. 10

Mar. 17

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Apr. 28

18,488

17,941

18,588

18,277

19,477

17,756

16,838

17,317

18,063

28,414
8,516
22,841
5,960
16,881
165,171
97,198

29,245
8,755
22,931
7,213
15,718
162,364
96,988

30,199
8,590
23,720
5,316
18,404
162,457
97,357

29,671
8,577
21,931
4,678
17,252
161,115
96,736

31,416
8,475
23,044
8,710
14,334
160,764
95,792

30,267
8,849
18,667
4,110
14,556
158,691
96,121

29,201
9,070
21,235
5,984
15,251
158,914
95,698

29,072
9,050
19,330
3,445
15,884
159,884
95,901

29,556
8,852
19,858
4,293
15,565
160,093
95,601

2,641
94,556
91,132
3,424
33,277
27,285
6,311
2,195
18,780
4,906

2,697
94,291
90,920
3,371
33,287
25,707
5,582
1,819
18,306
3,903

2,580
94,778
91,393
3,385
33,336
26,074
5,771
1,784
18,520
3,299

2,644
94,093
90,681
3,412
33,252
25,413
5,396
1,666
18,351
2,610

2,663
93,129
89,842
3,287
32,574
25,600
4,956
1,871
18,773
3,794

2,814
93,307
89,968
3,339
31,931
24,838
4,993
1,803
18,041
2,702

2,5%
93,102
89,846
3,256
32,245
24,258
4,935
1,822
17,502
3,504

2,574
93,327
90,021
3,306
32,264
25,501
5,077
1,659
18,765
3,008

2,622
92,979
89,668
3,311
32,399
25,544
5,001
1,680
18,863
3,264

398
2,107
32,243

396
2,082
32,090

386
2,004
30,910

370
2,734
30,741

368
2,637
33,955

364
2,735
31,619

406
2,803
32,157

388
2,821
31,944

382
2,902
32,084

312,754

310,535

309,771

306,975

306,205

297,992

2%,718

298,302

297,017

101,333
4,148

99,966
3,859

99,680
4,061

99,825
3,904

102,824
4,934

97,042
4,137

97,250
4,100

99,311
3,%3

101,357
5,008

3,144
1,004
97,185

2,962
897
96,107

3,060
1,001
95,619

3,211
693
95,921

3,413
1,521
97,890

2,945
1,193
92,905

3,182
918
93,150

3,052
911
95,348

3,533
1,476
%,349

67,619
29,566

67,240
28,866

66,701
28,918

66,463
29,458

67,955
29,935

65,4%
27,409

65,214
27,936

67,038
28,311

67.174
29.175

94,763
47,578

94,459
44,887

94,217
47,768

88,359
43,257

86,619
45,148

86,080
49,938

81,911
45,816

82,183
42,625

79,866
39,287

14,652
32,926
47,185

14,994
29,893
49,573

16,264
31,504
46,450

11,999
31,259
45,101

18,600
26,548
41,471

17,405
32,533
36,142

13,751
32,065
36,0%

12,841
29,783
39,559

12,057
27,230
40,579

9,154
38,030
31,245

9,981
39,591
32,486

10,194
36,256
30,136

9,619
35,483
30,320

9,166
32,305
32,447

8,107
28,035
30,276

7,261
28,835
30,068

7,202
32,357
30,345

7,784
32,795
30,424

312,754

310,535

309,771

306,975

306,205

297,992

2%,718

298,302

297,017

212,671
48,332

210,498
46,414

213,879
50,431

211,219
51,807

210,033
55,241

207,370
52,450

207,501
58,186

208,813
54,757

209,065
56,859

1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. Includes net due from related institutions abroad for U.S. branches and
agencies of foreign banks having a net "due from" position.
4. Includes other transaction deposits.




Mar. 24

5. Includes securities sold under agreements to repurchase.
6. Includes net to related institutions abroad for U.S. branches and agencies of
foreign banks having a net "due to" position.
7. Excludes loans to and federal funds transactions with commercial banks in
the United States.

Financial Markets

A25

1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December

1992

1993

Item
1989

1988

1990

1991

1992

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Commercial paper (seasonally adjusted unless noted otherwise)
458,464

525,831

562,656

531,724

549,433

557,915

558,414

549,433

541,508r

528,817r

535,027

159,777

1 All issuers.

183,622

214,706

213,823

228,260

231,751

230,966

228,260

214,196r

203,133r

219,732

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

210,930

200,036

183,379

172,813

181,388

179,279

172,813

181,264

177,370

171,959

1

Financial companies 2
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)3
Directly placed paper4
Total
Bank-related (not seasonally
adjusted)

1,248
194,931
43,155

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

103,756

6 Nonfinancial companies3

131,279

147,914

134,522

148,360

144,776

148,169

148,360

146,048

148,314

143,336

Bankers dollar acceptances (not seasonally adjusted)6
7 Total
8
9
10
11
12

66,631

54,771

43,770

38,194

37,599

37,651

38,194

35,995

35,212

34,929

9,433
8,510
924

9,017
7,930
1,087

11,017
9,347
1,670

10,555
9,097
1,458

10,236
8,764
1,472

10,301
9,156
1,145

10,555
9,097
1,458

9,115
7,922
1,193

9,869
8,352
1,516

11,026
9,153
1,873

1,493
56,052

1,066
52,473

918
44,836

1,739
31,014

1,276
26,364

1,204
26,159

1,289
26,061

1,276
26,364

1,317
25,563

1,169
24,175

1,108
22,795

14,984
14,410
37,237

Basis
13 Imports into United States
14 Exports from United States
15 All other

62,972

9,086
8,022
1,064

Holder
Accepting banks
Own bills
Bills bought from other banks .
Federal Reserve Banks
Foreign correspondents
Others

15,651
13,683
33,638

13,095
12,703
28,973

12,843
10,351
20,577

12,209
8,096
17,890

12,116
7,849
17,633

12,133
7,673
17,846

12,209
8,096
17,890

11,146
7,740
17,109

11,120
7,547
16,545

11,126
7,304
16,499

1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other
business lending; insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. Bank-related series were discontinued in January 1989.
4. As reported by financial companies that place their paper directly with
investors.

1.33

5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Data on bankers acceptances are gathered from approximately 100 institutions. The reporting group is revised every January.
7. In 1977 the Federal Reserve discontinued operations in bankers acceptances
for its own account.

PRIME RATE CHARGED BY BANKS on Short-Term Business Loans 1
Percent per year
Period

10.50
10.00
9.50
9.00
8.50
8.00
7.50
6.50
6.00

Average
rate

10.01

1990
1991
1992

8.46
6.25

1990Feb.
Mar.
Apr.
May .
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.

10.11
10.00

10.00
10.00
10.00

10.00
10.00
10.00
10.00

10.00
10.00
10.00

1. Data in this table also appear in the Board's H.15 (519) weekly and G.13
(415) monthly statistical releases. For ordering address, see inside front cover.




Period

1991— Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

Average
rate

9.52
9.05
9.00
9.00
8.50
8.50
8.50
8.50
8.20
8.00
7.58
7.21

Period

1992—Jan. ..
Feb. .
Mar. .
Apr. .
May ..
June ..
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec.
1993—Jan. .
Feb.
Mar.
Apr.
May .

A26

DomesticNonfinancialStatistics • July 1993

1.35 INTEREST RATES Money and Capital Markets
Averages, percent per year; weekly, monthly, and annual figures are averages of business day data unless otherwise noted
1993
Item

1990

1991

1993, week ending

1992
Jan.

Feb.

Mar.

Apr.

Apr. 2

Apr. 9

Apr. 16

Apr. 23

Apr. 30

MONEY MARKET INSTRUMENTS

1 Federal funds 1,2,3
2 Discount window borrowing^

8.10
6.98

5.69
5.45

3.52
3.25

3.02
3.00

3.03
3.00

3.07
3.00

2.%
3.00

3.18
3.00

3.11
3.00

2.93
3.00

2.91
3.00

2.87
3.00

3
4
5

Commercial paper5,5,6
1-month
3-month
6-month

8.15
8.06
7.95

5.89
5.87
5.85

3.71
3.75
3.80

3.21
3.25
3.35

3.14
3.18
3.27

3.15
3.17
3.24

3.13
3.14
3.19

3.19
3.19
3.24

3.16
3.17
3.23

3.14
3.16
3.20

3.10
3.12
3.16

3.10
3.11
3.16

6
7
8

Finance paper, directly placed*'5'1
1-month
3-month
6-month

8.00
7.87
7.53

5.73
5.71
5.60

3.62
3.65
3.63

3.25
3.32
3.29

3.18
3.27
3.21

3.15
3.17
3.14

3.06
3.06
3.07

3.10
3.10
3.09

3.08
3.08
3.09

3.07
3.06
3.07

3.05
3.06
3.07

3.03
3.04
3.05

9
10

Bankers acceptances3,5,8
3-month
6-month

7.93
7.80

5.70
5.67

3.62
3.67

3.14
3.23

3.06
3.15

3.07
3.14

3.05
3.10

3.09
3.15

3.07
3.13

3.04
3.09

3.04
3.08

3.04
3.09

11
12
13

Certificates of deposit, secondary
marker'
1-month
3-month
6-month

8.15
8.15
8.17

5.82
5.83
5.91

3.64
3.68
3.76

3.14
3.19
3.33

3.08
3.12
3.22

3.10
3.11
3.20

3.08
3.09
3.16

3.11
3.12
3.22

3.10
3.11
3.20

3.07
3.09
3.16

3.06
3.08
3.14

3.06
3.08
3.14

8.16

5.86

3.70

3.22

3.12

3.11

3.10

3.11

3.11

3.13

3.09

3.06

7.50
7.46
7.35

5.38
5.44
5.52

3.43
3.54
3.71

3.00
3.14
3.35

2.93
3.07
3.25

2.95
3.05
3.20

2.87
2.97
3.11

2.91
3.01
3.17

2.91
3.00
3.16

2.85
2.97
3.09

2.81
2.93
3.05

2.91
2.98
3.12

7.51
7.47
7.36

5.42
5.49
5.54

3.45
3.57
3.75

3.06
3.17
3.52

2.95
3.08
3.32

2.97
3.08
3.09

2.89
3.00
3.24

2.96
3.04
n.a.

2.92
3.04
3.24

2.89
3.00
n.a.

2.82
2.96
n.a.

2.88
2.95
n.a.

7.89
8.16
8.26
8.37
8.52
8.55
8.61

5.86
6.49
6.82
7.37
7.68
7.86
8.14

3.89
4.77
5.30
6.19
6.63
7.01
7.67

3.50
4.39
4.93
5.83
6.26
6.60
7.34

3.39
4.10
4.58
5.43
5.87
6.26
7.09

3.33
3.95
4.40
5.19
5.66
5.98
6.82

3.24
3.84
4.30
5.13
5.59
5.97
6.85

3.32
3.95
4.43
5.25
5.75
6.07
6.95

3.31
3.92
4.38
5.21
5.72
6.06
6.%

3.21
3.80
4.26
5.08
5.53
5.90
6.77

3.18
3.77
4.23
5.06
5.48
5.87
6.76

3.25
3.83
4.30
5.14
5.60
6.01
6.89

8.74

8.16

7.52

7.17

6.89

6.65

6.64

6.77

6.76

6.56

6.53

6.66

6.96
7.29
7.27

6.56
6.99
6.92

6.09
6.48
6.44

5.91
6.28r
6.15

5.61
5.98
5.87

5.42
5.81
5.64

5.47
5.88
5.76

5.64
6.04
5.86

5.65
6.05
5.84

5.44
5.85
5.70

5.39
5.82
5.67

5.38
5.79
5.75

9.77

9.23

8.55

8.24

8.01

7.83

7.76

7.89

7.88

7.71

7.66

7.74

33
34 Aa
35 A
36

9.32
9.56
9.82
10.36

8.77
9.05
9.30
9.80

8.14
8.46
8.62
8.98

7.91
8.11
8.26
8.67

7.71
7.90
8.03
8.39

7.58
7.72
7.86
8.15

7.46
7.62
7.80
8.14

7.64
7.75
7.92
8.23

7.61
7.75
7.90
8.25

7.45
7.59
7.74
8.07

7.34
7.50
7.72
8.05

7.40
7.59
7.80
8.15

37 A-rated, recently offered utility bonds16

10.01

9.32

8.52

8.13

7.80

7.61

7.66

7.86

7.64

7.55

7.59

7.76

8.%
3.61

8.17
3.25

7.46
2.99

7.25
2.88

7.37
2.81

6.70
2.76

6.69
2.82

6.64
2.76

6.74
2.82

6.72
2.78

6.62
2.82

6.67
2.86

14 Eurodollar deposits, 3-month3,10

18
19
20

U.S. Treasury bills
Secondary market3,5
3-month
6-month
1-year
Auction average ' •
3-month
6-month
1-year

21
22
23
7.4
25
26
27

Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
30-year

15
16
17

U . S . TREASURY NOTES AND BONDS

Composite
28 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS

Moody's series13
2.9
30 Baa
31 Bond Buyer series
CORPORATE BONDS

32 Seasoned issues, all industries15
Rating group

MEMO

Dividend-price ratio
38 Preferred stocks
39 Common stocks

1. The daily effective federal funds rate is a weighted average of rates on
trades through New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday
of the current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. An average of offering rates on commercial paper placed by several leading
dealers for firms whose bond rating is AA or the equivalent.
7. An average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest-rated money
center banks.
9. An average of dealer offering rates on nationally traded certificates of
deposit.
10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for
indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an
issue-date basis.




12. Yields on actively traded issues adjusted to constant maturities. Source:
U.S. Treasury.
13. General obligations based on Thursday figures; Moody's Investors Service.
14. General obligations only, with twenty years to maturity, issued by twenty
state and local governmental units of mixed quality. Based on figures for
Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently offered, A-rated utility bonds with a thirty-year maturity and five
years of call protection. Weekly data are based on Friday quotations.
17. Standard 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 ordering address, see inside front cover.

Financial Markets
1.36 STOCK MARKET

All

Selected Statistics
1992

Indicator

1990

1991

1993

1992
Aug.

Sept.

Oct.

Nov.

Dec.

Feb.

Jan.

Mar.

Apr.

Prices and trading volume (averages of daily figures)
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2 Industrial
3 Transportation
4 Utility
5 Finance

183.66
226.06
158.80
90.72
133.21

206.35
258.16
173.97
92.64
150.84

229.00
284.26
201.02
99.48
179.29

230.07
284.44
191.31
103.41
180.47

230.13
285.76
191.61
102.26
178.27

226.97
279.70
192.30
101.62
181.36

232.84
287.80
204.63
101.13
189.27

239.47
290.77
212.35
103.85
196.87

239.75
292.11
221.00
105.52
203.38

243.41
294.40
226.96
109.45
209.93

248.12
298.75
229.42
112.53
217.01

244.72
292.19
237.97
113.78
216.02

6 Standard & Poor's Corporation
(1941-43 = 10)'

335.01

376.20

415.75

417.93

418.48

412.50

422.84

435.64

435.40

441.76

450.15

443.08

7 American Stock Exchange
(Aug. 31, 1973 = 50?

338.32

360.32

391.28

385.80

382.67

371.27

387.75

392.69

402.75

409.39

418.56

418.54

156,359
13,155

179,411
12,486

202,558
14,171

174,003
11,875

191,774
11,198

204,787
11,966

208,221
14,925

222,736
16,523

266,011
17,184

288,540
18,154

251,170
16,150

279,778
15,521

Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange

Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers

28,210

36,660

43,990

39,940

41,250

41,590

43,630

43,990

44,020

44,290

45,160

47,420

Free credit balances at brokers4
11 Margin accounts5
12 Cash accounts

8,050
19,285

8,290
19,255

8,970
22,510

8,060
18,305

8,060
19,650

8,355
18,700

8,500
19,310

8,970
22,510

8,980
20,360

9,790
22,190

9,650
21,395

9,805
21,450

Margin requirements (percent of market value and effective date)6
Mar. 11, 1968
13 Margin stocks
14 Convertible bonds
15 Short sales

June 8, 1968

May 6, 1970

Dec. 6, 1971

Nov. 24, 1972

70
50
70

80
60
80

65
50
65

55
50
55

65
50
65

1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. On July 5,1983, the American Stock Exchange rebased its index, effectively
cutting previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included credit extended against stocks, convertible bonds, stocks
acquired through the exercise of subscription rights, corporate bonds, and
government securities. Separate reporting of data for margin stocks, convertible
bonds, and subscription issues was discontinued in April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand.
5. New series since June 1984.
6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit
that can be used to purchase and carry "margin securities" (as defined in the
regulations) when such credit is collateralized by securities. Margin requirements




Jan. 3, 1974
50
50
50

on securities other than options are the difference between the market value (100
percent) and the maximum loan value of collateral as prescribed by the Board.
Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1,
1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1,
1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20
percent of the market value of the stock underlying the option (or 15 percent in the
case of stock-index options).

A28
1.37

DomesticNonfinancialStatistics • July 1993
Selected Assets and Liabilities1

SELECTED FINANCIAL INSTITUTIONS
Millions of dollars, end of period

1992
Account

1990

1993

1991
May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

n.a.

n.a.

SAIF-insured institutions
1 Assets

1,084,821

919,979

870,334

861,517

856,390

856,165

847,235

846,730

840,605

832,039

633,385

551,322

521,911

516,654

512,264

512,077

508,815

502,863

496,974

490,558

155,228

129,461

124,225

123,282

122,385

120,438

119,715

120,715

120,292

122,171

16,897
24,125
48,753

12,307
17,139
41,775

11,120
14,607
37,868

11,282
14,020
37,403

11,044
13,929
37,230

11,164
13,525
37,123

11,073
13,419
36,732

11,207
13,630
35,938

10,509
13,180
36,019

12,742
8,109
36,362

2 Mortgages
3 Mortgage-backed
securities
4 Contra-assets to
mortgage assets .
5 Commercial loans
6 Consumer loans
7 Contra-assets to nonmortgage loans ..
8 Cash and investment
securities
9 Other

1,939

1,239

949

944

910

932

982

931

845

1,083

146,644
95,522

120,077
73,751

120,763
63,030

119,539
62,844

120,220
62,317

124,140
60,958

120,684
59,925

126,719
59,002

127,893
57,600

132,210
41,695

10 Liabilities and net worth . 1,084,821

919,979

870,334

861,517

856,390

856,165

847,235

846,730

840,605

832,039

835,496
197,353
100,391
96,962
21,332
30,640

731,937
121,923
65,842
56,081
17,560
48,559

688,199
110,126
61,439
48,687
19,626
52,383

682,535
108,943
62,760
46,183
17,740
52,299

676,141
109,036
62,359
46,677
18,570
52,642

672,354
110,109
62,225
47,884
20,523
53,178

667,027
110,022
64,105
45,917
18,017
52,169

660,906
114,123
63,065
51,058
19,853
51,846

654,047
114,354
64,742
49,612
20,406
51,798

650,045
115,107
64,742
50,365
16,078
50,867

11
12
13
14
15
16

Deposits
Borrowed money
FHLBB
Other
Other
Net worth

1. Beginning December 1992, data are available on a quarterly basis and are no
longer available monthly.
2. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
loans in process, unearned discounts and deferred loan fees, valuation allowances
for mortgages "held for sale," and specific reserves and other valuation allowances. Contra-assets to nonmortgage loans include loans in process, unearned
discounts and deferred loan fees, and specific reserves and valuation allowances.

3. Includes holding of stock in Federal Home Loan Bank and finance leases
plus interest.
NOTE. Components do not sum to totals because of rounding. Data for credit
unions and life insurance companies have been deleted from this table. Starting in
the December 1991 issue, data for life insurance companies are shown in a special
table of quarterly data.
SOURCE. Office of Thrift Supevision (OTS), insured by the Savings Association
Insurance Fund (SAIF) and regulated by the OTS.

1.38 FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Fiscal year

Calendar year
1992

Type of account or operation
1990

1991

1993

1992r
Nov.

U.S. budget1
1 Receipts, total
2 On-budget
3 Off-budget
4 Outlays, total
5 On-budget
6 Off-budget
7 Surplus or deficit ( - ) , total
8 On-budget
9 Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase (-)) . . .
12 Other 2

Dec.

Jan.

Feb.

Mar.

Apr.

1,031,308
749,654
281,654
1,251,766
1,026,701
225,064
-220,458
-277,047
56,590

1,054,265
760,382
293,883
1,323,757
1,082,072
241,685
-269,492
-321,690
52,198

l,090,513rr
788,087
302,426
l,380,657r
l,128,318r
252,339
-290,144r
-340,231r
50,087

74,633
51,219
23,414
107,361
83,442
23,919
-32,728
-32,223
-505

113,690
89,594
24,096
152,637r
116,575
36,061
-38,946
-26,981
-11,965

112,718
90,129
22,589
82,903
84,928
-2,025
29,815
5,201
24,614

66,138r
41,038r
25,100r
113,732r
89,276
24,456
-47,594
-48,238
644

83,453
57,259
26,194
128,030"
103,793
24,237
-46,577
-46,534
1,957

132,122
96,413
35,709
124,034
101,861
22,174
8,088
-5,448
13,535

220,101
818
-461

276,802
-1,329
-5,981

310,918
-17,305r
-3,469

61,969
-7,346
-21,895

21,078
-3,175
21,043

-8,355
-16,436
-5,024

30,689
27,227
-10,322

37,727
-2,452
9,302

5,464
-18,945
5,393

40,155
7,638
32,517

41,484
7,928
33,556

58,789
24,586
34,203

26,715
6,985
19,729

29,890
7,492
22,399

46,326
9,572
36,754

19,099
5,350
13,749

21,551
6,752
14,799

40,4%
7,273
33,233

MEMO

13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts

1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act also moved two
social security trust funds (federal old-age survivors insurance and federal
disability insurance) off budget. The Postal Service is included as an off-budget
item in the Monthly Treasury Statement beginning in 1990.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota
in the International Monetary Fund (IMF); loans to the IMF; other cash and




monetary assets; accrued interest payable to the public; allocations of SDRs;
deposit funds; miscellaneous liability (including checks outstanding) and asset
accounts; seigniorage; increment on gold; net gain or loss for U.S. currency
valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and
profit on sale of gold.
SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government (MTS) and the Budget of the U.S. Government.

Federal Finance

A29

1.39 U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Calendar year

Fiscal year

1991

1993

1992

1991

Source or type
1992
HI

H2

Hl r

H2

Feb.

Mar.

RECEIPTS

1,054,265

1 All sources
2 Individual income taxes, net
3 Withheld
4 Presidential Election Campaign Fund .
5 Nonwithheld
6 Refunds
Corporation income taxes
7 Gross receipts
8 Refunds
9 Social insurance taxes and contributions,
net
10 Employment taxes and
contributions
11
Self-employment taxes and
contributions
12 Unemployment insurance
13 Other net receipts4
14
15
16
17

Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts

l,«90,513r

540,504

519,181r

560,350

540,506r

66,138r

83,453

467,827
404,152
32
142,693
79,050

476,122
408,352
30
149,342
81,691

232,389
193,440
31
109,405
70,487

234,939
210,552
1
33,2%
8,910

236,646
198,868
20
110,997
73,237

246,%1
215,591
10
39,371

27,935
40,006

8,011

23,947
33,652
4
967
10,677

113,599
15,513

117,951
17,680

58,903
7,904

54,016
8,649

61,681

9,402

58,022
7,219

2,510
1,719

14,644
1,920

396,011

413,689

214,303

186,839

224,569

192,599

34,251

33,652

175,802

208,110

180,758

31,623

32,980

3,988
9,397
2,445

1,487
2,259
369

873
240
432

370,526

385,491

199,727

6

5,253
17,330

25,457
20,922
4,563

24,421
23,410
4,788

22,150
12,2%
2,279

3,306
8,721
2,317

20,433
14,070
2,389

42,430
15,921
11,138
22,852

45,570
17,359
11,143
26,522r

20,703
7,488
5,631
8,991

24,429
8,694
5,507
13,406r

22,389
8,146
5,701
10,695

23,456
9,497
5,733
ll,472r

3,342
1,347
822
1.6391"

4,514
1,598
977
2,051

1,323,757

1,380,657*

632,153

694,364r

704,288

723,367r

113,732r

128,030r

OUTLAYS

18 All types
19
20
21
22
23
24

National defense
International affairs
General science, space, and technology .
Energy
Natural resources and environment
Agriculture

272,514
16,167
15,946
2,511
18,708
14,864

298,361
16,106
16,409
4,509
20,017
14,997

122,089
7,592
7,4%
1,235
8,324
7,684

147,669
7,691
8,472
1,698
11,130
7,418

147,076
8,542
7,951
1,442
8,606
7,526

155,501
9,911
8,521
3,109
11,617

22,903
1,253
1,325
399

8,881

1,145

25,511
1,181
1,103
560
1,549
4,244

25
26
27
28

Commerce and housing credit
Transportation
Community and regional development ..
Education, training, employment, and
social services

75,639
31,531
7,432

9,753
33,759
7,923

17,992
14,748
3,552

36,534
17,093
3,783

15,620
15,676
3,903

-7,843
18,477
4,540

-3,532
2,093
690

-1,368
3,383
760

41,479

45,248

21,234

21,114

23,635

20,922

4,068

4,607
8,379
37,235
21,056
4,090
1,270
1,040
16,415
-2,987

1,282

29 Health
30 Social security and medicare
31 Income security

71,183
373,495
171,618

89,570
406,569
197,867

35,608
190,247
88,778

41,459
193,098
87,693

44,107
205,500
104,457

47,223
232,109
98,693

8,053
35,005
21,259

32
33
34
35
36

31,344
12,295
11,358
195,012
-39,356

34,133
14,450
12,939
199,429
-39,280

14,326
6,187
5,212
98,556
-18,702

17,425
6,574
6,794
99,149
-20,436

15,597
7,435
5,050
100,394
-18,229

18,561
7,283
8,138
98,549
-20,914

2,649
1,060
994
15,893
-2,809

Veterans benefits and services
Administration of justice
General government
Net interest6
,
Undistributed offsetting receipts'

1. Functional details do not sum to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.




5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Includes interest received by trust funds.
7. Consists of rents and royalties for the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1994.

A30

DomesticNonfinancialStatistics • July 1993

1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1992

1991

1993

Item
Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31

1 Federal debt outstanding

3,492

3,563

3,683

3,820

3,897

4,001

4,083

4,196

n.a.

? Public debt securities
3 Held by public
4 Held by agencies

3,465
2,598
867

3,538
2,643
895

3,665
2,746
920

3,802
2,833
969

3,881
2,918
964

3,985
2,977
1,008

4,065
3,048
1,016

4,177
3,129
1,048

4,231
n.a.
n.a.

27
26
0

25
25
0

18
18
0

19
19
0

16
16
0

16
16
0

18
18
0

19
19
0

3,377

3,450

3,569

3,707

3,784

3,891

3,973

4,086

4,140

3,377
0

3,450
0

3,569
0

3,706
0

3,783
0

3,890
0

3,972
0

4,085
0

4,139
0

4,145

4,145

4,145

4,145

4,145

4,145

4,145

4,145

4,145

5 Agency securities
6 Held by public
7 Held by agencies
8

Debt subject to statutory limit

9 Public debt securities
10 Other debt'
MEMO

11 Statutory debt limit

1. Consists of guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.

1.41

GROSS PUBLIC DEBT OF U.S. TREASURY

n.a.
n.a.
n.a.

SOURCES. U.S. Treasury Department, Monthly Statement of the Public Debt of
the United States and Treasury Bulletin.

Types and Ownership

Billions of dollars, end of period
1992
Type and holder

1989

1990

1991

1993

1992
Q2

1 Total gross public debt
By type
2 Interest-bearing
3 Marketable
4
Bills
5
Notes
6
Bonds
7 Nonmarketable
8
State and local government series
9
Foreign issues
10
Government
11
Public
12
Savings bonds and notes. 3
13
Government account series
14 Non-interest-bearing
By holder 4
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18 Commercial banks
19 Money market funds
20 Insurance companies
21 Other companies
22 State and local treasuries
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international5
26
Other miscellaneous investors

Q4

Q1

2,953.0

3,364.8

3,801.7

4,177.0

3,984.7

4,064.6

4,177.0

4,230.6

2,931.8
1,945.4
430.6
1,151.5
348.2
986.4
163.3
6.8
6.8
.0
115.7
695.6
21.2

3,362.0
2,195.8
527.4
1,265.2
388.2
1,166.2
160.8
43.5
43.5
.0
124.1
813.8
2.8

3,798.9
2,471.6
590.4
1,430.8
435.5
1,327.2
159.7
41.9
41.9
.0
135.9
959.2
2.8

4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1

3,981.8
2,605.1
618.2
1,517.6
454.3
1,376.7
161.9
38.7
38.7
.0
143.2
1,002.5
2.9

4,061.8
2,677.5
634.3
1,566.4
461.8
1,384.3
157.6
37.0
37.0
.0
148.3
1,011.0
2.8

4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1

4,227.6
2,807.1
659.9
1,652.1
480.2
1,420.5
151.6
37.0
37.0
.0
161.4
1,040.0
3.0

707.8
228.4
2,015.8
164.9
14.9
125.1
93.4
487.5

828.3
259.8
2,288.3
171.5
45.4
142.0
108.9
490.4

968.7
281.8
2,563.2
233.4
80.0
168.7
150.8
520.3

1,047.8
302.5
2,839.9
292.0
80.6
183.0
192.5
532.0

1,007.9
276.9
2,712.4
267.3
79.4
180.8
175.0
528.5

1,016.3
296.4
2,765.5
286.7
79.8
181.6
180.8
530.0

1,047.8
302.5
2,839.9
292.0
80.6
183.0
192.5
532.0

117.7
98.7
392.9
520.7

126.2
107.6
421.7
674.5

138.1
125.8
455.0
691.1

157.3
131.9
512.5
758.1

145.4
129.7
492.9
713.5

150.3
130.9
499.0
726.3

157.3
131.9
512.5
758.1

1. Includes (not shown separately) securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. Nonmarketable series denominated in dollars, and series denominated in
foreign currency held by foreigners.
3. Held almost entirely by U.S. Treasury and other federal agencies and trust
funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.




Q3

n a.

5. Consists of investments of foreign balances and international accounts in the
United States.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally sponsored agencies.
SOURCES. U.S. Treasury Department, data by type of security, Monthly
Statement of the Public Debt of the United States; data by holder, the Treasury
Bulletin.

Federal Finance
1.42 U.S. GOVERNMENT SECURITIES DEALERS

A31

Transactions1

Millions of dollars, daily averages
1993, week ending

1993
Jan.

Feb.

Mar. 10

Mar

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Apr. 28

IMMEDIATE TRANSACTIONS 2

By type of security
U.S. Treasury securities
1 Bills
Coupon securities, by maturity
2 Less than 3.5 years
3 3.5 to 7.5 years
4 7.5 to 15 years
15 years or more
5
Federal agency securities
Debt, by maturity
6
Less than 3.5 years
3.5 to 7.5 years
7
8
7.5 years or more
Mortgage-backed
9
Pass-throughs
10
All others 3 :

11
12
13
14
15
16

By type of counterparty
Primary dealers and brokers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
Customers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed

48,045r

44,487"

43,300"

42,349"

60,387"

37,539

39,583

36,263

46,812

42,055

36,580

47,717
46,216
19,149
16,239

56,575
48,296"
28,512"
21,502"

47,300"
45,252"
23,269
17,592"

45,826
46,107"
25,537
15,485

55,489"
53,711
30,411
23,961

43,753
43,393
24,281
19,087

47,550
40,783
19,568
14,606

43,291
42,606
17,455
13,979

34,141
37,288
18,214
18,751

35,705
49,562
17,864
17,133

30,816
37,940
20,333
16,422

6,176r
824
1,169

6,719
881
1,194

5,790
788
1,125

6,151
1,123
1,138

4,902
854
1,070

5,281
706
1,022

6,042
887
1,171

6,718
503

4,704
520
1,162

5,447
729
375

6,188

1,228

20,000
3,751

22,571"
4,509"

14,705
4,059"

18,247
6,206

22,852
3,641

14,743
3,391

9,641
3,517

9,461
4,401

15,789
2,553

25,851
3,685

16,051
2,830

109,23lr

123,545"

110,173"

107,517"

137,881"

106,943

99,558

97,905

92,876

100,757

88,099

1,779
10,454

1,970
11,756"

1,771
7,388

2,133
9,153

1,711
10,936

1,550
7,283

1,776
5,164

1,832
5,108

1,530
7,994

1,120

12,470

907
8,735

68,136"

75,826"

66,539

67,787

86,077

61,111

62,531

55,689

62,330

61,561

53,992

6,390"
13,296

6,825
15,324"

5,931
11,378"

6,278
15,299

5,116
15,558

5,458
10,851

6,324
7,995

6,616
8,754

4,856
10,349

5,431
17,066

6,325
10,146

2,586r

2,679"

2,205

4,271

3,630

1,192

1,693

1,067

1,267

2,150

2,325

2,155
1,486
2,668
9,140

2,622
1,890"
3,847"
11,748

2,348
2,287
3,542"
11,335

2,542
2,382
4,577"
11,121

3,156
3,240
5,315
17,788

2,058
1,913
2,719
11,479

2,269
1,841
2,578
8,436

1,791
2,096
2,937
7,764

1,719
1,250
2,238
9,300

2,280
1,241
3,126
9,611

1,734
1,265
1,663
8,061

44r
114
78

72
130"
44

92
103"
32

28
258"
25

79
40
17

21
73
39

243
100
38

63
105
39

28
242
11

16,662r
1,274

17,514"
1,478

22,141"
1,471

20,604
1,480

27,008
1,095

26,049
1,802

18,238
1,893

18,189
1,089

19,263
1,887

25,251
716

20,743
1,847

1,537
782
573
1,233

1,692
443
679
1,286

1,662
431
687
972

1,450
197

1,538
408
620
1,150

1,271
534
745
835

1,400
503
413
737

1,593
755
427
1,059

1,849
626
557
940

1,680

865

2,564
418
710
1,231

563

563

586

371

709

610

479

675

704

683

749

706
339

FUTURES AND FORWARD
TRANSACTIONS

By type of deliverable security
U.S. Treasury securities
17 Bills
Coupon securities, by maturity
18 Less than 3.5 years
19 3.5 to 7.5 years
20 7.5 to 15 years
21
15 years or more
Federal agency securities
Debt, by maturity
22
Less than 3.5 years
23
3.5 to 7.5 years
24
7.5 years or more
Mortgage-backed
25
Pass-throughs
26
Others 3

25
72
41

OPTIONS TRANSACTIONS5

27
28
29
30
31

By type of underlying security
U.S. Treasury, coupon
securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency, mortgagebacked securities
Pass-throughs

1,118

1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Averages are based on the number of trading
days in the period. Immediate, forward, and futures transactions are reported at
principal value, which does not include accrued interest; options transactions are
reported at the face value of the underlying securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Transactions for immediate delivery include purchases or sales of securities
(other than mortgage-backed agency securities) for which delivery is scheduled in
five business days or less and "when-issued" securities that settle on the issue
date of offering. Transactions for immediate delivery of mortgage-backed agency
securities include purchases and sales for which delivery is scheduled in thirty days or
less. Stripped securities are reported at market value by maturity of coupon or corpus.
3. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).




446
509
755

4. Futures transactions are standardized agreements arranged on an exchange.
Forward transactions are agreements made in the over-the-counter market that
specify delayed delivery. All futures transactions are included regardless of time
to delivery. Forward contracts for U.S. Treasuiy securities and federal agency
debt securities are included when the time to delivery is more than five business
days. Forward contracts for mortgage-backed agency securities are included
when the time to delivery is more than thirty days.
5. Options transactions are purchases or sales of put-and-call options, whether
arranged on an organized exchange or in the over-the-counter market, and include
options on futures contracts on U.S. Treasury and federal agency securities.
NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published
because of insufficient activity.
Data for several types of options transactions—U.S. Treasury securities, bills;
Federal agency securities, debt; and mortgage-backed securities, other than
pass-throughs—are no longer available because activity is insufficient.

A32
1.43

DomesticNonfinancialStatistics • July 1993
U.S. GOVERNMENT SECURITIES DEALERS

Positions and Financing1

Millions of dollars
1993, week ending

1993
item
Jan.

Feb.

Mar.

Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Apr. 7

Apr. 14

Apr. 21

Positions2
NET IMMEDIATE POSITIONS3

1

2
3
4
5
6
7
8
9
10
11
12
13

By type of security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others
Other money market instruments
Certificates of deposit
Commercial paper
Bankers acceptances

8,042

7,553

13,550

10,442

8,890

9,576

16,585

20,480

21,070

21,266

17,886

-4,518
-7,905
-13,562
7,040

800
-10,824
-9,682
7,126

1,628
-14,104
-10,240
9,342

5,028
-8,561
-11,245
6,988

1,793
-12,575
-8,861
9,114

-3,334
-15,080
-9,285
9,691

2,800
-15,846
-11,208
10,149

3,798
-15,290
-11,174
9,424

2,930
-18,071
-11,541
9,466

2,429
-15,721
-13,929
9,908

-478
-17,141
-13,214
9,653

5,267
2,617
3,802

6,674
2,708
3,811

6,451
3,332
4,896

6,943
3,397
4,524

6,310
3,303
4,772

8,741
3,411
4,801

5,604
3,372
5,240

4,937
3,216
4,931

7,305
3,136
4,194

8,193
3,198
4,254

5,345
3,203
3,899

35,214
24,531

34,699
24,540

33,009
25,734

27,607
27,871

42,168
23,639

37,448
24,782

32,746
24,828

21,988
28,773

35,026
26,683

39,434
25,931

36,431
25,317

2,907
6,947
672

3,571
6,911
990

3,212
6,237
1,139

4,063
7,097
1,151

3,127
6,426
1,002

2,652
6,261
1,096

2,987
5,883
1,247

3,719
6,008
1,208

2,438
4,725
1,197

3,506
5,948
1,130

3,310
4,879
941

-4,355

-5,805

-5,103

-6,392

-4,055

-4,647

-5,860

-5,297

-6,419

-7,161

-7,785

1,488
2,352
3,002
-6,174

839
2,513
1,851
-3,781

-568
4,333
2,954
-5,119

-757
2,075
1,645
-2,849

-181
4,703
1,056
-4,024

166
3,729
2,453
-7,131

-394
4,474
3,616
-4,895

-1,781
5,392
5,250
-5,399

-1,958
5,070
4,761
-4,601

-1,624
3,982
3,744
-6,405

-1,592
5,100
4,208
-5,231

-37
-11
20

-50
-12
22

-194
-39
33

29
-3

0
-23
64

-295
-77
170

-303
-24
-43

-275
-50
-44

-43
89
-73

-6
-17
-70

-35
-259
-64

-12,104
1,450
-66,597

-14,374
3,326
-117,589

-13,086
3,371
-156,612

-9,299
832
-148,110

-20,252
1,094
-141,247

-17,652
4,034
-155,743

-12,455
5,787
-167,837

-3,609
3,655
-165,264

-16,638
4,130
-171,999

-17,114
3,693
-163,417

-14,919
4,364
-150,788

FUTURES AND FORWARD POSITIONS5

By type of deliverable security
U.S. Treasury securities
14 Bills
Coupon securities, by maturity
15 Less than 3.5 years
16 3.5 to 7.5 years
17 7.5 to 15 years
18 15 years or more
Federal agency securities
Debt, by maturity
19
Less than 3.5 years
20
3.5 to 7.5 years
21
7.5 years or more
Mortgage-backed
Pass-throughs
22
All others^
23
24 Certificates of deposit

1

Financing6
Reverse repurchase agreements
25 Overnight and continuing
26 Term

230,130
345,749

230,919
364,102

233,038
360,955

233,287
341,048

246,770
371,688

238,647
391,491

226,850
384,258

219,779
304,913

237,057
386,911

225,016
388,465

217,913
392,306

Repurchase agreements
27 Overnight and continuing
28 Term

387,080
328,425

404,809
351,505

403,942
349,516

416,133
322,617

419,689
355,986

422,128
380,850

395,822
382,400

372,903
290,358

395,432
371,382

417,640
361,406

416,451
368,604

Securities borrowed
29 Overnight and continuing
30 Term

102,138
52,406

113,700
52,467

115,244
40,753

119,119
43,779

117,135
42,739

117,945
40,464

116,661
40,793

107,573
37,719

113,794
41,060

118,011
42,219

120,540
44,619

Securities loaned
31 Overnight and continuing
32 Term

3,724
351

3,898
467

3,504
482

4,450
1,053

3,473
277

3,810
358

3,123
871

3,206
179

3,771
148

5,409
288

4,569
1,064

Collateralized loans
33 Overnight and continuing

16,872

16,403

14,209

14,782

16,056

13,539

14,038

12,959

12,738

13,696

14,159

MEMO: Matched book7
Reverse repurchase agreements
34 Overnight and continuing
35 Term

166,917
304,402

162,596
318,706

158,182
313,409

164,638
299,829

167,598
324,918

164,012
337,456

154,575
335,227

143,775
261,854

153,699
337,525

156,740
334,948

148,784
341,050

Repurchase agreements
36 Overnight and continuing
37 Term

218,405
254,159

222,893
271,090

217,635
268,224

224,383
244,311

226,875
275,087

221,903
295,198

210,643
294,732

208,228
218,127

202,557
292,270

208,439
281,982

208,893
280,277

1. Data for positions and financing are obtained from reports submitted to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data.
2. Securities positions are reported at market value.
3. Net immediate positions include securities purchased or sold (other than
mortgage-backed agency securities) that have been delivered or are scheduled to
be delivered in five business days or less and "when-issued" securities that settle
on the issue date of offering. Net immediate positions of mortgage-backed agency
securities include securities purchased or sold that have been delivered or are
scheduled to be delivered in thirty days or less.
4. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).
5. Futures positions reflect standardized agreements arranged on an exchange.
Forward positions reflect agreements made in the over-the-counter market that
specify delayed delivery. All futures positions are included regardless of time to




delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days.
Forward contracts for mortgage-backed agency securities are included when the
time to delivery is more than thirty days.
6. Overnight financing refers to agreements made on one business day that
mature on the next business day; continuing contracts are agreements that remain
in effect for more than one business day but have no specific maturity and can be
terminated without advance notice by either party; term agreements have a fixed
maturity of more than one business day .
7. Matched-book data reflect financial intermediation activity in which the
borrowing and lending transactions are matched. Matched-book data are included
in the financing breakdowns given above. The reverse repurchase and repurchase
numbers are not always equal because of the "matching" of securities of different
values or different types of collateralization.
NOTE. Data for futures and forward commercial paper and bankers acceptances and
for termfinancingof collateralized loans are no longer available because of insufficient
activity.

Federal Finance
1.44 FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES

A33

Debt Outstanding

Millions of dollars, end of period
1992
Agency

1989

1988

1990

1993

1991
Oct.

1 Federal and federally sponsored agencies
2 Federal agencies
1
3 Defense Department2 3
4 Export-Import Bank '
5 Federal Housing Administration4
6 Government National Mortgage Association certificates of
participation
7 Postal Service6
8 Tennessee Valley Authority
9 United States Railway Association
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks8
15 Student Loan Marketing Association
16 Financing Corporation
17 Farm Credit Financial Assistance Corporation1
18 Resolution Funding Corporation

Nov.

Dec.

Jan.

Feb.

381,498

411,805

434,668

442,772

479,978

481,050

483,970

487,331

0

35,668
8
11,033
150

35,664
7
10,985
328

42,159
7
11,376
393

41,035
7
9,809
397

41,470
7
7,698
309

42,081
7
7,698
344

41,829
7
7,208
374

41,641
7
7,208
231

42,115
7
7,208
237

0
6,142
18,335
0

0
6,445
17,899
0

0
6,948
23,435
0

0
8,421
22,401
0

0
10,123
23,333
0

0
10,660
23,372
0

0
10,660
23,580
0

0
10,660
23,535
0

0
10,660
24,003
0

345,832
135,836
22,797
105,459
53,127
22,073
5,850
690
0

375,428
136,108
26,148
116,064
54,864
28,705
8,170
847
4,522

392,509
117,895
30,941
123,403
53,590
34,194
8,170
1,261
23,055

401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,996

438,508
112,436
34,108
159,764
52,510
39,766
8,170
1,261
29,996

438,969
114,364
30,914
161,308
52,728
39,737
8,170
1,261
29,996

442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,996

445,690
113,253
34,479
165,958
52,264
39,812
8,170
1,261
29,996

0
113,347
44,490
163,538
51,502
39,822
8,170
1,261
29,9%

142,850

134,873

179,083

185,576

159,899

156,579

154,994

151,059

147,464

11,027
5,892
4,910
16,955
0

10,979
6,195
4,880
16,519
0

11,370
6,698
4,850
14,055
0

9,803
8,201
4,820
10,725
0

7,692
9,903
4,790
7,175
0

7,692
10,440
4,790
6,975
0

7,202
10,440
4,790
6,975
0

7,202
10,440
4,790
6,825
0

7,202
10,440
4,790
6,825
0

58,496
19,246
26,324

53,311
19,265
23,724

52,324
18,890
70,896

48,534
18,562
84,931

42,979
18,172
69,188

42,979
18,172
65,531

42,979
18,172
64,436

42,979
18,037
60,786

42,979
18,036
57,192

MEMO

19 Federal Financing Bank debt13
20
21
22
23
24

Lending to federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6

Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other

1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued beforefiscalyear 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration, the Department of Health, Education, and Welfare, the Department of
Housing and Urban Development, the Small Business Administration, and the
Veterans' Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown on line 17.
9. Before late 1982, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 22.




10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January
1988 to provide assistance to the Farm Credit System, undertook its first
borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, undertook its first
borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Because 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.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter
are loans guaranteed by numerous agencies, with the amounts guaranteed by any
one agency generally being small. The Farmers Home Administration entry
consists exclusively of agency assets, while the Rural Electrification Administration entry consists of both agency assets and guaranteed loans.

A34

DomesticNonfinancialStatistics • July 1993

1.45 NEW SECURITY ISSUES

Tax-Exempt State and Local Governments

Millions of dollars
1993

1992
Type of issue or issuer,
or use

1990

1992

1991

Sept.

1 All issues, new and refunding1

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

120,339

154,402

215,191

18,698

21,092

14,133

19,577

17,981

17,793

27,471

18,661

By type of issue
2 General obligation
3 Revenue

39,610
81,295

55,100
99,302

78,611
136,580

7,461
11,237

7,733
13,359

5,203
8,930

6,024
13,553

4,840
13,141

6,963
10,830

8,254
19,217

8,272
10,581

By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township

15,149
72,661
32,510

24,939
80,614
48,849

25,295
127,618
60,210

1,710
11,054
5,934

2,742
13,113
5,237

1,688
8,197
4,248

2,339
11,159
6,079

1,339
12,556
3,994

3,485
9,654
4,654

2,139
18,355
6,977

1,463
7,628
9,570

103,235

116,953

120,272

10,496

13,760

8,028

8,010

5,875

4,636

9,716

5,385

17,042
11,650
11,739
23,099
6,117
34,607

21,121
13,395
21,039
25,648
8,376
30,275

22,071
17,334
20,058
21,7%
5,424
33,589

1,237
1,977
2,265
1,869
1,176
1,972

2,083
1,364
3,340
2,365
367
4,241

1,800
531
960
1,070
581
3,086

1,658
831
1,258
1,121
339
2,803

1,033
829
894
777
337
2,005

1,264
131
423
618
69
2,131

1,482
2,111
538
1,556
765
3,264

833
699
806
942
134
1,971

7 Issues for new capital
8
9
10
11
12
13

By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes

1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.

1.46 NEW SECURITY ISSUES

SOURCES. Securities Data Company beginning January 1993. Investment
Dealer's Digest for earlier data.

U.S. Corporations

Millions of dollars
1992
Type of issue, offering,
or issuer

1990

1991

1993

1992
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

340,049

465,483

n.a.

37,091

42,849

39,280

35,525

39,424

50,793

59,623r

55,272

2 Bonds

299,884

390,018

404,992

31,815

37,539

32,314

31,026

33,375

45,559

49,563"

46,434

By type of offering
3 Public, domestic
4 Private placement, domestic
5 Sold abroad

188,848
86,982
23,054

287,125
74,930
27,962

377,453
n.a.
27,539

28,561
n.a.
3,254

36,185
n.a.
1,355

30,249
n.a.
2,066

28,774
n.a.
2,252

31,835
n.a.
1,540

41,675
n.a.
3,884

47,165
n.a.
2,397"

41,699
n.a.
4,735

51,779
40,733
12,776
17,621
6,687
170,288

86,628
36,666
13,598
23,945
9,431
219,750

69,538
30,049
6,497
44,643
13,073
241,192

4,720
2,159
393
4,509
1,053
18,982

5,974
2,374
677
5,230
1,191
22,093

7,975
2,813
290
3,700
427
17,110

3,467
2,396
0
1,289
374
23,499

4,232
2,176
611
2,867
516
22,973

9,393
3,074
316
4,282
3,019
25,475

8,269"
2,268
248
5,624
2,890
30,264"

8,067
2,695
1,067
7,058
3,270
24,278

12 Stocks2

40,165

75,467

n.a.

5,276

5,310

6,966

4,499

6,049

5,234

10,060

8,838

By type of offering
13 Public preferred
14 Common
15 Private placement

n.a.
n.a.
16,736

17,408
47,860
10,109

21,332
57,099
n.a.

1,148
4,129
n.a.

1,233
4,077
n.a.

2,901
4,065
n.a.

1,540
2,958
n.a.

1,608
4,441
n.a.

1,112
4,122
n.a.

1,898
8,161
n.a.

1,647
7,191
n.a.

5,649
10,171
369
416
3,822
19,738

24,154
19,418
2,439
3,474
475
25,507

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

713
1,315
n.a.
921
n.a.
2,327

307
602
59
595
1,051
2,695

1,779
940
53
359
99
3,735

288
1,366
304
150
22
2,369

1,468
2,226
118
92
126
2,019

722
1,688
65
310
0
2,438

2,616
2,021
64
350
0
5,009

1,741
2,488
336
743
7
3,522

1 All issues'
2

6
7
8
9
10
11

16
17
18
19
20
21

By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

1. Figures represent gross proceeds of issues maturing in more than one year;
they are the principal amount or number of units calculated by multiplying by the
offering price. Figures exclude secondary offerings, employee stock plans,
investment companies other than closed-end, intracoiporate transactions, equities sold abroad, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.




2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCES. IDD Information Services, Inc., the Board of Governors of the
Federal Reserve System, and, before 1989, the U.S. Securities and Exchange
Commission.

Securities Market and Corporate Finance
1.47

OPEN-END INVESTMENT COMPANIES

A35

Net Sales and Assets

Millions of dollars
1993

1992
Item1

1992

1991

Aug.

Sept.

Nov.

Oct.

Dec.

Feb. r

Jan.

Mar.

1 Sales of own shares2

463,645

647,055

50,627

50,039

52,214

52,019

70,618

71,607

60,676

69,080

2 Redemptions of own shares
3 Net sales

342,547
121,098

447,140
199,915

35,223
15,404

37,862
12,177

37,134
15,080

34,126
17,893

51,993
18,625

46,545
25,062

39,684
20,992

47,414
21,666

4 Assets4

808,582

1,056,310

957,145

978,507

983,151

1,019,618

1,056,310

1,082,653

1,116,784

1,154,445

60,292
748,290

73,999
982,311

77,245
879,900

76,498
902,009

75,808
907,343

80,247
939,371

73,999
982,311

76,764
1,005,889

79,763
1,037,021

81,536
1,072,910

5

5 Cash
6 Other

4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership,
which comprises substantially all open-end investment companies registered with
the Securities and Exchange Commission. Data reflect underwritings of new
companies.

1. Data on sales and redemptions exclude money market mutual funds but
include limited-maturity municipal bond funds. Data on assets exclude both
money market mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of dividends. Excludes reinvestment of capital gains
distributions.
3. Excludes sales and redemptions resulting from transfers of shares into or out
of money market mutual funds within the same fund family.

1.48

CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991
Account

1990

1992

1993

1992r

1991

Q2

Q3

Q4

Q1

Q2

Q3

Q4r

Q1

1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits tax liability
4 Profits after taxes
5 Dividends
6 Undistributed profits

361.7
355.4
136.7
218.7
149.3
69.4

346.3
334.7
124.0
210.7
146.5
64.2

393.8
371.6
140.2
231.4
149.3
82.1

347.3
332.3
122.9
209.4
146.2
63.2

341.2
336.7
127.0
209.6
145.1
64.5

347.1
332.3
125.0
207.4
143.9
63.4

384.0
366.1
136.4
229.7
143.6
86.2

388.4
376.8
144.1
232.7
146.6
86.1

374.1
354.1
131.8
222.2
151.1
71.1

428.5
389.4
148.5
241.0
155.9
85.0

432.2
400.6
146.8
253.8
160.2
93.6

7 Inventory valuation
8 Capital consumption adjustment

-14.2
20.5

3.1
8.4

-7.4
29.5

9.9
5.1

-4.8
9.3

.7
14.1

-5.4
23.3

-15.5
27.0

-9.7
29.7

1.0
38.1

-9.3
40.8

SOURCE. U.S. Department of Commerce, Survey of Current Business.

1.50 NONFARM BUSINESS EXPENDITURES on New Plant and Equipment
Billions of dollars; quarterly data at seasonally adjusted annual rates

Industry

1991

1992

19931

1992

1991
1

1993

Q3

Q4

Q1

Q2

Q3

Q4

Qi

Q2

1 Total nonfarm business

528.39

546.08

582.31

526.59

529.87

535.72

540.91

547.53

560.16

571.41

578.15

Manufacturing
2 Durable goods industries
3 Nondurable goods industries

77.64
105.17

73.41
100.50

77.11
106.24

74.94
102.55

76.40
102.66

74.19
99.79

74.26
97.52

71.84
100.39

73.34
104.28

80.68
103.01

77.62
103.48

Nonmanufacturing
4 Mining
Transportation
5 Railroad
6 Air
7 Other
Public utilities
8 Electric
9 Gas and other
10 Commercial and other2

10.02

8.90

9.32

10.09

9.99

8.87

9.18

9.09

8.44

9.52

9.49

5.95
10.17
6.54

6.77
8.97
7.04

7.36
7.10
8.60

6.32
9.61
6.63

5.44
10.41
6.45

6.65
8.86
6.37

6.50
9.75
7.27

6.87
10.13
7.69

7.08
7.13
6.84

6.26
7.36
8.07

7.71
9.10
7.51

43.76
22.82
246.32

48.05
23.91
268.54

53.32
24.08
289.18

43.27
23.25
249.94

44.75
22.67
251.11

46.06
22.75
262.17

48.45
24.19
263.80

47.73
23.92
269.86

49.95
24.78
278.32

52.61
23.46
280.44

53.05
24.22
285.98

1. Figures are amounts anticipated by business.
2. "Other" consists of construction, wholesale and retail trade, finance and
insurance, personal and business services, and communication.




SOURCE. U.S. Department of Commerce, Survey of Current Business.

A36
1.51

DomesticNonfinancialStatistics • July 1993
DOMESTIC FINANCE COMPANIES Assets and Liabilities1
Billions of dollars, end of period; not seasonally adjusted
1992

1991
Account

1990

1991

1992
Q2

Q3

Q4

Q1

Q2

Q3

Q4

ASSETS

Accounts receivable, gross2
2 Consumer
3 Business
4
Real estate

492.3"
133.3"
293.6"
65.5"

480.6"
121.9"
292.9"
65.8"

482.1
117.1
296.5
68.4

488.9"
127.5"
295.7"
65.7"

485.2"
125.3"
293.7"
66.2"

480.6"
121.9"
292.9"
65.8"

475.6"
118.4"
290.8"
66.4"

476.7"
116.7"
293.2"
66.8"

473.9"
116.7"
288.5"
68.8"

482.1
117.1
296.5
68.4

57.6
9.6

55.1
12.9

50.8
15.8

58.0
11.1

57.6
13.1

55.1
12.9

53.6
13.0

51.2
12.3

50.8
12.0

50.8
15.8

7 Accounts receivable, net
8 All other

425.1"
113.9

412.6"
149.0

415.5
150.6

419.8"
122.8

414.6"
136.4

412.6"
149.0

409.0"
145.5

413.2"
139.4

411.1"
146.5

415.5
150.6

9 Total assets

539.0"

561.6"

566.1

542.6"

551.1"

561.6"

554.5"

552.6"

557.6"

566.1

31.0
165.3

42.3
159.5

37.6
156.4

36.9
156.1

39.6
156.8

42.3
159.5

38.0
154.4

37.8
147.7

38.1
153.2

37.6
156.4

n.a.
n.a.
37.5
178.2
63.9
63.7

n.a.
n.a.
34.5
191.3
69.0
64.8

n.a.
n.a.
37.8
195.3
71.2
67.8

n.a.
n.a.
34.2
184.5
67.1
63.3

n.a.
n.a.
36.5
185.0
68.8
63.8

n.a.
n.a.
34.5
191.3
69.0
64.8

n.a.
n.a.
34.5
189.8
72.0
66.0

n.a.
n.a.
34.8
191.9
73.4
67.1

n.a.
n.a.
34.9
191.4
73.7
68.1

n.a.
n.a.
37.8
195.3
71.2
67.8

539.6

561.2

566.1

542.1

550.5

561.2

554.6

552.7

559.4

566.1

1

5 LESS: Reserves for unearned income
6
Reserves for losses

LIABILITIES AND CAPITAL

10 Bank loans
11 Commercial paper
12
13
14
15
16
17

Debt
Other short-term
Long-term
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits

18 Total liabilities and capital

1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are amounts carried on the balance sheets of finance
companies; securitized pools are not shown since they are not on the books.

1.52 DOMESTIC FINANCE COMPANIES

2. Before deduction for unearned income and losses,

Consumer, Real Estate, and Business Credit1

Millions of dollars, amounts outstanding, end of period
1992
Type of credit

1990

1991"

1993

1992
Oct."

Nov."

Dec.

Jan.

Feb.

Mar.

Seasonally adjusted
1 Total

522,474"

519,910

534,845"

528,590

530,702

534,845"

529,256"

531,398"

532,144

2 Consumer
3 Real estate 2
4 Business

160,468"
65,147
2%,858"

154,822
65,383
299,705

157,707
68,011
309,127"

154,557
68,759
305,274

156,736
68,581
305,385

157,707
68,011
309,127"

156,551
68,942
303,763"

157,733
70,016
303,649"

156,277
68,726
307,141

Not seasonally adjusted
5 Total
6 Consumer
7 Motor vehicles
8 Other consumer
9 Securitized motor vehicles4
10 Securitized other consumer 4
11 Real estate 2
12 Business
13 Motor vehicles
14
Retail 5 ....
15
Wholesale6
16
Leasing
17 Equipment
18
Retail.....
19
Wholesale6
20
Leasing
^
21 Other business
22 Securitized business assets
23
Retail
24
Wholesale
25
Leasing

525,888r

523,192

538,158"

528,143

530,367

538,158"

528,847"

528,490"

,360"
,045
,213r
,837
,265
,509
,019"
,125"
,454"
,573
,098
,654
,968

155,713
63,415
58,522
23,166
10,610
65,760
301,719
90,613
22,957
31,216
36,440
141,399
30,962
9,671
100,766
60,900
8,807
576
5,285
2,946

158,631
57,605
59,522
29,775
11,729
68,410
311,118"
87,456
19,303
27,158
38,191
151,607
32,212
8,669
110,726
57,464
14,590"

155,561
59,290
57,068
27,823
11,379
69,206
303,376
86,747
20,763
n.a.
39,536
147,033
31,475
8,928
106,630
56,495
13,101
634
8,593
3,874

157,149
58,386
58,172
28,964
11,626
68,761
304,457
85,621
19,708
n.a.
39,020
148,127
31,427
8,824
107,877
56,926
13,782
607
8,813
4,362

158,631
57,605
59,522
29,775
11,729
68,410
311,118"
87,456
19,303
n.a.
38,191
151,607
32,212
8,669
110,726
57,464
14,590"

156,430
57,165
58,844
28,894
11,527
68,889
303,527"
86,491
19,124
n.a.
38,640
146,820
32,458
8,582
105,780
55,760
14,457"
1,036
8,582"
4,839

155,929
54,036
58,651
32,860
10,383
69,216
303,345"
86,412
17,881
n.a.
38,472
145,886
32,430
8,318
105,138
55,962
15,085"
973
9,408"
4,704

,101

,585
,773"
,467
667
281
519

1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are before deductions for unearned income and losses.
Data in this table also appear in the Board's G.20 (422) monthly statistical release.
For ordering address, see inside front cover.
2. Includes all loans secured by liens on any type of real estate, for example,
first and junior mortgages and home equity loans.
3. Includes personal cash loans, mobile home loans, and loans to purchase other
types of consumer goods such as appliances, apparel, general merchandise, and
recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these
FRASER
balances are no longer carried on the balance sheets of the loan originator.

Digitized for


1,118

8,756"
4,716

1,118

8,756"
4,716

5. Passenger car fleets and commercial land vehicles for which licenses are
required.
6. Credit arising from transactions between manufacturers and dealers, that is,
floor plan financing.
7. Includes loans on commercial accounts receivable, factored commercial
accounts, and receivable dealer capital; small loans used primarily for business or
farm purposes; and wholesale and lease paper for mobile homes, campers, and
travel trailers.

Real Estate

A37

1.53 MORTGAGE MARKETS Mortgages on New Homes
Millions of dollars except as noted
1993

1992
Item

1990
Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Terms and yields in primary and secondary markets
PRIMARY MARKETS

1
2
3
4
5

Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)

Yield (percent per year)
6 Contract rate 1 3
7 Effective rate '
8 Contract rate (HUD series)4

153.2
112.4
74.8
27.3
1.93

155.0
114.0
75.0
26.8
1.71

158.1
118.1
76.6
25.6
1.60

159.2
119.7
77.3
25.2
1.42

165.4
117.3
75.3
24.9
1.54

154.0
117.7
77.7
26.1
1.31

158.6
119.5
76.8
25.7
1.49

159.7
114.5
75.4
23.8
1.43

156.2
121.5
79.3
26.9
1.50

150.9
115.0
78.5
24.9
1.23

9.68
10.01
10.08

9.02
9.30
9.20

7.98
8.25
8.43

7.65
7.90
8.29

7.81
8.07
8.38

7.65
7.88
8.19

7.57
7.82
7.93

7.52
7.77
7.63

7.22
7.46
7.59

7.26
7.46
7.51

10.17
9.51

9.25
8.59

8.46
7.77

8.29
7.53

8.54
7.90

8.12
7.57

8.04
7.39

7.55
7.02

7.57
6.79

7.56
6.77

SECONDARY MARKETS

Yield (percent per year)
9 FHA mortgages (Section 203)5
10 GNMA securities6

Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION

Mortgage holdings (end of period)
11 Total
12 FHA/VA
13 Conventional

113,329
21,028
92,302

122,837
21,702
101,135

142,833
22,168
120,664

149,133
22,399
126,734

153,306
22,372
130,934

158,119
22,593
135,526

159,204
22,640
136,564

159,766
22,573
137,193

161,147
22,700
138,447

163,719
22,682
141,037

Mortgage transactions (during period)
14 Purchases

23,959

37,202

75,905

8,380

7,980

8,832

4,993

4,118

4,730

6,761

Mortgage commitments (during period)
15 Issued _
16 To sell8

23,689
5,270

40,010
7,608

74,970
10,493

8,195
0

6,084
237

6,185
1,811

4,189
1,159

4,177
221

6,644
0

7,764
112

Mortgage holdings (end of period)*
17 Total
18 FHA/VA
19 Conventional

20,419
547
19,871

24,131
484
23,283

29,959
408
29,552

32,995
365
32,630

32,703
359
32,343

33,665
352
33,313

32,370
347
32,023

32,454
343
32,112

35,421
337
35,084

n.a.
n.a.
n.a.

Mortgage transactions (during period)
20 Purchases
21 Sales

75,517
73,817

97,727
92,478

191,125
179,208

20,199
18,771

19,607
19,154

20,792
19,602

15,512
16,536

12,063
12,105

12,587
10,286

n.a.
14,427

102,401

114,031

261,637

27,380

29,717

32,453

17,591

23,366

21,103

n.a.

FEDERAL HOME LOAN MORTGAGE CORPORATION

Mortgage commitments (during period)9
22 Contracted

1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups for purchase of newly built homes; compiled by
the Federal Housing Finance Board in cooperation with the Federal Deposit
Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built
homes, assuming prepayment at the end of ten years.
4. Average contract rates on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD).
5. Average gross yields on thirty-year, minimum-downpayment, first mortgages insured by the Federal Housing Administration (FHA) for immediate
delivery in the private secondary market. Based on transactions on first day of
subsequent month.




6. Average net yields to investors on fully modified pass-through securities
backed by mortgages and guaranteed by the Government National Mortgage
Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by
the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal
Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, while the
corresponding data for FNMA exclude swap activity.

A38

DomesticNonfinancialStatistics • July 1993

1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1992

1991
Type of holder and property

1989

1990

1991
Q4

Q1

Q2

Q3

Q4P

3,570,906

3,795,210

3,915,871

3,915,871

3,938,198

3,976,483

4,012,983

4,057,012

2,424,258
307,672
754,952
84,025

2,635,428
311,113
764,953
83,716

2,764,447
310,427
758,063
82,934

2,764,447
310,427
758,063
82,934

2,790,734
310,499
754,290
82,674

2,838,732
306,038
748,4%
83,218

2,890,842
305,379
733,083
83,679

2,942,958
302,211
728,404
83,439

1,931,537
767,069
389,632
38,876
321,906
16,656
910,254
669,220
106,014
134,370
650
254,214
12,231
26,907
205,472
9,604

1,914,315
844,826
455,931
37,015
334,648
17,231
801,628
600,154
91,806
109,168
500
267,861
13,005
28,979
215,121
10,756

1,846,910
876,284
486,572
37,424
333,852
18,436
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044

1,846,910
876,284
486,572
37,424
333,852
18,436
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044

1,825,983
880,377
492,910
37,710
330,837
18,919
682,338
524,536
77,166
80,278
358
263,269
11,214
29,693
212,865
9,497

1,803,488
884,598
4%,518
38,314
330,229
19,538
659,624
508,545
74,788
75,947
345
259,266
10,676
29,425
210,139
9,026

1,793,505
891,484
506,658
38,985
325,934
19,906
648,178
501,604
73,723
72,517
334
253,843
10,451
28,804
205,709
8,878

1,771,502
893,793
511,306
38,013
324,5%
19,878
627,531
489,217
69,788
68,202
324
250,178
10,110
28,558
202,989
8,522

22 Federal and related agencies
23 Government National Mortgage Association
24
One- to four-family
25
Multifamily
26 Farmers Home Administration4
27
One- to four-family
28
Multifamily
29
Commercial
30
Farm
31 Federal Housing and Veterans' Administrations
32
One- to four-family
33
Multifamily
34 Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Commercial
38
Farm
39 Federal National Mortgage Association
40
One- to four-family
41
Multifamily
42 Federal Land Banks
43
One- to four-family
44
Farm
45 Federal Home Loan Mortgage Corporation
46
One- to four-family
47
Multifamily

197,778
23
23
0
41,176
18,422
9,054
4,443
9,257
6,087
2,875
3,212
0
0
0
0
0
99,001
90,575
8,426
29,640
1,210
28,430
21,851
18,248
3,603

239,003
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
32,600
15,800
8,064
8,736
0
104,870
94,323
10,547
29,416
1,838
27,577
21,857
19,185
2,672

266,156
19
19
0
41,713
18,496
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
112,283
100,387
11,896
28,777
1,693
27,084
26,809
24,125
2,684

266,156
19
19
0
41,713
18,4%
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
112,283
100,387
11,896
28,777
1,693
27,084
26,809
24,125
2,684

278,3%
19
19
0
41,791
18,488
10,270
4,%1
8,072
11,332
4,254
7,078
49,345
15,458
16,266
17,621
0
118,238
105,869
12,369
28,776
1,693
27,083
28,895
26,182
2,713

278,131
23
23
0
41,628
17,718
10,356
4,998
8,557
11,480
4,403
7,077
44,624
15,032
13,316
16,276
0
122,979
110,223
12,756
28,775
1,693
27,082
28,621
26,001
2,620

277,485
27
27
0
41,671
17,292
10,468
5,072
8,839
11,768
4,531
7,236
37,099
12,614
11,130
13,356
0
126,476
113,407
13,069
28,815
1,695
27,119
31,629
29,039
2,591

286,428
31
31
0
41,695
16,912
10,575
5,158
9,050
12,581
5,153
7,428
32,045
9,658
11,038
11,350
0
137,584
124,016
13,568
28,827
1,696
27,131
33,665
31,032
2,633

48 Mortgage pools or trusts5
49 Government National Mortgage Association
50
One- to four-family
51
Multifamily
52 Federal Home Loan Mortgage Corporation
53
One- to four-family
54
Multifamily
55 Federal National Mortgage Association
56
One- to four-family
57
Multifamily
,
58 Farmers Home Administration
59
One- to four-family
60
Multifamily
61
Commercial
62
Farm
63 Private mortgage conduits
64
One- to four-family
65
Multifamily
66
Commercial
67
Farm

951,740
368,367
358,142
10,225
272,870
266,060
6,810
228,232
219,577
8,655
80
21
0
26
33
82,191
77,217
462
4,512
0

1,116,452
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
96,581
90,684
731
5,166
0

1,270,862
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
114,373
104,1%
3,698
6,479
0

1,270,862
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
114,373
104,1%
3,698
6,479
0

1,288,823
421,977
412,574
9,404
367,878
360,887
6,991
389,853
380,617
9,236
43
10
0
18
16
109,071
95,600
4,686
8,784
0

1,341,338
422,922
413,828
9,094
382,797
376,177
6,620
413,226
403,940
9,286
43
9
0
18
15
122,350
105,700
5,7%
10,855
0

1,385,460
422,255
413,063
9,192
391,762
385,400
6,362
429,935
420,835
9,100
41
9
0
18
14
141,468
123,000
5,7%
12,673
0

1,425,546
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
153,499
132,000
6,305
15,194
0

68 Individuals and others6
69 One- to four-family
70 Multifamily
71 Commercial
72 Farm

489,851
300,805
85,427
84,224
19,395

525,440
331,282
87,713
87,400
19,045

531,943
330,131
87,324
95,693
18,795

531,943
330,131
87,324
95,693
18,795

544,9%
340,424
86,917
98,925
18,730

553,526
348,245
86,591
100,035
18,656

556,532
351,217
88,922
97,805
18,588

573,535
363,641
90,475
100,898
18,522

1 All holders
2
3
4
5

By type of property
One- to four-family residences
Multifamily residences
Commercial
Farm

By type of holder
6 Major financial institutions
7 Commercial banks
8
One- to four-family
9
Multifamily
10
Commercial
11
Farm
.
12 Savings institutions
13
One- to four-family
14
Multifamily
15
Commercial
16
Farm
17 Life insurance companies
18
One- to four-family
19
Multifamily
20
Commercial
21
Farm

1. Based on data from various institutional and governmental sources; figures
for some quarters estimated in part by the Federal Reserve. Multifamily debt
refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by
bank trust departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4
because of accounting changes by the Farmers Home Administration.




5. Outstanding principal balances of mortgage-backed securities insured or
guaranteed by the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and finance companies.

Consumer Installment Credit
1.55

A39

CONSUMER INSTALLMENT CREDIT 1
Millions of dollars, amounts outstanding, end of period
1992r
Holder and type of credit

1990r

1991r

1993

1992r
Dec.

Nov.

Oct.

Jan. r

Feb. r

Mar.

Seasonally adjusted
1 Total

738,765

733,510

741,093

734,195

736,023

741,093

744,196

748,765

752,205

2 Automobile
3 Revolving..
4 Other

284,739
222,552
231,474

260,898
243,564
229,048

259,627
254,299
227,167

258,208
251,806
224,181

258,860
252,086
225,077

259,627
254,299
227,167

258,463
256,435
229,299

260,945
259,378
228,443

261,255
261,329
229,621

Not seasonally adjusted
752,883

749,052

756,944

734,766

737,651

756,944

749,153

746,914

745,187

By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets2 ..

347,087
133,258
93,057
43,464
52,164
4,822
79,030

340,713
121,937
92,681
39,832
45,965
4,362
103,562

331,869
117,127
97,641
42,079
43,461
4,365
120,402

326,472
116,359
95,517
36,441
42,031
4,452
113,494

325,149
116,558
96,092
36,678
42,746
4,365
116,063

331,869
117,127
97,641
42,079
43,461
4,365
120,402

330,355
116,009
98,261
40,057
43,428
4,366
116,677

330,060
112,686
98,785
38,462
43,516
4,148
119,257

330,198
111,854
99,856
38,111
43,255
4,080
117,833

By major type of credit*
13 Automobile
14 Commercial banks
15 Finance companies
16 Pools of securitized assets2

284,903
124,913
75,045
24,620

261,219
112,666
63,415
28,915

259,964
109,743
57,605
33,878

260,201
110,447
59,290
32,065

259,148
109,459
58,386
32,979

259,964
109,743
57,605
33,878

257,744
109,671
57,165
32,388

259,344
111,005
54,036
36,031

258,8%
111,173
53,508
35,977

17 Revolving
18 Commercial banks
19 Retailers
20 Gasoline companies
21 Pools of securitized assets2

234,801
133,385
38,448
4,822
45,637

256,876
138,005
34,712
4,362
63,595

267,949
132,582
36,629
4,365
74,243

249,983
126,992
31,254
4,452
69,285

252,877
127,481
31,444
4,365
70,889

267,949
132,582
36,629
4,365
74,243

261,217
129,567
34,666
4,366
71,927

258,430
127,877
33,110
4,148
72,024

257,879
128,406
32,681
4,080
70,890

22 Other
23 Commercial banks
24 Finance companies
25 Retailers
26 Pools of securitized assets

233,178
88,789
58,213
5,016
8,773

230,957
90,042
58,522
5,120
11,052

229,031
89,544
59,522
5,450
12,281

224,581
89,033
57,068
5,187
12,144

225,626
88,209
58,172
5,234
12,195

229,031
89,544
59,522
5,450
12,281

230,192
91,117
58,844
5,391
12,362

229,141
91,178
58,651
5,352
11,202

228,412
90,619
58,346
5,430
10,966

5 Total
6
7
8
9
10
11
12

1. The Board's series on amounts of credit covers most short- and
intermediate-term credit extended to individuals that is scheduled to be repaid (or
has the option of repayment) in two or more installments.
Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.

2. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
3. Totals include estimates for certain holders for which only consumer credit
totals are available.

1.56 TERMS OF CONSUMER INSTALLMENT CREDIT 1
Percent per year except as noted
1993

1992
Item

1990

1991

1992
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

INTEREST RATES

Commercial banks2

Auto finance companies

11.78
15.46
14.02
18.17

11.14
15.18
13.70
18.23

9.29
14.04
12.67
17.78

n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.

8.60
13.55
12.36
17.38

n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.

8.57
13.57
12.38
17.26

n.a.
n.a.
n.a.
n.a.

12.54
15.99

12.41
15.60

9.93
13.80

8.65
13.44

9.51
13.37

9.65
13.37

9.65
13.66

10.08
13.72

10.32
13.90

9.95
13.21

54.6
46.0

55.1
47.2

54.0
47.9

53.3
47.7

54.1
47.9

54.1
47.8

53.6
47.7

53.9
49.2

54.3
49.0

54.6
49.0

87
95

88
%

89
97

90
97

89
97

89
97

90
97

90
97

91
98

90
98

12,071
8,289

12,494
8,884

13,584
9,119

13,889
8,402

13,885
9,373

14,043
9,475

14,315
9,464

13,975
9,472

13,849
9,457

14,013
9,641

OTHER TERMS 3

Maturity (months)

Loan-to-value ratio

Amount financed (dollars)

1. Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.




2. Data are available for only the second month of each quarter,
3. At auto finance companies.

A40
1.57

DomesticNonfinancialStatistics • July 1993
FUNDS RAISED IN U.S. CREDIT MARKETS 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992

1991
1988

1989

1990

1991

1992
Q2

Q3

04

Ql

Q2

Q3

04

Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors ..

775.8

740.8

665.0

442.7

587.4

534.4

401.4

371.1

687.5

583.0

476.0

603.2

By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages

155.1
137.7
17.4

146.4
144.7
1.6

246.9
238.7
8.2

278.2
292.0
-13.8

304.0
303.8
.2

276.7
282.9
-6.2

288.4
317.2
-28.8

320.4
316.6
3.8

368.9
380.1
-11.2

351.9
351.5
.4

193.4
184.4
9.0

301.7
299.1
2.7

5 Private

620.7

594.4

418.2

164.4

283.5

257.7

113.0

50.7

318.6

231.1

282.6

301.5

6
7
8
9
10
11
12
13
14
15
16

By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Open market paper
Other

53.7
103.1
317.3
241.8
16.7
60.8
-2.1
50.1
41.0
11.9
43.6

65.0
73.8
303.0
245.3
16.4
42.7
-1.5
41.7
40.2
21.4
49.3

51.2
47.1
244.0
219.4
3.7
21.0
-.1
17.5
4.4
9.7
44.2

45.8
78.8
120.1
129.0
-.9
-7.3
-.8
-12.5
-33.4
-18.4
-15.8

53.3
66.3
160.8
198.5
-8.3
-29.9
.5
2.4
-16.8
9.8
7.5

48.5
96.5
175.9
147.3
12.7
16.6
-.6
-7.8
-34.5
-15.9
-5.2

53.5
81.6
42.6
118.6
-31.0
-42.6
-2.4
-24.0
-18.2
-36.3
13.7

45.5
60.2
69.7
93.0
8.0
-31.4
.0
-8.0
-66.1
-7.0
-43.6

52.0
76.3
204.8
221.5
.0
-15.7
-1.0
3.1
-26.9
12.6
-3.2

73.0
77.5
116.6
155.5
-17.9
-23.2
2.2
-12.4
-21.5
-3.4
1.3

52.3
61.3
140.1
202.8
-2.7
-61.8
1.8
.4
-3.2
1.7
30.0

35.9
50.3
181.7
214.2
-12.7
-18.8
-1.0
18.8
-15.4
28.4
1.9

17
18
19
20
21
22

By borrowing sector
State and local government
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate

48.9
318.6
253.1
-7.5
61.8
198.8

63.2
305.6
225.6
1.6
50.4
173.6

48.3
254.2
115.6
2.5
26.7
86.4

38.5
144.9
-18.9
.9
-23.6
3.7

48.1
215.1
20.2
.9
-34.2
53.5

38.6
178.0
41.1
2.2
9.8
29.1

37.6
132.3
-56.9
-.2
-65.9
9.2

41.9
104.2
-95.4
-2.2
-51.5
-41.7

46.1
229.0
43.6
-1.6
-20.7
65.9

63.4
177.2
-9.4
6.6
-50.6
34.7

50.0
220.7
11.9
1.0
-40.3
51.1

32.9
233.7
34.9
-2.3
-25.2
62.4

23 Foreign net borrowing in United States
7.4 Bonds
7.5 Bank loans n.e.c
26 Open market paper
27 U.S. government loans

6.4
6.9
-1.8
8.7
-7.5

10.2
4.9
-.1
13.1
-7.6

23.9
21.4
-2.9
12.3
-6.9

14.1
14.9
3.1
6.4
-10.2

24.1
18.5
1.6
5.2
-1.2

-63.2
10.6
-3.5
-51.9
-18.3

15.6
15.5
1.4
16.0
-17.2

41.0
22.3
6.5
14.9
-2.7

9.9
4.9
1.5
-7.8
11.4

55.2
21.9
14.1
27.7
-8.5

30.6
22.3
3.9
12.8
-8.4

.8
25.1
-13.2
-11.9
.7

28 Total domestic plus foreign

782.2

750.9

688.9

456.8

611.6

471.2

417.0

412.1

697.4

638.2

506.6

604.0

Financial sectors
29 Total net borrowing by financial sectors

211.4

220.1

187.1

131.5

223.3

106.0

143.8

165.6

159.5

241.6

265.2

227.0

By instrument
U.S. government-related
Sponsored-credit-agency securities
Mortgage pool securities
Loans from U.S. government

119.8
44.9
74.9
.0

151.0
25.2
125.8
.0

167.4
17.1
150.3
-.1

150.0
9.2
140.9
.0

167.1
40.2
126.9
.0

129.4
-29.7
159.0
.0

156.0
20.6
135.5
.0

158.5
32.6
125.9
-.1

137.4
11.5
125.9
.0

222.8
48.3
174.4
.0

165.6
67.7
97.9
.0

142.7
33.5
109.2
.0

34 Private
35 Corporate bonds
36 Mortgages
37 Bank loans n.e.c
38 Open market paper
39 Loans from Federal Home Loan Banks

91.7
16.2
.3
.6
54.8
19.7

69.1
46.8
.0
1.9
31.3
-11.0

19.7
34.4
.3
1.2
8.6
-24.7

-18.6
47.7
.6
3.2
-32.0
-38.0

56.2
50.0
.3
7.2
-2.1
.8

-23.4
72.4
.9
-2.9
-46.0
-47.7

-12.3
29.5
.4
10.2
-16.7
-35.7

7.1
47.5
.8
4.5
-12.7
-33.0

22.1
14.9
.9
8.2
7.6
-9.5

18.9
25.5
.1
3.9
-16.3
5.7

99.6
59.8
.3
5.4
12.8
21.3

84.3
99.9
.1
11.1
-12.6
-14.2

By borrowing sector
40 Sponsored credit agencies
41 Mortgage pools
42 Private
43 Commercial banks
44 Bank affiliates
45 Savings and loan associations
46 Mutual savings banks
47 Finance companies
48 Real estate investment trusts (REITs)
49 Securitized credit obligation (SCO) issuers

44.9
74.9
91.7
-3.0
5.2
19.9
1.9
31.5
3.6
32.5

25.2
125.8
69.1
-1.4
6.2
-14.1
-1.4
59.7
-1.9
22.0

17.0
150.3
19.7
-1.1
-27.7
-29.9
-.5
35.6
-1.9
45.2

9.1
140.9
-18.6
-13.3
-2.5
-39.5
-3.5
4.5
.0
35.6

40.2
126.9
56.2
4.5
1.1
-4.6
1.7
14.3
1.8
37.4

-29.7
159.0
-23.4
-11.7
-3.5
-48.7
-1.7
3.4
.1
38.7

20.6
135.5
-12.3
-9.2
-6.8
-41.1
-5.5
12.2
-.3
38.5

32.5
125.9
7.1
-14.1
9.6
-25.1
-8.7
12.9
.1
32.3

11.5
125.9
22.1
7.2
2.7
-20.3
4.3
1.0
4.6
22.5

48.3
174.4
18.9
.8
-8.2
2.7
.3
-20.9
.9
43.2

67.7
97.9
99.6
1.6
10.5
10.0
8.3
28.9
1.3
39.1

33.5
109.2
84.3
8.2
-.4
-10.6
-6.2
48.0
.5
44.8

30
31
32
33




Flow of Funds

A41

1.57—Continued
1992

1991
Transaction category or sector

1988

1989

1990

1991

1992
Q2

Q3

Q4

Ql

Q2

Q3

04

All sectors
50 Total net borrowing, all sectors

993.6

971.0

876.0

588.3

834.9

577.2

560.8

577.7

856.9

879.8

771.8

831.0

51
52
53
54
55
56
57
58

274.9
53.7
126.3
317.5
50.1
39.9
75.4
55.8

297.3
65.0
125.5
303.0
41.7
41.9
65.9
30.6

414.4
51.2
102.9
244.3
17.5
2.8
30.7
12.4

428.3
45.8
141.3
120.7
-12.5
-27.1
-44.0
-64.2

471.1
53.3
134.9
161.1
2.4
-8.0
12.9
7.1

406.1
48.5
179.5
176.9
-7.8
-40.9
-113.8
-71.2

444.4
53.5
126.7
43.0
-24.0
-6.7
-37.0
-39.1

479.0
45.5
130.0
70.5
-8.0
-55.1
-4.9
-79.3

506.3
52.0
96.0
205.7
3.1
-17.2
12.4
-1.3

574.7
73.0
124.9
116.7
-12.4
-3.5
8.1
-1.6

359.0
52.3
143.4
140.3
.4
6.1
27.3
43.0

444.4
35.9
175.3
181.8
18.8
-17.5
3.9
-11.6

U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans

External corporate equity funds raised in United States
59 Total net share issues

-118.4

-65.7

22.1

198.8

272.1

182.3

232.5

268.2

230.3

291.7

288.6

277.7

60 Mutual funds
61 M o t h e r
62 Nonfinancial corporations
63 Financial corporations
64 Foreign shares purchased in United States

38.5
6.1
-124.5 -104.2
-129.5 -124.2
4.1
2.7
.9
17.2

67.9
-45.8
-63.0
9.8
7.4

150.5
48.3
18.3
-.1
30.2

206.4
65.7
26.8
7.4
31.5

125.6
56.7
12.0
8.1
36.6

182.5
50.0
19.0
-3.2
34.1

195.9
72.3
48.0
1.4
22.9

148.4
81.9
46.0
6.0
29.9

236.3
55.4
36.0
8.4
11.0

233.3
55.3
11.0
8.1
36.2

207.5
70.2
14.0
7.3
48.9

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.2 through F.5. For ordering address, see inside front cover.




A42
1.58

Domestic Financial Statistics • July 1993
SUMMARY OF FINANCIAL TRANSACTIONS 1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1991

Transaction category or sector

1988

1989

1990

1991

1992

1992
Q2

Q3

Q4

QL

Q3

Q4

879.8

771.8

831.0
78.0
84.9
-1.9
12.5
-17.6
-12.0
99.6
665.5
41.6
109.2
57.8
48.1
52.4
-7.6
2.5
.8
408.8
-18.5
-39.1
1.5
19.0
213.9
120.4
11.2
39.7
42.6
213.4
51.2
110.4
-14.7
7.0
14.7
44.8

Q2

N E T LENDING IN CREDIT MARKETS 2
1
2
3
4
5
6
7
8
9
10
11
12
N
14
15
16
17
18
19
70
71

V:
73
24
25

76
27
78

79
30

31
37,

33
34

Total net lending in credit markets
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Sponsored credit agencies
Mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank affiliates
Banks in U.S. possession
Private nonbank finance
Thrift institutions
Savings and loan associations
Mutual savings banks
Credit unions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds.
Finance n.e.c
Finance companies
Mutual funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Securitized credit obligation (SCOs) issuers .

993.6

971.0

876.0

588.3

834.9

577.2

560.8

577.7

206.5
227.2
-1.9
-2.7
-16.1
13.9
88.4
548.0
93.0
125.9
33.2
98.9
91.9
.6
6.4
.0
197.0
-113.3
-137.9
7.6
17.0
114.2
80.6
33.1
-28.7
29.2
196.1
40.8
64.0
61.9
-.7
7.5
22.5

120.6
111.3
-2.5
8.4
3.4
-24.9
138.4
645.6
40.0
174.4
9.8
58.4
.5
58.6
-.6
-.1
362.9
-81.6
-92.4
-7.4
18.3
183.6
81.9
22.2
49.5
30.0
260.9
-23.0
169.1
-20.9
2.6
89.8
43.2

-162.8
-160.3
-1.9
15.4
-15.9
-26.8
64.2
897.2
76.4
97.9
10.8
157.4
132.0
6.5
18.5
.4
554.7
-41.9
-38.5
-13.0
9.6
227.8
96.5
2.5
90.5
38.2
368.9
14.2
150.7
-16.3
-2.8
184.0
39.1

856.9

226.2
198.9
3.1
5.7
18.6
-10.6
96.3
681.8
37.1
74.9
10.5
157.1
127.1
29.4
-.1
.7
402.2
119.0
87.4
15.3
16.3
186.2
103.8
29.2
18.1
35.1
96.9
49.2
11.9
10.7
.9
-8.2
32.5

209.6
179.5
-.8
12.9
17.9
-3.1
74.1
690.4
-.5
125.8
-7.3
176.8
145.7
26.7
2.8
1.6
395.7
-91.0
-93.9
-4.8
7.7
207.7
93.1
29.7
36.2
48.7
278.9
69.3
23.8
67.1
.5
96.3
22.0

203.8
172.3
-1.4
6.6
26.2
33.7
58.4
580.2
16.4
150.3
8.1
125.4
95.2
28.4
-2.8
4.5
279.9
-151.9
-143.9
-16.5
8.5
188.5
94.4
26.5
16.6
51.0
243.3
41.6
41.4
80.9
-.7
34.9
45.2

10.5
-24.8
-1.9
20.9
16.3
10.0
42.6
525.1
14.2
140.9
31.1
84.0
38.9
48.5
-1.5
-1.9
255.0
-144.9
-140.9
-15.5
11.5
218.7
83.2
34.7
63.9
37.0
181.3
-23.1
90.3
30.1
-.7
49.0
35.6

60.6
65.8
-2.1
8.4
-11.5
-12.4
97.6
689.1
62.7
126.9
27.9
90.7
69.2
14.5
6.7
.3
380.9
-63.8
-77.0
-2.8
16.0
184.9
94.9
17.3
37.8
35.0
259.8
20.8
123.6
2.5
1.5
74.0
37.4

187.7
171.3
-2.0
29.0
-10.6
24.8
51.4
313.3
-25.2
159.0
-4.0
34.7
6.4
33.7
-2.6
-2.8
148.8
-164.8
-144.0
-31.1
10.2
216.3
132.8
37.0
-2.5
49.0
97.4
-14.5
75.3
-68.9
-.1
66.8
38.7

-143.2
-185.8
-1.6
32.2
12.1
-2.1
37.3
668.7
35.8
135.5
48.1
82.4
26.5
56.7
2.4
-3.3
367.0
-176.8
-156.3
-30.8
10.3
257.1
73.8
36.8
113.1
33.4
286.7
-5.2
117.1
1.1
-.6
135.8
38.5

-59.7
-105.9
-2.1
30.1
18.2
-17.9
71.0
584.3
18.6
125.9
22.3
104.3
45.6
61.3
-1.1
-1.5
313.1
-49.7
-83.3
11.5
22.2
156.5
13.2
32.1
94.2
17.0
206.3
-54.1
124.8
53.8
-.9
50.5
32.3

993.6

971.0

876.0

588.3

834.9

577.2

560.8

577.7

856.9

879.8

771.8

831.0

4.0
.5
25.3
193.6
2.9
259.9
43.2
120.8
53.6
21.9
23.5
-3.1
6.1
-124.5
3.0
89.2
5.3
-31.2

24.8
4.1
28.8
221.4
-16.5
290.0

2.0
2.5
25.7
186.8
34.2
96.8
44.2
59.9
-66.7
70.3
-23.5
12.6
67.9
-45.8
3.5
44.1
-.5
-39.3
120.5

-5.9
.0
24.5
267.7

-3.5
-1.8
32.0
227.3
46.4
50.8
122.1
-62.8
-79.1
8.3
71.8
-9.5
206.4
65.7
11.1
51.2
4.7
-10.6
201.8

-4.8
.4
31.4
194.7
-79.6
-75.4
7.9
-1.1
-63.0
-58.7
43.1
-3.6
125.6
56.7
20.1
41.2
-11.4

-15.5
.4
19.4
342.2

-5.0
.5
19.2
241.5
-32.5
47.8
114.4
13.0
-117.4
26.8
16.0
-5.0
195.9
72.3
120.7

45.6
38.7

-6.5
.3
28.7
178.6
20.8
-55.2
92.8
-89.3
-104.9
-38.3
136.9
-52.5
236.3
55.4
-4.3
36.0
10.7
11.6

-8.5
.2
32.5
305.3
119.4
223.9
202.7
-79.0
-54.8
-13.0
128.7
39.3
233.3
55.3
76.4
51.8
7.1

-33.6

3.5
.1
30.5
129.0
56.1
74.7
88.6
-29.9
-78.8
106.2
15.5
-26.9
148.4
81.9
-70.0
75.2
-2.3
-19.0
194.7

275.8

214.8

-2.4
-7.7
36.4
296.2
-10.7
-40.3
104.1
-52.9
-77.8
-21.7
6.1
2.0
207.5
70.2
42.5
41.8
3.4
-18.9
121.9

RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35

36
37
38
39
40
41
42
43
44
45
46
47
48
49

50
51
57
53

54

Net flows through credit markets
Other financial sources
Official foreign exchange
Treasury currency and special drawing rights
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Corporate equities
Security credit
Trade debt
Taxes payable
Noncorporate proprietors' equity
Miscellaneous

55 Totalfinancialsources
Floats not included in assets (-)
56 U.S. government checking deposits
57 Other checkable deposits
58 Trade credit
Liabilities not identified as assets (-)
59 Treasury currency
6 0 Interbank claims
61 Security repurchase agreements
67 Taxes payable
63 Miscellaneous
64 Totals identified to sectors as assets

222.3

6.1
96.7
17.6
90.1
78.3
1.1
38.5
-104.2
15.6
60.0
2.0
-32.5
269.9

61.1
75.8
16.7
-60.9
41.2
-16.4
4.6
150.5
48.3
51.4
10.4
-9.0

-.8
140.1

1,650.2 1,772.7 1,374.3 1,323.0 1,716.4
1.6

.8
-.9

-.1

-3.0
-29.8
6.3
4.4

8.4
-3.2
.6
-.2
-4.4
23.9
2.3
-95.6

3.3
2.5
21.5

.2
1.6

-34.8
6.5
-13.8

.1
1.6

-13.1
2.0
18.4

-4.5

-.6
26.2

-.2
-6.3

10.4

41.5

5.6
-30.6

9.8
-19.2

1,670.7 1,841.0 1,387.5 1,304.7 1,693.6

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.6 and F.7. For ordering address, see inside front cover.




-3.7

89.0

99.9
27.3
104.5
-42.4
-78.1
4.0
36.3
3.0
182.5
50.0
82.4
47.6
13.1

-7.3
-3.2

5.2
205.1

-16.2

931.6 1,494.5 1,438.0 1,559.8 1,668.1 2,066.9 1,571.0
23.9
-2.1

-73.1
-6.1

-11.7

-5.3

16.7

2.5

-13.9

27.2

-3.7

6.7

-29.1

24.3

-.2
-.3
20.8
28.4
76.2
36.9
2.0
23.4
6.4 -191.8

.2
44.0

-.4
13.4
-41.1
-11.3
-71.0

-.1
-15.1
104.2

-.3
-2.6
76.4
23.0
3.6

15.6
3.0
40.7

-.1

11.4

182.3

4.4

25.7
-76.1

13.0
1.1
-19.8

-.1

-20.8
26.6
1.8

66.8

767.1 1,548.9 1,283.1 1,642.4 1,667.8 1,961.6 1,502.5

2. Excludes corporate equities and mutual fund shares,

Flow of Funds

A43

1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
Billions of dollars, end of period
1992

1991
Transaction category or sector

1989

1990

1991

1992
Q4

Q3

Q2

Q1

Q2

Q3

Q4

Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors

10,087.1

10,760.8

11,200.9

11,788.3

10,960.1

11,081.3

11,200.9

11,331.8

11,471.8

11,615.3

11,788.3

By lending sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages

2,251.2
2,227.0
24.2

2,498.1
2,465.8
32.4

2,776.4
2,757.8
18.6

3,080.3
3,061.6
18.8

2,591.9
2,567.1
24.8

2,687.2
2,669.6
17.6

2,776.4
2,757.8
18.6

2,859.7
2,844.0
15.8

2.923.3
2.907.4
15.9

2,998.9
2,980.7
18.1

3,080.3
3,061.6
18.8

5 Private

7,835.9

8,262.6

8,424.5

8,708.0

8,368.2

8,394.1

8,424.5

8,472.0

8,548.5

8,616.4

8,708.0

6
7
8
9
10
11
12
13
14
15
16

By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Open market paper
Other

1.004.4
926.1
3.647.5
2,515.1
304.4
742.6
85.3
791.8
760.7
107.1
598.4

1,055.6
973.2
3,907.3
2,760.0
305.8
757.6
84.0
809.3
758.0
116.9
642.6

1,101.4
1,051.9
4,027.3
2,889.0
304.9
750.3
83.2
796.7
724.6
98.5
624.1

1,154.7
1,118.3
4,188.1
3,087.5
296.6
720.4
83.7
799.2
707.8
108.3
631.6

1,072.5
1,016.5
3,998.5
2,835.3
310.6
768.8
83.8
786.7
742.0
119.4
632.6

1,089.3
1,036.9
4,011.1
2,866.9
302.9
758.1
83.2
785.9
734.1
107.0
629.8

1,101.4
1,051.9
4,027.3
2,889.0
304.9
750.3
83.2
796.7
724.6
98.5
624.1

1,111.5
1,071.0
4,069.4
2,935.3
304.9
746.4
82.9
775.7
712.5
110.3
621.6

1,128.6
1,090.4
4,107.7
2,983.3
300.4
740.6
83.5
775.8
709.4
111.7
624.9

1.145.6
1.105.7
4,144.1
3,035.4
299.7
725.1
83.9
781.1
705.2
108.3
626.4

1,154.7
1,118.3
4,188.1
3,087.5
296.6
720.4
83.7
799.2
707.8
108.3
631.6

17
18
19
20
21
22

By borrowing sector
State and local government
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate

815.7
3.508.2
3,512.0
139.2
1,177.5
2.195.3

864.0
3,780.6
3,618.0
140.5
1,204.2
2,273.4

902.5
3,925.5
3.596.5
138.8
1.180.6
2,277.1

950.6
4.140.6
3.616.7
139.7
1,146.4
2,330.6

878.5
3.846.7
3,643.0
139.6
1.210.8
2,292.7

891.4
3,886.0
3,616.7
140.4
1,191.0
2,285.3

902.5
3,925.5
3.596.5
138.8
1.180.6
2,277.1

911.3
3,950.6
3,610.1
136.4
1,174.9
2,298.9

925.9
4,008.1
3,614.5
140.1
1,163.7
2,310.7

942.3
4,068.6
3.605.5
141.2
1.150.6
2.313.7

950.6
4.140.6
3.616.7
139.7
1,146.4
2,330.6

254.8

278.6

292.7

307.6

277.6

282.2

292.7

282.4

298.4

306.9

307.6

88.0
21.4
63.0
82.4

109.4
18.5
75.3
75.4

124.2
21.6
81.8
65.2

142.7
23.2
77.7
64.0

114.8
19.7
74.0
69.1

118.6
20.0
78.0
65.6

124.2
21.6
81.8
65.2

125.4
22.0
70.5
64.4

130.9
25.5
77.5
64.5

136.5
26.5
80.7
63.4

142.7
23.2
77.7
64.0

10,341.9

11,039.4

11,493.6

12,095.9

11,237.7

11,363.5

11,493.6

11,614.1

11,770.2

11,922.2

12,095.9

23 Foreign credit market debt held in
United States
24
25
26
27

Bonds
Bank loans n.e.c
Open market paper
U.S. government loans

28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign

Financial sectors
29 Total credit market debt owed by
financial sectors

2,333.0

2,524.2

2,665.9

2,890.1

2,578.2

2,615.1

2,665.9

2,697.7

2,756.6

2,824.0

2,890.1

By instrument
U.S. government-related
Sponsored credit-agency securities
Mortgage pool securities
Loans from U.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks..

1,249.3
373.3
871.0
5.0
1,083.7
491.9
3.4
37.5
409.1
141.8

1,418.4
393.7
1,019.9
4.9
1,105.8
528.2
4.2
38.6
417.7
117.1

1,574.3
402.9
1,166.7
4.8
1,091.6
580.2
4.8
41.8
385.7
79.1

1,741.5
443.1
1,293.5
4.8
1,148.6
621.8
5.1
49.0
392.8
79.9

1,489.6
389.6
1,095.2
4.9
1,088.6
562.2
4.5
37.0
390.1
94.7

1,531.1
394.7
1,131.5
4.9
1,084.0
569.5
4.6
39.0
387.0
83.9

1,574.3
402.9
1,166.7
4.8
1,091.6
580.2
4.8
41.8
385.7
79.1

1,603.8
405.7
1,193.2
4.8
1,094.0
578.2
5.0
41.6
392.9
76.3

1,658.3
417.8
1,235.6
4.8
1,098.3
583.2
5.0
43.7
389.5
76.9

1,702.0
434.7
1,262.5
4.8
1,122.0
598.4
5.1
44.5
393.9
80.2

1,741.5
443.1
1,293.5
4.8
1,148.6
621.8
5.1
49.0
392.8
79.9

By borrowing sector
40 Sponsored credit agencies
41 Mortgage pools
42 Privatefinancialsectors
43 Commercial banks
44 Bank affiliates
45 Savings and loan associations
46 Mutual savings banks
47 Finance companies
48 Real estate investment trusts (REITs)—
49 Securitized credit obligation (SCO) issuers

378.3
871.0
1,083.7
77.4
142.5
145.2
17.2
504.2
10.1
187.1

398.5
1,019.9
1,105.8
76.3
114.8
115.3
16.7
539.8
10.6
232.3

407.7
1,166.7
1,091.6
63.0
112.3
75.9
13.2
547.9
11.4
268.0

447.9
1,293.5
1,148.6
67.4
113.4
71.3
14.9
562.2
14.0
305.4

394.4
1,095.2
1,088.6
65.9
113.3
91.0
16.6
540.4
11.0
250.3

399.5
1,131.5
1,084.0
64.6
110.6
79.0
15.2
543.7
11.2
259.9

407.7
1,166.7
1,091.6
63.0
112.3
75.9
13.2
547.9
11.4
268.0

410.5
1,193.2
1,094.0
60.8
115.0
71.2
13.5
547.1
12.7
273.6

422.6
1,235.6
1,098.3
61.7
112.7
70.3
14.3
541.8
13.2
284.4

439.5
1,262.5
1,122.0
63.3
114.4
70.9
16.2
549.4
13.7
294.2

447.9
1,293.5
1,148.6
67.4
113.4
71.3
14.9
562.2
14.0
305.4

30
31
32
33
34
35
36
37
38
39

All sectors
50 Total credit market debt, domestic and foreign..
51
52
53
54
55
56
57
58

U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans

12,674.9

13,563.6

14,159.6

14,985.9

13,815.9

13,978.7

14,159.6

14,311.9

14,526.8

14,746.2

14,985.9

3,495.6
1,004.4
1,506.0
3,650.9
791.8
819.6
579.2
827.5

3,911.7
1,055.6
1,610.7
3,911.5
809.3
815.1
609.9
839.9

4,345.9
1,101.4
1,756.4
4,032.1
796.7
788.0
565.9
773.2

4,817.0
1,154.7
1,882.8
4,193.3
799.2
780.0
578.8
780.3

4,076.6
1,072.5
1,693.5
4,003.0
786.7
798.7
583.6
801.4

4,213.5
1,089.3
1,725.0
4,015.6
785.9
793.2
572.0
784.2

4,345.9
1,101.4
1,756.4
4,032.1
796.7
788.0
565.9
773.2

4,458.7
1,111.5
1,774.6
4,074.5
775.7
776.1
573.7
767.1

4,576.8
1,128.6
1,804.5
4,112.7
775.8
778.7
578.7
771.1

4,696.0
1,145.6
1,840.5
4,149.2
781.1
776.1
582.9
774.8

4,817.0
1,154.7
1,882.8
4,193.3
799.2
780.0
578.8
780.3

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.2 through L.4. For ordering address, see inside front cover.




A44
1.60

DomesticNonfinancialStatistics • July 1993
SUMMARY OF FINANCIAL ASSETS A N D LIABILITIES 1
Billions of dollars except as noted, end of period
1992

1991

Transaction category or sector

1989

1990

1991

1992
Q2

Q3

Q4

Q1

Q2

Q3

Q4

CREDIT MARKET DEBT OUTSTANDING 2

1 Total credit market assets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Sponsored credit agencies
Mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank affiliates
Banks in U.S. possession
Private nonbank finance
Thrift institutions
Savings and loan associations
Mutual savings banks
Credit unions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds.
Finance n.e.c
Finance companies
Mutual funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Securitized credit obligation (SCOs) issuers .

12,674.9 13,563.6 14,159.6 14,985.9 13,815.9 13,978.7 14,159.6 14,311.9 14,526.8 14,746.2 14,985.9
2,440.5
1,710.1
56.4
180.3
493.7
205.1
734.2
9,295.1
367.2
871.0
233.3
2,643.9
2,368.4
242.3
16.2
17.1
5,179.7
1,484.9
1,088.9
241.1
154.9
2,140.3
1,013.1
317.5
394.7
414.9
1,554.5
617.1
307.2
291.8
8.4
142.9
187.1

2,644.2
1,882.3
55.0
186.9
519.9
238.7
792.4
9,888.3
383.6
1,019.9
241.4
2,769.3
2,463.6
270.8
13.4
21.6
5,474.1
1,335.5
945.1
227.1
163.4
2,329.1
1,116.5
344.0
431.3
437.4
1,809.4
658.7
360.2
372.7
7.7
177.9
232.3

2,531.9
1,734.7
53.1
207.9
536.2
246.2
835.1
10,546.4
397.7
1,166.7
272.5
2,853.3
2,502.5
319.2
11.9
19.7
5,856.2
1,190.6
804.2
211.5
174.9
2,674.9
1,199.6
378.7
622.2
474.3
1,990.7
635.6
450.5
402.7
7.0
226.9
268.0

2,584.0
1,791.9
51.1
216.3
524.7
233.7
932.8
11,235.5
460.5
1,293.5
300.4
2,944.0
2,571.7
333.8
18.6
20.0
6,237.1
1,126.8
727.2
208.7
190.9
2,859.8
1,294.5
396.0
660.0
509.3
2,250.5
656.4
574.0
405.2
8.5
300.9
305.4

2,661.3
1,889.5
53.3
189.7
528.8
252.9
807.9
10,093.8
382.0
1,095.2
253.7
2,796.6
2,480.0
284.4
11.3
20.9
5,566.4
1,248.4
866.3
216.4
165.7
2,443.9
1,183.7
361.4
437.1
461.7
1,874.1
651.7
394.4
389.9
7.4
180.4
250.3

2,653.8
1,881.0
52.9
189.9
530.0
252.0
817.2
10,255.6
389.3
1,131.5
264.7
2,817.8
2,488.7
297.5
11.6
20.0
5,652.2
1,205.1
826.1
208.7
170.2
2,507.4
1,201.4
370.7
465.4
470.1
1,939.7
647.4
421.4
389.5
7.2
214.3
259.9

2,531.9
1,734.7
53.1
207.9
536.2
246.2
835.1
10,546.4
397.7
1,166.7
272.5
2,853.3
2,502.5
319.2
11.9
19.7
5,856.2
1,190.6
804.2
211.5
174.9
2,674.9
1,199.6
378.7
622.2
474.3
1,990.7
635.6
450.5
402.7
7.0
226.9
268.0

2,546.1
1,766.5
51.9
196.2
531.4
250.2
857.2
10,658.4
419.9
1,193.2
271.8
2,860.6
2,514.0
313.3
13.6
19.7
5,913.0
1,161.8
771.1
213.4
177.2
2,708.0
1,224.3
387.0
615.1
481.6
2,043.3
641.0
470.0
423.1
6.8
228.8
273.6

2,548.9
1,756.8
51.3
207.5
533.3
245.3
891.8
10,840.9
429.0
1,235.6
282.6
2,882.9
2,521.9
328.2
13.1
19.7
6,010.7
1,143.0
748.8
211.6
182.6
2,756.2
1,247.1
392.5
627.4
489.1
2,111.5
641.6
513.3
413.5
7.5
251.2
284.4

2,539.7
1,759.2
50.8
202.1
527.6
238.1
907.9
11,060.5
446.3
1,262.5
285.2
2,922.9
2,556.7
328.9
17.5
19.8
6,143.6
1,133.2
737.9
208.3
187.0
2,812.2
1,270.3
393.1
650.1
498.7
2,198.2
642.5
548.7
408.8
6.8
297.3
294.2

2,584.0
1,791.9
51.1
216.3
524.7
233.7
932.8
11,235.5
460.5
1,293.5
300.4
2,944.0
2,571.7
333.8
18.6
20.0
6,237.1
1,126.8
727.2
208.7
190.9
2,859.8
1,294.5
396.0
660.0
509.3
2,250.5
656.4
574.0
405.2
8.5
300.9
305.4

RELATION OF LIABILITIES
TO FINANCIAL ASSETS

35 Total credit market debt
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52

Other liabilities
Official foreign exchange
Treasury currency and special drawing rights
certificates
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Security credit
Trade debt
Taxes payable
Miscellaneous

53 Total liabilities

12,674.9 13,563.6 14,159.6 14,985.9 13,815.9 13,978.7 14,159.6 14,311.9 14,526.8 14,746.2 14,985.9
53.6

61.3

23.8
354.3
3,210.5
32.4
4,644.6
888.6
2,265.4
615.4
428.1
403.2
43.9
566.2
133.9
903.9
81.8
2,508.3

26.3
380.0
3,303.0
64.0
4,741.4
932.8
2,325.3
548.7
498.4
379.7
56.6
602.1
137.4
938.0
81.4
2,678.8

55.4
26.3
402.0
4,223.4
65.2
4,802.5
1,008.5
2,342.0
487.9
539.6
363.4
61.2
813.9
188.9
940.9
72.3
2,811.7

51.8

53.6

52.9

55.4

52.7

54.4

55.4

51.8

24.5
434.0
4,585.8
111.4
4,853.3
1,130.3
2,279.3
409.0
547.9
435.2
51.6
1,056.5
224.3
992.1
77.1
2,921.0

26.1
392.3
3,550.9
35.9
4,765.7
933.1
2,351.5
532.6
532.8
354.0
61.7
683.7
137.5
909.4
65.8
2,699.2

26.2
397.2
3,716.5
60.9
4,769.5
948.3
2,339.7
517.1
533.1
368.9
62.4
744.2
158.1
935.3
71.9
2,733.4

26.3
402.0
4,223.4
65.2
4,802.5
1,008.5
2,342.0
487.9
539.6
363.4
61.2
813.9
188.9
940.9
72.3
2,811.7

26.3
409.6
4,242.1
67.4
4,796.7
984.3
2,340.9
469.7
571.0
376.4
54.4
857.7
195.1
940.9
74.2
2,828.8

26.4
416.8
4,294.2
70.7
4,790.9
1,032.3
2,314.7
438.7
557.2
406.8
41.3
935.5
194.1
945.3
69.8
2,875.3

26.5
424.9
4,429.1
101.8
4,843.1
1,071.6
2,294.3
428.8
553.2
444.1
51.1
977.4
213.1
974.6
74.8
2,915.2

24.5
434.0
4,585.8
111.4
4,853.3
1,130.3
2,279.3
409.0
547.9
435.2
51.6
1,056.5
224.3
992.1
77.1
2,921.0

25,188.3 26,577.2 28,562.1 30,317.6 27,136.1 27,644.8 28,562.1 28,803.3 29,200.2 29,782.1 30,317.6

Financial assets not included in liabilities (+)
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business

21.0
3,819.7
2,524.9

22.0
3,506.6
2,449.4

22.3
4,630.0
2,367.8

19.6
5,127.7
2,263.6

21.4
4,104.7
2,511.8

21.8
4,338.5
2,495.2

22.3
4,630.0
2,367.8

22.0
4,739.7
2,373.5

22.1
4,678.1
2,354.7

23.2
4,860.5
2,330.9

19.6
5,127.7
2,263.6

Floats not included in assets (-)
57 U.S. government checking deposits
58 Other checkable deposits
59 Trade credit

6.1
26.5
-159.7

15.0
28.9
-148.0

3.8
30.9
-134.0

6.8
32.5
-138.5

8.3
29.9
-157.7

19.8
23.6
-154.2

3.8
30.9
-134.0

.9
29.5
-135.2

1.4
32.6
-154.7

4.0
23.3
-152.7

6.8
32.5
-138.5

-4.3
-31.0
11.5
20.6
-251.1

-4.1
-32.0
-23.3
21.8
-247.3

-4.8
-4.2
-12.9
18.9
-452.3

-5.0
-10.7
27.1
28.9
-549.3

-4.7
-9.9
-25.8
11.8
-242.3

-4.7
-4.7
-10.6
17.6
-300.8

-4.8
-4.2
-12.9
18.9
-452.3

-4.9
-1.8
-10.1
11.5
-443.0

-4.9
-4.0
11.6
18.0
-455.7

-5.0
-5.9
36.5
24.4
-510.1

-5.0
-10.7
27.1
28.9
-549.3

60
61
62
63
64

Liabilities not identified as assets (-)
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous

65 Totals identified to sectors as assets

31,935.2 32,944.3 36,136.8 38,336.6 34,164.3 34,914.2 36,136.8 36,491.8 36,810.8 37,582.0 38,336.6

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.6 through L.7. For ordering address, see inside front cover.




2. Excludes corporate equities and mutual fund shares,

Selected Measures
2.10

NONFINANCIAL BUSINESS ACTIVITY

A45

Selected Measures

Monthly data seasonally adjusted, 1987=100 except as noted
1993

1992
Measure

1992

1990"

Sept.'

Oct.r

Nov.'

Dec.

106.2

107.5

108.4

108.9

109.3

109.9

107.1

109.1
112.3

110.5

Aug.1
1 Industrial production1
Market groupings
2 Products, total
3 Final, total
4
Consumer goods
5
Equipment
6 Intermediate
7 Materials
Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing

106.0

104.1

106.5

105.5
107.0
103.4
112.1

103.1
105.3

105.6

101.2

106.8

108.9
96.5
105.5

106.1

11 Nonagricultural employment, total4
12 Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production worker
15 Service-producing
16 Personal income, total
17 Wages and salary disbursements
18
Manufacturing
19 Disposable personal income3
20 Retail sales6
Prices7
21 Consumer (1982-84= 100)
22 Producer finished goods (1982=100)

108.2

106.4
115.4
97.8
108.1

110.0

108.5
111.9
107.6
118.1
98.2
110.4

107.0

106.8

108.0

108.9

109.2

109.9

108.2
118.1

99.3
111.0

77.8

78.8

78.7

78.4

79.2

79.7

79.8

80.3

95.3

89.7

93.6

90.0

89.0

104.0

92.0

90.0

100.0

95.0

107.4
101.0
100.5

106.0
96.4
97.0
96.1
109.0
127.0
124.4
113.6

106.2

106.2

94.6
95.4
94.9
109.9
133.0
129.6
115.3
134.6
127.3

94.3
95.2
94.6

106.2
94.2
94.9
94.3

106.3
94.2
95.0
94.6

106.5
94.2
95.1
95.2
110.5
137.4
133.1
117.2
138.8
132.0

106.9
94.6
95.2
95.2

121.3

106.1
94.8
95.6
95.2
109.7
133.0
129.0
115.4
134.7
127.2

136.2
121.7

140.3
123.2

140.9
123.6

142.6
124.0

100.1

109.5
122.7
121.3
113.5
122.9
120.2
130.7
119.2

128.0

1. A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989
Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the
Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other
sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, from McGraw-Hill Information Systems
Co., F.W. Dodge Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings.
Series covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current
Business.

2.11

111.5
107.5
117.2
98.3

81.1

(percent)
10 Construction contracts3

110.1

104.4
113.5
96.9
107.4

107.8
111.0
107.1
116.7
98.1
109.3

108.2

108.1

105.9
108.9
105.1
114.3
97.0
107.6

105.3

105.2
112.7
97.6
107.9
106.9

102.8

Feb.

110.0

110.1

110.2

133.6
129.5
115.3
135.2
128.1

135.3
130.5
116.5
137.0
130.7

135.3
131.2
116.0
136.8
130.5

106.4
94.2
94.9
94.7
110.3
136.6
132.3
118.0
138.2
131.9

141.3
123.3

141.8
124.4

142.0
124.0

141.9
123.8

110.8

137.5
132.9
117.8
139.0
131.9
143.1
124.3

6. Based on data from U.S. Bureau of the Census, Survey of Current Business.
7. Based on data not seasonally adjusted. Seasonally adjusted data for changes
in the price indexes can be obtained from the Bureau of Labor Statistics, U.S.
Department of Labor, Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and
indexes for series mentioned in notes 3 and 7 can also be found in the Survey of
Current Business.
Figures for industrial production for the latest month are preliminary, and many
figures for the three months preceding the latest month have been revised. See
"Recent Developments in Industrial Capacity and Utilization," Federal Reserve
Bulletin, vol. 76 (June 1990), pp. 411-35.

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted except as noted
1993

1992
Category

1990

1991

1992
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

193,513

193,683

193,847

194,026

194,159

194,298

194,456

194,618

128,839
127,327

128,926
127,429

128,833
127,341

HOUSEHOLD SURVEY DATA

1 Noninstitutional population1
3
4
5
6
7
8

Civilian labor force
Employment
Nonagricultural industries2
Agriculture
Unemployment
Number
Rate (percent of civilian labor force) —
Not in labor force

189,686

191,329

193,142

126,424
124,787

126,867
125,303

128,548
126,982

128,840
127,274

128,618
127,066

128,896
127,365

129,108
127,591

128,598
127,083

114,728
3,186

114,644
3,233

114,391
3,207

114,503
3,221

114,518
3,169

114,855
3,209

115,049
3,262

114,879
3,191

115,335
3,116

115,483
3,082

115,356
3,060

6,874
5.5
63,262

8,426
6.7
64,462

9,384
7.4
64,594

9,550
7.5
64,673

9,379
7.4
65,065

9,301
7.3
64,951

9,280
7.3
64,918

9,013
7.1
65,561

8,876
7.0
65,459

8,864
7.0
65,530

8,925
7.0
65,785

109,782

108,310

108,434

108,497

108,571

108,646

108,752

108,865

109,203

109,194

109,313

19,117
710
5,133
5,808
25,877
6,729
28,130
18,304

18,455
691
4,685
5,772
25,328
6,678
28,323
18,380

18,192
635
4,594
5,741
25,120
6,672
28,903
18,578

18,102
620
4,574
5,738
25,079
6,669
29,065
18,650

18,046
623
4,601
5,731
25,115
6,680
29,152
18,623

18,068
622
4,590
5,732
25,092
6,669
29,188
18,685

18,062
619
4,582
5,742
25,132
6,677
29,253
18,685

18,092
616
4,559
5,763
25,222
6,682
29,267
18,664

18,112
605
4,657
5,771
25,363
6,681
29,322
18,692

18,088
607
4,598
5,770
25,351
6,680
29,400
18,700

18,023
603
4,588
5,768
25,371
6,697
29,551
18,712

ESTABLISHMENT SURVEY DATA

9 Nonagricultural payroll employment3

12 Contract construction
13 Transportation and public utilities
14 Trade
17 Government

1. Persons sixteen years of age and older, including Resident Armed Forces.
Monthly figures are based on sample data collected during the calendar week that
contains the twelfth day; annual data are averages of monthly figures. By
definition, seasonality does not exist in population figures.
2. Includes self-employed, unpaid family, and domestic service workers.
3. Includes all full- and part-time employees who worked during, or received




pay for, the pay period that includes the twelfth day of the month; excludes
proprietors, self-employed persons, household and unpaid family workers, and
members of the armed forces. Data are adjusted to the March 1984 benchmark,
and only seasonally adjusted data are available at this time.
SOURCE. Based on data from U.S. Department of Labor, Employment and
Earnings.

A46

Domestic Nonfinancial Statistics • July 1993

2.12

OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION1
Seasonally adjusted
1992

c

Q2

Q3

1993
Q4

Q1

1993

1992
Q2

Q4

Q3

Q1

Capacity (percent of 1987 output)

Output (1987=100)

1992
Q2

1993

Q3

Q4

Ql

Capacity utilization rate (percent)

1 Total industry

106.3

106.5

108.3

109.7

133.2

133.7

134.2

134.8

79.8

79.7

80.7

81.4

2 Manufacturing

106.7

107.0

108.7

110.4

135.4

136.0

136.6

137.2

78.8

78.7

79.6

80.4

3
4

Primary processing
Advanced processing

103.9
108.0

103.7
108.5

104.7
110.6

106.5
112.2

126.1
139.8

126.4
140.6

126.6
141.3

126.8
142.1

82.4
77.3

82.1
77.2

82.7
78.3

83.9
79.0

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment

107.8
95.1
101.3
104.7
96.7
122.6
119.0
105.7

108.3
96.0
99.7
103.5
94.5
126.8
120.9
103.6

110.8
98.5
101.5
105.0
96.7
132.4
124.0
111.4

113.6
100.2
105.1
109.6
99.0
137.2
126.9
120.8

141.2
112.3
125.6
130.8
118.5
159.0
149.9
151.2

141.9
112.4
125.3
130.4
118.3
160.6
151.3
152.9

142.6
112.5
125.0
129.9
118.2
162.1
152.6
154.5

143.4
112.6
124.9
129.8
118.1
163.7
154.1
155.8

76.3
84.7
80.7
80.1
81.6
77.1
79.4
69.9

76.3
85.4
79.6
79.4
79.8
79.0
80.0
67.7

77.7
87.6
81.2
80.8
81.8
81.7
81.2
72.1

79.2
89.0
84.2
84.5
83.8
83.8
82.3
77.5

101.3

99.5

97.7

95.7

135.7

135.7

135.8

135.7

74.7

73.3

72.0

70.5

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

105.4
104.6
108.7
114.8
109.8
102.7

105.4
105.2
108.6
114.7
110.5
100.2

106.1
105.2
107.9
116.9
106.6
104.2

106.4
106.4
109.7
116.5

128.7
116.6
121.7
142.6
128.3
116.6

129.1
116.7
122.1
143.5
128.8
116.2

129.6
116.9
122.5
144.4
115.9

82.2
89.8
89.6
81.0
85.9
87.8

81.9
90.3
89.2
80.4
86.2
85.9

82.1
90.1
88.4
81.4
82.8
89.7

82.1
91.0
89.6
80.7

103.9

128.3
116.4
121.3
141.7
127.8
116.9

89.7

97.8
111.1
110.7

97.5
110.9
110.6

97.9
114.7
114.3

96.4
115.8
115.8

112.6
130.9
127.4

112.3
131.4
127.9

112.0
131.8
128.5

111.7
132.2
129.0

86.9
84.8
86.9

86.9
84.5
86.4

87.4
87.1
89.0

86.3
87.6
89.8

Mar/

Apr."

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

20 Mining
21 Utilities
22 Electric

Previous cycle2
High

Low

Latest cycle3

1992

Low

Apr.

High

1992
Sept.

Oct.

1993
Nov.

Dec.

Jan.r

Feb.r

Capacity utilization rate (percent)
1 Total industry

89.2

72.6

87.3

71.8

79.9

79.3

80.2

80.8

81.0

81.2

81.5

81.4

81.4

2 Manufacturing

88.9

70.8

87.3

70.0

78.8

78.4

79.2

79.7

79.8

80.3

80.5

80.5

80.7

3
4

92.2
87.5

68.9
72.0

89.7
86.3

66.8
71.4

82.3
77.3

81.7
77.0

82.3
77.9

83.0
78.4

82.9
78.6

83.5
78.9

84.4
78.9

83.9
79.1

84.1
79.2

68.5
62.2
66.2
66.6
61.3
74.5
63.8
51.1

86.9
87.6
102.4
110.4
90.5
92.1
89.4
93.0

65.0
60.9
46.8
38.3
62.2
64.9
71.1
44.5

76.1
84.9
81.0
80.6
81.5
76.2
79.1
69.4

76.1
84.3
78.2
78.3
78.1
79.4
80.1
66.8

77.1
87.0
80.4
80.0
80.8
80.8
80.6
70.1

77.8
88.7
81.2
79.7
83.5
82.0
81.5
71.1

78.2
87.1
82.0
82.7
80.9
82.3
81.6
74.9

78.9
88.2
82.3
82.4
82.2
82.8
82.0
77.7

79.4
90.0
86.4
86.9
85.7
83.7
82.4
77.9

79.4
88.7
83.9
84.0
83.7
85.0
82.6
76.9

79.5
87.5
84.1
84.3
83.9
86.1
82.4
76.8

Primary processing
Advanced processing

5
6
7
8
9
10
11
12
13

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment.

88.8
90.1
100.6
105.8
92.9
96.4
87.8
93.4
77.0

66.6

81.1

66.9

75.1

72.7

72.4

72.0

71.5

71.2

70.6

69.8

68.9

14
15
16
17
18
19

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

87.9
92.0
96.9
87.9
102.0
96.7

71.8
60.4
69.0
69.9
50.6
81.1

87.0
91.7
94.2
85.1
90.9
89.5

76.9
73.8
82.0
70.1
63.4
68.2

82.4
90.2
90.1
81.0
85.2
88.6

81.7
90.1
89.9
80.6
85.4
86.8

82.0
88.7
88.0
81.1
84.1
90.5

82.4
90.8
88.6
82.1
83.6
89.4

82.0
90.8
88.6
81.2
80.5
89.1

82.2
91.5
88.8
81.1
86.0
89.0

82.1
91.1
90.1
80.2
85.3
90.3

82.0
90.4
89.8
80.7

82.2
91.4
90.5
80.9

89.7

89.6

94.4
95.6
99.0

88.4
82.5
82.7

96.6
88.3
88.3

80.6
76.2
78.7

86.5
85.7
87.9

86.5
84.5
86.6

87.1
85.6
87.7

87.4
87.1
88.8

87.8
88.5
90.4

87.9
85.4
87.7

85.5
88.8
90.8

85.4
88.6
90.9

86.1
85.4
87.5

20 Mining
21 Utilities
22 Electric

1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover. For a detailed description of
the series, see "Recent Developments in Industrial Capacity and Utilization,"
Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial
Production Capacity and Capacity Utilization since 1987," Federal Reserve
Bulletin, vol. 79, (June 1993), pp. 590-605.




2. Monthly high, 1973; monthly low, 1975.
3. Monthly highs, 1978 through 1980; monthly lows, 1982.

Selected Measures
2.13

INDUSTRIAL PRODUCTION

A47

Indexes and Gross Value 1

Monthly data seasonally adjusted

Group

1987
proportion

1993

1992
1992
avg.
Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan. r

Feb. r

Mar.r

Apr.p

Index (1987 = 100)
MAJOR MARKETS

100.0

106.5

106.3

106.7

106.0

106.8

106.6

106.2

107.5

108.4

108.9

109.3

109.9

109.9

110.0

2 Products
3 Final products
4
Consumer goods, total
5
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods..
11
Other
12
Appliances, A/C, and T V . . . .
13
Carpeting and furniture
14
Miscellaneous home goods ..
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
18
Chemical products
Paper products
19
20
Energy
21
Fuels
22
Residential utilities

60.8
46.0
26.0
5.6
2.5
1.5
.9
.6
1.0
3.1
.8
.9
1.4
20.4
9.1
2.6
3.5
2.5
2.7
.7
2.0

105.6
108.2
105.2
102.5
99.4
96.9
79.0
127.9
103.7
105.2
110.4
99.9
105.6
105.9
104.7
95.0
118.7
100.8
108.3
104.7
109.6

105.3
107.7
105.4
102.6
99.0
97.4
79.2
129.1
101.5
105.8
111.4
101.0
105.8
106.1
104.8
95.0
118.9
101.2
109.0
105.2
110.5

105.7
108.3
105.8
105.6
102.9
102.1
85.3
131.2
104.4
107.9
116.8
102.7
106.3
105.9
104.7
95.7
118.1
101.0
107.8
104.8
108.9

104.8
107.1
104.0
102.0
99.0
96.5
83.5
119.2
103.2
104.6
109.6
98.0
106.0
104.6
103.3
94.5
117.6
100.6
105.2
103.8
105.8

105.7
108.1
104.9
102.8
98.8
95.3
81.2
119.8
104.6
106.3
109.7
101.7
107.4
105.5
105.0
95.1
117.3
100.1
106.3
104.1
107.2

105.9
108.9
105.1
101.9
99.5
96.0
77.0
128.8
105.3
104.0
111.0
97.7
104.1
106.0
107.0
94.0
116.5
100.2
105.6
98.9
108.2

105.3
108.1
104.4
100.9
97.3
93.5
77.9
120.4
103.7
104.1
112.9
98.2
102.9
105.3
104.9
94.3
118.5
100.4
104.6
103.5
105.1

107.1
110.1
106.4
104.1
103.1
101.5
78.5
141.3
105.9
104.9
110.8
98.5
105.8
107.1
105.9
94.5
121.1
100.1
111.1
109.8
111.6

107.8
111.0
107.1
105.7
104.1
102.9
79.6
143.3
106.0
107.1
110.8
103.7
107.1
107.5
105.2
95.9
123.3
100.9
112.0
107.7
113.6

108.2
111.5
107.5
107.9
108.7
111.7
86.9
154.6
103.8
107.2
110.5
105.4
106.6
107.4
104.8
96.0
121.7
100.9
114.4
106.1
117.5

108.5
111.9
107.6
110.9
112.7
116.8
86.6
169.1
105.8
109.3
116.0
105.5
108.0
106.7
104.6
95.7
122.4
100.2
109.5
106.5
110.7

109.1
112.3
108.2
111.7
112.6
115.7
91.9
156.9
107.5
110.9
117.6
107.4
109.4
107.3
104.9
95.4
120.4
101.8
114.0
108.9
115.9

109.1
112.3
108.1
111.0
111.4
113.5
90.6
153.1
107.9
110.7
120.4
105.2
108.8
107.3
104.3
95.2
122.7
101.8
113.6
107.4
116.0

109.1
112.5
107.9
111.2
111.0
112.8
88.0
155.9
107.9
111.4
120.1
107.2
109.2
107.0
104.4
94.9
123.2
102.2
110.2
106.0
111.8

23
24
25
26
27
28
29
30
31
32
33

Equipment
Business equipment
Information processing and related .
Office and computing
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes

20.0
13.9
5.6
1.9
4.0
2.5
1.2
1.9
5.4
.6
.2

112.7
123.2
134.7
176.8
108.5
137.1
117.9
104.7
85.9
78.3
99.7

111.1
120.6
129.6
168.2
106.8
137.5
119.5
104.2
87.7
75.5
93.0

112.0
122.1
131.4
170.5
108.4
136.9
123.3
106.5
87.2
75.4
92.5

111.6
121.9
134.3
174.0
108.7
133.9
117.2
99.2
86.5
73.1
90.1

112.7
123.7
137.4
178.0
109.1
135.3
114.2
100.2
85.1
73.8
101.3

114.3
126.1
138.5
182.0
109.2
143.3
117.3
105.6
84.5
75.6
96.9

113.5
125.0
138.2
184.0
109.6
134.5
114.7
107.3
84.4
76.3
100.9

115.4
127.5
142.2
187.0
110.1
137.4
121.7
108.8
83.5
82.7
110.4

116.7
129.0
142.9
189.0
112.0
140.4
123.9
110.7
83.2
86.4
118.5

117.2
129.6
143.2
198.5
112.3
144.1
131.4
109.2
82.5
91.2
128.6

118.1
131.2
144.4
205.0
113.1
146.7
136.7
112.6
82.0
89.0
129.4

118.1
131.8
146.1
214.1
112.5
147.1
138.1
113.0
81.4
77.9
127.1

118.4
132.9
149.2

119.1
134.0
151.9

1R6
145.0
135.9
113.8
80.9
71.1
116.2

li2:6
143.5
134.6
114.6
80.5
72.4
116.7

34
35
36

Intermediate products, total
Construction supplies
Business supplies

14.7
6.0
8.7

97.6
93.8
100.1

97.9
93.6
100.7

97.9
95.3
99.6

97.7
93.6
100.6

98.6
94.3
101.4

97.0
94.1
99.0

96.9
93.0
99.5

97.8
94.7
99.9

98.1
95.1
100.0

98.3
94.5
100.8

98.2
94.8
100.5

99.3
97.3
100.6

99.4
97.2
100.8

98.6
96.3
100.2

37 Materials
38 Durable goods materials
39
Durable consumer parts
40
Equipment parts
41
Other
42
Basic metal materials
43 Nondurable goods materials
44
Textile materials
45
Pulp and paper materials
46
Chemical materials
47
Other
48 Energy materials
49
Primary energy
50
Converted fuel materials

39.2
19.4
4.2
7.3
7.9
2.8
9.0
1.2
1.9
3.8
2.1
10.9
7.2
3.7

107.9
108.9
101.5
116.5
106.0
108.3
110.9
102.8
109.9
114.2
110.4
103.4
99.7
110.6

107.9
108.8
102.0
115.2
106.5
109.2
111.2
102.9
111.0
114.3
110.4
103.5
99.2
112.1

108.0
109.0
101.5
116.1
106.5
109.2
111.5
102.4
109.6
115.5
110.9
103.3
99.5
110.6

107.8
108.7
101.5
116.6
105.4
107.8
111.5
101.8
110.8
114.8
111.6
103.1
99.6
109.9

108.5
109.3
100.6
117.7
106.3
108.7
111.5
107.7
110.3
114.1
110.0
104.4
100.4
112.3

107.6
108.9
101.4
117.1
105.5
107.7
110.7
101.6
108.7
114.5
110.5
102.5
99.4
108.7

107.4
107.6
98.5
116.2
104.6
105.8
111.7
103.3
112.3
114.5
110.5
103.6
99.6
111.4

108.1
109.7
101.8
118.3
106.2
108.3
110.7
102.7
109.1
114.4
109.7
103.0
99.4
110.0

109.3
111.1
104.3
119.3
107.4
109.8
112.0
103.4
110.2
115.6
112.0
103.9
100.2
111.1

110.0
111.9
107.5
119.7
107.5
108.8
111.5
102.9
110.7
114.6
111.3
105.1
101.3
112.4

110.4
113.3
110.8
120.4
108.6
110.4
112.4
104.2
110.7
114.9
114.1
103.4
100.4
109.1

111.0
114.4
111.8
120.9
110.2
113.1
112.1
103.0
111.9
114.6
112.8
103.9
98.0
115.4

111.0
114.3
111.9
121.2
109.7
110.7
112.4
103.8
111.1
115.4
113.0
103.8
98.1
115.1

111.4
115.0
112.4
122.3
110.1
111.9
113.5
104.8
113.2
116.6
112.7
102.9
98.4
111.7

97.3
95.3

106.6
106.6

106.3
106.4

106.6
106.6

106.1
106.1

107.0
107.0

106.7
106.7

106.3
106.4

107.4
107.5

108.4
108.4

108.6
108.6

108.9
108.7

109.5
109.3

109.6
109.4

109.7
109.5

97.5

105.0

105.1

105.3

104.6

105.3

105.0

104.5

105.7

106.6

107.1

107.3

107.8

107.6

107.5

24.5
23.3

105.7
104.8

105.9
104.9

106.1
105.6

104.6
103.9

105.5
104.7

105.7
105.0

105.1
104.3

106.8
105.9

107.4
106.6

107.3
106.8

107.0
107.4

107.7
107.6

107.8
107.5

107.6
107.6

12.7

123.7

120.7

122.0

122.3

124.5

126.9

125.9

128.0

129.5

129.5

130.7

131.3

132.7

133.9

118.1
110.0

119.7
111.4

120.1
111.8

121.0
113.0

120.7
113.7

120.7
113.7

120.7
114.5

1 Total index

SPECIAL AGGREGATES

51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts..
53 Total excluding office and computing
machines
54 Consumer goods excluding autos and
trucks
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding office and
computing equipment
58 Materials excluding energy




12.0
28.4

115.7
109.5

114.2
109.5

115.3
109.8

114.3
109.5

115.6
110.0

118.1
109.4

116.1
108.8

A48

Domestic Nonfinancial Statistics • July 1993

2.13—Continued

Group

SIC
code

1987
proportion

1992

1993

1992
avg.
Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.r

Feb. r

Mar.r

Apr."

Index (1987 = 100)
MAJOR INDUSTRIES

100.0

106.5

106.3

106.7

106.0

106.8

106.6

106.2

107.5

108.4

108.9

109.3

109.9

109.9

110.0

2 Manufacturing
3 Primary processing
4 Advanced processing

84.3
27.1
57.1

106.9
103.8
108.3

106.5
103.8
107.8

107.1
104.2
108.4

106.5
103.7
107.9

107.1
104.3
108.4

107.0
103.5
108.7

106.8
103.3
108.4

108.0
104.1
109.9

108.9
105.1
110.7

109.2
105.0
111.3

109.9
105.8
111.9

110.5
107.1
112.2

110.6
106.5
112.6

111.0
106.9
113.0

5
6
7
8

Durable goods
"'24
Lumber and products . . .
Furniture and fixtures . . .
25
Clay, glass, and stone
32
products
Primary metals
33
331,2
Iron and steel
Raw steel
Nonferrous
333-6,9
Fabricated metal
products
34
Industrial and commercial
machinery and
computer equipment.
35
Office and computing
machines
357
36
Electrical machinery
Transportation
37
equipment
Motor vehicles and
371
parts
Autos and light
trucks
Aerospace and miscellaneous transportation equipment.. 372-6,9
Instruments
38
Miscellaneous
39

46.5
2.1
1.5

108.1
96.4
99.0

107.2
95.3
99.4

108.4
96.1
101.0

107.6
93.8
94.2

108.2
96.6
97.5

108.5
96.6
99.2

108.1
94.7
100.5

109.8
97.8
100.4

110.9
99.8
102.3

111.8
98.0
103.9

112.9
99.3
105.2

113.9
101.3
105.2

114.0
99.9
107.0

114.4
98.6
107.3

2.4
3.3
1.9
.1
1.4

96.0
101.1
104.7
101.2
96.1

94.5
101.8
105.6
103.5
96.6

97.4
101.1
104.8
101.9
95.9

95.6
101.2
103.8
101.6
97.5

96.8
100.6
104.7
101.7
95.0

95.7
100.5
103.8
99.1
96.1

96.5
98.0
102.0
98.9
92.4

96.8
100.5
104.1
99.8
95.6

97.6
101.6
103.6
102.8
98.7

98.0
102.4
107.4
104.6
95.7

97.0
102.8
107.0
103.4
97.1

99.1
107.9
112.8
105.9
101.1

98.0
104.8
109.1
102.0
98.8

98.3
105.1
109.5
103.2
99.0

5.4

96.7

96.8

97.2

97.1

97.0

97.0

96.5

97.5

97.6

97.8

99.8

99.8

100.1

100.4

8.5

124.8

120.9

123.2

123.8

125.7

126.9

127.9

130.6

132.8

133.8

135.0

137.1

139.6

142.0

2.3
6.9

168.3
119.8

158.5
118.2

162.1
119.5

167.3
119.3

171.8
120.7

173.7
120.6

178.3
121.5

183.1
122.6

184.5
124.4

186.4
124.8

192.0
125.8

198.0
127.0

205.7
127.8

212.8
127.9

Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing ..
Chemicals and products .
Petroleum products
Rubber and plastic
products
Leather and products . . .

1 Total index

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 Mining
35 Metal
36 Coal
37 Oil and gas extraction
38 Stone and earth minerals . .
39 Utilities
40 Electric
41 Gas

9.9

102.6

103.2

104.5

102.7

101.4

102.4

100.5

103.0

103.6

106.3

108.4

108.1

107.0

106.4

4.8

104.8

104.5

107.9

104.8

103.1

105.0

102.6

108.0

109.9

116.2

120.9

121.3

120.0

120.2

2.2

101.4

102.4

107.9

102.7

100.8

99.7

97.9

104.1

105.4

114.4

118.2

119.2

117.0

115.6

5.1
5.1
1.3

100.6
104.2
109.7

102.0
104.9
108.5

101.3
105.1
110.2

100.8
104.4
109.7

99.8
104.9
111.6

100.0
104.3
109.1

98.6
103.7
108.7

98.3
103.7
110.5

97.7
103.6
111.4

97.1
103.3
111.8

96.7
103.0
110.9

95.7
102.1
111.9

94.7
102.9
112.1

93.4
103.3
112.9

"20
21
22
23
26
27
28
29

37.8
8.8
1.0
1.8
2.3
3.6
6.5
8.8
1.3

105.4
106.0
99.2
104.7
92.3
108.2
95.0
115.0
102.0

105.5
106.0
97.3
105.0
93.4
109.2
95.8
114.6
103.7

105.4
106.1
97.9
105.0
93.5
108.2
94.5
114.8
102.5

105.2
105.4
96.4
103.8
91.7
108.7
95.6
114.9
101.8

105.7
105.9
101.5
107.0
92.7
109.1
95.7
114.6
101.5

105.2
106.3
115.5
103.5
91.3
107.1
93.5
114.4
98.0

105.2
105.6
101.7
105.1
91.5
109.5
94.1
115.2
101.1

105.8
106.8
102.4
103.5
91.7
107.3
94.5
116.2
105.3

106.4
106.4
101.9
106.0
92.9
108.2
94.2
117.7
103.9

106.0
106.2
96.1
106.0
92.7
108.3
94.7
116.7
103.4

106.4
105.9
100.5
106.9
93.1
108.6
94.7
116.8
103.2

106.4
106.3
99.5
106.6
92.9
110.4
94.3
115.8
104.7

106.4
106.1
97.5
105.7
92.5
110.1
94.4
116.9
103.9

106.8
106.2
98.6
107.0
92.1
111.1
94.8
117.4
103.7

30
31

3.2
.3

109.7
92.6

109.1
91.1

110.3
91.8

109.7
92.3

110.7
93.6

110.7
92.0

108.5
93.8

109.9
95.1

111.3
96.6

111.3
96.7

113.6
97.1

114.0
97.3

114.3
97.8

114.3
97.7

"lO
12
13
14

8.0
.3
1.2
5.8
.7

97.6
161.7
105.5
92.6
93.8

97.4
156.0
106.5
92.4
94.8

98.8
172.2
109.5
92.5
96.9

97.1
157.8
101.9
93.1
92.7

98.5
156.5
108.0
93.6
94.1

97.0
165.5
103.9
91.9
93.8

97.1
159.8
103.6
92.7
91.9

97.6
168.1
103.8
92.7
93.6

97.8
171.6
103.5
92.8
94.4

98.2
158.1
107.9
93.4
92.6

98.3
167.7
108.2
92.7
93.8

95.6
163.0
101.7
90.4
95.1

95.4
163.5
102.3
90.0
95.3

96.1
161.9
108.0
89.9
95.2

49UPT
492,3PT

7.7
6.1
1.6

112.0
111.6
113.2

112.0
111.8
113.0

111.2
110.8
112.6

110.0
109.5
112.0

111.2
110.8
112.8

110.4
110.0
112.1

111.2
110.9
112.0

112.7
112.6
113.2

114.7
114.1
117.3

116.8
116.4
118.2

112.8
112.9
112.4

117.4
117.2
118.2

117.3
117.4
116.9

113.1
113.2
112.7

79.5

107.0

106.6

107.0

106.6

107.4

107.2

107.1

108.0

108.8

108.8

109.3

109.8

110.0

110.4

81.9

105.1

105.0

105.5

104.8

105.3

105.1

104.8

105.9

106.7

107.0

107.6

108.0

107.9

108.1

SPECIAL AGGREGATES

42 Manufacturing excluding
motor vehicles and
parts
43 Manufacturing excluding
office and computing
machines

Gross value (billions of 1987 dollars, annual rates)
MAJOR MARKETS

44 Products, total

1,707.0 1,806.4 1,804.4 1,814.8 1,794.6 1,806.8 1,802.7 1,799.9 1,835.6 1,846.7 1,857.5 1,864.9 1,878.4 1,874.1 1,870.1

45 Final
46 Consumer goods
47 Equipment
48 Intermediate

1,314.6 1,420.1 1,416.2 1,426.9 1,408.8 1,416.7 1,417.8 1,415.7 1,448.1 1,457.1 1,466.8 1,476.4 1,484.1 1,479.7 1,478.6
866.6 913.0 914.7 920.1 906.6 912.6 908.1 905.1 928.4 931.6 936.3 940.0 947.1 942.1 939.2
448.0 507.1 501.5 506.8 502.2 504.1 509.7 510.6 519.7 525.5 530.5 536.5 537.1 537.6 539.4
392.5 386.4 388.2 387.9 385.9 390.1 385.0 384.2 387.4 389.6 390.7 388.4 394.3 394.4 391.5

1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover.
A revision of the industrial production index and the capacity utilization rates




was released in May 1993. See "Industrial Production, Capacity, and Capacity
Utilization since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
2. Standard industrial classification.

Selected Measures

A49

2.14 HOUSING AND CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1993

1992
Item

1990

1991

1992
June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.r

Feb.r

Mar.

1,141
957
184

1,034
871
163
1,137
1,000
137
638
506
132
1,096
991
105
247

Private residential real estate activity (thousands of units except as noted)
N E W UNITS

l,095rr
911
184
1,200
1,030
169
612
473
140
1,158
964
194

Permits authorized
One-family
Two-or-more-family
Started
One-family
Two-or-more-family
.
Under construction at end of period1
One-family
Two-or-more-family
Completed
One-family
Two-or-more-family
Mobile homes shipped

794
317
1,193
895
298
711
449
262
1,308
966
342
188

949
754
195
1,014
840
174
606
434
173
1,091
838
253
171

Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period .

535
321

507
284

265

122.3
149.0

120.0

147.0

18 Number sold

3,211

Price of units sold (thousands
of dollars)
19 Median
20 Average

95.2
118.3

1
2
3
4
5
6
7
8
9
10
11
12
13

Price of units sold (thousands
of dollars)2
16 Median
17 Average

1,111

210

l,048rr
878

m

1,141
994
147
641
481
160
1,181

979
202

194

r
l,083r
882
201
1,106
961
145
628
474
154
1,234
1,026
208
210

l,081r

885rr
196
1,229
1,038
191
633
479
154
1,133
945

l,120rr
918r
202
1,218

1,226

l,196r
l,037r1
159

1,226

l,136rr
963r
173

1,079
147
645
493
152
1,137
964
173

1,133
153
644
501
143
1,227
1,016
211
266

1,157
972
185
1,171
1,051
120
641
506
135
1,136
980
156
267

l,141rr
954r
187

202

217

228

1,089
137
641
498
143
1,229
1,002
227
244

188

1,045
173
637
485
152

1,128

942
186

1,286

1,180

1,036
144
641
508
133
1,237
1,053
184
262

584
273

622
271

625
270

672
267

637
264

615
262

662r
265

597
266

608

268

637
269

121.3r

144.?

124.5
146.6

118.0

123.5
145.3

119.5
142.2

125.0
148.4

128.9
147.2

126.0r

118.0

137.7

137.9

128.4
147.9

125.0
146.0

3,219

3,520

3,320

3,380

3,340

3,380

3,710

3,860

4,040

3,780

3,460

3,370

99.7
127.4

103.6
130.8

105.5
133.9

102.8

105.0
132.4

103.5
131.0

103.4
129.3

102.7
128.8

104.2
131.0

103.1
129.4

103.6
129.6

105.1
131.5

146.2r

EXISTING UNITS ( o n e - f a m i l y )

132.2

Value of new construction (millions of dollars)
CONSTRUCTION

21 Total put in place

442,066 400,955 426,657 426,730 425,700 419,598 429,291 432,250 436,140 439,948 441,344 446,365 442,677

22 Private
23 Residential
24 Nonresidential, total
25
Industrial buildings
26
Commercial buildings
27
Other buildings
28
Public utilities and other

334,153 290,707 308,246 312,182 305,848 301,984 308,813 315,855 317,451 320,720 327,790 331,473 327,686
182,856 157,837 184,127 184,630 181,162 184,201 186,343 192,553 194,801 198,538 204,757 205,001 204,511
151,297 132,870 124,119 127,552 124,686 117,783 122,470 123,302 122,650 122,182 123,033 126,472 123,175
23,849 22,281 20,173 20,285 20,594 17,862 19,019 18,646 19,083 18,721 18,768 19,439 19,530
62,866 48,482 40,417 43,310 39,988 37,010 39,333 40,195 40,379 38,326 39,314 41,152 37,974
21,591 20,797 21,514 21,991 22,228 21,518 22,068 21,545 21,542 21,370 20,795 21,941 22,075
42,991 41,310 42,015 41,966 41,876 41,393 42,050 42,916 41,646 43,765 44,156 43,940 43,596

29 Public
30 Military
31 Highway
32 Conservation and development...
33 Other

107,909 110,247 118,408 114,548 119,853 117,614
2,438
2,372
2,503
2,484
1,837
2,664
31,154 29,918 32,759 31,496 32,682 33,451
5,382
5,772
5,889
5,978
4,958
4,607
69,484 73,534 77,187 74,660 79,027 76,343

1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable
with data for previous periods because of changes by the Census Bureau in its
estimating techniques. For a description of these changes, see Construction
Reports (C-30-76-5), issued by the Census Bureau in July 1976.




120,478 116,395 118,689
2,612
2,438
3,172
34,651 32,056 34,636
6,210
5,630
6,364
76,291 76,271 75,231

119,229 113,554 114,892 114,991
2,376
2,459
2,419
2,483
31,237 29,811 31,306 31,995
5,708
8,237
7,136
6,752
77,272 75,576 74,415 73,484

SOURCE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 17,000 jurisdictions
beginning in 1984.

A50
2.15

Domestic Nonfinancial Statistics • July 1993
C O N S U M E R A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier

Change from 3 months earlier
(annual rate)

Item

1993

1992
1992
Apr.

1993
Apr.

Change from 1 month earlier
Index
level,
Apr.
19931

19931

1992

Juner

Sept.r

Dec.r

Mar.r

Dec.

Jan.

Feb.

Mar.

Apr.

CONSUMER PRICES2

(1982-84=100)
1 All items

3.2

3.2

2.6

2.6

3.2

4.0

.1

.5

.3

.1

.4

144.0

? Food
3 Energy items
4 All items less food and energy
5 Commodities
6 Services

1.0
.0
3.9
3.0
4.3

1.8
3.6
3.5
2.7
3.8

-1.2
8.6
2.8
2.5
3.1

3.2
1.2
2.5
1.8
2.9

1.4
1.9
3.8
1.5
4.7

2.6
3.1
4.3
4.6
4.4

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

.4
.5
.5
.5
.4

.1
-.4
.5
.5
.4

.1
.7
.1
.1
.2

.4
.2
.4
.3
.4

140.6
103.1
151.7
136.0
160.7

1.1
-2.0
-.4
2.9
2.3

2.4
2.9
3.7
2.0
1.4

3.3
-.6
16.6
2.4
.9

1.3
4.3
-3.5
1.5
1.2

-.3
3.3
-10.2
1.2
.6

3.9
-2.2
17.2
2.9
3.4

.0
1.3r
-2.4 r
.1r
,2

.2
-l.O'
l.Of
.4
.2"

.4
-.1
1.7
.3
.5

.4
.5
1.3
.1
.2

.6
1.4
.1
.4
.2

125.3
126.3
78.2
139.8
130.9

-.1
.2

2.2
1.8

5.0
1.7

.7
1.3

-2.1
-.3

5.3
4.3

,4r
.3

.5
.5

.3
.2

.1
.2

116.5
124.0

-3.2
-2.2
-2.7

4.4
3.1
9.7

2.7
51.5
4.8

-4.8
19.8
2.2

5.1
-17.8
1.9

1.1
-9.7
25.0

.R

.1
-2.5
2.2

.1
.8
.4

2.5
-.6
1.8

110.1
77.3
141.6

PRODUCER PRICES

(1982=100)
7 Finished goods
8 Consumer foods
9 Consumer energy
10 Other consumer goods
11 Capital equipment
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
IS Energy
16 Other

1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a
rental-equivalence measure of homeownership.




-.R

.2
I.R

-4.8 rr
2.2

-,8 r1
3.0

SOURCE. Bureau of Labor Statistics.

Selected Measures

A51

2.16 GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993

1992
Account

1990

1991

1992
Q1

Q2

Q3

Q4

Ql

GROSS DOMESTIC PRODUCT
5,522.2

5,677.5

5,950.7

5,840.2

5,902.2

5,978.5

6,081.8

6,148.0

3.748.4
464.3
1.224.5
2,059.7

3,887.7
446.1
1,251.5
2,190.1

4,095.8
480.4
1,290.7
2,324.7

4,022.8
469.4
1,274.1
2,279.3

4,057.1
470.6
1,277.5
2,309.0

4.108.7
482.5
1.292.8
2,333.3

4,194.8
499.1
1,318.6
2,377.1

4,238.6
500.6
1,321.8
2,416.3

799.5
793.2
577.6
201.1
376.5
215.6

721.1
731.3
541.1
180.1
360.9
190.3

770.4
766.0
548.2
168.4
379.9
217.7

722.4
738.2
531.0
170.1
360.8
207.2

773.2
765.1
550.3
170.3
380.0
214.8

781.6
766.6
549.6
166.1
383.5
217.0

804.3
794.0
562.1
167.0
395.1
231.9

844.1
805.1
571.0
167.1
403.9
234.1

6.3
3.3

-10.2
-10.3

4.4
2.2

-15.8
-13.3

8.1
6.4

15.0
9.7

10.3
6.2

39.0
36.7

-68.9
557.0
625.9

-21.8
598.2
620.0

-30.4
636.3
666.7

-8.1
628.1
636.2

-37.1
625.4
662.5

-36.0
639.0
675.0

-40.5
652.7
693.2

-50.9
649.7
700.5

17 Government purchases of goods and services ..
18 Federal
19 State and local

1,043.2
426.4
616.8

1,090.5
447.3
643.2

1,114.9
449.1
665.8

1,103.1
445.0
658.0

1,109.1
444.8
664.3

1,124.2
455.2
669.0

1,123.3
451.6
671.7

1,116.1
441.2
674.9

By major type of product
20 Final sales, total
21 Goods
Durable
22
23
Nondurable
24 Services
25 Structures

5,515.9
2,160.1
920.6
1,239.5
2,846.4
509.4

5.687.7
2.192.8
907.6
1,285.1
3,030.3
464.7

5,946.3
2.260.3
943.9
1.316.4
3,197.1
488.8

5,855.9
2,233.6
923.6
1,310.0
3,142.2
480.1

5.894.1
2.233.2
932.3
1,300.8
3,173.4
487.6

5.963.5
2,258.4
943.8
1.314.6
3,217.8
487.3

6,071.5
2,316.1
975.8
1,340.3
3,255.1
500.3

6,109.0
2,310.4
968.5
1,341.9
3,298.6
500.0

6.3
-.9
7.2

-10.2
-19.3
9.0

4.4
-3.5
7.9

-15.8
-19.3
3.5

8.1
9.5
-1.4

15.0
2.7
12.3

10.3
-6.9
17.2

39.0
18.8
20.2

4,877.5

4,821.0

4,922.6

4,873.7

4,892.4

4,933.7

4,990.8

5,002.5

4,468.3

4,544.2

4,743.4R

4,679.4

4,716.5

4,719.6

4,858.0R

4,923.5

3,534.3
2,923.5
564.3
2,359.1
610.8
302.9
307.9

3,583.7
2,963.9
569.6
2,394.3
619.8
307.6
312.2

3,628.9
3,000.3
578.1
2,422.2
628.6
312.0
316.5

397.4
365.9
31.5

428.4
380.4
48.1

442.0
389.1
52.9

1 Total
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services

2
3
4
5

6 Gross private domestic investment
7 Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
13

Change in business inventories
Nonfarm

14 Net exports of goods and services
15 Exports
16 Imports

26 Change in business inventories
27 Durable goods
28 Nondurable goods
MEMO

29 Total GDP in 1987 dollars
NATIONAL INCOME

30 Total

3,291.2
2,742.9
514.8
2,228.0
548.4
277.4
271.0

3,390.8
2,812.2
543.5
2,268.7
578.7
290.4
288.3

3,525.2
2,916.6
562.5
2,354.1
608.6
302.9
305.7

3,476.3
2,877.6
554.6
2,323.0
598.7
299.4
299.2

3,506.3
2,901.3
561.4
2,339.9
605.0
301.5
303.6

38 Proprietors'income1
39 Business and professional1
40 Farm1

366.9
325.2
41.7

368.0
332.2
35.8

404.5
364.9
39.5

393.6
353.6
40.1

398.4
359.9
38.5

41 Rental income of persons2

-12.3

-10.4

4.7

-4.5

3.3

6.4

384.0
366.1
-5.4
23.3

388.4
376.8
-15.5
27.0

374.1
354.1
-9.7
29.7

r
428.5r
389.4
1.0
38.1

432.2
400.6
-9.3
40.8

430.0

420.0

407.3

403.6

402.9

31 Compensation of employees
32 Wages and salaries
33
Government and government enterprises ..
34
Other
35 Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income

42 Corporate profits ..
43 Profits before tax3
44 inventory valuation adjustment
45 Capital consumption adjustment

361.7
355.4
-14.2
20.5

346.3
334.7
3.1
8.4

393.8r
371.6r
-7.4
29.5

46 Net interest

460.7

449.5

415.2

1

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




13.6

3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.

17.5

A52
2.17

Domestic Nonfinancial Statistics • July 1993
PERSONAL INCOME A N D SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993

1992
Account

1990

1991

1992
Ql

Q2

Q3

04

Ql

PERSONAL INCOME AND SAVING

1 Total personal income

4,664.2

4,828.3

5,058.1

4,980.5

5,028.9

5,062.0

5,160.9

5,237.6

2 Wage and salary disbursements
3 Commodity-producing industries
4
Manufacturing
5 Distributive industries
6 Service industries
7 Government and government enterprises

2,742.8
745.6
556.1
634.6
847.8
514.8

2,812.2
737.4
556.9
647.4
883.9
543.6

2,918.1
743.2
565.7
666.8
945.5
562.5

2,877.6
736.8
559.9
660.9
925.3
554.6

2,901.3
743.1
564.7
662.9
933.9
561.4

2,923.5
742.4
565.5
667.7
949.1
564.3

2,969.9
750.6
572.8
675.8
973.9
569.6

3,006.3
754.4
576.4
685.6
988.2
578.1

271.0
366.9
325.2
41.7
-12.3
140.3
694.5
685.8
352.0

288.3
368.0
332.2
35.8
-10.4
137.0
700.6
771.1
382.0

305.7
404.5
364.9
39.5
4.7
139.3
670.2
866.1
414.1

299.2
393.6
353.6
40.1
-4.5
133.9
684.8
842.7
405.7

303.6
398.4
359.9
38.5
3.3
136.6
675.2
859.7
412.1

307.9
397.4
365.9
31.5
6.4
141.0
663.2
874.1
417.1

312.2
428.4
380.4
48.1
13.6
145.8
657.8
888.0
421.6

316.5
442.0
389.1
52.9
17.5
149.9
656.4
909.4
434.2

8
9
10
11
12
13
14
15
16

Other labor income
Proprietors' income1
Business and professional
Farm1
.
Rental income of persons2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits ..

17

LESS: Personal contributions for social insurance

18 EQUALS: Personal income

224.8

238.4

250.6

246.8

249.3

251.5

254.8

260.4

4,664.2

4,828.3

5,058.1

4,980.5

5,028.9

5,062.0

5,160.9

5,237.6

621.3

618.7

627.3

619.6

617.1

628.8

643.6

656.3

20 EQUALS: Disposable personal income

4,042.9

4,209.6

4,430.8

4,360.9

4,411.8

4,433.2

4,517.3

4,581.4

21

LESS: Personal outlays

3,867.3

4,009.9

4,218.1

4,146.3

4,179.5

4,229.9

4,316.9

4,362.3

22 EQUALS: Personal saving

175.6

199.6

212.6

214.6

232.3

203.3

200.4

219.0

19,513.0
13,043.6
14,068.0

19,077.1
12,824.1
13,886.0

19,271.4
12,973.9
14,035.0

19,158.5
12,930.2
14,017.0

19,181.8
12,893.3
14,021.0

19,288.4
12,973.3
13,998.0

19.456.3
13.098.4
14,105.0

19,454.4
13,105.3
14,165.0

4.3

4.7

4.8

4.9

5.3

4.6

4.4

4.8

718.0

708.2

686.3r

677.5

682.9

696.9

687.9r

736.5

854.1

901.5

r

968.8

950.1

968.1

992.1

965.0"^

999.0

29 Personal saving
30 Undistributed corporate profits
31 Corporate inventory valuation adjustment

175.6
75.7
-14.2

199.6
75.8
3.1

212.6r
104.3
-7.4

214.6
104.0
-5.4

232.3
97.7
-15.5

203.3
91.2
-9.7

200.4 r
124. l
1.0

219.0
125.2
-9.3

Capital consumption allowances
32 Corporate
33 Noncorporate

368.3
234.6

383.0
243.1

394.8
258.6

386.1
245.3

391.2
247.0

407.2
290.4

394.7
251.8

399.8
261.1

-136.1
-166.2
30.1

-193.3
-210.4
17.1

-272.6
-289.2
16.6

-285.2
-302.9
17.7

-295.2
-304.4
9.2

-277.21r
—295.51
18.3

-262.5
-273.5
11.0

19

LESS: Personal tax and nontax payments

MEMO

Per capita (1987 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING

27 Gross saving
28 Gross private saving

34 Government surplus, or deficit (-), national income and
product accounts
Federal
State and local

35
36

r
-282.5r
-298.0
15.5

37 Gross investment

723.4

730.1

720.4

706.5

713.8

732.0

729.5

783.3

38 Gross private domestic
39 Net foreign

799.5
-76.1

721.1
9.0

770.4
-49.9

722.4
-16.0

773.2
-59.4

781.6
-49.6

804.3
-74.7

844.1
-60.8

5.4

21.9

34. l r

29.0

30.9

35.1

40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments
2. With capital consumption adjustment.




4i .r

SOURCE. U.S. Department of Commerce, Survey of Current Business.

46.8

Summary
3.10

Statistics

A53

U.S. INTERNATIONAL TRANSACTIONS Summary
Millions of dollars; quarterly data seasonally adjusted except as noted1
1992

1991
Item

1991

1990

Q4
1 Balance on current account..
2 Merchandise trade balance
Merchandise exports
3
Merchandise imports
4
5 Military transactions, net
6
Other service transactions, net
7 Investment income, net
8
U.S. government grants
9 U.S. government pensions and other transfers
10 Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )

-90,428
-108,853
388,705
-497,558
-7,818
39,873
19,287
-17,597
-2,945
-12,374

-3,682
-73,436
415,962
-489,398
-5,524
50,821
16,429
24,487
-3,462
-12,996

Ql

Q2

Q3

Q4P

-13,832
-3,736
-13,793

-7,218
-18,539
107,851
-126,390
-540
13,676
2,458
78
-1,080
-3,271

-6,374
-17,663
107,634
-125,297
-624
14,450
4,394
-2,620
-830
-3,481

-18,279
-25,004
107,148
-132,152
-623
13,242
1,851
-3,085
-1,119
-3,541

-15,771
-27,634
110,119
-137,753
-579
16,315
2,977
-2,521
-941
-3,388

-22,020
-25,974
114,371
-140,345
-677
13,625
839
-5,605
-846
-3,382

-62,448
-96,275
439,272
-535,547
-2,503
57,628

10,062

2,304

3,397

-959

-437

-38

-277

-301

-344

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

-2,158
0
-192
731
-2,697

5,763
0
-177
-367
6,307

3,901
0
2,316
-2,692
4,277

1,225
0
-23
17
1,232

-1,057
0
-172
111
-9%

1,464
0
-168

1,952
0
-173

1
1,631

2,243

1,542
0
2,829
-2,685
1,398

17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims3
19 Nonbank-reported claims
20 U.S. purchases of foreign securities, net
21 U.S. direct investments abroad, net

-56,467
7,469
-2,477
-28,765
-32,694

-71,379
-4,753
5,526
-45,017
-27,135

-47,843
32,372
3,742
-48,646
-35,311

-44,947
-23,219
1,269
-11,305
-11,692

-3,614
15,859
4,764
-8,703
-15,534

-1,610
10,943
3,137
-8,221
-7,469

-22,892
-1,274
-4,159
-13,934
-3,525

-19,726
6,844

33,908
29,576
667
1,866
3,385
-1,586

18,407
15,815
1,301
1,600
-1,668
1,359

40,307
18,333
4,025
2,469
16,168
-688

12,819
12,619
1,075
-344
-914
383

21,192
14,909
540
%
5,534
113

20,895
11,126
1,699
598
7,547
-75

-7,269
-323
912
929
-7,787

5,489
-7,379
874
846
10,874
274

80,093
14,667
4,413
35,077
29,884
-3,948

36,110
23,465
725
1,408
4,832
5,680

-2,577
-4,474
1,942

26,571
-551
1,141

26,854
-3,213

-828

10,286

4,551
-3,768

10,333
5,362

29,246
22,905
1,330
4,870
2,693
-2,552

20,749
12,307
-2,989

0
2,447
613
1,835

0
-7,532
4,901
-12,433

0
-28,764
1,296
-30,060

0
15,035
-6,640
21,675

0
8,205
439
7,767

22 Change in foreign official assets in United States (increase, + ) . .
23 U.S. Treasury securities
24 Other U.S. government obligations
25 Other U.S. government liabilities
26 Other U.S. liabilities reported by U.S. banks 3
27 Other foreign official assets 5

48,573
-13,678
-405
16,241
34,918
11,498

28 Change in foreign private assets in United States (increase, + ) . .
29 U.S. bank-reported liabilities3
30 U.S. nonbank-reported liabilities
31 Foreign private purchases of U.S. Treasury securities, net
32 Foreign purchases of other U.S. securities, net
33 Foreign direct investments in United States, net

65,471
16,370
4,906
-2,534
1,592
45,137

34 Allocation of special drawing rights
35 Discrepancy
36 Due to seasonal adjustment
37 Before seasonal adjustment

0

0

0

47,370

-1,078

-13,051

47,370

-1,078

-13,052

-118

-1,000

-17,788
-8,782

MEMO

Changes in official assets
38 U.S. official reserve assets (increase, - )
39 Foreign official assets in United States, excluding line 25
(increase, +)
40 Change in Organization of Petroleum Exporting Countries
official assets in United States (part of line 22)

-2,158

5,763

3,901

1,225

-1,057

1,464

1,952

1,542

32,042

16,807

37,838

13,163

21,096

20,297

-8,198

4,643

1,707

-5,604

5,402

2,459

-2,125

3,062

2,006

1. Seasonal factors not calculated for lines 12-16, 18-20, 22-34, and 38-40.
2. Data are on an international accounts basis. The data differ from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise trade data and are included in line 6.
3. Reporting banks include all types of depository institution as well as some
brokers and dealers.




4. Associated primarily with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Survey of Current Business.

A54
3.11

International Statistics • July 1993
U.S. FOREIGN TRADE 1
Millions of dollars; monthly data seasonally adjusted
1992r
Item

1990

1991

1993

1992
Sept.

1 Exports of domestic and foreign
merchandise, excluding grant-aid
shipments
2 General imports including merchandise
for immediate consumption
plus entries into bonded
warehouses

393,592

421,730

448,164

Nov.

Dec.

Jan. r

Feb. r

37,661

38,885

37,796

39,178

37,505

36,928

Mar. p

38,9%

495,311

488,453

532,665

45,968

46,119

45,633

46,143

45,176

44,832

49,203

-101,718

3 Trade balance

-66,723

-84,501

-8,307

-7,233

-7,837

-6,965

-7,672

-7,904

-10,207

1. Government and nongovernment shipments of merchandise between foreign
countries and the fifty states, including the District of Columbia, Puerto Rico, the
U.S. Virgin Islands, and U.S. Foreign Trade Zones. Data exclude (1) shipments
among the United States, Puerto Rico, the U.S. Virgin Islands, and other U.S.
affiliated insular areas, (2) shipments to U.S. Armed Forces and diplomatic
missions abroad for their own use, (3) U.S. goods returned to the United States by
its Armed Forces, (4) personal and household effects of travelers, and (5)
in-transit shipments. Data reflect the total arrival of merchandise from foreign
countries that immediately entered consumption channels, warehouses, or U.S.
Foreign Trade Zones (general imports). Import data are Customs value; export
data are F.A.S. value. Beginning in 1990, data for U.S. exports to Canada are
derived from import data compiled by Canada; similarly, in Canadian statistics,
Canadian exports to the United States are derived from import data compiled by

3.12

Oct.

the United States. Since Jan. 1,1987, merchandise trade data have been released
forty-five days after the end of the month; the previous month is revised to reflect
late documents.
Data in this table differ from figures for merchandise trade shown in the U.S.
balance of payments accounts (table 3.10, lines 2 to 4) primarily for reasons of
coverage. For both exports and imports a large part of the difference is the
treatment of military sales and purchases. The military sales to foreigners
(exports) and purchases from foreigners (imports) that are included in this table as
merchandise trade are shifted, in the balance of payments accounts, from
"merchandise trade" into the broader category "military transactions."
SOURCE. FT900, U.S. Merchandise Trade, (U.S. Department of Commerce,
Bureau of the Census).

U.S. RESERVE ASSETS
Millions of dollars, end of period
1992
Asset

1989

1990

1991
Oct.

Jan.

Feb.

Mar.

74,609

1 Total
2 Gold stock, including Exchange
Stabilization Fund
3 Special drawing rights 2,
4 Reserve position in International
Monetary Fund
5 Foreign currencies

83,316

77,719

74,207

72,231

71,323

71,962

72,847

74,378

11,059
9,951

11,058
10,989

11,057
11,240

11,060
11,561

11,059
11,495

11,056
8,503

11,055
8,546

11,055
8,651

11,054
8,787

9,048
44,551

9,076
52,193

9,488
45,934

9,261
42,325

8,781
40,896

11,759
40,005

12,079
40,282

12,021
41,120

12,184
42,353

1. Gold held "under earmark" at Federal Reserve Banks for foreign and
international accounts is not included in the gold stock of the United States; see
table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted
by the International Monetary Fund (IMF) in July 1974. Values are based on a
weighted average of exchange rates for the currencies of member countries. From
July 1974 through December 1980, 16 currencies were used; since January 1981,

3.13

Dec.

5 currencies have been used. U.S. SDR holdings and reserve positions in the IMF
also have been valued on this basis since July 1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1
of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—
$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million;
plus net transactions in SDRs.
4. Valued at current market exchange rates.

FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1992
Asset

1989

1990

Oct.
1 Deposits
Held in custody
2 U.S. Treasury securities
3 Earmarked gold

Nov.

Dec.

Jan.

Feb.

Mar.

Apr. p

589

369

968

415

229

205

325

2%

317

221

224,911
13,456

278,499
13,387

281,107
13,303

311,538
13,201

308,959
13,192

314,481
13,686

324,356
13,077

329,183
13,074

326,486
12,989

339,3%
12,924

1. Excludes deposits and U.S. Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S.
Treasury securities payable at face value in dollars or foreign currencies.




1993

1991

3. Held for foreign and international accounts and valued at $42.22 per fine
troy ounce; not included in the gold stock of the United States.

Summary
3.14 FOREIGN BRANCHES OF U.S. BANKS

Statistics

A55

Balance Sheet Data1

Millions of dollars, end of period
1993

1992
Account

1989

1990

1991
Sept.

Oct.

Dec.

Nov.

Jan.

Feb.

Mar.

All foreign countries

ASSETS

545,366

556,925

548,901

544,908'

553,977'

566,721

542,545'

543,624'

554,280

2 Claims on United States
3 Parent bank
4 Other banks in United States
5 Nonbanks
6 Claims on foreigners
7 Other branches of parent bank
8
Banks
9 Public borrowers
10 Nonbank foreigners
11 Other assets

198,835
157,092
17,042
24,701
300,575
113,810
90,703
16,456
79,606
45,956

188,4%
148,837
13,2%
26,363
312,449
135,003
72,602
17,555
87,289
55,980

176,301
137,509
12,884
25,908
303,934
111,729
81,970
18,652
91,583
68,666

167,419
134,119
8,083
25,217
320,111
118,952
83,756
20,511
%,892
57,378r

174,986
138,940
10,683
25,363
319,139
115,521
86,560
20,809
%,249
59,852r

177,443
141,542
10,019
25,882
328,592
125,143
86,086
20,378
%,985
60,686

166,798
132,275
9,703
24,820
318,071
123,256
82,190
20,756
91,869
57,676'

169,278
134,218'
9,570'
25,490
314,736'
116,325
19,984
%,615'
59,610'

172,304'
139,170'
9,249
23,885'
317,868'
115,323'
84,439
19,822
98,284
64,108

12 Total payable in U.S. dollars . . .

382,498

379,479

363,941

347,036r

364,000'

374,420'

365,824'

353,643'

361,251

13 Claims on United States
14 Parent bank
15 Other banks in United States
16 Nonbanks
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
20 Public borrowers
21 Nonbank foreigners
22 Other assets

191,184
152,294
16,386
22,504
169,690
82,949
48,396
10,961
27,384
21,624

180,174
142, %2
12,513
24,699
174,451
95,298
36,440
12,298
30,415
24,854

169,662
133,476
12,025
24,161
167,010
78,114
41,635
13,685
33,576
27,269

161,463
130,446
7,476
23,541
166,6%r
72,348
42,276r
13,990
38,082r
18,877r

169,290
136,156
9,360
23,774
173,427'
76,098
45,436
13,966
37,927r
21,283'

171,938
138,424
9,291
24,223
182,360'
83,902
45,931
13,995
38,532'

162,125
129,329
9,266
23,530
183,527'
83,117
47,250
14,313
38,847'
20,172'

164,681
131,554'
9,213'
23,914
171,120'
77,606
41,616'
13,883
38,015'
17,842

167,773'
136,650'
8,704
22,4^
174,726'
77,681'
43,067
13,710
40,268
18,752

1 Total payable in any currency ..

20,122'

81,812'

United Kingdom
23 Total payable in any currency ..

161,947

184,818

175,599

161,486'

167,786'

168,333

165,850'

164,360

165,132

24 Claims on United States
25 Parent bank
26 Other banks in United States
27 Nonbanks
28 Claims on foreigners
29 Other branches of parent bank
30 Banks
31 Public borrowers
32 Nonbank foreigners
33 Other assets

39,212
35,847
1,058
2,307
107,657
37,728
36,159
3,293
30,477
15,078

45,560
42,413
792
2,355
115,536
46,367
31,604
3,860
33,705
23,722

35,257
31,931
1,267
2,059
109,692
35,735
36,394
3,306
34,257
30,650

35,891
32,929
1,067
1,895
107,675
38,894
36,039
3,371
29,371
17.9201

39,558
36,413
1,400
1,745
109,919
40,594
36,701
3,692
28,932
18,309r

38,358
35,027
925
2,406
113,193
45,092
34,559
3,370
30,172
16,782

36,403
33,460
1,298
1,645
111,623
46,165
33,399
3,329
28,730
17,824'

37,609
34,290
886
2,433
108,362
42,894
33,513
3,059
28,8%
18,389

34,919'
32,779r
783
1,357
110,420r
41,317'
36,601
2,542
29,960
19,793

34 Total payable in U.S. dollars . . .

103,208

116,762

105,974

100,568'

107,290'

109,479

109,493'

101,375'

99,755

35 Claims on United States
36 Parent bank
37 Other banks in United States
38 Nonbanks
39 Claims on foreigners
40 Other branches of parent bank
41 Banks
42 Public borrowers
43 Nonbank foreigners
44 Other assets

36,404
34,329
843
1,232
59,062
29,872
16,579
2,371
10,240
7,742

41,259
39,609
334
1,316
63,701
37,142
13,135
3,143

32,418
30,370

33,618
31,578
711
1,329
59,338
28,225

37,359
35,299
769
1,291
61,658
30,217
17,269
2,515
11,657
8,273'

35,956
33,765
438
1,753
65,164
34,434
16,848
2,501
11,381
8,359

34,508
32,186
1,300
66,335
34,124
17,089
2,349
12,773
s.eso'

35,481
33,070
684
1,727
59,505'
30,823
14,316'
2,154
12,212
6,389

32,929'
31,559'
428
942
60,695'
28,856'

10,281

11,802

822

1,226
58,791
28,667
15,219
2,853
12,052
14,765

16,800

2,604
11,709
7,612'

1,022

16,800

1,883
13,156
6,131

Bahamas and Cayman Islands
45 Total payable in any currency ..

176,006

162,316

168,326

145,786

154,293

156,176

147,422

144,894

151,175

46 Claims on United States
47 Parent bank
48 Other banks in United States
49 Nonbanks
50 Claims on foreigners
51 Other branches of parent bank
52 Banks
53 Public borrowers
54 Nonbank foreigners
55 Other assets

124,205
87,882
15,071
21,252
44,168
11,309

115,244
81,520
10,907
22,817
45,229
11,098
20,174
7,161
6,7%
7,853

96,911
68,309
6,562
22,040
41,884
7,753
18,412
7,128
8,591
6,991

102,726
72,207
8,199
22,320
42,844
7,287
19,840
7,146
8,571
8,723

104,245
73,856
8,282
22,107
44,156
8,238

5,217
5,031
7,633

112,989
77,873
11,869
23,247
41,356
13,416
16,310
5,807
5,823
7,971

%,280
66,608
7,828
21,844
44,509
7,293
21,212
7,786

%,976
67,219
7,%2
21,795
41,185
7,041
18,464
7,564

6,633

6,733

102,836
73,825
7,892
21,119
40,821
7,311
17,440
7,422
8,648
7,518

56 Total payable in U.S. dollars

170,780

158,390

163,771

140,104

149,304

151,436

142,861

140,332

146,809

22,611

1. Since June 1984, reported claims held by foreign branches have been
reduced by an increase in the reporting threshold for "shell" branches from $50




20,122

7,209
8,587
7,775

8,218

8,116

million to $150 million equivalent in total assets, the threshold now applicable to
all reporting branches.

A56
3.14

International Statistics • July 1993
FOREIGN BRANCHES OF U.S. BANKS

Balance Sheet Data1—Continued
1992

Sept.

Oct.

1993

Nov.

Dec.

Jan.

Feb.

Mar.

All foreign countries

LIABILITIES
r

57

Total payable in any currency

545,366

556,925

548,901

544,908

553,977r

566,721

542,545'

543,624'

554,280

547,297

58
59
60
61
62

Negotiable certificates of deposit (CDs) ..
To United States
Parent bank
Other banks in United States
Nonbanks

23,500
197,239
138,412
11,704
47,123

18,060
189,412
138,748
7,463
43,201

16,284
198,121
136,431
13,260
48,430

12,389
185,492 R
127,685 R
12,408
45,399

12,056
189,090*
133,110 1 "
12,281
43,699

12,342
188,116 R
131,918 R
13,392
42,806

10,032
189,444*
134,339*
12,182
42,923

12,320
175,978*
122,627*
12,829
40,522*

11,872
184,155*
124,123*
12,373
47,659

11,598
186,741
124,549
13,306
48,886

63
64
65
66
67
68

To foreigners
Other branches of parent bank
Banks
:
Official institutions
Nonbank foreigners
Other liabilities

296,850
119,591
76,452
16,750
84,057
27,777

311,668
139,113
58,986
14,791
98,778
37,785

288,254
112,033
63,097
15,5%
97,528
46,242

312,390
120,714
68,493
16,720
106,463
34,637 R

315,401 R
118,001
70,439
20,572
106,389 R
37,430 R

330,315 R
126,018
74,536
20,645
109,116 R
35,948 R

309,704
125,160
62,189
19,731
102,624
33,365*

321,297*
120,179*
67,843
23,654*
109,621*
34,029*

319,638
119,601
70,056
21,469
108,512
38,615*

312,705
115,456
68,407
18,689
110,153
36,253

69

Total payable in U.S. dollars

396,613

383,522

370,561

346,946r

365,399'

372,819*

368,773'

353,725'

363,285

353,351

70
71
72
73
74

Negotiable CDs
To United States
Parent bank
Other banks in United States
Nonbanks

19,619
187,286
132,563
10,519
44,204

14,094
175,654
130,510
6,052
39,092

11,909
185,286
129,669
11,707
43,910

7,628
171,198 R
U9,826R
11,117
40,255

6,710
176,124*
125,602 R
11,409
39,113

7,503
175,%9 R
124,770*
12,246
38,953

6,238
178,674*
127,948*
11,512
39,214

7,102
164,634*
116,008*
11,710
36,916*

6,640
172,223*
117,228*
11,418
43,577

6,519
175,269
118,201
12,467
44,601

75
76
77
78
79
80

To foreigners
Other branches of parent bank
Banks
Official institutions
Nonbank foreigners
Other liabilities

176,460
87,636
30,537
9,873
48,414
13,248

179,002
98,128
20,251
7,921
52,702
14,772

158,993
76,601
24,156
10,304
47,932
14,373

155,740 R
73,208
22,822
9,939
4 9 , 7 7 LR
12,38V

166,443 R
77,197
25,210
12,097
51,939"
16,122 R

175,791*
82,957
28,404
12,342
52,088*
13,556*

172,189*
83,700
26,118
12,430
49,941*
11,672*

169,595*
79,144
23,281
14,067*
53,103*
12,394*

170,756
79,594
25,571
14,034
51,557
13,666*

160,741
77,656
21,226
10,762
51,097
10,822

r

United Kingdom
161,947

184,818

175,599

161,486

167,786r

168,333

165,850'

164,360

165,132

162,122

Negotiable CDs
To United States
Parent bank
Other banks in United States
Nonbanks

20,056
36,036
29,726
1,256
5,054

14,256
39,928
31,806
1,505
6,617

11,333
37,720
29,834
1,438
6,448

7,266
35,885
27,528
1,670
6,687

6,064
35,399
27,427
1,341
6,631

5,636
34,532
26,471
1,689
6,372

4,517
39,174
31,100
1,065
7,009

5,774
32,780*
25,099*
1,742
5,939*

5,597
33,092
24,250
1,633
7,209

4,753
38,011
29,421
1,192
7,398

87
88
89
90
91
92

To foreigners
Other branches of parent bank
Banks
Official institutions
Nonbank foreigners
Other liabilities

92,307
27,397
29,780
8,551
26,579
13,548

108,531
36,709
25,126
8,361
38,335
22,103

98,167
30,054
25,541
9,670
32,902
28,379

101,999
30,756
25,823
9,131
36,289
16,336 R

109,358
33,6%
28,792
11,687
35,183
16,%5 R

113,395
35,560
30,609
11,438
35,788
14,770

107,176
35,983
25,231
12,090
33,872
14,983*

111,351*
35,376
2 5 ,% 5
14,188
35,822*
14,455

110,514
35,143
27,227
12,938
35,206
15,929

104,356
33,424
23,985
10,531
36,416
15,002

93

Total payable in U.S. dollars

108,178

116,094

108,755

95,556r

104,469r

105,699

108,214'

100,731

101,342

95,892

Negotiable CDs
To United States
% Parent bank
97
Other banks in United States
98
Nonbanks

18,143
33,056
28,812
1,065
3,179

12,710
34,697
29,955
1,156
3,586

10,076
33,003
28,260
1,177
3,566

5,689
30,330
25,700
992
3,638

4,213
31,266
26,021
866
4,379

4,494
30,204
25,160
906
4,138

3,894
35,417
29,957
709
4,751

4,770
28,545*
23,767*
1,063
3,715*

4,444
28,874
23,097
1,097
4,680

3,765
33,552
28,067
707
4,778

50,517
18,384
12,244
5,454
14,435
6,462

60,014
25,957
9,488
4,692
19,877
8,673

56,626
20,800
11,069
7,156
17,601
9,050

51,916
17,986
9,112
6,156
18,662
7,621 R

59,938
22,080
10,956
8,142
18,760
9,052 R

62,899
22,8%
13,050
8,459
18,494
8,102

62,048
22,026
12,540
8,847
18,635
6,855*

60,107*
20,807
9,740
10,114
19,446*
7,309

59,643
20,516
10,359
9,%7
18,801
8,381

51,850
19,516
6,702
7,008
18,624
6,725

81

Total payable in any currency

82
83
84
85
86

94
95

99
100
101
102
103
104

To foreigners
Other branches of parent bank
Banks
Official institutions
Nonbank foreigners
Other liabilities

Bahamas and Cayman Islands
105

Total payable in any currency

176,006

162,316

168,326

145,786

154,293

156,176

147,422

144,894

151,175

148,867

106
107
108
109
110

Negotiable CDs
To United States
Parent bank
Other banks in United States
Nonbanks

678
124,859
75,188
8,883
40,788

646
114,738
74,941
4,526
35,271

1,173
129,872
79,394
10,231
40,247

872
109,408 R
63,169 R
9,801
36,438

1,394
114,439*
69,649*
10,303
34,487

1,939
116,699*
71,381*
10,944
34,374

1,350
111,861*
67,347*
10,445
34,069

1,355
108,150*
65,122*
10,265
32,763

1,142
110,729*
62,336*
10,059
38,334

1,713
110,391
59,252
11,492
39,647

111
112
113
114
115
116

To foreigners
Other branches of parent bank
Banks
Official institutions
Nonbank foreigners
Other liabilities

47,382
23,414
8,823
1,097
14,048
3,087

44,444
24,715
5,588
622
13,519
2,488

35,200
17,388
5,662
572
11,578
2,081

34,060
16,071
6,788
984
10,217
L,446 R

34,8%
15,441
6,988
1,058
11,409
3,564 R

35,411
16,287
7,574
932
10,618
2,127*

32,556
15,169
6,422
805
10,160
1,655*

33,766
15,411
6,350
932
11,073
1,623*

37,690
18,056
7,%7
1,036
10,631
1,614*

35,369
18,015
6,476
858
10,020
1,394

117

Total payable in U.S. dollars

171,250

157,132

163,603

140,298

149,320

143,150

140,734




151,527

146,875

144,291

Summary

Statistics

A57

3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1992
Item

1990

1993

1991
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.p

344,529

1
By type
7 Liabilities reported by banks in the.United States
3 U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
4
5 Nonmarketable
6 U.S. securities other than U.S. Treasury securities3
By area
7 Western Europe
8
9 Latin America and Caribbean
10
11
12 Other countries

360,530

393,687

405,465

394,845

398,672

411,817'

413,235r

409,872

39,880
79,424

38,396
92,692

43,604
113,634

60,933
104,286

54,007
100,702

54,823
104,5%

63,792r
111,540

66,454r
113,594

62,869
113,547

202,487
4,491
18,247

203,677
4,858
20,907

208,924
4,505
23,020

211,875
4,473
23,898

211,272
4,503
24,361

210,553
4,532
24,168

207,588
4,563
24,334

203,224
4,592
25,371

202,552
4,622
26,282

167,191
8,671
21,184
138,096
1,434
7,955

168,365
7,460
33,554
139,465
2,092
9,592

186,364
7,027
37,736
151,667
3,360
7,531

194,551
8,111
38,678
153,555
3,481
7,087

184,207
6,381
38,945
154,493
3,779
7,038

188,693
7,920
40,015
152,148
3,565
6,329

l%,240r
8,411
41,388
156,211
3,705
5,860

199,659r
7,886
42,502
154,015
3,866
5,305

187,302
9,326
44,509
157,898
3,919
6,916

1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies; zero coupon bonds are included at
current value.

5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
SOURCE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States and on the 1984 benchmark survey of foreign portfolio
investment in the United States.

3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1
Payable in Foreign Currencies
Millions of dollars, end of period
1992
Item

1989

1990

1991
Mar.

1 Banks' liabilities
2 Banks' claims
3 Deposits
4 Other claims
5 Claims of banks' domestic customers2

67,835
65,127
20,491
44,636
3,507

1. Data on claims exclude foreign currencies held by U.S. monetary
authorities.




70,477
66,7%
29,672
37,124
6,309

75,129
73,195
26,192
47,003
3,398

June

Sept.

Dec.r

68,434
60,424
23,270
37,154
2,%2

71,240
58,262
23,466
34,7%
4,375

84,487
72,003
28,074
43,929
3,987

73,227
62,772
24,186
38,586
4,432

2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.

A58

International Statistics • July 1993

3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars

Reported by Banks in the United States1

Millions of dollars, end of period
1992
Item

1990

1991

1993

1992
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.r

Mar."

795,856

793,298

799,590

809,919r

801,57Ir

814,328

797,916

605,617
22,310
147,053
106,280
329,974

586,066
21,580
141,526
99,624
323,336

HOLDER AND TYPE OF LIABILITY

1 Total, all foreigners
7 Banks' own liabilities
3 Demand deposits
4 Time deposits
S Other.
6 Own foreign offices4
7 Banks' custodial liabilities5
8 U.S. Treasury bills and certificates
9 Other negotiable and readily transferable
instruments
10 Other
11 Nonmonetary international and regional
organizations
Banks' own liabilities
Demand deposits
N
Time deposits
14
Other.
15
12

16
17
18
19

Banks' custodial liabilities5
U.S. Treasury bills and certificates
Other negotiable and readily transferable
instruments
Other

7.0 Official institutions9
21 Banks' own liabilities
Demand deposits
22
23
Time deposits2
Other.
24
7,5
26
27
28
79

30
31
37.
33
34
35
36
37
38
39

Banks' custodial liabilities5
U.S. Treasury bills and certificates
Other negotiable and readily transferable
instruments
Other
Banks10
Banks' own liabilities
Unaffiliated foreign banks
Demand deposits
Time deposits
Other.
Own foreign offices
Banks' custodial liabilities5
U.S. Treasury bills and certificates
Other negotiable and readily transferable
instruments
Other

40 Other foreigners
41 Banks' own liabilities
Demand deposits
47
43
Time deposits2
Other.
44
45
46
47
48

Banks' custodial liabilities5
U.S. Treasury bills and certificates
Other negotiable and readily transferable
instruments
Other

756,066

809,919r

577,229
21,723
168,017
65,822
321,667

575,374
20,321
159,649
66,305
329,099

r
606,168r
21,822r
160,327r

93,854
330,165

587,139
22,479
143,336
84,107
337,217

590,791
21,302
157,488
92,315
319,686

601,073
21,935
156,814
%,294
326,030

606,168rr
21,822
160,327rr
93,854
330,165

592,187rr
21,106
150,095r
103,828rr
317,158

182,405
96,796

180,692
110,734

203,751
127,649

208,717
134,894

202,507
127,993

198,517
122,480

203,751
127,649

209,384
133,799

208,711
135,389

211,850
137,062

17,578
68,031

18,664
51,294

21,982
54,120

19,349
54,474

20,043
54,471

21,755
54,282

21,982
54,120

22,%9
52,616

20,735
52,587

22,309
52,479

5,918
4,540
36
1,050
3,455

8,981
6,827
43
2,714
4,070

9,350
6,951
46
3,214
3,691

11,285
8,648
24
2,577
6,047

10,727
7,001
73
1,899
5,029

9,915
6,982
58
2,561
4,363

9,350
6,951
46
3,214
3,691

r
11,099r
7,837
39
2,809r
4,989

11,338
8,684
47
2,376
6,261

9,425
6,167
1%
2,670
3,301

1,378
364

2,154
1,730

2,399
1,908

2,637
1,991

3,726
3,085

2,933
2,371

2,399
1,908

3,262
2,774

2,654
2,348

3,258
2,876

1,014
0

424
0

486
5

646
0

641
0

561
1

486
5

488
0

306
0

382
0

119,303
34,910
1,924
14,359
18,628

131,088
34,411
2,626
16,504
15,281

159,419
51,058
1,274
17,828
31,956

157,238
40,453
1,761
16,125
22,567

165,219
57,225
1,723
19,741
35,761

154,709
50,027
1,492
17,834
30,701

159,419
51,058
1,274
17,828
31,956

r
175,332r
59,577r
l,397
18,685
39,495

180,048
62,687
1,764
18,9%
41,927

176,416
59,366
1,457
18,707
39,202

84,393
79,424

96,677
92,692

108,361
104,5%

116,785
113,634

107,994
104,286

104,682
100,702

108,361
104,5%

115,755
111,540

117,361
113,594

117,050
113,547

4,766
203

3,879
106

3,726
39

2,922
229

3,595
113

3,784
1%

3,726
39

4,054
161

3,648
119

3,411
92

540,805
458,470
136,802
10,053
88,541
38,208
321,667

522,265
459,335
130,236
8,648
82,857
38,731
329,099

546,412r
475,260"
145,095rr
10,168
90,193r
44,734r
330,165

537,936
466,617
129,400
10,443
74,075
44,882
337,217

525,221
454,183
134,497
9,741
85,729
39,027
319,686

543,980
472,949
146,919
10,088
87,690
49,141
326,030

546,412r
475,260rr
145,095r
10,168
90,193r
44,734r
330,165

522,015r
453,242rr
136,084r
9,903
80,35 l rr
45,830r
317,158

530,028
462,530
132,556
10,974
77,690
43,892
329,974

520,209
451,215
127,879
10,493
72,228
45,158
323,336

82,335
10,669

62,930
7,471

71,152
11,087

71,319
10,905

71,038
10,481

71,031
10,444

71,152
11,087

68,773
9,685

67,498
9,2%

68,994
9,976

5,341
66,325

5,694
49,765

7,568
52,497

7,373
53,041

7,325
53,232

7,572
53,015

7,568
52,497

7,708
51,380

6,692
51,510

7,%5
51,053

93,608
79,309
9,711
64,067
5,530

93,732
74,801
9,004
57,574
8,223

94,738rr
72,899r
10,334
49,092r
13,473

89,397
71,421
10,251
50,559
10,611

92,131
72,382
9,765
50,119
12,498

90,986
71,115
10,297
48,729
12,089

94,738rr
72,899r
10,334
49,092r
13,473

93,125r
r
71,531r
9,767r
48,250
13,514

92,914
71,716
9,525
47,991
14,200

91,866
69,318
9,434
47,921
11,963

14,299
6,339

18,931
8,841

21,839
10,058

17,976
8,364

19,749
10,141

19,871
8,%3

21,839
10,058

21,594
9,800

21,198
10,151

22,548
10,663

6,457
1,503

8,667
1,423

10,202
1,579

8,408
1,204

8,482
1,126

9,838
1,070

10,202
1,579

10,719
1,075

10,089
958

10,551
1,334

7,073

7,456

9,114

7,452

7,672

7,716

9,114

9,724

9,499

9,548

759,634

MEMO

49 Negotiable time certificates of deposit in custody for
foreigners

1. Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts due to own foreign branches and foreign
subsidiaries consolidated in Consolidated Report of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of
foreign banks, consists principally of amounts due to head office or parent foreign
bank, and foreign branches, agencies, or wholly owned subsidiaries of head office
or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.




6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, the
Inter-American Development Bank, and the Asian Development Bank. Excludes
"holdings of dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."

Nonbank-Reported

Data

3.17—Continued
1993

1992
1991

Item

1992
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.'

AREA

1 Total, all foreigners

759,634

756,066

809,919'

795,856

793,298

799,590

809,919'

801,571'

814,328

2 Foreign countries ..

753,716

747,085

800,569'

784,571

782,571

789,675

800,569'

790,472'

802,990

254,452
1,229
12,382
1,399
602
30,946
7,485
934
17,735
5,350
2,357
2,958
7.544
1,837
36,690
1,169
109,555
928
11,689
119
1.545

249,097
1,193
13,337
937
1,341
31,808
8,619
765
13,541
7,161
1,866
2,184
11,391

308,398r
l,611r
20,572
3,060
1,299
41,459
18,631
910
10,041
7,372
3,319
2,465
9,796r
2,986
39,440
2,666
112,434
504
25,834r
577
3,422

290,435
1,456
17,948
1,760
685
32,158
14,739
1,069
12,236
10,407
1,851
2,245
15,589
3,194
39,314
2.087
115,817
567
12,867
499
3,947

306,547
1,584
21,183
1,788
949
34,881
13,810
872
11,104
8,%2
1,577
2,258
14,602
5,312
38,240
2,524
114,705
577
27,228
450
3,941

311,875
1,358
19,662
1,481
1,144
39,968
15,401
749
12,494
8,411
2,014
2,255
10,383
4,485
40,791
2,360
117,353
575
26,691
601
3,699

308,398r
1,61 l r
20,572
3,060
1,299
41,459
18,631
910
10,041
7,372
3,319
2,465
9,7% r
2,986
39,440
2,666
112,434
504
25,834r
577
3,422

303,721'
1,158
21,255
1,885

304,841
1,942
19,729
2,835
2,049
32,457
18,934
758
10,701
11,711
2,521
2,508
17,233
1,991
40,227
2,862
105,497
512
27,495
497
2,382

3 Europe
4 Austria
5 Belgium and Luxembourg .
6 Denmark
7 Finland
8
France
9 Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia"
21 Others in Western Europe 1
22 Russia
in
23 Other Eastern Europe 1

2,222

37,238
1,598
100,292
622
9,274
241
3,467

1,862

34,285
20,685
815
8,759'
8,731
3,550
2,518
14,904'
2,%2

41,533'
2,533
106,700
506
25,926
436
2,718

20,349

21,605

22,746

22,668

21,378

22,052

22,746

21,467

22,898

25 Latin America and Caribbean.
26 Areentina
27 Bahamas
28 Bermuda
29 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
42 Venezuela
43 Other

332,997
7,365
107,386
2,822
5,834
147,321
3,145
4,492
11
1,379
1,541
257
16,650
7,357
4,574
1,294
2,520
12,271
6,779

345,529
7,753
100,622
3,178
5,704
163,620
3,283
4,661

316,008r
9,477r

310,015
9,387
85,878
5,889
5,828
143,311
3,253
4,767
10
1,026
1,376
274
19,216
4,708
4,116
1,141
2,087
11,504
6,244

309,750
8,715
86,310
6,355
5,235
143,084
2,925
4,677
11
1,016
1,323
271
19,543
6,101
3,976
1,047
2,092
11,003
6,066

316,008r
9,477r

313,248'
10,792'
84,767'
6,319
5,321
146,879'
3,638
4,438

1,955
ll,387 r
6,151r

316,995
9,065
77,633
4,275
5,393
159,838
3,440
4,792
33
1,073
1,416
309
19,650
4,751
4,5%
1,152
2,019
11,101
6,459

6,098'

320,497
10,608
87,793
6,508
5,304
149,506
3,420
4,417
3
886
1,311
279
21,207
4,869
4,214
1,045
2,061
10,984
6,082

44 Asia
China
45
People's Republic of China
46
Republic of China (Taiwan)
47 Hong Kong
48 India
49 Indonesia
50 Israel
51 Japan
52 Korea (South)
53 Philippines
...
54 Thailand
55 Middle Eastern oil-exporting countries"
56 Other

136,844

120,462

143,362r

144,793

134,385

136,111

143,362'

141,524

143,915

2,421
11,246
12,754
1,233
1,238
2,767
67,076
2,287
1,585
1.443
15,829
16,965

2,626
11,491
14,269
2,418
1.463
2,015
47,069
2,587
2,449
2,252
15,752
16,071

3,202r
8,379r
18.445
1,396
1,480
3,775
58,332
3,336
2,275
5,582
21.446
15,714r

2,480
9,431
18,682
1,372
1,507
2,613
64,606
3,673
2,028
4,517
19,977
13,907

2,582

2,559
8,750
16,322
1,210
1,217
3,691
55,356
3,698
2,223
5,797
20,266
15,022

3,202'
8,379'
18.445
1,3%
1,480
3,775
58,332
3,336
2,275
5,582
21.446
15,714'

3,114'
8,929'
17,510
1,323
1,392
3,389
56,007
3,415
2,350
5,722
19,877
18,4%

3,007
9,102
19,445
1,377
1,460
3,371
58,390
3,468
2,746
5,375
19,897
16,277

57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries13
63 Other

4,630
1,425
104
228
53
1,110
1,710

4,825
1,621
79
228
31

5,592
2,243
100
190
14
1,339
1,706

5,843
2,598
98
240
24
1,201

1,784

5,884r
2,472
76
190
19
1,346
1,781'

1,682

6,062
2,601
93
214
23
1,402
1,729

5,884'
2,472
76
190
19
1,346
1,781'

5,913
2,756
88
158
25
1,125
1,761

6,364
3,077
92
319
17
1,135
1,724

64 Other
65
Australia
66 Other . . .

4.444
3,807
637

5,567
4.464
1,103

4,171r
3,047
l,124r

4.088
2,927
1,161

4,403
2,987
1,416

3,825
2,654
1,171

4,171'
3,047
1,124'

4,599
3,502
1,097

4,475
3,388
1,087

67 Nonmonetary international and regional
organizations
68
International16
69 Latin American regional1
70 Other regional18

5,918
4,390
1,048
479

8,981
6,485
1,181
1,315

9,350
7,434
1,415
501

11,285
8,204
2,274
807

10,727
7,689
2,130
908

9,915
6,764
2,248
903

9,350
7,434
1,415
501

11,099*
7,864'
2,327
908

11,338
8,657
1,738
943

24 Canada.

2

1,232
1,594
231
19,957
5,592
4,695
1,249
2,096
13,181
6,879

1,082

11. Beginning December 1992, excludes Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23. Beginning December 1992, includes, in addition, all
former parts of the U.S.S.R. (except Russia), and Bosnia, Hercegovina, Croatia,
and Slovenia.
13. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
14. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




82,212r

7,079
5,584
151,886r
3,035r
4,580r
3
993r
l,377r
371
19,456r
5,205r
4,177r

1,080"

8,616

17,542
1,234
1,260
2,208
56,101
3,529
2,275
5,082
19,040
14,916

82,212 r

7,079
5,584
151,886'
3,035'
4,58c
3
993'
1,377'
371
19,456'
5,205'
4,177'

1,08c

1,955
11,387'
6,151'

2

945
1,311
294
20,023
4,352
4,013
1,052
1,898

11,106

15. Comprises Algeria, Gabon, Libya, and Nigeria.
16. Principally the International Bank for Reconstruction and Development.
Excludes "holdings of dollars" of the International Monetary Fund.
17. Principally the Inter-American Development Bank.
18. 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 1993
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1992
Area and country

1990

1991

1993

1992
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.'

Mar.p

1 Total, all foreigners

511,543

514,339

495,713'

486,071

493,689

490,721

495,713'

483,903'

493,522

473,045

2 Foreign countries

506,750

508,056

490,631'

481,900

491,217

487,840

490,631'

480,803'

489,414

469,602

113,093
362
5,473
497
1,047
14,468
3,343
727
6,052
1,761
782
292
2,668
2,094
4,202
1,405
65,151
1,142
597
530
499

114,310
327
6,158
686
1,907
15,112
3,371
553
8,242
2,546
669
344
1,881
2,335
4,540
1,063
60,395
825
789
1,970
597

124,13c
341
6,404
707
1,419
14,847
4,229
718
9,048
2,497
356
325
2,772
4,929
4,722
962
63,98c
569
1,706
3,147'
452

117,349
367
7,533
1,012
1,299
15,084
4,075
589
9,485
1,980
639
383
3,304
5,494
3,102
986
56,483
674
1,211
3,199
450

126,170
414
6,980
830
817
16,111
5,629
583
9,752
2,334
666
327
4,642
6,678
3,688
1,177
60,209
668
959
3,190
516

122,143
463
6,423
1,056
1,230
15,718
5,328
598
9,443
3,006
435
330
3,481
5,786
3,591
950
58,991
661
1,019
3,174
460

124,13C
341
6,404
707
1,419
14,847
4,229
718
9,048
2,497
356
325
2,772
4,929
4,722
962
63.98C
569
1,706
3,147'
452

117,308'
366
6,473
705
1,275
14,012
5,544'
669
8,716
2,927
649
390
2,593'
5,340
4,493
1,071
56,262'
571
1,607
3,154
491

124,724
530
5,886
785
1,226
14,670
5,370
668
8,466
3,279
750
494
4,158
5,155
4,971
1,041
61,394
567
1,607
3,154
553

122,636
1,101
6,066
682
1,010
13,240
5,900
583
8,493
2,676
645
454
3,889
4,809
4,410
943
62,026
553
1,780
2,906
470

3 Europe
4 Austria
5 Belgium and Luxembourg
6 Denmark
7 Finland
8 France
9 Germany
10 Greece
11 Italy
1? Netherlands
13 Norway
14 Portugal
Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia2
21 Others in Western Europe
22 Russia
23 Other Eastern Europe

16,091

15,113

14,185

15,862

16,830

15,834

14,185

16,481'

14,972

18,375

25 Latin America and Caribbean
76 Argentina
7,7 Bahamas
78 Bermuda
79 Brazil
30 British West Indies
31 Chile
37, Colombia
33 Cuba
34 Ecuador
35 Guatemala
36 Jamaica
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41 Uruguay
4? Venezuela
43 Other

231,506
6,967
76,525
4,056
17,995
88,565
3,271
2,587
0
1,387
191
238
14,851
7,998
1,471
663
786
2,571
1,384

246,137
5,869
87,138
2,270
11,894
107,846
2,805
2,425
0
1,053
228
158
16,567
1,207
1,560
739
599
2,516
1,263

213,772'
4,882
59,532
5,934
10,733'
98,738
3,397
2,750
0
884
262
167
15,049
1,379
4,474
730
936
2,525
1,40C

210,580
4,553
58,588
3,567
11,308
99,580
3,300
2,475
0
924
235
160
17,234
1,045
1,937
724
921
2,653
1,376

213,423
4,564
64,853
2,798
11,558
96,906
3,323
2,595
5
936
275
147
16,621
1,080
1,979
713
882
2,700
1,488

217,040
4,605
65,139
6,035
11,583
96,325
3,309
2,698
0
926
255
162
16,495
1,529
2,080
723
877
2,880
1,419

213,772'
4,882
59,532
5,934
10,733'
98,738
3,397
2,750
0
884
262
167
15,049
1,379
4,474
730
936
2,525
1,40C

218,391'
4,804'
62,831
6,797
10,924'
100,926
3,690
2,752'
0
853
240
170
15,216'
1,735'
2,024'
735
895
2,409'
1,39C

210,770
4,859
63,898
2,851
10,507
94,885
3,795
2,819
0
835
257
164
15,988
1,938
2,307
708
844
2,485
1,630

201,920
4,835
56,978
3,910
10,863
92,200
3,639
2,807
0
808
274
151
15,107
2,107
2,550
650
846
2,557
1,638

44

138,722

125,262

131,248

131,011

127,358

126,143

131,248

121,729

131,456

119,047

620
1,952
10,648
655
933
774
90,699
5,766
1,247
1,573
10,749
13,106

747
2,087
9,617
441
952
860
84,807
6,048
1,910
1,713
8,284
7,796

906
2,046
9,673
529
1,189
820
78,609
6,170
2,145
1,867
18,559
8,735

636
2,054
10,057
499
1,089
800
83,527
6,247
2,144
1,795
14,613
7,550

978
1,848
9,095
500
1,112
826
80,253
6,113
2,181
1,764
15,488
7,200

624
1,653
9,287
539
1,135
937
77,676
6,288
2,034
1,873
16,858
7,239

906
2,046
9,673
529
1,189
820
78,609
6,170
2,145
1,867
18,559
8,735

774
1,683
9,145
532
1,323
877
74,593
6,063'
1,871
1,7%
17,083
5,989'

892
1,585
10,298
549
1,292
809
79,753
6,753
1,842
1,737
17,775
8,171

939
1,634
10,549
443
1,469
895
66,767
6,944
1,713
1,659
19,048
6,987

57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries
63 Other

5,445
380
513
1,525
16
1,486
1,525

4,928
294
575
1,235
4
1,298
1,522

4,289
194
441
1,041
4
1,004
1,605

4,333
256
467
1,055
4
1,067
1,484

4,303
229
452
1,036
4
1,056
1,526

4,233
214
443
1,063
4
1,029
1,480

4,289
194
441
1,041
4
1,004
1,605

4,262
171
421
1,069
3
1,067
1,531

4,147
291
403
1,030
3
1,108
1,312

3,871
192
3%
1,021
3
1,130
1,129

64 Other
65 Australia
66 Other

1,892
1,413
479

2,306
1,665
641

3,007'
2,263
744'

2,765
1,765
1,000

3,133
1,951
1,182

2,447
1,601
846

3,007'
2,263
744'

2,632
1,8%
736

3,345
2,552
793

3,753
3,117
636

67 Nonmonetary international and regional
organizations

4,793

6,283

5,082

4,171

2,472

2,881

5,082

3,100

4,108

3,443

24 Canada

45
46
47
48
49
50
51
5?
53
54
55
56

China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Japan
Korea (South)
Philippines
Thailand
,
Middle Eastern oil-exporting countries
Other

1. Reporting banks include all types of depository institutions, as well as some
brokers and dealers.
2. Beginning December 1992, excludes Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23. Beginning December 1992, includes, in addition, all
former parts of the U.S.S.R. (except Russia), and Bosnia, Hercegovina, Croatia,
and Slovenia.




4. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
6. Comprises Algeria, Gabon, Libya, and Nigeria.
7. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."

Nonbank-Reported

Data

3.19 BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1992
Claim

1990

1991

1992r
Sept.

Oct.

Nov.

493,689
32,056
298,056
112,224
60,856
51,368
51,353

490,721
30,955
290,974
112,512
61,999
50,513
56,280

Dec/

1 Total

579,044

579,683

555,697

548.286

2 Banks' claims
3 Foreign public borrowers
4 Own foreign offices2
5 Unaffiliated foreign banks
6
Deposits
7
Other
8 All other foreigners

511,543
41,900
304,315
117,272
65,253
52,019
48,056

514,339
37,126
318,800
69,018
47,584
41,811

495,713
31,370
299,770
109,909
61,125
48,784
54,664

486,071
31,504
298.287
105,768
54,315
51,453
50,512

67,501
14,375

65,344
15,280

59,984
15,452

62,215
15,348

37,125

31,400

33,687

12,939

13,132

13,180

13,628

8,974

8,701

8,540

44,638

40,146

33,605

34,692

36,151

36,922

8,701

14 Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States ..

493,522
30,500
303,819
102,840
51,690
51,150
56,363

13,132

13 Customer liability on acceptances

483,903
33,163
290,938
101,949
53,612
48,337
57,853

31,400

11,792

Feb/

59,984
15,452

41,333

Jan.'

9 Claims of banks' domestic customers3
10 Deposits
11 Negotiable and readily transferable
instruments
12 Outstanding collections and other
claims
MEMO

116,602

34,522

33,708

495,713
31,370
299,770
109,909
61,125
48,784
54,664

33,605

foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
3. Assets held by reporting banks for the account of their domestic customers.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see Federal Reserve
Bulletin, vol. 65 (July 1979), p. 550.

1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are quarterly.
Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. For U.S. banks, includes amounts due from own foreign branches and
foreign subsidiaries consolidated in Consolidated Report of Condition filed with
bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due from head office or parent

3.20

555,697

BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1992
Maturity, by borrower and area

1989

1990

1991
Mar.

1 Total
2
3
4
5
6
7

8
9
10
11
1?
13

By borrower
Maturity of one year or less2
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean

Africa 3
All other
Maturity of more than one year
14 Europe
15 Canada
16 Latin America and Caribbean
17
18 Africa 3
19 All other

Sept.

Dec.

238,123

206,903

195,302

194,450

196,768

187,398

195,626

178,346
23,916
154,430
59,776
36,014
23,762

165,985
19,305
146,680
40,918
22,269
18,649

162,573
21,050
141,523
32,729
15,859
16,870

161,566
20,253
141,313
32,884
16,182
16,702

162,433
20,528
141,905
34,335
15,145
19,190

155,254
17,863
137,391
32,144
13,295
18,849

164,059
17,867
146,192
31,567
13,223
18,344

53,913
5,910
53,003
57,755
3,225
4,541

49,184
5,450
49,782
53,258
3,040
5,272

51,835
6,444
43,597
51,059
2,549
7,089

52,911
6,958
48,536
43,645
2,470
7,046

54,997
7,986
49,094
41,409
2,127
6,820

55,986
5,949
45,241
40,824
2,183
5,071

53,885
6,118
50,320
45,862
1,810
6,064

4,121
2,353
45,816
4,172
2,630
684

3,859
3,290
25,774
5,165
2,374
456

3,878
3,595
18,277
4,459
2,335
185

4,315
3,289
18,120
4,714
2,207
239

6,752
3,158
16,827
4,979
2,356
263

6,625
3,227
15,092
4,815
2,107
278

5,360
3,290
15,166
4,977
2,364
410

1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.




June

2. Maturity is time remaining to maturity,
3. Includes nonmonetary international and regional organizations.

A61

A62
3.21

International Statistics • July 1993
CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1
Billions of dollars, end of period
1990
Area or country

1988

1992

1991

1989
Dec.

1 Total

346.3

338.8

Mar.

June

Sept.

Dec.

Mar.

June

Sept.

Dec.

317.8

325.3

320.4

335.7

341.5

347.91

357.4r

343.9r

345.8r

r

r

Italy

16

Finland

19

Portugal

21

Turkey

23

South Africa

25 OPEC2

Latin America
33
34

Brazil
Chile

37
38

Peru
Other
Asia
China

152.9
6.3
11.7
10.5
7.4
3.1
2.0
7.1
67.2
5.4
32.2

132.1
5.9
10.4
10.6
5.0
3.0
2.2
4.4
60.8
5.9
23.9

129.9
6.2
9.7
8.8
4.0
3.3
2.0
3.7
62.3
6.8
23.2

129.8
6.1
10.5
8.3
3.6
3.3
2.5
3.3
59.5
8.2
24.6

134.0
5.8
11.1
9.7
4.5
3.0
2.1
3.9
64.9
5.8
23.2

137.2
6.0
11.0
8.3
5.6
4.7
1.9
3.4
68.5
5.8
22.2

131.r
5.3
10.0
8.4
5.4
4.3
2.0*
3.2
64.8
6.6
21.lr

136.3
6.2
12.0
8.8
8.0
3.3
1.9
4.6
65.9*
6.7
18.7r

137.5
6.2
15.5
10.9
6.4
3.7
2.2
5.2
61.8r
6.71
18.9

134.0r
5.6
15.4r
9.3
6.5
2.8
2.3r
4.8r
61.4r
6.6r
19.2

21.3
1.5
1.1
1.1
1.8
1.8
.4
6.2
1.5
1.7
2.4
1.8

21.0
1.5
1.1
1.0
2.5
1.4
.4
7.1
1.2
1.0
2.0
1.6

22.9
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
1.2
1.8
1.8

23.5
1.4
.9
1.0
2.5
1.5
.6
9.0
1.7
1.2
1.8
1.9

21.3
1.1
1.2
.8
2.4
1.5
.6
7.1
1.9
1.1
1.8
2.0

22.1
1.0
.9
.6
2.3
1.4
.5
8.3
1.6
1.3
1.6
2.4

22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7

21.5
.8
.8
.8
2.3
1.5
.5
7.7
1.2
1.5
1.8
2.3

25.5
.8
1.3
.8
2.8
1.7
.5
10.1
1.5
2.0
1.7
2.3

25.1
.8
1.5
1.0
3.<y
1.6
.5
9.8
1.5
1.5
1.7
2.3

24.1
1.2
.9
.7
3.0
1.2
.4
9.0
1.3
1.7
1.7
2.9

16.6
1.7
7.9
1.7
3.4
1.9

17.1
1.3
7.0
2.0
5.0
1.7

12.8
1.0
5.0
2.7
2.5
1.7

17.1
.9
5.1
2.8
6.6
1.6

14.0
.9
5.3
2.6
3.7
1.5

15.6
.8
5.6
2.8
5.0
1.5

14.6
.7
5.4
2.8
4.2
1.5

15.8
.7
5.4
3.0
5.3
1.4

16.2
.7
5.3
3.0
5.9
1.4

15.9
.7
5.4
3.0
5.4
1.4

16.1
.6
5.2
3.0
6.2
1.1

85.3

6

152.7
9.0
10.5
10.3
6.8
2.7
1.8
5.4
66.2
5.0
34.9

77.5

65.4

66.4

65.0

65.0

64.3

70.2r

68. l r

12.9

12.2'

9.0
22.4
5.6
2.1
18.8
.8
2.6

6.3
19.0
4.6
1.8
17.7
.6
2.8

5.0
14.4
3.5
1.8
13.0
.5
2.3

4.7
13.9
3.6
1.7
13.7
.5
2.2

4.6
11.6
3.6
1.6
14.3
.5
2.0

4.5
10.5
3.7
1.6
16.2
.4
1.9

4.8
9.6
3.6
1.7
15.5
.4
2.1

5.0
10.8
3.9
1.6
18.2
.4
2.2

5.1
10.6
4.0
1.6
16.3
.4
2.2

6.2
10.8
4.2
1.7
17.1r
.5
2.5

6.6
10.8
4.4
1.8
16.0
.5
2.6

.3
3.7
2.1
1.2
6.1
1.6
4.5
1.1
.9

.3
4.5
3.1
.7
5.9
1.7
4.1
1.3
1.0

.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7

.4
3.6
3.5
.5
6.8
2.0
3.7
1.6
2.1

.6
4.1
3.0
.5
6.9
2.1
3.7
1.7
2.3

.4
4.1
2.8
.5
6.5
2.3
3.6
1.9
2.3

.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.4

.3
4.8
3.6
.4
6.9
2.5
3.6
1.7
2.3r

.3
4.6
3.8
.4
6.9
2.7
3.1
1.9
2.5r

.3
5.0
3.6
.4
7.4
3.0
3.6
2.2 r
2.7

.7
5.2
3.2
.4
6.6
3.0
3.6
2.2r
2.7

42
43

Israel
Korea (South)

46

Thailand

48

Africa
Egypt

50
51

Zaire
Other Africa5

.4
.9
.0
1.1

.4
.9
.0
1.0

.4
.8
.0
1.0

.4
.8
.0
.8

.4
.7
.0
.8

.4
.7
.0
.8

.4
.7
.0
.7

.3
.7
.0
.7

.5
.7
.0
.6

.3
.6
.0
.9

.2
.6
.0
1.0

Other

3.6
.7
1.8
1.1

3.5
.7
1.6
1.3

2.3
.2
1.2
.9

2.1
.3
1.0
.8

2.1
.4
1.0
.7

1.8
.4
.8
.7

2.4
.9
.9
.7

2.9
1.4
.8
.6

3.0
1.7
.7
.6

3.1
1.8
.7
.7

3.1
1.9
.6
.6

36.6
5.5
1.7
9.0
2.3
1.4
.1
9.7
7.0
.0

42.5
2.8
4.4
11.5
7.9
1.4
.1
7.7
6.6
.0

50.0
8.3
4.4
14.1
1.1
1.5
.1
11.6
8.9
.0

48.3
6.8
4.2
14.9
1.4
1.3
.1
12.4
7.2
.0

52.7
6.7
7.1
13.8
3.9
1.3
.1
12.1
7.7
.0

52.0
11.9
2.3
15.8
1.2
1.3
.1
12.2
7.1
.0

58.4r
14 .(F
3.9
17.4
1.0
1.3
.1
12.2r
8.5
.0

59.4 r
12.2
5.1
18.1
.8
1.7
.1
15.0*
6.4
.0

52.3
8.r
3.8
15.7
.7
1.8
.1
15.2
6.8
.0

55.2rr
5.6
6.2

Other

44.2
11.0
.9
12.9
1.0
2.5
.1
9.6
6.1
.0
22.6

30.3

39.8

36.4

39.9

44.6

48.2

48.0

48.6r

36.8r

41 .(F

55

65

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).
Since June 1984, reported claims held by foreign branches have been reduced
by an increase in the reporting threshold for "shell" branches from $50 million to




2o.r
I.I
1.7
.1
13.8
6.5
.0

$150 million equivalent in total assets, the threshold now applicable to all
reporting branches.
2. Organization of Petroleum Exporting Countries, shown individually; other
members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar,
Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally
members of OPEC).
3. Excludes Liberia.
4. Includes Canal Zone beginning December 1979.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional
organizations.

Nonbank-Reported
3.22

Data

A63

LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States 1
Millions of dollars, end of period
1992

1991
Type and area or country

1989

1990

1991
Sept.

Dec.

Mar.

June

Sept.

Dec.

1 Total

38,764

46,043

43,156

43,218

43,156

44,098

44,176

45,166

42,899

2 Payable in dollars
3 Payable in foreign currencies

33,973
4,791

40,786
5,257

37,764
5,392

38,482
4,736

37,764
5,392

38,640
5,458

37,481
6,695

36,574
8,592

35,4%
7,403

By type
4 Financial liabilities
5 Payable in dollars
6 Payable in foreign currencies

17,879
14,035
3,844

21,066
16,979
4,087

21,893
17,781
4,112

21,652
17,947
3,705

21,893
17,781
4,112

22,255
18,027
4,228

21,988
16,744
5,244

23,406
16,468
6,938

22,013
15,668
6,345

20,885
8,070
12,815
19,938
947

24,977
10,683
14,294
23,807
1,170

21,263
8,310
12,953
19,983
1,280

21,566
8,313
13,253
20,535
1,031

21,263
8,310
12,953
19,983
1,280

21,843
8,926
12,917
20,613
1,230

22,188
9,516
12,672
20,737
1,451

21,760
9,409
12,351
20,106
1,654

20,886
8,849
12,037
19,828
1,058

11,660
340
258
464
941
541
8,818

10,978
394
975
621
1,081
545
6,357

11,905
217
2,106
682
1,056
408
6,429

12,311
397
2,164
682
1,050
497
6,589

11,905
217
2,106
682
1,056
408
6,429

12,449
174
1,997
666
1,025
355
7,338

13,030
194
2,324
836
979
490
7,344

14,070
256
2,785
941
980
627
7,680

12,600
427
1,608
740
606
569
7,987

7 Commercial liabilities
8 Trade payables
9 Advance receipts and other liabilities
10 Payable in dollars
11 Payable in foreign currencies

12
13
14
15
16
17
18

By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

19

Canada

610

229

267

305

267

283

337

320

491

20
21
22
23
24
25
26

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

1,357
157
17
0
724
6
0

4,153
371
0
0
3,160
5
4

4,325
537
114
6
3,065
7
4

3,883
314
0
6
2,961
6
4

4,325
537
114
6
3,065
7
4

4,062
396
114
8
2,930
7
4

3,323
343
114
10
2,182
8
4

3,345
220
115
18
2,291
12
5

3,480
349
114
19
2,307
12
6

27
28
29

Asia
Japan
Middle East oil-exporting countries' —

4,151
3,299
2

5,295
4,065
5

5,338
4,102
13

5,149
4,000
19

5,338
4,102
13

5,366
4,107
13

5,209
4,116
10

5,581
4,548
17

5,408
4,375
19

30
31

Africa
.
Oil-exporting countries3

2
0

2
0

6
4

3
2

6
4

7
6

0
0

5
0

6
0

All other4

100

409

52

1

52

88

89

85

28

32

9,071
175
877
1,392
710
693
2,620

10,310
275
1,218
1,270
844
775
2,792

7,808
248
830
944
709
488
2,310

8,084
225
992
911
751
492
2,217

7,808
248
830
944
709
488
2,310

7,501
256
678
880
574
482
2,445

7,144
240
659
702
605
400
2,404

6,714
173
688
744
601
369
2,262

6,624
285
660
592
555
398
2,225

33
34
35
36
37
38
39
40

Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada

1,124

1,261

990

1,011

990

1,095

1,077

1,085

998

41
42
43
44
45
46
47

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

1,224
41
308
100
27
323
164

1,672
12
538
145
30
475
130

1,352
3
310
219
107
304
94

1,512
14
450
211
46
291
102

1,352
3
310
219
107
304
94

1,701
13
493
230
108
375
168

1,803
8
409
212
73
475
279

1,518
3
338
115
85
322
147

1,520
6
292
197
55
444
127

48
49
50

Asia
Japan
Y<
Middle Eastern oil-exporting countries 0

7,550
2,914
1,632

9,483
3,651
2,016

9,330
3,720
1,498

8,855
3,363
1,780

9,330
3,720
1,498

9,890
3,549
1,591

10,439
3,537
1,778

11,006
3,909
1,813

10,643
3,990
1,946

51
52

Africa
.
Oil-exporting countries3

886
339

844
422

713
327

836
357

713
327

644
253

775
389

675
337

535
291

53

Other4

1,030

1,406

1,070

1,268

1,070

1,012

950

762

566

1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.

A64
3.23

International Statistics • July 1993
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States 1

Reported by Nonbanking Business Enterprises in

Millions of dollars, end of period
1991
Type, and area or country

1989

1990

1992

1991
Sept.

Dec.

Mar.

June

Sept.

Dec.

1 Total

33,173

35,348

42,667

38,315

42,667

42,199

41,869

38,659

38,086r

2 Payable in dollars
3 Payable in foreign currencies

30,773
2,400

32,760
2,589

40,098
2,569

35,952
2,363

40,098
2,569

39,558
2,641

38,899
2,970

35,738
2,921

35,598rr
2,488

By type
4 Financial claims
5 Deposits
6
Payable in dollars
7
Payable in foreign currencies
8 Other financial claims
9
Payable in dollars
10
Payable in foreign currencies

19,297
12,353
11,364
989
6,944
6,190
754

19,874
13,577
12,552
1,025
6,297
5,280
1,017

25,463
17,218
16,343
875
8,245
7,365
880

22,536
16,188
15,182
1,006
6,348
5,611
737

25,463
17,218
16,343
875
8,245
7,365
880

25,328
16,964
15,803
1,161
8,364
7,617
747

24,612
15,116
13,829
1,287
9,4%
8,771
725

21,367
12,547
11,489
1,058
8,820
7,788
1,032

20,922r
12,734rr
ll,988
746
8,188r
7,425rr
763

11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
14 Payable in dollars
15 Payable in foreign currencies

13,876
12,253
1,624
13,219
657

15,475
13,657
1,817
14,927
548

17,204
14,479
2,725
16,390
814

15,779
13,429
2,350
15,159
620

17,204
14,479
2,725
16,390
814

16,871
14,266
2,605
16,138
733

17,257
14,756
2,501
16,299
958

17,292
14,552
2,740
16,461
831

17,164r
14,886rr
2,278
16,185rr
979

8,463
28
153
152
238
153
7,496

9,645
76
371
367
265
357
7,971

13,546
13
312
342
385
591
11,251

13,129
76
255
434
420
580
10,997

13,546
13
312
342
385
591
11,251

14,205
12
277
290
727
682
11,631

13,200
25
786
381
732
779
8,768

11,249
16
809
321
766
602
7,727

9,346r
8
774r
401
536r
507
5,947r

16
17
18
19
20
21
22

By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

23

Canada

1,904

2,934

2,679

2,163

2,679

2,750

2,529

2,256

l,701r

24
25
26
27
28
29
30

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

8,020
1,890
7
224
5,486
94
20

6,201
1,090
3
68
4,635
177
25

7,932
758
8
192
6,384
321
40

6,289
652
19
137
5,106
176
32

7,932
758
8
192
6,384
321
40

7,070
415
12
191
5,912
318
34

7,260
523
12
181
6,018
343
32

6,523
1,099
65
135
4,792
222
26

8,505r
625
40
4%rr
6,712
270
29

31
32
33

Asia
Japan
Middle East oil-exporting countries2 ..

590
213
8

860
523
8

957
385
5

614
277
3

957
385
5

961
380
3

1,275
712
4

995
481
4

839r
683r
3

34
35

Africa
.
Oil-exporting countries

140
12

37
0

57
1

61
1

57
1

60
0

57
0

66
1

79r
9

36

All other4

180

195

292

280

292

282

291

278

452

6,209
242
964
696
479
313
1,575

7,044
212
1,240
807
555
301
1,775

7,950
192
1,544
943
643
295
2,088

6,884
190
1,330
858
641
258
1,807

7,950
192
1,544
943
643
295
2,088

7,894
181
1,562
936
646
328
2,086

8,138
255
1,563
908
666
399
2,173

7,792
170
1,741
885
588
294
1,977

7,448r
183
1,394
883
541r
260
1,776

37
38
39
40
41
42
43
44

Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada

1,091

1,074

1,174

1,232

1,174

1,176

1,131

1,172

1,251^

45
46
47
48
49
50
51

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

2,184
58
323
297
36
508
147

2,375
14
246
326
40
661
192

2,591
11
263
418
41
829
202

2,494
8
255
385
37
741
196

2,591
11
263
418
41
829
202

2,572
11
272
364
45
892
206

2,672
9
291
438
32
847
251

3,141
7
245
395
43
968
302

2,842r
18
237
336
39 r
85 l r
316

52
53
54

Asia
Japan
Middle Eastern oil-exporting countries'

3,570
1,199
518

4,127
1,460
460

4,573
1,878
621

4,282
1,808
496

4,573
1,878
621

4,354
1,782
635

4,463
1,786
609

4,308
1,793
512

4,638r
1,848
653

55
56

Africa
.
Oil-exporting countries

429
108

488
67

418
95

431
80

418
95

418
75

422
73

430
66

536
77

57

Other4

393

367

498

456

498

457

431

449

450r

1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.

Securities Holdings and Transactions

A65

3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars

1991

1993

1992

1993
Transaction and area or country

1992
Jan.Mar.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb. r

Mar."

22,725
20,382

19,170
19,353

28,772
25,980

27,008
24,546

U.S. corporate securities
STOCKS

211,207
200,116

1 Foreign purchases
2 Foreign sales
3 Net purchases or sales ( - )

74,950
69,879

13,884
17,034

18,820
18,170

17,885
16,598

11,091

-5,140

5,071

-3,150

650

1,287

2,343

-183

2,792

2,462

-178

2,702

2,305

10,522

4 Foreign countries

7
8
9
10

221,350
226,490

Germany
Netherlands
Switzerland
United Kingdom

12 Latin America and Caribbean
13 Middle East1
14 Other Asia
17 Other countries
18 Nonmonetary international and
regional organizations

-5,173

4,829

-3,059

653

1,284

2,319

53
9
-63
-227
-131
-352
3,845
2,177
-134
4,255
1,179
153
174

-4,934
-1,331
-64
-280
143
-3,294
1,405
2,209
-88
-3,944
-3,598
10
169

3,314
15
290
121
1,062
1,280
-108
480
-170
1,233
-346
33
47

-1,683
-234
-112
-107
-189
-869
-278
-90
136
-1,064
-97
14
-94

75
-92
-52
-24
-124
362
-227
235
-57
767
184
-21
-119

371
-50
47
-4
-40
361
43
649
-219
373
220
-18
85

1,505
-154
162
190
221
705
176
422
70
122
215
-7
31

52
-25
91
64
205
-350
-341
305
-92
-123
28
4
17

2,290
223
97
-11
501
1,154
57
-235
-65
593
-624
27
35

972
-183
102
68
356
476
176
410
-13
763
250
2
-5

568

33

242

-91

-3

3

24

-5

90

157

153,096
125,637

214,801
175,310

64,629
56,653

17,160
14,452

19,315
15,224

18,082
16,317

19,264
15,513

17,417
15,439

21,754
18,671

25,458
22,543

BONDS 2

19 Foreign purchases
20 Foreign sales
21 Net purchases or sales ( - )

27,459

39,491

7,976

2,708

4,091

1,765

3,751

1,978

3,083

2,915

22 Foreign countries

27,590

38,375

8,334

2,573

4,045

1,600

3,206

2,074

3,209

3,051

23
24
25
26
27
28
29
30
31
32

13,112
847
1,577
482
656
8,931
1,623
2,672
1,787
8,459
5,767
52
-116

18,314
1,221
2,503
531
-513
13,229
236
8,833
3,166
7,545
-450
354
-73

4,503
487
86
-430
95
3,525
-173
1,391
811
1,670
846
185
-53

1,818
155
387
58
-51
1,319
48
548
-5
171
-590
-7
0

1,993
-4
-34
133
-23
1,568
198
842
273
790
467
-50
-1

-492
-7
-113
144
-260
-312
281
540
515
692
266
-4
68

1,996
217
857
48
105
962
-38
513
360
119
9
302
-46

1,302
101
91
-119
122
349
-437
419
300
305
190
168
17

2,188
311
52
-133
-38
2,421
145
482
248
149
61
27
-30

1,013
75
-57
-178
11
755
119
490
263
1,216
595
-10
-40

-131

1,116

-358

135

46

165

545

-96

-126

-136

-4,511
17,438
21,949
-4,368
69,812
74,180

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia

35 Other countries
36 Nonmonetary international and
regional organizations

Foreign securities
-31,967
120,598
152,565
-14,828
330,311
345,139

-32,186
149,987
182,173
-18,470
485,659
504,129

-8,408
45,210
53,618
-19,057
163,940
182,997

-2,892
13,632
16,524
-1,420
46,140
47,560

-4,260
12,477
16,737
-2,205
49,670
51,875

-3,636
11,672
15,308
-791
52,066
52,857

-4,368
12,781
17,149
-2,874
39,607
42,481

—2,337rr
12,726r
15,063

-s.ioo'
38,411
43,51r

-1,560
15,046
16,606
-9,589
55,717
65,306

43 Net purchases or sales ( - ) , of stocks and bonds

-46,795

-50,656

-27,465

-4,312

-6,465

-4,427

-7,242

—7,437r

-11,149

-8,879

44 Foreign countries

-46,711

-53,992

-26,506

-4,333

-6,492

-4,500

-7,196

—6,430r

-11,287

-8,789

47
48
49
50

-34,452
-7,004
759
-7,350
-9
1,345

-38,109
-6,653
-1,830
-6,583
-57
-760

-16,157
-8,222
223
-2,259
-22
-69

-3,196
-222
308
-1,667
-14
458

-6,851
-1,008
1,091
681
-2
-403

-5,001
571
-1,671
1,567
42
-8

-4,516
-1,167
512
-1,670
-11
-344

-6,478 r
-161
195
-381
-7
402

-6,702
-5,028
-20
567
3
-107

-2,977
-3,033
48
-2,445
-18
-364

-84

3,336

-959

21

27

73

-46

138

-90

37 Stocks, net purchases or sales ( - ) 3
38 Foreign purchases
40 Bonds, net purchases or sales ( - )
42

Foreign sales

Latin America and Caribbean
Asia
Africa
Other countries

51 Nonmonetary international and
regional organizations

1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities and securities of U.S.
government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments
abroad.




-1,007

3. In a July 1989 merger, the former stockholders of a U.S. company received
$5,453 million in shares of the new combined U.K. company. This transaction is
not reflected in the data.

A66
3.25

International Statistics • July 1993
MARKETABLE U.S. TREASURY BONDS AND NOTES

Foreign Transactions

Millions of dollars
1993
Country or area

1992

1993

1992

1991

Jan.Mar.

Sept.

Oct.

Nov.

Jan.

Dec.

Feb.

Mar."

Transactions, net purchases or sales ( - ) during period1
1 Estimated total

19,865

39,319

5,876

-5,995

3,546

17,648

8

454

-l,273 r

6,695

2 Foreign countries

19,687

37,966

3,848

-6,204

4,351

17,661

-194

-129

-2,166 r

6,143

3 Europe
4 Belgium and Luxembourg
5 Germany
6 Netherlands
7 Sweden
8 Switzerland
9 United Kingdom
10 Other Western Europe
11 Eastern Europe
12 Canada

8,663
523
-4,725
-3,735
-663
1,007
6,218
10,024
13
-3,019

19,647
1,985
2,076
-2,923
-804
481
24,184
-6,002
650
562

-4,931
504
-3,692
-885
-336
-2,223
2,880
-1,408
229
5,874

-4,655
-25
900
-239
-843
292
16
-4,761
5
-4,281

4,671
232
-8
-40
202
769
4,068
-551
-1
458

7,284
370
-1,584
1,827
668
1,334
7,209
-2,758
218
-1,087

3,163
-28
898
-804
-344
213
2,833
395
0
-99

-585
-59
697
-1,238
-54
-199
2,025
-1,759
2
3,302

-382 r
45
-1,632
206
258
-455 r
183
975
38
82

-3,964
518
-2,757
147
-540
-1,569
672
-624
189
2,490

13 Latin America and Caribbean
14 Venezuela
15 Other Latin America and Caribbean
16 Netherlands Antilles
17
18 Japan
19
20 Other

10,285
10
4,179
6,097
3,367
-4,081
689
-298

-3,223
539
-1,957
-1,805
23,526
9,817
1,103
-3,649

-1,668
158
-5,436
3,610
5,047
3,518
-238
-236

-1,479
31
-2,537
1,027
4,004
2,448
59
148

-1,915
155
-3,233
1,163
1,416
-339
-37
-242

7,270
27
2,385
4,858
4,000
3,383
119
75

-4,519
11
415
-4,945
1,188
2,201
0
73

-1,495
-175
-3,309
1,989
-1,136
-743
-33
-182

445
179
-1,656
1,922
-1,032
804
-139
-1,140

-618
154
-471
-301
7,215
3,457
-66
1,086

178
-358
-72

1,353
1,018
533

2,028
865
506

209
-31
201

-805
-903
219

-13
-38
-31

202
76
97

583
228
270

893
581
235

552
56
1

19,687
1,190
18,4%

37,966
6,876
31,090

3,848
-8,001
11,849

-6,204
-4,483
-1,721

4,351
2,951
1,400

17,661
-603
18,264

-194
-719
525

-129
-2,%5
2,836

—2,166r
-4,364 r
2,198

6,143
-672
6,815

-6,822
239

4,323
11

-1,282
8

750
4

-271
0

407
0

511
0

-238
8

-1,855
0

811
0

21 Nonmonetary international and regional organizations
22 International
23 Latin American regional
MEMO

24 Foreign countries
25 Official institutions
26 Other foreign2
Oil-exporting countries
2
27 Middle East
28 Africa

1. Official and private transactions in marketable U.S. Treasury securities
having an original maturity of more than one year. Data are based on monthly
transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes
held by official institutions of foreign countries.




2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.

Interest and Exchange
3.26

Rates

A67

DISCOUNT RATES OF FOREIGN CENTRAL BANKS 1
Percent per year

Country

Country
Percent
6.75
6.25
5.10
10.5
7.50

Apr. 1993
May 1993
May 1993
Mar. 1993
May 1993

Percent
Germany...
Italy
Japan
Netherlands

1. Rates shown are mainly those at which the central bank either discounts or
makes advances against eligible commercial paper or government securities for
commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood
that the central bank transacts the largest proportion of its credit operations.

3.27

Month
effective

Percent

Month
effective

7.25
10.50
2.5
6.25

Month
effective

Austria..
Belgium .
Canada..
Denmark
France 2 ..

Rate on May 28, 1993

Rate on May 28, 1993

Rate on May 28, 1993
Country

Apr. 1993
May 1993
July 1992
May 1993

7.75
5.0
12.0

Apr. 1993
Mar. 1993
Sept. 1992

United Kingdom

2. Since Feb. 1981, the rate has been that at which the Bank of France
discounts Treasury bills for seven to ten days.

FOREIGN SHORT-TERM INTEREST RATES 1
Averages of daily figures, percent per year
1993

1992
Type or country

1990

1991

1992
Nov.

1
2
3
4
5
6
7
8
9
10

Eurodollars
United Kingdom.
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan

8.16

14.73
13.00
8.41
8.71
8.57

10.20
12.11

9.70
7.75

5.86
11.47
9.07
9.15

8.01

9.19
9.49
12.04
9.30
7.33

3.70
9.56
6.76
9.42
7.67
9.25
10.14
13.91
9.31
4.39

1. Rates are for three-month interbank loans, with the following exceptions:
Canada, finance company paper; Belgium, three-month Treasury bills; and Japan,
CD rate.




Dec.

Jan.

Feb.

Mar.

Apr.

May

3.67
7.16
7.63
8.84
6.44
8.66
9.58
14.38
8.64
3.77

3.50
7.11
7.93
8.93
6.13
8.55
10.75
13.60
8.65
3.76

3.22
6.88
7.03
8.50
5.52
8.00
11.69
12.56
8.19
3.70

3.12

6.38
8.29
5.34
7.98
11.70
11.43
8.75
3.27

3.11
5.91
5.59
7.85
5.05
7.47
10.89
11.26
8.27
3.26

3.10
5.90
5.43
7.81
4.97
7.43
8.73
11.41
7.94
3.22

3.12
5.91
5.29
7.41
4.97
6.98
7.48
10.74
7.16
3.23

6.10

A68
3.28

International Statistics • July 1993
FOREIGN EXCHANGE RATES1
Currency units per dollar except as noted
1993

1992
Country/currency unit

1990

1991

1992
Dec.

1
2
3
4
5
6
7
8
9
10

Australia/dollar2
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma

11
12
13
14
15
16
17
18
19
20

Hong Kong/dollar
India/rupee
Ireland/pound2
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar
Norway/krone
Portugal/escudo

21
22
23
24
25
26
27
28
29
30

Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound

Jan.

Feb.

Mar.

Apr.

May

78.069
11.331
33.424
1.1668
4.7921
6.1899
3.8300
5.4467
1.6166
158.59

77.872
11.686
34.195
1.1460
5.3337
6.4038
4.0521
5.6468
1.6610
182.63

73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81

68.974
11.130
32.545
1.2725
5.8106
6.1206
5.1444
5.3974
1.5822
209.48

67.297
11.368
33.239
1.2779
5.77%
6.2319
5.4242
5.4751
1.6144
215.97

68.294
11.556
33.841
1.2602
5.7874
6.3019
5.8534
5.5594
1.6414
220.60

70.775
11.586
33.919
1.2471
5.7455
6.3242
5.9767
5.5944
1.6466
223.57

71.155
11.234
32.857
1.2621
5.7202
6.1339
5.6190
5.3984
1.5964
217.90

69.859
11.305
33.044
1.2698
5.7392
6.1751
5.4847
5.4180
1.6071
218.12

7.7899
17.492
165.76
1,198.27
145.00
2.7057
1.8215
59.619
6.2541
142.70

7.7712
22.712
161.39
1,241.28
134.59
2.7503
1.8720
57.832
6.4912
144.77

7.7402
28.156
170.42
1,232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07

7.7416
28.979
166.71
1,412.38
124.04
2.5710
1.7788
51.570
6.6804
142.05

7.7376
29.043
163.37
1,491.07
124.99
2.5985
1.8155
51.270
6.8721
145.36

7.7335
30.042
148.11
1,550.43
120.76
2.6295
1.8473
51.603
6.9779
149.89

7.7332
31.939
147.58
1,591.35
117.02
2.6051
1.8507
53.026
6.9989
152.17

7.7306
31.610
152.75
1,536.14
112.41
2.5777
1.7942
53.904
6.7399
148.25

7.7290
31.613
151.65
1,475.66
110.34
2.5661
1.8026
54.290
6.8027
151.89

1.8134
2.5885
710.64
101.96
40.078
5.9231
1.3901
26.918
25.609
178.41

1.7283
2.7633
736.73
104.01
41.200
6.0521
1.4356
26.759
25.528
176.74

1.6294
2.8524
784.58
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63

1.6397
3.0140
791.75
112.95
45.046
6.8903
1.4219
25.452
25.488
155.10

1.6527
3.0713
794.87
114.62
46.307
7.2536
1.4774
25.452
25.523
153.25

1.6463
3.1313
799.25
117.51
46.351
7.5566
1.5178
25.837
25.508
143.95

1.6446
3.1790
7%.42
117.71
47.069
7.7362
1.5206
26.026
25.425
146.17

1.6228
3.1718
798.61
115.64
47.712
7.4500
1.4599
25.987
25.251
154.47

1.6136
3.1787
803.19
121.30
47.%5
7.3271
1.4504
25.978
25.234
154.77

89.09

89.84

86.61

90.50

92.36

93.65

90.62

90.24

MEMO

31 United States/dollar3

1. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) monthly statistical release.
For ordering address, see inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the
currencies of ten industrial countries. The weight for each of the ten countries is




93.82

the 1972-76 average world trade of that country divided by the average world
trade of all ten countries combined. Series revised as of August 1978 (see Federal
Reserve Bulletin, vol. 64, August 1978, p. 700).

A69

Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List

Published Semiannually, with Latest

BULLETIN

Reference
Issue
June 1993

SPECIAL TABLES—Quarterly

Data Published Irregularly, with Latest

BULLETIN

Page
A78

Issue

Anticipated schedule of release dates for periodic releases

Page

Reference

Title and Date
Assets and liabilities of commercial banks
March 31, 1992
June 30, 1992
September 30, 1992
December 31, 1992

August
November
February
May

1992
1992
1993
1993

A70
A70
A70
A70

Terms of lending at commercial banks
May 1992
August 1992
November 1992
February 1993

September
November
February
May

1992
1992
1993
1993

A78
A76
A76
A76

Assets and liabilities of U.S. branches and agencies of foreign banks
March 31,1992
June 30, 1992
September 30, 1992
December 31, 1992

September
November
February
May

1992
1992
1993
1993

A82
A80
A80
A80

Pro forma balance sheet and income statements for priced service operations
June 30,1991
September 30, 1991
March 30, 1992
June 30, 1992

November
January
August
October

1991
1992
1992
1992

A80
A70
A80
A70

Assets and liabilities of life insurance companies
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992

December
May
August
March

1991
1992
1992
1993

A79
A81
A83
A71




A70

Index to Statistical Tables
References are to pages A3-A68 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 22, 23
Assets and liabilities (See also Foreigners)
Banks, by classes, 20-23
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 24
Automobiles
Consumer installment credit, 39
Production, 47, 48
BANKERS acceptances, 10, 23, 26
Bankers balances, 20-23. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 35
Rates, 26
Branch banks, 24, 55
Business activity, nonfinancial, 45
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 20
Federal Reserve Banks, 11
Central banks, discount rates, 67
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 18, 22
Weekly reporting banks, 22-24
Commercial banks
Assets and liabilities, 20-23
Commercial and industrial loans, 18, 20, 21, 22, 23, 24
Consumer loans held, by type and terms, 39
Deposit interest rates of insured, 16
Loans sold outright, 22
Nondeposit funds, 19
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 4
Commercial paper, 25, 26, 36
Condition statements (See Assets and liabilities)
Construction, 45, 49
Consumer installment credit, 39
Consumer prices, 45, 46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 39
Currency in circulation, 5,14
Customer credit, stock market, 27
DEBITS to deposit accounts, 17
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 20-24




Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 24
Turnover, 17
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 20-23, 24
Federal Reserve Banks, 5,11
Interest rates, 16
Turnover, 17
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 26
FARM mortgage loans, 38
Federal agency obligations, 5, 10, 11, 12, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 30
Receipts and outlays, 28, 29
Treasuryfinancingof surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 7, 19, 22, 23, 24, 26, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11,12, 30
Federal Reserve credit, 5, 6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39
Paper, 25, 26
Financial institutions
Loans to, 22, 23, 24
Selected assets and liabilities, 28
Float, 51
Flow of funds, 40, 42, 43, 44
Foreign banks, assets and liabilities of U.S. branches and
agencies, 23, 24
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5, 11, 22, 23
Foreign exchange rates, 68
Foreign trade, 54

A71

Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 45, 51, 52
Industrial production, 45, 47
Installment loans, 39
Insurance companies, 30, 38
Interest rates
Bonds, 26
Consumer installment credit, 39
Deposits, 16
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 67
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 20, 21, 22, 23, 24,28
Commercial banks, 4, 18, 20-23
Federal Reserve Banks, 11,12
Financial institutions, 38
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 20-23
Commercial banks, 4, 18, 20-23
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 28, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 46
Production, 46,48
Margin requirements, 27
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 26
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 45, 50
Stock market, 27
Prime rate, 25
Producer prices, 45, 50
Production, 45,47
Profits, corporate, 35




REAL estate loans
Banks, by classes, 18, 22, 23, 38
Financial institutions, 28
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7, 19, 22, 23, 24
Reserve requirements, 9
Reserves
Commercial banks, 20
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40,45
SAVING
Flow of funds, 40, 42,43, 44
National income accounts, 51
Savings and loan associations, 38, 39, 40. (See also SAIF-insured
institutions)
Savings Association Insurance Funds (SAIF) insured institutions, 28
Savings banks, 28, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 22, 23
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 22, 23
Rates on securities, 26
Stock market, selected statistics, 27
Stocks (See also Securities)
New issues, 34
Prices, 27
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 4. (See also Credit unions and Savings and
loan associations)
Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 20, 21, 22, 23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 20-23, 24, 30
Dealer transactions, positions, andfinancing,32
Federal Reserve Bank holdings, 5, 11, 12, 30
Foreign and international holdings and
transactions, 11, 30, 66
Open market transactions, 10
Outstanding, by type and holder, 28, 30
Rates, 25
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 22-24
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)

A72

Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
DAVID W. MULLINS, JR., Vice

OFFICE OF BOARD

WAYNE D . ANGELL
EDWARD W. KELLEY, JR.

Chairman

MEMBERS

JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant to the Board
THEODORE E. ALLISON, Assistant to the Board for

Federal

Reserve System Affairs
LYNN S. FOX, Special Assistant to the Board
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board

LEGAL

DIVISION OF INTERNATIONAL FINANCE
EDWIN M . TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
D A L E W . HENDERSON, Associate Director
DAVID H . HOWARD, Senior Adviser
DONALD B . ADAMS, Assistant Director
PETER HOOPER III, Assistant Director
KAREN H . JOHNSON, Assistant Director
RALPH W . SMITH, JR., Assistant Director

DIVISION

J. VIRGIL MATTINGLY, JR., General Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel

DIVISION OF RESEARCH AND STATISTICS
MICHAEL J. PRELL, Director
EDWARD C . ETTIN, Deputy Director
WILLIAM R . JONES, Associate Director
THOMAS D . SIMPSON, Associate Director
LAWRENCE SLIFMAN, Associate

Director

Associate Director
MARTHA BETHEA, Deputy Associate Director
PETER A . TINSLEY, Deputy Associate Director
MYRON L . KWAST, Assistant Director
PATRICK M . PARKINSON, Assistant Director
MARTHA S . SCANLON, Assistant Director
JOYCE K . ZICKLER, Assistant Director
DAVID J. STOCKTON,

OFFICE OF THE SECRETARY
WILLIAM W . WILES,

Secretary

JENNIFER J. JOHNSON, Associate
BARBARA R. LOWREY, Associate
ELLEN M A L A N D , Assistant

Secretary
Secretary

Secretary

DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN, Director
STEPHEN C . SCHEMERING, Deputy Director
D O N E . KLINE, Associate Director
WILLIAM A . RYBACK, Associate Director
FREDERICK M . STRUBLE, Associate Director
HERBERT A . BIERN, Deputy Associate Director
ROGER T. COLE, Deputy Associate Director
JAMES I. GARNER, Deputy Associate Director
HOWARD A . AMER, Assistant Director
GERALD A . EDWARDS, JR., Assistant Director
JAMES D . GOETZINGER, Assistant Director
STEPHEN M . HOFFMAN, JR., Assistant Director
LAURA M . HOMER, Assistant Director
JAMES V. HOUPT, Assistant Director
JACK P. JENNINGS, Assistant Director
MICHAEL G . MARTINSON, Assistant Director
RHOGER H PUGH, Assistant Director
SIDNEY M . SUSSAN, Assistant Director
MOLLY S . WASSOM, Assistant Director




JOHN J. MINGO,

Adviser

LEVON H . GARABEDIAN,

Assistant Director

(Administration )
DIVISION OF MONETARY

AFFAIRS

Director
DAVID E . LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D . PORTER, Deputy Associate Director
DEBORAH DANKER, Assistant Director
DONALD L . KOHN,

NORMAND R. V. BERNARD, Special Assistant to the Board

DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L . GARWOOD,

Director

Associate Director
DOLORES S . SMITH, Associate Director
MAUREEN P. ENGLISH, Assistant Director
IRENE SHAWN M C N U L T Y , Assistant Director
G L E N N E . LONEY,

JOHN P. LAWARE
LAWRENCE B . LINDSEY

SUSAN M . PHILLIPS

OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
S . DAVID FROST, Staff Director
WILLIAM SCHNEIDER, Special Assignment:
Project Director, National Information Center
PORTIA W . THOMPSON, Equal Employment Opportunity
Programs Officer

DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
CLYDE H . FARNSWORTH, JR., Director
DAVID L . ROBINSON, Deputy Director (Finance and
Control)
CHARLES W . BENNETT, Assistant Director
JACK DENNIS, JR., Assistant Director
EARL G . HAMILTON, Assistant Director
JEFFREY C . MARQUARDT, Assistant Director

DIVISION OF HUMAN
MANAGEMENT

RESOURCES

JOHN H. PARRISH, Assistant

Director
Associate Director
A N T H O N Y V. DIGIOIA, Assistant Director
JOSEPH H . HAYES, JR., Assistant Director
FRED HOROWITZ, Assistant Director
DAVID L . S H A N N O N ,

JOHN R . WEIS,

OFFICE OF THE

CONTROLLER
Controller
Assistant Controller (Programs and

GEORGE E . LIVINGSTON,
STEPHEN J. CLARK,

Budgets)
DARRELL R . PAULEY,

Assistant Controller (Finance)

DIVISION OF SUPPORT

SERVICES

Director
GEORGE M . LOPEZ, Assistant Director
DAVID L . WILLIAMS, Assistant Director
ROBERT E . FRAZIER,

DIVISION OF INFORMATION
MANAGEMENT

RESOURCES

Director
Deputy Director

STEPHEN R . MALPHRUS,
BRUCE M . BEARDSLEY,

MARIANNE M. EMERSON, Assistant

Po

Director

Assistant Director
RAYMOND H . MASSEY, Assistant Director
EDWARD T. MULRENIN, Assistant Director
DAY W . RADEBAUGH, JR., Assistant Director
ELIZABETH B . RIGGS, Assistant Director
RICHARD C . STEVENS, Assistant Director
KYUNG KIM,




Director

Assistant Director
YOUNG, Assistant Director

LOUISE L . ROSEMAN,
FLORENCE M .

OFFICE OF THE INSPECTOR

GENERAL

BRENT L. BOWEN, Inspector
General
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General

A74

Federal Reserve Bulletin • July 1993

Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET

COMMITTEE
MEMBERS

A L A N GREENSPAN,

Chairman

E . GERALD CORRIGAN,

Vice Chairman

WAYNE D . ANGELL

EDWARD W . KELLEY, JR.

EDWARD G . BOEHNE

JOHN P. LAWARE

SUSAN M . PHILLIPS

SILAS KEEHN

LAWRENCE B . LINDSEY

GARY H . STERN

DAVID W . MULLINS, JR.

ROBERT D . MCTEER, JR.

ALTERNATE

J. ALFRED BROADDUS, JR.

JERRY L . JORDAN

ROBERT P. FORRESTAL

MEMBERS

JAMES H . OLTMAN

ROBERT T. PARRY

STAFF
DONALD L. KOHN, Secretary
NORMAND R . V . BERNARD,

and

RICHARD W. LANG, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
KARL A. SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist

Economist

Deputy Secretary

JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General Counsel
ERNEST T. PATRIKIS,

Deputy General Counsel

MICHAEL J. PRELL, Economist
EDWIN M . TRUMAN, Economist

RICHARD G. DAVIS, Associate

Economist

Manager of the System Open Market Account
Deputy Manager for Foreign Operations
Deputy Manager for Domestic Operations

WILLIAM J. MCDONOUGH,

MARGARET L . GREENE,
JOAN E . LOVETT,

FEDERAL ADVISORY

COUNCIL
E. B. ROBINSON, JR.,
JOHN B . MCCOY,

First District
Second District
ANTHONY P. TERRACCIANO, Third District
JOHN B . MCCOY, Fourth District
EDWARD E . CRUTCHFIELD, JR., Fifth District
E . B . ROBINSON, JR., Sixth District
MARSHALL

N.

CARTER,

CHARLES S . SANFORD, JR.,




President

Vice President
Seventh District
III, Eighth District
JOHN F. GRUNDHOFER, Ninth District
DAVID A . RISMILLER, Tenth District
CHARLES R . HRDLICKA, Eleventh District
RICHARD M . ROSENBERG, Twelfth District
EUGENE A . MILLER,
ANDREW

B.

CRAIG,

HERBERT V. PROCHNOW, Secretary
WILLIAM J. KORSVIK, Associate
Secretary

A75

CONSUMER ADVISORY

COUNCIL

Denver, Colorado, Chairman
Chicago, Illinois, Vice Chairman

DENNY D . DUMLER,
JEAN POGGE,

Charlottesville, Virginia
Madison, Wisconsin
GARY S. HATTEM, New York, New York
JULIA E. HILER, Marietta, Georgia
RONALD HOMER, Boston, Massachusetts
THOMAS L. HOUSTON, Dallas, Texas

BARRY A. ABBOTT, San Francisco, California
JOHN R. ADAMS, Philadelphia, Pennsylvania
JOHN

A.

BAKER,

BONNIE GUITON,

JOYCE HARRIS,

Atlanta, Georgia
Denver, Colorado

VERONICA E. BARELA,

MULUGETTA BIRRU, Pittsburgh, Pennsylvania
DOUGLAS

D.

St. Paul, Minnesota
Bronx, New York

BLANKE,

GENEVIEVE BROOKS,

HENRY JARAMILLO, Belen, N e w Mexico

TOYE L. BROWN, Boston, Massachusetts

EDMUND MIERZWINSKI, W a s h i n g t o n , D . C .

CATHY CLOUD, W a s h i n g t o n , D . C .

JOHN V. SKINNER, Irving, Texas

D.

LOWELL

Yelm, Washington
MICHAEL FERRY, St. Louis, Missouri
NORMA L. FREIBERG, New Orleans, Louisiana
LORI GAY, LOS Angeles, California
DONALD A. GLAS, Hutchinson, Minnesota
MICHAEL

EDWARDS,

THRIFT INSTITUTIONS ADVISORY

GRACE W. WEINSTEIN, Englewood, N e w Jersey
JAMES L. WEST,

COUNCIL

DANIEL

Minneapolis, Minnesota
Davenport, Iowa
GEORGE R . GLIGOREA, Sheridan, Wyoming
THOMAS J. HUGHES, Merrifield, Virginia
KERRY KILLINGER, Seattle, Washington
PAUL

L.

A.

COOPER,

ECKERT,




Tijeras, New Mexico

ROBERT O . ZDENEK, W a s h i n g t o n , D . C .

C.

Houston, Texa^, President
Somerville, New Jersey, Vice President

ARNOLD,

BEATRICE D'AGOSTINO,

WILLIAM

N. SWANSON, Portland, Oregon
W. TIERNEY, Washington, D.C.

MICHAEL

Cleveland, Ohio
New Bedford, Massachusetts
NICHOLAS W. MITCHELL, JR., Winston-Salem, North Carolina
STEPHEN W. PROUGH, Irvine, California
THOMAS R . RICKETTS, Troy, Michigan
CHARLES JOHN KOCH,
ROBERT MCCARTER,

A76

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1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM
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BUSINESS LOANS BY COMMERCIAL BANKS, 1 9 7 7 - 8 4 , b y

1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR-

Gregory E. Elliehausen and John D. Wolken. September
1990. 35 pp.
1980-90, by Margaret Hastings Pickering. May 1991.
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Thomas F. Brady. November 1985. 25 pp.
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April 1987. 18 pp.
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1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING

MARKETS, by James V. Houpt. May 1988. 47 pp.
1 5 7 . M 2 PER UNIT OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D.

Porter, and David H. Small. April 1989. 28 pp.
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE

PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, by Nellie Liang

and Donald Savage. February 1990. 12 pp.




REPRINTS OF SELECTED B u l l e t i n ARTICLES
Some Bulletin articles are reprinted. The articles listed below
are those for which reprints are available. Most of the articles
reprinted do not exceed twelve pages. Limit of ten copies
Recent Developments in the Bankers Acceptance Market. 1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and U.S.
Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
Home Equity Lines of Credit. 6/88.
Mutual Recognition: Integration of the Financial Sector in the
European Community. 9/89.
The Activities of Japanese Banks in the United Kingdom and in
the United States, 1980-88. 2/90.
Industrial Production: 1989 Developments and Historical
Revision. 4/90.
Recent Developments in Industrial Capacity and Utilization.
6/90.
Developments Affecting the Profitability of Commercial Banks.
7/90.
Recent Developments in Corporate Finance. 8/90.
U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90.
The Transmission Channels of Monetary Policy: How Have
They Changed? 12/90.
Changes in Family Finances from 1983 to 1989: Evidence from
the Survey of Consumer Finances. 1/92.
U.S. International Transactions in 1991. 5/92.

A78

Maps of the Federal Reserve System

HAWAII

LEGEND

Both pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.

Facing page
• Federal Reserve Branch city
— Branch boundary

NOTE

The Federal Reserve officially identifies Districts
by number and Reserve Bank city (shown on both
pages) and by letter (shown on the facing page).
In the 12th District, the Seattle Branch serves
Alaska, and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as follows: the New York Bank serves the



Commonwealth of Puerto Rico and the U.S. Virgin
Islands; the San Francisco Bank serves American
Samoa, Guam, and the Commonwealth of the
Northern Mariana Islands. The Board of Governors
revised the branch boundaries of the System most
recently in December 1991.

A79

1-A

2-B

3-C

5_E

4-D

Baltimore

Pittsburgh

A
-

•

/

Charlotte
• Cincinnati

Buffalo

• •

CT

NJ

BOSTON

\

KY

NY

N E W YORK

6-F

PHILADELPHIA

RICHMOND

CLEVELAND

7-G

• Nashville

8-H

Birminghanu
WI

/

MS

MO

"I

GA

Louisville

Detroit •

1A

. L B
LA

^

M

MD

Jacksonville

New Orleans

„

MS

Littl* )
Rock f

J Miami.

ATLANTA

V^™
p • Memphis

AR

Spill

CHICAGO

*

ST. LOUIS

9-1
MT
MN

• Hel<

MI

I

•

SD

MINNEAPOLIS
10-J

12-L

WY

illllSSl®/Ji

-

L

Omaha •
I

Denver

KS

MO

ALASKA

•

,

Seattle

r~

NM

/
/ ID

Portland
Oklahoma• City

OR

^

CA

KANSAS CITY

/

N 7
V
S

11-K
•

El Paso




^

UT

/

Salt Lake City

*

• I
San Antonio!

Houston
•

• Los Angeles
HAWAII

DALLAS

SAN FRANCISCO

AZ

~

A80

Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
Chairman
branch, or facility
Zip
Deputy Chairman

President
First Vice President

BOSTON*

02106

Jerome H. Grossman
Warren B. Rudman

Richard F. Syron
Cathy E. Minehan

NEW YORK*

10045

Ellen V. Futter
Maurice R. Greenberg
Joseph J. Castiglia

E. Gerald Corrigan
James H. Oltman

Buffalo

14240

Vice President
in charge of branch

James O. Aston

PHILADELPHIA

19105

Jane G. Pepper
James M. Mead

Edward G. Boehne
William H. Stone, Jr.

CLEVELAND*

44101

Jerry L. Jordan
Sandra Pianalto

Cincinnati
Pittsburgh

45201
15230

A. William Reynolds
G. Watts Humphrey, Jr.
Marvin Rosenberg
Robert P. Bozzone

RICHMOND*

23219

Anne Marie Whittemore
Henry J. Faison
Rebecca Hahn Windsor
Anne M. Allen

J. Alfred Broaddus, Jr.
Jimmie R. Monhollon

Edwin A. Huston
Leo Benatar
Donald E. Boomershine
Joan D. Ruffier
R. Kirk Landon
James R. Tuerff
Lucimarian Roberts

Robert P. Forrestal
Jack Guynn

Richard G. Cline
Robert M. Healey
J. Michael Moore

Silas Keehn
William C. Conrad

Robert H. Quenon
Janet McAfee Weakley
Robert D. Nabholz, Jr.
John A. Williams
Seymour B. Johnson

Thomas C. Melzer
James R. Bowen

Delbert W. Johnson
Gerald A. Rauenhorst
James E. Jenks

Gary H. Stern
Colleen K. Strand

Burton A. Dole, Jr.
Herman Cain
Barbara B. Grogan
Ernest L. Holloway
Sheila Griffin

Thomas M. Hoenig
Henry R. Czerwinski

Leo E. Linbeck, Jr.
Cece Smith
W. Thomas Beard, III
Judy Ley Allen
Erich Wendl

Robert D. McTeer, Jr.
Tony J. Salvaggio

Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans

30303
35283
32231
33152
37203
70161

CHICAGO*

60690

Detroit

48231

ST. LOUIS

63166

Little Rock
Louisville
Memphis

72203
40232
38101

MINNEAPOLIS

55480

Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
SAN FRANCISCO
Los Angeles
Portland
Salt Lake City
Seattle

59601
64198
80217
73125
68102
75201
79999
77252
78295

94120 James A. Vohs
Judith M. Runstad
90051 Donald G. Phelps
97208 William A. Hilliard
84125 Gary G. Michael
98124 George F. Russell, Jr.

Charles A. Cerino1
Harold J. Swart1

Ronald B. Duncan1
Walter A. Varvel1
John G. Stoides1

Donald E. Nelson1
FredR. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso

Roby L. Sloan1

Karl W. Ashman
Howard Wells
John P. Baumgartner

John D. Johnson

Kent M. Scott
David J. France
Harold L. Shewmaker

Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson
Robert T. Parry
Patrick K. Barron

John F. Moore1
E. Ronald Liggett1
Andrea P. Wolcott
Gordon Werkema1

•Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; 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.
1. Senior Vice President.



Publications of Interest
FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects
as how the Equal Credit Opportunity Act protects
women against discrimination in their credit dealings,
how to use a credit card, and how to resolve a billing
error.
The Board also publishes the Consumer Handbook
to Credit Protection Laws, a complete guide to consumer credit protections. This forty-four-page booklet
explains how to shop and obtain credit, how to maintain a good credit rating, and how to dispute unfair
credit transactions.




Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage Lock-Ins,
A Consumer's Guide to Mortgage Refinancings, and
A Consumer's Guide to Mortgage Settlement Costs.
These booklets were prepared in conjunction with the
Federal Home Loan Bank Board and in consultation
with other federal agencies and trade and consumer
groups.
Copies of consumer publications are available free
of charge from Publications Services, mail stop 138,
Board of Governors of the Federal Reserve System,
Washington, DC 20551. Multiple copies for classroom use are also available free of charge.

A guide to

Business
Credit
tor Women,
Minorities, a n d

Small Businesses

Publications of Interest
FEDERAL RESERVE REGULATORY SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf service
containing all Board regulations as well as related
statutes, interpretations, policy statements, rulings,
and staff opinions. For those with a more specialized
interest in the Board's regulations, parts of this service are published separately as handbooks pertaining
to monetary policy, securities credit, consumer affairs,
and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains
citation indexes and a subject index.
The Monetary Policy and Reserve Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with related statutes, Board interpretations, rulings,
and staff opinions. Also included are the Board's list

of marginable OTC stocks and its list of foreign
margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, and BB, and
associated materials.
The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation
CC, Regulation J, the Expedited Funds Availability
Act and related statutes, the official Board commentary on Regulation CC, and policy statements on risk
reduction in the payment system.
For domestic subscribers, the annual rate is $200
for the Federal Reserve Regulatory Service and $75
for each Handbook. For subscribers outside the
United States, the price including additional air mail
costs is $250 for the Service and $90 for each Handbook. All subscription requests must be accompanied
by a check or money order payable to the Board of
Governors of the Federal Reserve System. Orders
should be addressed to Publications Services, mail
stop 138, Board of Governors of the Federal Reserve
System, Washington, DC 20551.

U.S. MONETARY POLICY AND FINANCIAL MARKETS
U.S. Monetary Policy and Financial Markets by AnnMarie Meulendyke offers an in-depth description of
the way monetary policy is developed by the Federal
Open Market Committee and the techniques employed to implement policy at the Open Market Trading Desk. Written from her perspective as a senior
economist in the Open Market Function at the Federal
Reserve Bank of New York, Ann-Marie Meulendyke
describes the tools and the setting of policy, including
many of the complexities that differentiate the process
from simpler textbook models. Included is an account
of a day at the Trading Desk, from morning
information-gathering through daily decisionmaking
and the execution of an open market operation.
The book also places monetary policy in a broader




context, examining first the evolution of Federal
Reserve monetary policy procedures from their beginnings in 1914 to the end of the 1980s. It indicates how
policy operates most directly through the banking
system and the financial markets and describes key
features of both. Finally, the book turns its attention to
the transmittal of monetary policy actions to the U.S.
economy and throughout the world.
The book is $5.00 a copy for U.S. purchasers and
$10.00 for purchasers outside the United States. Copies are available from the Public Information Department, Federal Reserve Bank of New York, 33 Liberty
Street, New York, NY 10045. Checks must accompany orders and should be payable to the Federal
Reserve Bank of New York in U.S. dollars.

Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve
System makes some of its statistical releases available to the public through the U.S. Department of
Commerce's economic bulletin board. Computer
access to the releases can be obtained by sub-

scription. For further information regarding a
subscription to the economic bulletin board,
please call (202) 482-1986. The releases transmitted
to the economic bulletin board, on a regular basis,
are the following:

Reference
Number

Statistical release

Frequency of release

H.3

Aggregate Reserves

Weekly/Thursday

H.4.1

Factors Affecting Reserve Balances

Weekly/Thursday

H.6

Money Stock

Weekly/Thursday

H.8

Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions

Weekly/Monday

H.10

Foreign Exchange Rates

Weekly/Monday

H.15

Selected Interest Rates

Weekly/Monday

G.5

Foreign Exchange Rates

Monthly/end of month

G.17

Industrial Production and Capacity Utilization

Monthly/midmonth

G.19

Consumer Installment Credit

Monthly/fifth business day

Z.7

Flow of Funds

Quarterly