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Volume 85 • Number 6 • J u n e 1999

Federal Reserve

BULLETIN

Board of Governors of the Federal Reserve System, Washington, D.C.



Table of Contents
3 6 9 PROFITS AND BALANCE
SHEET
DEVELOPMENTS
AT U.S.
COMMERCIAL
BANKS IN 1998

The performance of the U.S. commercial banking industry remained strong in 1998, but
slipped a bit from the remarkable results of
recent years. Both the return on assets and the
return on equity edged down last year, although
they remained high by historical standards.
While supported by growth in fee income, profitability was damped by a large decline in the
rates banks earned on their interest-bearing
assets relative to the rates they paid on their
liabilities, and also by higher noninterest costs,
especially merger and restructuring expenses.
Profitability was uneven last year across bank
sizes: Whereas the largest and the smallest banks
posted lower earnings, the profits of mediumsized banks—which account for almost twothirds of industry assets—improved once again
in 1998. Nevertheless, though these figures attest to the profitability of most banks, the share
of bank assets at unprofitable institutions
increased 2 percentage points, to 2.6 percent, the
highest since 1994.

3 9 6 TREASURY AND FEDERAL
RESERVE
FOREIGN EXCHANGE
OPERATIONS

During the first quarter of 1999, the dollar appreciated 8.4 percent against the euro and 5.3 percent against the yen. The dollar's value was
largely influenced by changes in market expectations for economic growth in the United States,
Europe, and Japan. Against the euro, the dollar
strengthened as the differential between U.S. and
European interest rates moved increasingly in
favor of the dollar. Against the yen, the dollar
fell to a two-and-a-half-year low and then
rebounded after the Bank of Japan reportedly
intervened to counter yen appreciation and
subsequently guided overnight interest rates to
near zero. The U.S. monetary authorities did not
intervene in the foreign exchange markets during the quarter.



401 INDUSTRIAL
UTILIZATION

PRODUCTION
FOR APRIL

AND
1999

CAPACITY

Industrial production, which had been essentially flat between October and February, accelerated in March and April. At 134.0 percent of
its 1992 average, industrial production in April
was 2.0 percent higher than in April 1998.
Capacity utilization in manufacturing, mining,
and electric and gas utilities rose 0.2 percentage
point in April, to 80.6 percent, down from
82.6 percent a year earlier.
4 0 4 STATEMENTS

TO THE

CONGRESS

Edward W. Kelley, Jr., member, Board of Governors, discusses the Board's extensive interest in,
and efforts to address, Year 2000 issues and
testifies that he is increasingly optimistic that the
operational transition will go well and has come
to believe that Year 2000 technical issues will
not cause major problems in the financial markets of the United States. He further testifies that
the Federal Reserve is committed to a rigorous
program of industry testing and contingency
planning and, through our supervisory initiatives, to identifying those organizations that
most need to apply additional attention to
Year 2000 readiness programs. (Testimony
before the House Committee on Banking and
Financial Services, April 13, 1999)
413 Kenneth D. Buckley, Assistant Director, Division of Reserve Bank Operations and Payment
Systems, discusses the arrangements the Federal
Reserve is making to ensure the timely delivery
of veterans' benefit payments made by direct
deposit during the rollover to the Year 2000
and testifies that internal Federal Reserve systems used to deliver veterans' benefit payments
have been modified, tested, and placed into
production. Further, he testifies that while the
Board expects that the industry may experience
some minor or localized problems during the
rollover, it fully expects to conduct business as
usual through the year 2000 and veterans and
their families should be confident that their
benefits will be paid as usual. (Testimony before

the Senate Committee on Veterans' Affairs,
April 20, 1999)
415 Richard A. Small, Assistant Director, Division
of Banking Supervision and Regulation, discusses the Federal Reserve's role in the government's efforts to detect and deter money
laundering and other financial crimes, with a
particular emphasis on matters related to the
Bank Secrecy Act and the reporting of suspicious activity; he testifies that compliance with
the Bank Secrecy Act and the suspicious-activity
reporting requirements by financial institutions
provides timely and valuable information to law
enforcement and is the best indicator of the
existence of satisfactory anti-money-laundering
and anti-fraud policies and procedures. (Testimony before the Subcommittee on General
Oversight and Investigations and the Subcommittee on Financial Institutions and Consumer
Credit of the House Committee on Banking and
Financial Services, April 20, 1999)
419 Alan Greenspan, Chairman, Board of Governors, presents the views of the Federal Reserve
on the current version of H.R. 10, the approach
to financial modernization most recently approved by the House Banking Committee and
testifies that the Federal Reserve strongly supports the new powers that would be authorized
by H.R. 10. He testifies that the new activities
should not be authorized for banks through operating subsidiaries and that the holding company
structure is the most appropriate and effective
one for limiting transfer of the federal subsidy to
new activities and fostering a level playing field
both for financial firms affiliated with banks and
for independent firms, while fostering the safety
and soundness of our insured banking system,
enhancing functional regulation, and achieving
the benefits of financial modernization for the
consumer and the financial services industry.
(Testimony before the Subcommittee on Finance
and Hazardous Materials of the House Committee on Commerce, April 28, 1999)
424

ANNOUNCEMENTS

Launch of a new design for the Federal Reserve
Board's web site.
Issuance by the Basle Committee of a paper on
credit-risk modeling.
Enforcement actions.
Changes in Board staff.



426 MINUTES OF THE FEDERAL OPEN
MARKET COMMITTEE MEETING HELD ON
FEBRUARY 2-3, 1999
At its meeting on February 2-3, 1999, the Committee voted to approve without change the
growth ranges for M2 and M3 in 1999 that had
been established on a provisional basis on
July 1, 1998.
For the intermeeting period ahead, the Committee adopted a directive that called for conditions in reserve markets that were consistent
with an unchanged federal funds rate of 43A percent. The directive did not include a bias with
regard to any adjustments to policy during the
intermeeting period.
4 3 7 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
April 28, 1999.
A 3 GUIDE

TO TABULAR

PRESENTATION

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

RELEASES

A 6 4 INDEX

TABLES

TO STATISTICAL

AND

A66 BOARD OF GOVERNORS AND STAFF
A68 FEDERAL OPEN MARKET COMMITTEE AND
STAFF;

ADVISORY

A 7 0 FEDERAL
A 7 2 SCHEDULE
PERIODIC

RESERVE

COUNCILS
BOARD

OF RELEASE
RELEASES

PUBLICATIONS

DATES

FOR

A74 MAPS OF THE FEDERAL RESERVE SYSTEM
A76 FEDERAL RESERVE BANKS, BRANCHES,
AND

OFFICES

PUBLICATIONS COMMITTEE

Lynn S. Fox, Chair • Karen H. Johnson • Donald L. Kohn • Stephen R. Malphrus
• J. Virgil Mattingly, Jr. • Michael J. Prell • Dolores S. Smith • Richard Spillenkothen

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 Multimedia Technologies Center
under the direction of Christine S. Griffith, and Publications Services supervised by Linda C. Kyles.




Profits and Balance Sheet Developments
at U.S. Commercial Banks in 1998
Antulio N. Bomfim and William R. Nelson, of the
Board's Division of Monetary Affairs, prepared
this article. Thomas C. Allard assisted in developing, and was responsible for maintaining, the database used in this article. Douglas M. Conover and
Adrian R. Sosa provided research assistance.
The performance of the U.S. commercial banking
industry remained strong in 1998, but slipped a bit
from the remarkable results of recent years. Both the
return on assets and the return on equity edged down
last year, although they remained high by historical
standards (chart 1). While supported by growth in fee
income, profitability was damped by a large decline
in the rates banks earned on their interest-bearing
assets relative to the rates they paid on their liabilities, and also by higher noninterest costs, especially
merger and restructuring expenses. Profitability was
uneven last year across bank sizes: Whereas the
largest and the smallest banks posted lower earnings,
the profits of medium-sized banks—which account
for almost two-thirds of industry assets—improved
once again in 1998. Nevertheless, though these figures attest to the profitability of most banks, the share
of bank assets at unprofitable institutions increased
2 percentage points, to 2.6 percent, the highest since
1994.1
1. Except where otherwise indicated, data in this article are from
the quarterly Reports of Condition and Income (Call Reports) for
insured domestic commercial banks and nondeposit trust companies
(hereafter, banks). The data consolidate information from foreign and
domestic offices and have been adjusted to take account of mergers.
For additional information on the adjustments to the data, see the
appendix in William B. English and William R. Nelson, "Profits and
Balance Sheet Developments at U.S. Commercial Banks in 1997,"
Federal Reserve Bulletin, vol. 84 (June 1997), p. 408. Size categories,
based on assets at the start of each quarter, are as follows: the 10
largest banks, large banks (those ranked 11 through 100 by size),
medium-sized banks (those ranked 101 through 1,000 by size), and
small banks (those not among the largest 1,000 banks). At the start of
the fourth quarter of 1998, the approximate asset size of the banks in
those groups were as follows: the 10 largest banks, more than $71 billion; large banks, $6 billion to $71 billion; medium-sized banks,
$309 million to $6 billion; small banks, less than $309 million. Many
of the data series reported here begin in 1985 because the Call Reports
were significantly revised in 1984. Data from before 1985 are taken
from Federal Deposit Insurance Corporation, Statistics on Banking
(FDIC, 1997). The FDIC data are also available on the World Wide
Web (http://www.fdic.gov/databank/sob/). Data shown may not match




1. Measures of commercial bank profitability, 1970-98
Percent

Return on equity

- -

—

V ;

Mil

—

Return on assets

s

15

—

10

—

5

1 i ! ! ! 1

/

—

1.0

—

0.5

Mil
1970

1975

1980

1985

1990

1995

Although, in the third quarter, trading income was
sharply curtailed and provisions for loan losses were
elevated at the largest banks, the turmoil in financial
markets in the second half had little effect on profits
last year for the banking industry as a whole. But
the late-summer currency devaluation and default in
Russia left a discernible imprint on the balance sheets
of U.S. commercial banks in 1998: Growth in bank
assets was boosted by the financial reintermediation
process that characterized much of the second half of
last year, with holdings of both loans and securities
posting sizable gains.
Bank stocks underperformed broader market
indexes in 1998, ending the year about where they
began. After having risen strongly in the first half,
bank equity prices, particularly those of money center banks, fell sharply in the aftermath of the Russian
crisis, but later recovered as conditions abroad
calmed and the domestic economic expansion continued. Dividend payments made by banks, including
those made to parent holding companies, declined
last year, helping bank capital to grow in line with
assets. Risk-based capital measures edged down
again, but remained high: Nearly 95 percent of bank

data published in earlier years because of revisions and corrections. In
the tables, components may not sum to totals because of rounding.

370

2.

Federal Reserve Bulletin • June 1999

Number of commercial banks and percentage of assets
at the largest 100 banks, 1970-98
Thousands

bank assets. A 9Vi percent expansion in managed
liabilities, matched by a similar gain in equity capital,
bridged the gap between growth in assets and in core
deposits.

Number

Loans to Businesses

Percentage of assets
at largest 100

assets were held by institutions classified as "well
capitalized" at year-end.
Bank consolidation continued and included some
particularly large mergers. As a result, the share of
industry assets at the largest 3100 banks rose to 70 percent at year-end, up from 67 /4 percent a year earlier
and around 50 percent in 1985. The number of commercial banks fell by 371, as the number of newly
created banks was more than offset by the 588 banks
that ceased to exist (almost entirely because of mergers). At the end of 1998, there were 8,817 commercial banks in the United States, more than one-third
fewer than the 14,393 banks that existed in 1985
(chart 2). Banking industry consolidation was also
evident in mergers between holding companies,
whose numbers declined by 139 last year, to 5,971.
The largest 50 holding companies continued to
steadily increase their share of industry assets, from
74 percent at the end of 1997 to 76 percent at the end
of last year.

Bank loans to commercial and industrial (C&I) enterprises expanded almost 13 percent last year, topping
even 1997's considerable advance. Nowhere was the
influence of last year's two driving forces for bank
credit—strong economic fundamentals and skittish
financial markets—more evident than in this category
of bank loans. For the year as a whole, capital expenditures by nonfinancial corporations expanded rapidly, particularly for below-investment-grade companies, while profits remained near their 1997 level.
As a result, the financing gap—the excess of capital expenditures over internally generated funds—
widened substantially (chart 3). The borrowing needs
of nonfinancial corporations were further elevated
by a rapid pace of net equity retirement, which was
fueled by corporate mergers and acquisitions and
stock buyback programs.
Banks played an especially important role in business financing needs during the fall of last year, when
the issuance of corporate securities was severely disrupted and spreads between yields on private debt
instruments and on comparable Treasury securities
widened appreciably. Indeed, with investors favoring safe and liquid assets, yields on junk bonds
rose even as Treasury yields were falling, and the

3.

Financing gap at nonfarm nonfinancial corporations,
1990-98
Billions of dollars

BALANCE

SHEET

DEVELOPMENTS
—

Bank assets expanded 81/4 percent last year, versus
9!/4 percent in 1997 (table 1). In addition to robust
economic conditions throughout the year, turmoil in
financial markets in the fall helped sustain the rapid
growth of bank credit in 1998. Loans on banks'
books benefited the most, increasing almost 9 percent
last year after a 5Vi percent rise in 1997. Banks'
securities holdings also advanced briskly, rising
8'/3 percent, although that was a bit less fast than the
increase posted in 1997. On the liability side, core
deposits grew 7 percent, well above the AVi percent
increase in 1997 but still short of the rapid advance in



1990

1992

1994

19%

100

1998

NOTE. T h e data are four-quarter m o v i n g averages. T h e financing gap is the
difference between capital expenditures and internally generated funds.
SOURCE. Federal Reserve Board, Statistical Release Z . l , " F l o w of Funds
Accounts of the United States," table F. 102.

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

371

1. Annual rates of growth of balance sheet items, 1989-98
Percent

——rrrrc
MEMO:

Dec.
Item

Assets
Interest-earning assets
Loans and leases (net)
Commercial and industrial
Real estate
Booked in domestic offices
One- to four-family
residential
Other
Booked in foreign offices
Consumer
Other loans and leases
Loan-loss reserves and
unearned income
Securities
Investment account
U.S. Treasury
U.S. government agency and
corporation obligations
Other
Trading account
Other
Non-interest-earning assets
Liabilities
Core deposits
Transaction deposits
Savings and small time deposits
Managed liabilities 1
Deposits booked in foreign
offices
Large time
Subordinated notes and
debentures
Other managed liabilities
Other
Equity capital

1989

1990

1991

1992

1993

1994

5.35
5.61
6.24
2.97
12.69
13.02

2.64
2.23
2.37
-.67
8.79
8.55

1.33
1.98
-2.65
-9.10
2.73
2.90

2.19
2.53
-1.04
-4.10
1.94
2.57

5.68
6.56
6.05
.52
6.13
6.17

8.06
5.77
9.83
9.33
7.90
7.64

7.55
7.69
10.53
12.26
8.33
8.48

6.09
5.67
8.12
7.24
5.44

16.13
10.34
2.99
6.18
-.94

14.00
3.62
16.64
.38
-5.68

7.76
-1.93
-2.35
-2.55
-4.91

7.53
-2.86
-17.80
-1.66
-4.24

11.08
.22
4.67
9.06
9.97

10.09
4.35
18.35
16.01
5.29

10.29
5.08
4.04
-13.79

.35
8.46
8.19
3.50

-3.78
16.23
14.42
32.01

-4.85
12.29
11.44
23.95

-5.82
12.26
8.11
7.24

33.41
-5.35
20.62
2.49
3.50

24.02
-6.70
11.87
11.70
5.51

15.88
-2.56
38.88
2.82
-3.10

12.77
-5.20
21.01
1.57
-.32

9.62
6.09
51.84

5.43
5.75
.93
8.71
5.13

2.37
7.58
2.43
10.51
-6.15

1.01
5.25
3.38
6.24

-1.07
5.00

-5.88
—5.68

16.98
9.86
3.29
4.18

1998

1997

1998

9.24

5.50

8.88
8.38
12.02
9.30
9.53

8.22
8.18
8.91
12.97
7.98
7.96

5,380
4,631
3,142
893
1,335
1,304

10.06
6.25
2.81
9.50
14.23

4.65
6.75
3.18
4.90
22.28

9.67
9.33
.34
-2.18
13.73

6.34
10.28
8.79
1.03
14.04

758
546
31
550
425

-2.22
-2.61
-1.73
-8.46

.25
.57
-1.58
-19.21

-.06
.84
-1.12
-14.30

-.49
8.86
8.68
-8.85

3.38
8.34
12.04
-25.17

60
1,090
965
113

-7.90
-.86

.87
2.49
-9.43
3.25
25.65

6.43
4.20
18.51
7.64
6.61

3.61
1.82
14.44
-.90
8.87

14.20
11.21
9.97
12.81
11.48

16.98
26.93
-13.56
2.35
8.47

585
267
125
399
749

-6.19

1.35
5.09
14.62
.18
-6.07

5.12
1.49
5.47
-.85
12.30

8.31
-.17
-.33
-.08
17.57

7.17
3.97
-3.09
8.37
10.44

5.95
4.12
-3.45
8.34
9.65

9.13
4.53
-4.54
9.04
13.84

8.09
7.05
-1.35
10.71
9.60

4,926
2,670
747
1,923
1,885

3.81
-19.73

-5.85
-26.20

15.06
-9.21

30.89
8.72

5.13
19.61

4.27
21.16

11.13
20.15

8.71
9.09

572
413

20.99
-8.06
4.43

4.69
-1.39
-4.18

34.90
6.94
-1.02

10.82
22.18
15.30

9.23
12.91
79.17

6.61
11.24
20.46

17.74
8.21
2.60

21.05
12.23
23.79

17.00
9.87
8.11

72
827
371

6.64

5.98

13.75

12.58

5.24

12.00

7.72

10.46

9.62

454

-2.58
19.27

-4.03
10.37

-.60
9.66

4.00
-3.12

6.35
.67

7.66
2.03

10.13
14.18

11.35
22.11

554
464

1995

1996

(billions
of
dollars)

MEMO

Commercial real estate loans 2
Mortgage-backed securities

n.a.

n.a.

41.00

34.39

NOTE. Data are from year-end to year-end.
n.a. Not available.
1. Measured as the sum of deposits in foreign offices, large time deposits in
domestic offices, federal funds purchased and securities sold under agreements
to resell, demand notes issued to the U.S. Treasury, subordinated notes and
debentures, and other borrowed money.

2. Measured as the sum of construction and land development loans secured
by real estate; real estate loans secured by nonfarm nonresidential properties;
real estate loans secured by multifamily residential properties; and loans to
finance commercial real estate, construction, and land development activities
not secured by real estate.

spread between yields on those bonds and yields
on comparable Treasuries roughly doubled between
midsummer and mid-fall. The spread between
investment-grade corporate bonds and Treasuries also
widened substantially during that period, as did that
between yields on lower-tier commercial paper and
higher-quality paper (charts 4 and 5). Consistent with
such inhospitable financial market conditions, respondents to the Federal Reserve's Senior Loan Officer
Opinion Survey on Bank Lending Practices (BLPS)
in November pointed to shifts from other sources of
credit as the primary cause for increased loan demand
in the fall. In particular, about three-quarters of the
largest domestic and the foreign respondents indicated that substitution from the bond market had
intensified loan demand; about half also mentioned

substitution from the commercial paper market.
Partly as a result of these substitutions, banks posted
further gains in their share of total nonmortgage
credit market debt owed by the nonfinancial business
sector (chart 6).
The substitutions toward bank financing occurred
even though banks, like other lenders, tightened the
terms and standards on loans to businesses after the
turbulence that hit the financial markets in the second
half of the year. Judging from responses to the BLPS,
the tightening was especially noticeable for large and
medium-sized borrowers and represented the first
time that large banks did not ease terms, on net, since
1993 (chart 7). Respondents to the September and
November BLPSs cited a reduced tolerance for risk
and a less favorable economic environment as rea-




372

4.

Federal Reserve Bulletin • June 1999

Spreads between yields on corporate bonds
and Treasury securities, 1998
Basis points

200

1998
NOTE. T h e data are daily. T h e spread of high-yield b o n d s c o m p a r e s the yield
on the Merrill L y n c h Master II index with that on a seven-year Treasury; the
other t w o spreads c o m p a r e yields on the appropriate Merrill L y n c h indexes with
that on a ten-year Treasury.
SOURCE. Merrill L y n c h ; Federal Reserve Board, Statistical Release H.15,
"Selected Interest Rates."

sons for the tightening in the latter part of the year.2
Data from the Federal Reserve's quarterly Survey of
Terms of Business Lending (STBL) also showed a
widening of the average spread on business loans in
late 1998 (chart 8, upper panels).3 While growth in
2 . O r d i n a r i l y , t h e B L P S i s c o n d u c t e d o n a q u a r t e r l y b a s i s , but the
F e d e r a l R e s e r v e u s e d its a u t h o r i t y t o c o n d u c t u p t o s i x s u r v e y s a y e a r
t o a s s e s s the i m p a c t o f t h e o n g o i n g

financial

t u r b u l e n c e o n the b a n k

l o a n m a r k e t in a s p e c i a l B L P S in m i d - S e p t e m b e r .
3. A l t h o u g h s p r e a d s o v e r t h e f e d e r a l f u n d s rate w i d e n e d last f a l l ,
rates o n l o a n s g e n e r a l l y d e c l i n e d , r e f l e c t i n g the e f f e c t s o n m a r k e t rates
o f the three e a s i n g a c t i o n s u n d e r t a k e n b y t h e F e d e r a l R e s e r v e b e t w e e n

C&I loans was strong for banks of all sizes, the
widening of spreads was generally applied to larger
loans—which are typically made by the bigger banks.
These loans were probably taken out by businesses
most affected by the financial market turmoil, either
because they would normally have raised a significant share of their funds in the capital market, or
because they were directly exposed to the Russian
crisis and the subsequent deterioration in other
emerging-market economies.
Last fall's disruption in the private debt markets
highlighted the important role played by loan commitments as a buffer against sudden shifts in financing conditions. Indeed, according to the STBL,
spreads on C&I loans not made under commitment
widened much more sharply in late 1998 than did
those on other loans, indicating that businesses would
have been subject to considerably more financial
strain in the absence of such commitments (chart 8,
lower panels). As with total C&I loans, the tightening
in conditions on bank loans not made under commitment was most evident for larger loans; spreads on
smaller loans widened only slightly last year.
Of course, the existence of loan commitments
implies that banks likely made some loans at spreads
they considered too narrow under the circumstances that emerged during the second half of
last year. Indeed, one-fourth of the banks reported
in the January 1999 BLPS that they would tighten
terms on more than 20 percent of their outstanding
revolving loan commitments if those commitments
were maturing and being repriced at the time of the
survey.

September and N o v e m b e r .

5. Spread between rates on lower-tier commercial paper
and rates on high-quality paper, 1998

6. Bank loans as a share of total nonmortgage credit market
debt, nonfinancial businesses, 1970-98
Percent

Basis points

1998
NOTE. T h e data are daily. T h e spread c o m p a r e s the rate on A2/P2-rated,
thirty-day commercial paper with that on AA-rated, thirty-day paper.
SOURCE. Federal Reserve Board. Statistical Release, " C o m m e r c i a l Paper."




1970

1975

1980

1985

1990

1995

NOTE. T h e data are quarterly.
SOURCE. Federal Reserve Board, Statistical Release Z . l . " F l o w of Funds
Accounts of the United States," table L. 101.

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

7. C&I loan standards and terms, by size of borrower,
1990-99: Q1

373

8. Spread between the C&I loan rate and the intended
federal funds rate, by size of loan and commitment status,
1998-99:Q1
Percent
Basis points

N e t percentage o f selected large c o m m e r c i a l banks
A l l l o a n s o f m o r e than $ 1 , 0 0 0 , 0 0 0

that t i g h t e n e d s t a n d a r d s

180
160
140

Small
borrowers

120

Net percentage o f selected large commercial banks
that i n c r e a s e d s p r e a d s o v e r their c o s t o f f u n d s

All loans of l e s s than $ 1 , 0 0 0 , 0 0 0
60

400

40

380

20
+

360

0

340

20
40

:

L o a n s o f m o r e than $ 1 , 0 0 0 , 0 0 0
not made under c o m m i t m e n t

180
160

NOTE. T h e data are quarterly. Net percentage is the percentage of b a n k s
reporting a tightening of standards or an increase in spreads less the percentage
reporting an easing or decrease. T h e definition for firm size suggested for, and
generally used by, survey respondents is that medium firms are those with sales
of between $ 5 0 million and $ 2 5 0 million.
SOURCE. Federal Reserve Board, Senior Loan Officer Opinion Survey on
Bank Lending Practices.

140

•
Hi
120

L o a n s o f less than $ 1 , 0 0 0 , 0 0 0
not m a d e under c o m m i t m e n t

Commercial real estate loans on banks' books
accelerated to an 11 Vs percent rise in 1998, fueled by
continuing strong conditions in the property market,
especially in the office sector, where vacancy rates
fell further and prices continued to rise. In addition,
BLPS responses suggest that the demand for bank
financing of commercial real estate ventures was
enhanced at the end of last year by the turmoil in
financial markets. Take, for example, the 35 percent
of the domestic survey respondents that reported
an increase in demand for commercial real estate
loans over the previous three months on the January
1999 BLPS; among them, the most important explanation for the stronger demand was a shift in customer borrowing from lenders having difficulty securitizing commercial mortgages. As with C&I loans,
banks tightened terms and standards on commercial
real estate loans in response to market turbulence.
According to responses to the November 1998 and
January 1999 surveys, the primary reasons for tightening in the second half of the year were disruptions in the market for commercial mortgage-backed
securities, a less favorable, or more uncertain, eco-




400

380

360

340

1998

1999

NOTE. The data are quarterly and weighted by loan volume.
SOURCE. Federal Reserve Board, Statistical Release E.2, " S u r v e y of Terms
of Business Lending."

nomic outlook, and deepened concern about the reliability of take-out financing.
The strong pace of commercial real estate lending
by banks in 1998 extended a five-year uptrend and
was most evident among those institutions not
included among the top 100 banks. The share of total
assets at such banks represented by nonfarm nonresidential real estate loans has been rising steadily,
roughly doubling between 1985 and 1998. In contrast, this same share has remained close to constant
so far this decade among the largest 100 banks,
where commercial real estate loans grew only
6.9 percent last year. Larger banks tend to securitize

374

Federal Reserve Bulletin • June 1999

many of their originations as commercial mortgagebacked securities and so hold on their books a smaller
share of the loans they make. Increases in securitization in recent years may account for the slow growth
of commercial real estate loans on the books of such
banks.

10. Securitized share of outstanding consumer loans
originated by banks, 1988-98
Percent

/
—

Loans to Households

9. Net percentage of selected commercial banks that
tightened standards for credit cards and other
consumer loans, 1996-99:Q1
Percent

1997

1998

NOTE. T h e data are quarterly. Net percentage is the percentage of b a n k s that
reported a tightening of standards less the percentage that reported an easing.
SOURCE. Federal Reserve Board, Senior Loan Officer Opinion Survey on
Bank Lending Practices.




/

—

Consumer loans on banks' books expanded 1 percent
last year, following a 2VS percent decline in 1997.
Two main factors helped restrain growth in this
category of bank loans, even as consumer spending
remained strong throughout the year and a lower
proportion of banks reported tightening standards for
credit card and other consumer loans than in 1997
(chart 9). On the demand side, households apparently
substituted mortgage for consumer debt, as they did
in 1997. On the supply side, 1998 was another strong
year for consumer loan securitization, although
stresses in the financial markets in the fall did cause a
temporary disruption to the market for asset-backed
securities—which include securities backed by credit
card and auto loans. For the year as a whole, the
securitized share of bank consumer loans outstanding
reached a new high of almost 35 percent at the end of
1998 (chart 10). Including these loans, outstanding
consumer loans originated by banks expanded 6 percent last year, compared with a 4 percent rise in 1997.
This acceleration reflected a pick-up in the growth
of credit card loans originated by banks, which rose

1996

/

1
1988

1
1990

1

1
1992

1

1
1994

1

1
1996

—

30

—

20

—

10

1

1
1998

NOTE. T h e data are quarterly and seasonally adjusted.
SOURCE. Federal Reserve B o a r d , Statistical Releases H.8, "Assets and Liabilities of C o m m e r c i a l Banks in the United States," and G.19, " C o n s u m e r
Credit."

93/4 percent in 1998, significantly more than the
nearly 6 percent rise in 1997.
Substitutions by households from consumer loans
at banks toward home equity loans, which had been
particularly prevalent in recent years, were not much
in evidence in 1998. Outstanding loans on banks'
books made under home equity lines of credit actually fell 1V2 percent last year, and closed-end residential real estate loans secured by junior liens (second
mortgages) increased only 53/4 percent, less than half
the average pace of the previous three years. Instead,
households appear to have tapped into the accumulated equity in their homes directly in the form of
cash-out refinancing and to have used some of the
proceeds to pay down or substitute for other debt,
including home equity loans.4 Indeed, a by-product
of the steep decline in yields on Treasury securities during last year's market turmoil was a significant, though not so pronounced, fall in the rates on
thirty-year fixed-rate mortgages, which substantially
bolstered mortgage refinancing activity last year
(chart 11).
The high level of refinancing also acted to lengthen
the average remaining maturity of the home mortgages held by banks at year-end, though that lengthening likely reflected, in part, a buildup of loans
targeted for securitization by some banks during last
year's financial market stress.5 Taken together, the

4. According to available estimates, one-third to one-half of homeowners took some cash out when refinancing their mortgages last year.
5. Postponed securitizations probably also contributed to the
impressive 14 percent advance in residential real estate loans on
banks' books in the fourth quarter.

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

11. Average rate on new, fixed-rate thirty-year mortgages
and the mortgage refinancing index, 1990-99:Q1
Percent

Mortgage rate

](

^ ^ ^ ^ ^ ^

i
Index. I990.Q1 = 1

Refinancing index

1990

1992

1994

1996

1998

NOTE. The data are quarterly.
SOURCE. Mortgage rate, f r o m the Federal Home Loan M o r t g a g e Corporation;
refinancing index, f r o m the Mortgage Bankers Association.

pickup in refinancing activity and the relative slowing in mortgage securitization during the fall and
early winter fostered an expansion in the fraction of
mortgages that have fixed rates on banks' books from
just over one-half, where it had persisted for several
years, to more than two-thirds by year-end. Similarly,
the fraction of home mortgages that next reprice or
mature further out than five years rose over the year
from about one-fourth to about two-fifths.
Despite last year's low mortgage rates, one- to
four-family residential loans on banks' books increased only 6lA percent, well below the 9% percent expansion in 1997. Several factors help account
for this downshift, even as the residential mortgage
market heated up. First, despite the troubles associated with the financial market turmoil, banks continued to securitize a large share of the residential real
estate loans they originated in 1998. Indeed, the shift
toward fixed-rate mortgages, whose durations considerably exceed that of banks' liabilities, likely
increased banks' incentive to securitize those loans.
Second, in recent years, banks have faced stiffer
competition from nonbank financial institutions in
the market for fixed-rate mortgages and thus have
benefited relatively less from an increase in demand
for these loans. Lastly, as noted above, the expansion
in fixed-rate mortgages came partly at the expense of
home equity loans.

rate as total assets. Coupled with the sizable growth
in total loans on banks' books, the surge in securities
suggests that banks stretched their capital positions
further in 1998. Asked about reasons for the rapid
buildup in securities during the first quarter of the
year, respondents to the May 1998 BLPS cited a
willingness to boost leverage to improve return on
equity. With growth in bank security holdings strong
again late last year, the January 1999 BLPS included
additional questions on the subject. Among large
banks that reported increased securities holdings in
the fourth quarter of 1998, the most important reason
offered was that yields on some securities were attractive relative to the costs of funds. Indeed, heightened
interest rate volatility and intense risk aversion in the
financial markets around that time pushed the yields
on mortgage-backed securities to high levels relative
to three-month wholesale CD rates (chart 12). Yield
spreads on other securities also widened in the fourth
quarter relative to funding costs, especially for commercial paper and other corporate securities.
Other reasons offered by banks for expanding their
securities holdings in the fourth quarter were, again,
a willingness to use more leverage to improve the
return on equity and a desire to extend the duration of
their securities portfolios. Banks' concerns about the
duration of those portfolios were likely related to the
market turmoil that dominated the latter part of
the year: Unexpectedly low mortgage rates—and
the resulting higher prepayment risk—reportedly
led to unintended reductions in the duration of banks'
portfolios of mortgage-backed securities.
The market turmoil may also have contributed to
the fourth-quarter buildup in securities by making it
more difficult to place mortgage-backed securities in

12. Spread between the yield on mortgage-backed securities
and the rate on the three-month wholesale CD, 1998
Basis points

150

I

Securities
Banks' holdings of securities increased a strong
8!/3 percent last year, expanding at about the same



375

1

L_

1

I

I

L

i

I

1

I

I

i

1998

NOTE. T h e data are weekly.
SOURCE. For the C D rate. Federal Reserve Board, Statistical Release H.15,
" S e l e c t e d Interest R a t e s ; " for the yield on m o r t g a g e - b a c k e d securities,
Bloomberg L.R

376

Federal Reserve Bulletin • June 1999

the market. In particular, many banks apparently converted refinanced residential loans into mortgagebacked securities because they have a lower capital
charge than loans do, but then waited for a more
receptive market to sell them. In addition, banks
added briskly to their holdings of "other"
securities—which include commercial paper and corporate bonds—whose yields, as discussed above, rose
relative to other market rates. Other securities also
include the many types of instruments backed by
loans—including bank-originated loans—other than
residential mortgages. As in the mortgage-backed
securities market, reluctance by some participants to
invest in these securities in the fourth quarter may
have contributed to the increase in holdings by banks.
All of the growth in banks' securities portfolios
last year occurred in investment accounts, whose
holdings advanced 12 percent in 1998, topping even
the previous year's strong 8% percent expansion.
Holdings of securities in trading accounts declined a
sizable 131/2 percent last year, reflecting a pullback
from trading activities in the wake of losses related to
the Russian debt default. Over the final two quarters
of last year, securities in banks' trading accounts
declined nearly $34 billion—more than 20 percent—
with the runoff occurring entirely in trading assets
booked abroad.

Liabilities
Core deposits at commercial banks grew 7 percent
last year, well above the 4!/2 percent advance in
1997.6 Some of the pickup resulted from a decrease
in short-term interest rates spurred by the three monetary policy actions in the fall: As usual, rates on
deposits fell more slowly than market rates, trimming
the opportunity cost of holding deposits. However, an
important additional source of the expansion in core
deposits in the latter part of 1998 was likely related to
investors' increased preference for safe and liquid
assets in light of the turmoil that followed the Russian crisis.
Banks continued to deepen their reliance on managed liabilities, which grew faster than total bank
assets for the sixth consecutive year (chart 13).7
Though strong, last year's 9V2 percent expansion fell
short of the nearly 14 percent rise posted in 1997.
The slower growth in 1998 reflected the pickup in
core deposits and the deceleration in asset growth.
6. Core deposits are transaction accounts, savings accounts (including MMDAs), and small time deposits.
7. Managed liabilities are defined in table 1.




13. Annual growth of assets and change in the ratio
of managed liabilities to assets, 1986-98
Percent

1986

1988

1990

1992

1994

1996

1998

NOTE. T h e data are f r o m year-end to year-end.

Subordinated notes and debentures, which expanded
17 percent, posted the strongest growth among major
categories of managed liabilities.

Capital
Bank equity grew 9Vi percent last year, maintaining
the share of assets funded with capital essentially at
its 1997 level of 8V2 percent. Capital for regulatory
purposes also increased about in line with assets, and
the leverage ratio moved sideways. About half of the
growth in bank equity was attributable to the portion
of income retained by banks. Indeed, as discussed
below, the dollar amount of dividends paid in 1998
declined for the first time since 1992, suggesting that
rapid growth in both loans and securities may have
resulted in some capital pressures last year. Those
same pressures probably were related to the substantial rise in new capital provided by parent holding
companies last year, as they evidently felt the need
to bolster the capital positions of their banks. New
capital accounted for about a quarter of the growth in
bank equity, and the remainder was owed in large
part to the excess of banks' issuance of equity related
to acquisitions over the value of the shares of banks
retired in mergers.
Though the ratio of capital to assets was unchanged, risk-based capital measures (total and tier 1)
edged down again in 1998, after several consecutive
annual increases through 1996 (chart 14).8 Despite
8. The tier 1 ratio is the ratio of tier 1 capital to risk-weighted
assets, and the total ratio is the ratio of the sum of tier 1 and tier 2
capital to risk-weighted assets. Tier 1 capital consists mainly of
common equity (excluding intangible assets such as goodwill and

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

14. Regulatory capital ratios and the share of industry
assets at well-capitalized banks, 1991-98

TRENDS IN PROFITABILITY
Percent

Regulatory capital ratios
Total (tier 1 + tier 2 ) ratio

1991

1992

1993

1994

1995

1996

—

1997

'4

1998

NOTE. T h e data on regulatory capital ratios are quarterly. For the definition of
capital ratios, see text note 8.

their decline last year, regulatory capital ratios
remained high, and nearly 95 percent of bank assets
were at well-capitalized banks at the end of 1998.
Nevertheless, the average margin by which these
banks remained well capitalized shrank further last
year, a signal that banks may become more concerned about their overall capital positions.9

excluding net unrealized gains on investment account securities classified as available for sale) and certain perpetual preferred stock. Tier 2
capital consists primarily of subordinated debt, preferred stock not
included in tier 1, and loan-loss reserves. Risk-weighted assets are
calculated by multiplying the amount of assets and the creditequivalent amount of off-balance-sheet items (an estimate of the
potential credit exposure posed by the item) by the risk weight for
each category, where the risk weights rise from zero to 1 as the credit
risk of the assets increases. The leverage ratio is the ratio of tier 1
capital to average tangible assets. Tangible assets are equal to total
assets less assets excluded from common equity in the calculation of
tier 1 capital.
9. The average margin by which banks remained well capitalized
was computed as follows. First, we looked at the leverage, tier 1, and
total capital ratios of each well-capitalized bank and defined the
institution's tightest capital ratio as that one closest to the regulatory
standard for being "well capitalized." We then defined the bank's
margin as the percentage-point difference between its tightest capital




377

The net income of U.S. commercial banks increased
4 percent to $611/2 billion in 1998. The industry's
return on assets fell 5 basis points to 1.20 percent
(table 2), and return on equity declined 3A percentage
point to 14 percent—below the elevated range it has
occupied since 1993, although still high relative to
longer-term historical norms. The prices of bank
stocks, particularly those of money center banks, rose
strongly in the first half of the year, as concerns
ebbed that the troubles that had emerged in Asia in
the preceding year would slow the U.S. economy or
cause significant trading and loan losses at banks
with Asian exposures (chart 15). In the summer,
however, worries over prospects for emerging-market
economies arose, and fresh turbulence in financial
markets sparked by the Russian default resulted in
sharply lower trading income and higher loan losses
at some large banking companies. A sharp decline in
bank stocks ensued. Toward year-end, as markets
calmed and investors' concerns about trading exposures eased, bank stock prices recovered, ending the
year about where they began, although down relative
to most broad stock indexes.
Though investor attention was focused on the trading and foreign-related losses of a few large banks in
the third quarter, industry profitability for the year as
a whole was more seriously affected by a narrowing
of the net interest margin and by a rise in noninterest
expense, including merger and restructuring charges.
These influences were only partly offset by higher
noninterest income, which reflected a continuation of
a decade-long rise in fee-generating activities, including the funding by banks of assets through securitization rather than on their balance sheets.
As a result of the decline in profitability, as well as
the capital pressures discussed above, the dollar
amount of dividends, which are paid primarily to
parent holding companies, declined more than 3 percent last year (a decline of 10 basis points as a
percentage of assets); this was the first annual reduction in the dollar amount of dividends since 1992.
Nonetheless, the fifty largest bank holding companies
increased dividends paid to stockholders $2.6 billion,
to $19.6 billion, last year. However, those holding
companies more than offset the rise in dividends
by reducing net stock repurchases $17.3 billion, to

ratio and the corresponding regulatory standard. The average margin
among all well-capitalized banks—the measure we refer to in the
text—is the weighted average of all the individual margins, in which
the weights are each bank's share of the total assets of well-capitalized
banks.

378

Federal Reserve Bulletin • June 1999

2. Selected income and expense items as a proportion of assets, 1992-98
Percent
1992

1993

1994

1995

1996

1997

1998

3.89
1.95
3.86
.78
.11
1.32

3.90
2.13
3.94
.47
.09
1.70

3.78
2.00
3.75
.28
-.01
1.73

3.72
2.02
3.64
.30
.01
1.81

3.73
2.18
3.71
.37
.03
1.85

3.67
2.23
3.61
.41
.04
1.93

3.52
2.40
3.77
.41
.06
1.81

Taxes and extraordinary items
Net i n c o m e (return o n assets)

.41
.91

.50
1.20

.58
1.15

.63
1.18

.65
1.20

.67
1.25

.61
1.20

Dividends

.41

.62

.73

.75

.90

.90

.80

Retained income

.49

.58

.42

.43

.30

.35

.39

Item
Net interest income
Noninterest i n c o m e
Noninterest e x p e n s e
Loss provisioning
Realized gains on investment account securities
I n c o m e before taxes and extraordinary items

$8.9 billion. The sum of dividends and net stock
repurchases at the top fifty holding companies was
one-third lower in 1998 than in 1997.
Industry performance differed markedly by bank
size in 1998. The return on equity of the top 10
banks, which absorbed the bulk of the trading and
foreign-related losses as well as the merger and
restructuring charges, was the hardest hit, falling
23/4 percentage points to 10 Vi percent, its lowest level
since 1991. At the other end of the spectrum, earnings of the smallest banks—those not in the top
1,000—were also below recent norms last year.
Net interest income makes up the largest share of
revenue for these banks, and smaller net interest
margins contributed to a decline of Vi percentage
point in their return on equity to just over 12 percent.
By contrast, medium-sized banks, for which noninterest income is a more significant share of revenue and
which generally do not have large trading or foreign

15. Indexes of bank holding company stock prices and the
S&P 500, January 7, 1998-March 31, 1999
Index, January 7, 1998 = 100

140

S & P 5 < M ) A / ^

—

— -

120

J

110

—

Regional
bank holding
companies

—

—

1 I I

130

i

11

V \
\\
U

rj
[
/
^ \ /
v/

III.
1998

i

/

\f

y

100

Money center
bank holding
companies

90
80

I i t i i !
1999

NOTE. T h e data are weekly. T h e holding company indexes are for seven
m o n e y center companies and forty-two regional companies as defined by D o w
Jones.
SOURCE. D o w Jones and Standard and P o o r ' s .




operations, had another record year in 1998. Banks
in the top 100 but not in the top 10, and those in
the top 1,000 but not in the top 100, generated
returns on equity of MVI percent and \5VI percent,
respectively—in both cases record highs.

Interest Income and Expense
Net interest income as a percentage of average assets
declined 15 basis points last year, reflecting a similar
decline in banks' net interest margin (net interest
income as a percentage of average interest-earning
assets), which fell to a level not seen in seven years
(chart 16). Three factors contributed to the decline in
the net interest margin: A shift in bank assets away
from relatively high-yielding assets, a shift in bank
sources of funds toward relatively expensive liabilities, and, controlling for these shifts, a decline in
rates earned on bank assets relative to rates paid on
bank liabilities.
About one-third of the narrowing of the net interest
margin resulted from the shift in the composition of
bank assets last year away from consumer loans.
Consumer loan yields are higher, on average, than
those on other bank assets, in part as compensation
for the higher expense of servicing these loans, and
also because of their higher loss rates. As noted
earlier, some of the slow growth in consumer loans
on banks' books last year resulted from the funding
of these loans off bank balance sheets through securitization, which shifted some of the associated net
revenue generated out of net interest income and into
noninterest income. In addition, a few basis points of
the decline in the net interest margin stemmed from
banks' increased reliance on managed liabilities,
which generally pay higher yields than core deposits.
The remaining two-thirds of the narrowing of the
net interest margin resulted from a decline in the
yields on bank assets relative to bank liabilities after

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

16. Net interest margin, investment-account securities
as a share of interest-earning assets, and consumer
loans as a share of total loans, 1985-98

Net interest margin1

4.4

—

4.2

4.0

I n v e s t m e n t - a c c o u n t securities as a share
of interest-earning assets

1986

1988

1990

1992

1994

1996

1998

NOTE. Data are annual averages.
1. Net interest margin is net interest income divided by interest-earning
assets.

controlling for shifts in composition. Yields on bank
assets shrank in part because for most of the year,
banks continued to compete vigorously for business
loans, and as discussed above, the average spread on
these loans over the intended federal funds rate,
measured by the Survey of Terms of Business Lending, remained quite narrow through the early part of
the third quarter. It widened in the fourth quarter, but
because the survey measures rates on newly extended
loans, most of any resulting gain in bank profits will



379

appear only gradually over several quarters. A decline
in the average yield on real estate loans, no doubt
owing in part to the wave of refinancings last year,
also contributed to the decline in the average yield on
bank assets.
Developments that placed upward pressure on
interest expense also acted to narrow the net interest
margin. In the fall, the spread between rates on the
managed liabilities of banks and risk-free rates widened sharply, as these institutions were seen by investors as vulnerable to losses abroad and a slowing in
the domestic economy.10 Furthermore, rates on core
deposits, which tend to adjust gradually in any case,
were especially slow to match the decline in market
rates in the fall, because banks needed to fund the
rapid growth in assets at that time.
The shrinkage in the net interest margin last year
nearly completes the reversal of the sharp expansion
in the margin in 1991 and 1992. That expansion was
largely the result of two factors. First, it was a reaction to the compression of margins in the late 1980s
by competition among banks for loans and funding
sources as well as by the elevated rates that some
troubled banks and thrift institutions were paying for
funds. Second, a number of banks may not have had
the capital levels they needed to meet risk-based
capital rules phased in between 1990 and 1992. With
bank equity prices depressed at that time, capital was
expensive to raise, and so these banks were under
pressure to limit balance sheet expansion and push up
profits. Consequently, they bid for deposits and made
loans less aggressively, causing a widening of spreads
between loan and deposit rates. Moreover, competitive pressures on margins also may have eased as
troubled institutions were recapitalized or closed.
Since 1993, the banking industry has grown rapidly, and the forces that widened the margin have
been unwound, largely because of banks' increasingly competitive stance in loan markets and greater
reliance on managed liabilities. Several factors had
limited the narrowing in the margin between 1994
and 1996, including a shift in bank assets toward
loans, particularly consumer loans; relatively low
rates paid on deposits compared with market rates;
and a greater reliance on capital, the returns on which
are not included as an interest expense. However, for
the last two years these supporting forces have generally not been present, or have been reversed. As a
result, the net interest margin has narrowed faster.

10. In the fourth quarter, banks still found it advantageous to invest
in assets, particularly some types of securities, suggesting that
expected returns on these assets rose by even more than the increase
in banks' marginal cost of funds.

380

Federal Reserve Bulletin • June 1999

Noninterest

Income

Noninterest income as a percentage of assets rose
18 basis points last year, more than matching the
decline in net interest income. Noninterest income
also increased as a share of revenue last year, continuing a decade-long trend (chart 17). The increase
was concentrated in the "other fee income" component of noninterest income, which includes, among
other items, credit card fees, mortgage servicing fees,
fees from the sale and servicing of mutual funds
and annuities, ATM surcharges, and fee income from
securitized loans; it excludes deposit fees, which
edged down 1 basis point as a percentage of assets
last year. Although no finer detail is available on
other fee income, the increase last year probably
reflected, in part, the high level of mortgage refinancing, for which banks collect processing fees, and
the rapid growth in bank loans that are securitized,
earnings on which are generally booked in this
component.

17. Noninterest income and its components
as a share of total revenue, 1985-98

Selected components

Deposit fees

Other noninterest income

1986

1990

1994

1998

NOTE. Components of "other noninterest income" were first included in the
March 1991 Call Reports.




The rise in other fee income was particularly apparent at banks that specialize in credit card lending.11
These credit card banks, defined here as those banks
among the largest 1,000 by assets for which credit
card loans constitute more than half of assets, earned
a return on equity of 29Vi percent in 1998; this was
sharply more than the 173/4 percent in 1997, and only
slightly below the returns on equity earned by these
banks in 1993 and 1994, before the significant worsening of the performance of credit card loans in 1995.
Credit card banks earn nearly half of their revenue
as other fee income, compared with 14V2 percent
of revenue for other banks, and they account for a
quarter of the other fee income earned by all commercial banks. Other fee income makes up such a large
share of revenue at these banks because more than
three-fourths of their on-balance-sheet assets are
credit card loans, and off-balance-sheet credit card
loans at these banks exceed their on-balance-sheet
assets.
The increase in noninterest income was due also to
a rise in the nonfee component of "other noninterest
income." Among the items in this component are
income from professional services, including those
provided for holding company affiliates; gains on the
sale of assets other than securities, including loans
and bank branches; and income from venture capital
activities. Industry consolidation may have contributed to the growth in this component, in part because
of the resulting rise in the provision of specialized
services within holding companies (fees on which do
not increase the income of the holding company as a
whole), and in part because of the sale of assets in the
course of mergers and reorganizations. Some banks
book gains on proprietary investments in equities
resulting from the venture capital activities of their
small business investment company subsidiaries in
this component, so the rise in stock prices over recent
years has probably contributed to its growth as well.
The bull market for equities, and the high volume
of financial transactions, has likely also benefited
fiduciary income, which rose 2 basis points as a
percentage of assets in 1998. Fiduciary income
includes earnings on services rendered by banks'
trust departments and by any consolidated subsidiaries acting in a fiduciary capacity.
The trading income component of noninterest
income declined 2 basis points last year as a percentage of assets. During the first half of the year, trading

11. For more information on credit card banks, see William R.
Nelson and Ann L. Owen, "Profits and Balance Sheet Developments
at U.S. Commercial Banks in 1996," Federal Reserve Bulletin, vol. 83
(June 1997), pp. 476-77.

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

3. Trading revenue at all U.S. banks,
by type of exposure, 1995-98

Noninterest

Millions of dollars
Year

Total

Interest
rate

Foreign
exchange

Equity and
other

1995

6,337

3,012

2,491

635

1996

7,526

4,112

2,689

725

1997

8,020

3,995

3,951

72

1998

7,678

2,469

4,715

493

Ql

2,652

1,068

1,320

264

Q2

2,531

942

1,342

247

Q3

543

-101

875

-232

Q4

1,952

560

1,178

214

revenues, particularly those earned on exchange rate
exposures, were robust (table 3). However, in the
third quarter, following the pronounced widening of
liquidity and risk spreads, trading income declined
precipitously and several large banks posted trading
losses. The losses, reportedly, were of three general
kinds: First, the sharp decline in the value of certain
securities, including some foreign-related assets such
as Brady bonds, caused losses at those banks holding such securities in their trading accounts on an
unhedged basis. Second, in some cases U.S. banks
had hedged their holdings by taking two offsetting
positions. When some Russian counterparties
defaulted, the U.S. banks were left with substantial
losses on the contracts that had been hedged by the
contracts with those Russian counterparties.12 Lastly,
in other cases, the deteriorating financial condition
of counterparties in emerging-market economies,
including Asia and Latin America, led some banks to
write down the value of trading assets to reflect
widening credit-risk spreads. Trading income subsequently recovered in the fourth quarter and, for the
year as a whole, was only slightly below its level in
1997.
Profits were supported somewhat last year by realized gains on investment account securities, which
increased 40 percent to $3 billion. The realized gains
were strongest in the fourth quarter and reflected, in
part, sales of Treasury securities that had risen in
value in the fall.

12. When bank counterparties in derivatives transactions default,
the resulting obligation to the bank is either first recorded as a loan
and then charged off, or is recorded as a trading loss. Since 1996,
banks have reported credit losses on derivatives transactions on the
Call Report, although they have not indicated whether the losses were
booked as a charge-off or as a debit to trading revenue. These losses
totaled $781 million last year, up from $120 million in 1997 and




381

Expense

Bank profitability was damped last year by a sharp
rise in noninterest expense, as a percentage of both
assets and revenue (chart 18). The rise was largest
in the broad "other noninterest expense" category, which accounts for almost half of noninterest
expense. Some of it was attributable to merger and
restructuring charges and to an increase in data processing services, in part from efforts to prepare computer systems for the century date change.13
Noninterest expense was also elevated by a rise in
wage and occupancy costs, both of which increased
about 10 percent last year, in each case the most rapid
growth in more than a decade. Labor costs rose so
fast in part because employment, which had declined
4 percent between 1985 and 1995, advanced 4lA percent last year alone, following 2 percent growth in
13. The five largest bank holding companies, which together
account for one-third of commercial bank assets, reported aggregate
costs of preparing for the century date change of approximately
$1.3 billion in 1998. By comparison, other noninterest expense of
commercial banks rose $13.6 billion in 1998. However, not all of the
preparedness costs repeated by the these bank holding companies
would be booked at their commercial bank subsidiaries.

18. Noninterest expense and its components
as a percentage of total revenue, 1985-98

382

Federal Reserve Bulletin • June 1999

1997. Employment growth was particularly robust in
the fourth quarter, and was relatively faster at those
banks that posted more rapid growth in home mortgages, suggesting employment growth may have been
lifted by the mortgage refinancing boom. Despite the
rise in employment, revenue per employee increased
4VI percent last year, although employment costs per
employee rose 5 V2 percent.
The rise in occupancy costs stemmed, in part, from
a small increase in the number of bank offices, but
more importantly from a 63A percent rise in real
occupancy cost per office, which had fallen 3 percent
between 1985 and 1997. The abundant supply of
office space had resulted in a decline in the rents on,
and prices of, office buildings nationwide in the early
1990s, helping to restrain banks' occupancy costs,
but office rents and prices rose sharply in 1997 and
1998.
Loan Provisioning and Loan

Performance

Bank profits continue to be supported by the good
overall performance of loans. Although provisions
for loan and lease losses edged up last year as a
percentage of loans, tracking the slight rise in net

19. Loss provisioning and net charge-offs
as a percentage of loans, 1976-98
Percent

Loss provisioning

—

i

f

—

2.0

—

1.5

—

1.0

—

.5

Net charge-offs

w

1978

1982

1986

1990

1994

1998

NOTE. Net charge-offs are charge-offs net of recoveries.

charge-offs, both provisions and charge-offs remained
very low in 1998 (chart 19).
The performance of specific types of loans also
changed little last year. The delinquency rate on
commercial mortgages fell a bit further from the
already low levels posted in 1997, reflecting
the strong market for office and commercial space

20. Delinquency and charge-off rates, by type of loan, 1991-98
Percent
D e l i n q u e n c y rates for loans to businesses

Charge-off rates for loans to businesses

12

C o m m e r c i a l real estate

C o m m e r c i a l real estate

—^^ •

D e l i n q u e n c y rates for loans to households

0

Charge-off rates for loans to households

R e s i d e n t i a l real e s t a t e
Other consumer

R e s i d e n t i a l real e s t a t e

1992

1994

1996

1998

NOTE. T h e data are quarterly and seasonally adjusted. Delinquent loans are
loans that are not accruing interest and those that are accruing interest but are
more than thirty days past due. T h e delinquency rate is the end-of-period
level of delinquent loans divided by the end-of-period level of outstanding




1992

1994

1996

1998

loans. T h e charge-off rate is the annualized a m o u n t of charge-offs over the
period, net of recoveries, divided by the average level of outstanding loans over
the period.

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

21. Charge-off rates on C&I loans, by location of borrower,

383

22. Debt burden of businesses, 1985-98
Percent

Percent

—

All l o a n s

—
—

—

20

—

15

—

10

L o a n s to
non-US.
addressees
1

!

1985

1987

1
1
1989

1
1
1991

1
1993

1

1995

1997

NOTE. T h e data are quarterly. Debt burden is for nonfinancial corporations
and is calculated as interest p a y m e n t s as a percentage of cash flow.
SOURCE. National income and product accounts and the Federal Reserve
System.

(chart 20). The net charge-off rate on these loans
remained near zero. Delinquency and charge-off rates
on commercial and industrial loans rose a little,
though they too remained low. Most of the moderate
upward trend in charge-off rates on C&I loans for the
past two years reflects an increase in loss rates
on loans booked abroad, probably to some extent
because of difficulties in a number of emergingmarket economies (chart 21). The good performance
of C&I loans was in line with the strong financial
condition of the nonfinancial business sector: The
aggregated debt-service burden for nonfinancial corporations, measured as the ratio of net interest payments to cash flow, remained near its low of 1997
and less than half its peak level earlier in the decade
(chart 22), and business failures remained at the low
end of the range seen over the past decade.
Measures of household financial stress were also
relatively stable last year, although some were at high
levels. The annual increase in personal bankruptcy
filings has been about 3 percent for the past year and
a half, sharply down from annual increases of roughly
25 percent between early 1995 and early 1997.
Although household debt grew rapidly last year,
lower interest rates and longer loan maturities, which
resulted from the shift toward mortgage finance,
helped mitigate the effects of increased borrowing on
household debt-service burdens. Reflecting these
trends, the delinquency and charge-off rates on consumer loans varied little, although they tended to be
on the high side of historical norms. By contrast,
delinquency and charge-off rates on household mortgages stayed low.
The net charge-off rate on loans other than business, consumer, and real estate loans, which had been
less than 0.1 percent per year in the preceding three
years, ticked up to 0.4 percent in 1998. More than



half of those charge-offs occurred during the turbulent third quarter, when some loans to hedge funds
were written off and when some banks' counterparties on derivatives transactions defaulted.
Of course, the strength of the economy was responsible for much of the continued good overall loan
performance last year. If the economy were to slow,
loan losses would probably rise, perhaps markedly if
the easing in bank lending standards during the current long expansion turns out to have been excessive.
At the end of last year, reserves for loan and lease
losses remained high relative to delinquent loans
(chart 23). However, relative to net charge-offs,
reserves have fallen in recent years and are now near
the middle of their historical range.
On the one hand, it seems sensible to compare
reserves to delinquencies, because it is for losses that
are probable at the time that banks should be setting
23. Measures of reserves for loan and lease losses, 1985-98
Percent
Reserves as a percentage
—

of delinquencies

Ratio
Ratio o f reserves to c h a r g e - o f f s

384

Federal Reserve Bulletin • June 1999

aside reserves. On the other hand, one may want to
compare reserves to net charge-offs, because different
loan types have different levels of losses for the same
level of delinquencies. As a result, changes in the
distribution of banks' delinquent loans can affect the
expected level of losses for a given level of delinquencies. In particular, the average ratio of chargeoffs to delinquencies on consumer loans is well above
the average for other loan types. Given the shift in the
composition of delinquent loans toward consumer
loans in recent years, the ratio to net charge-offs
is probably a more reliable measure of the adequacy
of loan-loss reserves, suggesting that banks, in the
aggregate, do not appear particularly over- or underreserved.14

International Operations of U.S. Banks
Lingering concerns over economic prospects in Asia
and growing worries over Latin America, Russia, and
Eastern Europe led many banks to scale back their
foreign operations last year. The share of U.S. bank
assets booked at foreign offices fell nearly 2 percentage points to about 13 percent in 1998, after having
risen by nearly 3 percentage points since 1993
(table 4). The share of income attributable to foreign
operations fell from 10V4 percent in the previous
year to 8V2 percent—the lowest since 1989. Foreign
income had been relatively high in the first half of the
year, but declined sharply in the third quarter and
remained low in the fourth quarter. The drop in the
14. Indeed, if l o a n - l o s s r e s e r v e s are c o m p a r e d w i t h d e l i n q u e n c i e s
w e i g h t e d , f o r e a c h l o a n c o m p o n e n t , by the a v e r a g e ratio o f chargeo f f s to d e l i n q u e n c i e s o f that c o m p o n e n t in recent years, the a d e q u a c y
o f l o a n - l o s s reserves appears to be about as it d o e s w h e n r e s e r v e s are
c o m p a r e d with net c h a r g e - o f f s .

4. Share of U.S. bank assets booked at foreign offices and net
income attributable to foreign operations, 1993-98
Percent
Year

Assets

Net income

1993

12.15

16.34

1994

13.21

11.94

1995

13.64

11.61

1996

14.76

12.02

1997

15.04

10.27

1998

13.17

8.48

Q1

14.96

11.13

Q2

15.03

12.68

Q3

14.44

3.70

Q4

13.17

5.84

NOTE. Foreign offices include Edge Act and agreement subsidiaries and
international banking facilities (IBFs). Edge Act and agreement subsidiaries are
federally or state-chartered corporations, respectively, that are domiciled in the
United States but engage in international banking activities. An I B F is a set of
asset and liability accounts that cover selected international transactions of the
U.S. offices of the bank.

third quarter was concentrated in noninterest income,
perhaps owing to losses on trading account securities
booked abroad, and was widespread among those
banks with significant foreign operations.15
The decline in foreign revenue also resulted from
efforts by banks to lessen their exposure to troubled
foreign economies. The exposure of U.S. commercial
banks, as a fraction of capital, to troubled Asian,
Eastern European, and Russian economies declined
about one-fourth from year-end 1997 to year-end
1998 (table 5). The exposure of money center and
other large banks to Russia declined from over 3 percent of capital to less than V2 percent, as many of
these institutions wrote off a large fraction, of Russian
obligations. The exposure to Latin American econo15. For additional details o n the international o p e r a t i o n s o f U.S.
banks, s e e E n g l i s h and N e l s o n , "Profits and B a l a n c e S h e e t D e v e l o p m e n t s at U.S. C o m m e r c i a l B a n k s in 1 9 9 7 , " p. 4 0 6 .

5. Exposure of U.S. banking organizations to selected economies, relative to capital, year-end 1997 and 1998
Percent except as noted
Money center
and other large banks

All reporting
Region or country

MEMO:

All other banks

Total exposure, all banks
(billions of dollars)

1997

1998

1997

1998

1997

1998

1997

1998

16.11

9.47

26.87

15.17

2.34

1.21

55.24

37.87

3.47
1.80

2.13
.26

6.12
3.16

3.54
.43

.08
.05

.09

0.00

11.91
6.16

8.53
1.05

Latin America
All
Brazil

29.67
9.74

26.24
6.89

48.37
16.13

40.56
10.76

5.73
1.56

0.00

101.73
33.40

104.96
27.55

Total

49.25

37.84

81.37

59.27

8.16

6.83

168.89

151.36

Troubled Asia 1
Eastern Europe and Russia
All
Russia

NOTE. Exposures include the institutions' lending and derivatives exposures
for cross-border as well as local-office operations. Respondents may file information on one bank or on the bank holding company as a whole. Capital is
defined as equity, subordinated debt, and loan-loss reserves.




5.53

1. Indonesia, Korea, Malaysia, Philippines, and Thailand.
SOURCE. Federal Financial Institutions Examination Council, Country Exposure Report.

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

mies at these large banks fell nearly 8 percentage
points to a bit over 40 percent of capital, with much
of the decline resulting from reduced exposures to
Brazil.

DEVELOPMENTS IN 1999
Responding, in part, to earnings concerns, but also to
the devaluation and subsequent floating of the Brazilian real, indexes of bank stock prices fell in January.
However, as evidence accumulated that the U.S.
economy continued to enjoy strong growth and low
inflation, and emerging-market economies appeared
to stabilize, bank equities recovered. The stock prices
of money center bank holding companies were up
about 10 percent for the year through April; those of
regional banks were about 4 percent higher, half the
rise in the broader market.
Bank stock prices were lifted by first-quarter earnings announcements, which generally exceeded
expectations. Bank holding companies again reported
A.l.

385

hefty gains in fee income, including fees from
consumer lending, mortgage banking, and investment banking. Trading revenue also contributed
to the gains, in part because credit-risk spreads on
emerging-market securities narrowed.
Assets at the domestic offices of U.S. commercial
banks were about unchanged in the first quarter of
1999, with weakness in many of the components that
had expanded in the wake of financial turmoil in the
fall. Business loans declined early in the quarter,
as borrowers that had turned to banks returned to
the corporate bond and commercial paper markets.
Banks' holdings of mortgage-backed securities and
other non-Treasury issues, which had ballooned in
the fall, fell sharply. As mortgage refinancings ebbed,
banks caught up on securitizing the backlog of mortgages that had been brought onto their books when
refinanced, and real estate loans were about flat in the
first quarter. Those loans may have been supported,
in part, by further substitution for consumer loans,
which edged down somewhat despite strong consumer spending.
•

Report of income, all U.S. banks, 1989-98
Millions of dollars
Item

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse
repurchase agreements
Other

317,046
321,251
237,815
46,713

320,404
324,054
238,829
51,031

290,692
293,879
215,019
52,769

256,415
259,394
185,938
51,825

244,742
247,620
178,425
48,678

257,064
259,821
189,762
48,299

302,376
305,010
227.218
51,030

313,115
315,575
239,307
50,601

338,230
340,664
255,504
52,662

359,250
361,716
271,012
56.607

13,059
19,461

12,571
17,971

9,149
13,757

5,913
12,739

4,796
12,843

6,415
12,587

9,744
14,382

9,265
13,944

13,658
16,407

15,001
16,629

Gross interest expense
Deposits
Gross federal funds purchased and
repurchase agreements
Other

205,078
157,466

204,949
161,483

168,492
139,431

122,517
98,809

105,615
79,503

110,849
79,106

147,958
105,329

150,045
107,465

164,516
117,351

178,026
125,229

24,898
22,713

22,778
20,687

14,439
14,623

9,263
14,441

8,442
17,669

12,476
19,269

18,424
24,204

16,775
25,806

20,440
26,724

22,184
30,612

Net interest income
Taxable equivalent

111.968
116,173

115,455
119,105

122,200
125,387

133,898
136,877

139,127
142,005

146,215
148,972

154,418
157,052

163.070
165,530

173,714
176,148

181,224
183,690

Loss provisioning 1

31,297

32,282

34,871

26,813

16,841

10,993

12,631

16,206

19,173

21,217

Noninterest income
Service charges on deposits
Income from fiduciary activities
Trading income
Other

51,599
10,270
8,313
4,051
28,965

55,684
11,446
8,886
4,854
30,497

61,124
12,884
9,499
5,954
32,785

67,044
14,126
10,452
6,273
36,193

75,847
14,898
11,199
9,238
40,513

77,223
15,281
12,124
6,249
43,572

83,851
16,057
12,890
6,337
48,567

95,278
17,042
14,288
7,526
56,421

105,775
18,558
16,604
8,020
62,593

123,592
19,773
18,972
7,678
77,172

108,993
49,412
16,697
42,885

116,606
52,111
17,547
46,948

126,665
53,810
17,984
54,871

132,815
55,484
18,152
59,181

140,523
58,507
18,578
63,439

144,905
60,904
18,978
65,023

151,137
64,013
19,760
67,363

162,399
67,775
20,883
73,741

170,995
72,347
22,082
76,567

193,719
79,521
24,161
90,038

57,394

60,922

65,541

65,771

64,676

67,682

67,286

67,121

65,220

70,127

Noninterest expense
Salaries, wages, and employee benefits ..
Expenses of premises and fixed assets ..
Other
Net noninterest expense
Realized gains on investment account
securities

800

474

2,897

3,957

3,054

-560

481

1,123

1,826

3,088

Income before taxes and extraordinary
items
Taxes
Extraordinary items

24,079
9,547
312

22,725
7,749
650

24,684
8,292
1,198

45,273
14,450
401

60,662
19,861
2,085

66,989
22,430
-17

74,980
26,222
28

80,864
28,430
88

91,145
31,988
56

92,967
31,941
508

Net income

14,843

15,626

17,590

31,224

42,886

44,542

48,785

52,521

59,211

61,535

14,127
716

13,965
1,661

15,562
2,028

14,226
16,997

22,068
20,816

28,164
16,377

31,105
17,681

39,391
13,131

42,726
16,485

41,3001
20,233

Cash dividends declared
Retained income

1. Includes provisions for loan and lease losses and for allocated transfer risk.




386

Federal Reserve Bulletin • June 1999

A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1989-98
A. All banks
Item

1989

1990

1991

1992

1993

1994

1995

1
!

r
1996

i

1997

1998

Balance sheet items as a percentage of average net consolidated assets
Interest-earning assets
Loans and leases, net
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
In domestic offices
Construction and land development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
In foreign offices
Depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
LESS: Unearned income on loans
LESS: Loss reserves'
Securities
Investment account
Debt
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage pools ..
Collateralized mortgage obligations . . .
Other
State and local government
Private mortgage-backed securities
Other
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Non-interest-earning assets
Revaluation gains on off-balance-sheet items 2 ..
Other

87.94
60.64
19.09
16.54
2.55
11.89
3.69
8.20
22.50
21.78
4.16
.51
10.15
1.42
8.73
.60
6.36
.72
1.76
1.03
.96
4.31
1.10
-.48
-1.52
18.39
17.14
16.84
4.98

87.82
60.53
18.50
15.99
2.51
11.77
3.78
7.99
23.86
23.10
4.00
.51
11.21
1.67
9.54
.62
6.76
.76
1.60
.78
.96
3.93
1.12
-.42
-1.57
19.09
17.63
17.37
4.57

88.04
59.55
17.33
15.00
2.33
11.45
3.88
7.57
24.87
24.11
3.41
.53
12.27
1.95
10.32
.66
7.23
.76
1.42
.75
1.01
3.60
1.09
-.36
-1.62
20.70
18.93
18.62
5.06

88.33
57.30
15.78
13.54
2.24
11.00
3.80
7.20
24.87
24.18
2.64
.56
12.91
2.09
10.83
.75
7.32
.69
1.24
.73
1.02
3.50
1.03
-.28
-1.60
23.52
21.18
20.82
6.49

88.50
56.25
14.88
12.72
2.16
11.00
3.88
7.11
24.80
24.18
1.99
.57
13.49
2.07
11.42
.79
7.33
.62
1.08
.67
.99
3.56
.99
-.21
-1.51
25.37
22.50
22.12
7.08

86.55
56.07
14.51
12.35
2.16
11.43
4.21
7.22
24.43
23.80
1.65
.56
13.74
1.91
11.84
.79
7.07
.63
1.42
.41
1.00
3.34
1.03
-.16
-1.36
24.27
21.60
21.21
6.77

86.47
58.37
15.20
12.87
2.33
12.08
4.69
7.39
25.01
24.36
1.59
.56
14.42
1.88
12.54
.81
6.97
.65
1.88
.30
.96
3.15
1.19
-.14
-1.26
21.94
19.39
18.98
5.25

86.80
59.89
15.60
13.07
2.53
12.21
4.87
7.34
25.06
24.43
1.63
.56
14.43
1.85
12.57
.85
6.96
.63
2.29
.26
.92
3.36
1.51
-.12
-1.21
21.01
18.20
17.75
4.20

86.58
58.69
15.78
13.18
2.60
11.44
4.55
6.89
25.02
24.41
1.73
.55
14.42
1.94
12.48
.83
6.88
.61
1.89
.18
.90
2.84
1.87
-.09
-1.13
20.41
17.25
16.75
3.38

86.26
58.32
16.37
13.62
2.75
10.36
3.97
6.39
24.86
24.29
1.86
.55
14.26
1.89
12.37
.82
6.81
.57
1.88
.15
.89
2.81
2.14
-.07
-1.07
20.38
17.48
16.94
2.71

6.04
3.27
n.a.
2.77
3.15
n.a.
2.68
.30
1.25
4.33
4.58
12.06
n.a.
12.06

7.56
4.08
1.25
2.22
2.64
n.a.
2.59
.27
1.46
4.46
3.75
12.18
n.a.
12.18

8.75
4.51
2.07
2.16
2.28
.94
1.59
.31
1.77
4.58
3.21
11.96
n.a.
11.96

9.86
4.52
3.12
2.21
2.08
.82
1.58
.37
2.34
4.54
2.97
11.67
n.a.
11.67

10.73
4.74
3.72
2.27
2.06
.73
1.52
.38
2.87
4.27
2.62
11.50
n.a.
11.50

10.24
4.67
3.24
2.33
2.02
.64
1.54
.39
2.67
3.82
2.40
13.45
2.61
10.84

9.81
4.47
2.67
2.68
1.80
.62
1.49
.41
2.55
3.93
2.23
13J3
2.90
10.62

9.75
4.80
2.11
2.83
1.68
.61
1.51
.45
2.81
3.82
2.08
13.20
2.25
I0'95

9.74
4.94
1.94
2.86
1.59
.50
1.54
.50
3.16
5.18
2.29
1342
2.59
10.83

10.28
5.17
2.12
2.99
1.57
.67
1.70
.55
2.89
5.37
2.19
13.74
2.95
10.79

Liabilities
Interest-bearing liabilities
Deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Small-denomination time deposits
Large-denomination time deposits
Gross federal funds purchased and RPs
Other
Non-interest-bearing liabilities
Demand deposits in domestic offices
Revaluation losses on off-balance-sheet items 2
Other

93.64
76.02
62.58
9.68
5? 90
6.12
16.28
18.38
12.13
8.22
5.22
17.62
13.49
n.a.
4.13

93.60
76.53
63.44
9.26
54.18
6.19
16.59
19.96
11.44
8.03
5.07
17.07
12.79
n.a.
4.27

93.33
76.58
64.45
8.55
55.90
6.72
18.00
21.30
9.89
7.09
5.03
16.75
12.59
n.a.
4.16

92.82
75.32
62.94
8.37
54.56
7.65
20.28
19.21
7.42
7.02
5.36
17.50
13.24
n.a.
4.27

92.15
73.92
60.26
8.32
51.94
8.24
20.91
16.98
5.81
7.47
6.19
18.23
13.86
n.a.
4.37

92.12
71.86
57.34
9.39
47.96
7.80
19.60
15.33
5.23
7.60
6.92
20.26
13.49
2.32
445

91.99
71.86
56.30
10.28
46.03
6.63
17.48
16.14
5.77
7.71
7.85
20.13
12.68
2.88
4.57

91.73
71.62
55.87
10.01
45.86
4.75
18.71
15.97
6.42
7.18
8.56
20.11
12.82
2.14
5.14

91.57
71.36
55.01
10.02
44.99
3.62
19.13
15.17
7.08
8.13
8.21
20.21
12.16
2.64
5.41

91.51
71.35
54.67
10.15
44.53
3.12
19.92
14.16
7.34
7.99
8.69
20.15
11.00
2.97
6.18

6.36

6.40

6.67

7.18

7.85

7.88

8.01

8.27

8.43

8.49

n.a.
.39
35.78

n.a.
.50
34.31

12.02
.75
31.05

11.34
.82
28.70

10.63
.63
28.28

9.94
.36
29.61

9.83
.19
32.08

9.92
.14
32.73

9.99
.11
34.09

10.12
.08
34.95

3,187

3,338

3,379

3.442

3.566

3.863

4,148

4,376

4,733

5,145

Capital account
MEMO

Commercial real estate loans . . .
Other real estate owned
Managed liabilities
Average net consolidated assets
(billions of dollars)




Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

387

A.2.—Continued
A. All banks
Item

1989

1990

1991

1992

1993

1994

1995

Effective interest rate (percent)

1996

1997

1998

3

Rates earned
Interest-earning assets
Taxable equivalent
Loans and leases, gross
Net of loss provisions
Securities
Taxable equivalent
Investment account
U.S. government and other debt
State and local
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories

11.13
11.29
12.02
10.44
8.73
9.25
8.55
8.83
7.45
7.70
11.11
9.17
10.59

10.67
10.80
11.49
9.94
8.79
9.21
8.67
8.92
7.39
7.34
10.15
8.08
9.96

9.57
9.69
10.40
8.72
8.19
8.56
8.25
8.43
7.25
6.20
7.54
5.69
8.44

8.27
8.37
9.20
7.87
7.04
7.34
7.11
7.18
6.81
5.32
6.40
3.58
7.31

7.61
7.71
8.69
7.87
6.08
6.36
6.07
6.07
6.25
4.79
6.16
3.04
6.61

7.61
7.70
8.62
8.12
5.96
6.20
5.79
5.80
5.87
4.79
7.41
4.26
5.71

8.33
8.41
9.25
8.74
6.51
6.73
6.35
6.42
5.82
5.51
7.73
5.63
6.84

8.14
8.21
8.99
8.39
6.42
6.66
6.35
6.47
5.55
5.23
6.86
5.21
6.21

8.15
8.22
9.01
8.34
6.50
6.73
6.45
6.60
5.41
5.15
6.75
5.45
6.24

7.99
8.06
8.85
8.15
6.37
6.63
6.29
6.45
5.23
4.92
6.85
5.29
6.27

Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large-denomination time deposits 4
Small-denomination time deposits 4
Gross federal funds purchased and RPs
Other interest-bearing liabilities

8.53
7.87
10.87
7.32
4.83
6.18
8.66
8.29
9.20
13.76

8.04
7.57
10.71
7.02
4.79
5.99
8.03
7.97
7.97
12.26

6.55
6.34
8.54
6.00
4.34
5.11
6.69
6.93
5.76
8.65

4.75
4.51
7.32
4.07
2.70
3.25
4.90
5.15
3.64
7.87

4.01
3.65
6.82
3.14
1.99
2.50
4.00
4.19
3.07
8.02

4.01
3.53
5.59
3.14
1.85
2.58
4.09
4.17
4.18
7.25

4.99
4.47
6.12
4.11
2.06
3.19
5.47
5.44
5.65
7.47

4.82
4.33
5.54
4.07
2.03
2.99
5.39
5.40
5.12
6.93

4.92
4.39
5.44
4.16
2.25
2.93
5.45
5.54
5.17
6.95

4.88
4.31
5.66
4.01
2.29
2.79
5.22
5.47
5.19
6.88

Income and expense as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse RPs
Other

9.95
10.08
7.46
1.47
.41
.61

9.60
9.71
7.15
1.53
.38
.54

8.60
8.70
6.36
1.56
.27
.41

7.45
7.54
5.40
1.51
.17
.37

6.86
6.94
5.00
1.37
.13
.36

6.65
6.73
4.91
1.25
.17
.33

7.29
7.35
5.48
1.23
.23
.35

7.16
7.21
5.47
1.16
.21
.32

7.15
7.20
5.40
1.11
.29
.35

6.98
7.03
5.27
1.10
.29
.32

Gross interest expense
Deposits
Gross federal funds purchased and RPs
Other

6.44
4.94
.78
.71

6.14
4.84
.68
.62

4.99
4.13
.43
.43

3.56
2.87
.27
.42

2.96
2.23
.24
.50

2.87
2.05
.32
.50

3.57
2.54
.44
.58

3.43
2.46
.38
.59

3.48
2.48
.43
.56

3.46
2.43
.43
.60

Net interest income
Taxable equivalent

3.51
3.65

3.46
3.57

3.62
3.71

3.89
3.98

3.90
3.98

3.78
3.86

3.72
3.79

3.73
3.78

3.67
3.72

3.52
3.57

Loss provisioning 5

.98

.97

1.03

.78

.47

.28

.30

.37

.41

.41

1.62
.32
.26
.13
n.a.
n.a.
n.a.
.91

1.67
.34
.27
.15
n.a.
n.a.
n.a.
.91

1.81
.38
.28
.18
n.a.
n.a.
n.a.
.97

1.95
.41
.30
.18
n.a.
n.a.
n.a.
1.05

2.13
.42
.31
.26
n.a.
n.a.
n.a.
1.14

2.00
.40
.31
.16
n.a.
n.a.
n.a.
1.13

2.02
.39
.31
.15
n.a.
n.a.
n.a.
1.17

2.18
.39
.33
.17
.09
.06
.02
1.29

2.23
.39
.35
.17
.08
.08
•
1.32

2.40
.38
.37
.15
.05
.09
.01
1.50

Noninterest expense
Salaries, wages, and employee benefits
Expenses of premises and fixed assets
Other

3.42
1.55
.52
1.35

3.49
1.56
.53
1.41

3.75
1.59
.53
1.62

3.86
1.61
.53
1.72

3.94
1.64
.52
1.78

3.75
1.58
.49
1.68

3.64
1.54
.48
1.62

3.71
1.55
.48
1.69

3.61
1.53
.47
1.62

3.77
1.55
.47
1.75

Net noninterest expense

1.36

Noninterest income
Service charges on deposits
Income from fiduciary activities
Trading income
Interest rate exposures
Foreign exchange exposures
Equity, commodity, and other exposures
Other

...

1.80

1.83

1.94

1.91

1.81

1.75

1.62

1.53

1.38

Realized gains on investment account securities .

.03

.01

.09

.11

.09

-.01

.01

.03

.04

.06

Income before taxes and extraordinary items
Taxes
Extraordinary items

.76
.30
.01

.68
.23
.02

.73
.25
.04

1.32
.42
.01

1.70
.56
.06

1.73
.58

1.81
.63

1.85
.65

1.93
.68

1.81
.62
.01

Net income (return on assets)
Cash dividends declared
Retained income

.47
.44
.02

.47
.42
.05

.52
.46
.06

.91
.41
.49

1.20
.62
.58

1.15
.73
.42

1.18
.75
.43

1.20
.90
.30

1.25
.90
.35

1.20
.80
.39

7.33

7.31

7.80

12.64

15.32

14.63

14.69

14.52

14.84

14.08

MEMO: Return on equity

*

•

*

*

* In absolute value, less than 0.005 percent.
DEFINITIONS.
n.a. Not available.
MMDA Money market deposit account.
RP Repurchase agreement.
C D Certificate of deposit.
1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve.
2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities"
if a gain and "other non-interest-bearing liabilities" if a loss.
3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports.
4. Before 1997, data for large time open accounts are included in small-denomination time deposits.
5. Includes provisions for loan and lease losses and for allocated transfer risk.




388

A.2.

Federal Reserve Bulletin • June 1999

Portfolio composition, interest rates, and income and expense, all U.S. banks, 1989-98
B. Ten largest banks by assets
Item

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Balance sheet items as a percentage of average net consolidated assets
Interest-earning assets
Loans and leases, net
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
In domestic offices
Construction and land development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
In foreign offices
Depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
LESS: Unearned income on loans
LESS: Loss reserves'
Securities
Investment account
Debt
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage pools . . .
Collateralized mortgage obligations
Other
State and local government
Private mortgage-backed securities
Other
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Non-interest-earning assets
Revaluation gains on off-balance-sheet items 2 . . .
Other

85.16
59.66
22.61
13.18
9.43
6.21
1.99
4.22
18.02
15.05
3.60
.08
7.45
1.04
6.41
.68
3.23
2.97
4.56
3.34
.31
6.36
1.49
-.45
-2.77
13.13
9.05
8.83
1.29

84.85
61.69
22.91
13.39
9.53
6.87
2.20
4.67
20.56
17.36
3.79
.08
9.31
1.31
8.00
.68
3.51
3.20
3.64
2.76
.31
6.05
1.60
-.39
-2.63
14.03
9.22
8.98
1.09

85.41
62.14
22.42
13.44
8.97
7.20
2.53
4.67
21.68
18.37
3.42
.08
10.34
1.63
8.71
.57
3.95
3.32
3.05
2.88
.31
5.61
1.68
-.35
-2.34
15.58
9.38
9.08
1.35

85.16
58.34
20.32
12.00
8.32
7.31
2.61
4.70
19.93
17.07
2.48
.07
10.08
1.63
8.46
.58
3.86
2.85
2.56
2.75
.28
6.05
1.51
-.27
-2.08
19.13
10.70
10.36
2.30

84.79
55.57
18.65
10.75
7.90
7.33
2.50
4.83
18.54
15.99
1.59
.07
10.29
1.60
8.68
.53
3.51
2.55
2.35
2.46
.27
6.82
1.30
-.21
-1.94
22.74
12.45
12.08
2.39

76.97
49.91
16.43
9.16
7.27
6.59
2.28
4.31
16.21
13.80
.84
.06
9.69
1.40
8.29
.41
2.79
2.41
3.37
1.27
.25
6.44
1.14
-.16
-1.63
20.43
11.68
11.30
2.17

77.02
50.05
16.16
8.66
7.50
6.60
1.96
4.65
15.82
13.48
.58
.06
9.62
1.40
8.22
.38
2.83
2.35
4.95
.90
.21
5.85
1.14
-.14
-1.45
19.53
10.65
10.27
2.03

79.94
53.51
17.17
9.59
7.59
6.22
1.23
4.99
16.53
14.44
.51
.06
10.43
1.53
8.90
.38
3.05
2.09
6.06
.69
.23
6.42
1.59
-.11
-1.30
19.83
10.60
10.22
1.93

81.62
50.91
16.90
10.24
6.66
6.40
1.34
5.06
17.42
15.69
.68
.09
11.02
1.70
9.31
.39
3.52
1.73
4.14
.45
.31
4.21
2.24
-.07
-1.08
20.00
10.97
10.55
1.56

81.07
50.77
18.07
11.76
6.31
6.04
1.30
4.74
16.51
15.08
.77
.09
10.33
1.72
8.61
.38
3.51
1.43
4.00
,35
.28
3.79
2.81
-.06
-1.01
19.72
12.12
11.65
1.70

2.29
2.07
n.a.
.22
1.58
n.a.
3.68
.22
4.08
4.12
8.26
14.84
n.a.
14.84

2.91
2.24
.54
.14
1.08
n.a.
3.90
.24
4.81
2.88
6.25
15.15
n.a.
15.15

3.46
2.26
1.12
.08
.77
.48
3.01
.30
6.19
2.96
4.74
14.59
n.a.
14.59

4.45
2.43
1.97
.05
.66
.33
2.62
.33
8.43
3.23
4.45
14.84
n.a.
14.84

6.14
3.30
2.76
.08
.59
.38
2.59
.36
10.30
2.71
3.76
15.21
n.a.
15.21

5.16
2.79
2.31
.06
.60
.43
2.94
.38
8.74
2.68
3.95
23.03
9.89
13.14

4.46
2.89
1.50
.08
.49
.32
2.97
.38
8.88
3.20
4.25
22.98
10.77
12.21

4.59
3.58
.95
.06
.39
.30
3.01
.38
9.23
3.10
3.50
20.06
7.63
12.43

5.34
4.26
.93
.15
.51
.32
2.81
.42
9.03
7.56
3.15
18.38
7.36
11.02

6.31
5.13
.93
.26
.47
.60
2.57
.47
7.60
7.81
2.77
18.93
7.61
11.32

Liabilities
Interest-bearing liabilities
Deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Small-denomination time deposits
Large-denomination time deposits
Gross federal funds purchased and RPs
Other
Non-interest-bearing liabilities
Demand deposits in domestic offices
Revaluation losses on off-balance-sheet items 2 .
Other

95.11
74.17
57.56
30.08
27.49
2.70
11.32
5.64
7.82
6.72
9.89
20.94
11.60
n.a.
9.34

95.29
73.97
57.95
29.66
28.28
2.74
12.05
6.16
7.33
6.90
. 9.13
21.32
10.93
n.a.
10.39

94.97
74.62
57.67
28.47
29.19
3.00
13.50
6.55
6.14
6.80
10.15
20.35
10.36
n.a.
9.99

94.44
73.08
55.73
27.16
28.56
3.38
14.91
5.72
4.56
6.19
11.16
21.36
11.05
n.a.
10.30

93.24
71.56
52.91
25.51
27.41
3.45
15.33
5.09
3.53
6.70
11.94
21.68
11.27
n.a.
10.41

93.42
64.33
48.20
26.10
22.10
2.91
12.70
3.98
2.51
5.83
10.29
29.09
10.15
8.75
10.20

93.59
63.37
47.49
28.36
19.12
2.30
10.56
4.04
2.23
6.17
9.71
30.22
8.88
10.68
10.66

93.04
64.45
47.87
26.41
21.46
1.61
12.31
4.68
2.86
5.88
10.69
28.59
9.73
7.27
11.59

92.61
65.83
47.36
22.18
25.18
1.21
14.26
5.82
3.89
10.26
8.20
26.78
8.98
7.53
10.27

92.57
65.81
47.65
20.17
27.48
.99
15.84
6.03
4.62
9.79
8.37
26.76
8.46
7.66
10.64

4.89

4.71

5.03

5.56

6.76

6.58

6.41

6.96

7.39

7.43

n.a.
.23
56.31

n.a.
.42
54.79

9.05
.78
53.23

8.01
1.13
50.82

6.46
1.02
49.23

4.65
.58
46.21

4.40
.27
47.94

4.65
.18
47.39

5.45
.13
46.02

5.61
.09
44.43

693

725

717

775

818

949

1,051

1,189

1,514

1,820

Capital account
MEMO

Commercial real estate loans
Other real estate owned
Managed liabilities
Average net consolidated assets
(billions of dollars)




Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

389

A.2.—Continued
B. Ten largest banks by assets
Item

1989

1990

1991

1992

1993

1994

1995

Effective interest rate (percent)

1996

1997

1998

3

Rates earned
Interest-earning assets
Taxable equivalent
Loans and leases, gross
Net of loss provisions
Securities
Taxable equivalent
Investment account
U.S. government and other debt
State and local
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories

12.31
12.31
13.19
10.87
10.11
10.08
9.20
9.60
7.69
7.03
12.13
8.98
10.88

11.65
11.70
12.29
11.10
9.85
10.00
9.34
9.68
7.54
5.82
10.75
8.01
11.06

9.92
9.95
10.46
8.58
8.52
8.63
8.99
9.29
7.67
4.22
7.84
5.60
10.05

8.67
8.72
9.36
7.51
7.38
7.54
7.96
8.13
7.40
4.04
6.69
3.65
9.29

8.16
8.20
9.07
7.95
6.69
6.77
6.90
6.99
6.99
3.72
6.45
3.02
8.34

8.15
8.18
8.89
8.38
7.09
7.19
6.57
6.70
6.35
3.27
7.79
4.52
7.27

8.20
8.22
8.84
8.62
7.41
7.47
7.06
7.22
6.23
4.03
7.83
5.20
7.15

7.72
7.74
8.32
8.11
6.80
6.85
6.71
6.86
5.73
3.84
6.90
4.92
6.71

7.55
7.60
8.25
7.93
6.70
6.85
6.61
6.80
5.55
3.47
6.81
5.45
6.91

7.54
7.57
8.21
7.62
6.79
6.89
6.71
6.92
5.50
2.98
6.92
5.20
7.16

Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including M M D A s )
Large-denomination time deposits 4
Small-denomination time deposits 4
Gross federal funds purchased and RPs
Other interest-bearing liabilities

10.74
9.19
10.96
7.28
4.40
6.49
8.87
8.26
9.27
19.31

10.18
9.03
11.11
6.81
4.35
6.21
7.96
7.76
7.75
17.27

7.71
7.09
8.76
5.47
3.93
5.09
6.50
6.09
5.98
11.20

6.17
5.33
7.55
3.25
1.97
2.95
4.66
3.81
4.04
10.40

5.60
4.50
6.87
2.36
1.28
2.14
3.55
3.01
3.26
11.16

5.43
4.32
6.04
2.35
1.10
2.35
3.12
2.80
4.05
10.87

5.88
4.99
6.07
3.42
1.29
3.11
3.73
5.08
5.22
9.80

5.44
4.57
5.62
3.32
1.32
2.76
4.62
4.58
4.93
8.86

5.41
4.54
5.52
3.69
1.97
2.68
5.17
5.45
5.02
9.13

5.29
4.40
5.83
3.39
1.67
2.45
4.53
5.21
5.18
8.85

Income and expense as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse RPs
Other

10.82
10.83
8.23
.83
.37
1.39

10.37
10.43
7.96
.86
.25
1.30

8.77
8.80
6.77
.84
.17
.98

7.69
7.72
5.65
.85
.14
1.05

7.22
7.25
5.22
.86
.11
1.04

6.37
6.40
4.49
.77
.15
.97

6.42
6.43
4.44
.75
.21

1.00

6.26
6.27
4.48
.71
.18
.88

6.31
6.33
4.31
.73
.45
.82

6.21
6.23
4.27
.81
.42
.70

Gross interest expense
Deposits
Gross federal funds purchased and RPs
Other

8.01
5.37
.72
1.92

7.65
5.41
.64
1.60

5.81
4.23
.43
1.15

4.54
3.09
.28
1.17

4.06
2.48
.24
1.35

3.52
2.15
.24
1.13

3.74
2.43
.35
.95

3.52
2.26
.31
.95

3.55
2.26
.54
.75

3.48 1
2.20
.54
.74 I

Net interest income
Taxable equivalent

2.82
2.82

2.72
2.77

2.96
2.99

3.15
3.18

3.16
3.19

2.86
2.88

2.68
2.70

2.73
2.75

2.76
2.79

2.73
2.75

Loss provisioning

5

1
1
I

1.45

.77

1.21

1.12

.64

.26

.11

.11

.16

.31

Noninterest income
Service charges on deposits
Income from fiduciary activities
Trading income
Interest rate exposures
Foreign exchange exposures
Equity, commodity, and other exposures
Other

2.19
.22
.27
.42
n.a.
n.a.
n.a.
1.29

2.27
.23
.31
.52
n.a.
n.a.
n.a.
1.21

2.40
.26
.33
.64
n.a.
n.a.
n.a.
1.16

2.59
.30
.37
.66
n.a.
n.a.
n.a.
1.27

2.99
.30
.39
.91
n.a.
n.a.
n.a.
1.38

2.33
.26
.36
.53
n.a.
n.a.
n.a.
1.18

2.16
.25
.30
.46
n.a.
n.a.
n.a.
1.15

2.34
.28
.31
.52
.30
.17
.05
1.23

2.12
.32
.34
.43
.23
.20
1.04

2.15
.33
.32
.33
.10
.20
.03
1.17

Noninterest expense
Salaries, wages, and employee benefits
Expenses of premises and fixed assets
Other

3.43
1.66
.62
1.15

3.55
1.74
.65
1.16

3.83
1.79
.66
1.38

3.86
1.78
.65
1.43

4.13
1.88
.66
1.59

3.56
1.65
.55
1.36

3.32
1.58
.50
1.24

3.57
1.57
.50
1.50

3.24
1.45
.47
1.33

3.47 |
1.45 1
.47
1.54

Net noninterest expense

1.24

1.28

1.44

1.27

1.14

1.23

1.16

1.23

1.12

1.32

Realized gains on investment account securities .

.03

.02

.04

.11

.13

.02

.03

.04

.08

.11

Income before taxes and extraordinary items
Taxes
Extraordinary items

.16
.38
.03

.69
.27
.06

.34
.17
.03

.87
.26

1.50
.53
.16

1.39
.48

1.44
.55

1.44
.52

1.56
.58

1.22
.44

•

*

*

*

*

*

-.19
.37
-.57

.48
.26
.21

*

.61
.18
.43

1.13
.28
.85

.91
.58
.33

.88
.57
.31

.92
.70
.21

.98
.82
.15

.78
.53
.25

-3.92

10.13

10.91

16.75

13.86

13.78

13.21

13.22

10.53

Net income (return on assets)
Cash dividends declared
Retained income
MEMO: Return on equity

.21
.21
4.23

*

* In absolute value, less than 0.005 percent.
DEFINITIONS.
n.a. Not available.
M M D A Money market deposit account.
RP Repurchase agreement.
C D Certificate of deposit.
1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve.
2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities"
if a gain and "other non-interest-bearing liabilities" if a loss.
3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports.
4. Before 1997, data for large time open accounts are included in small-denomination time deposits.
5. Includes provisions for loan and lease losses and for allocated transfer risk.




1
I
I
1
1
|
1
J

I
I

1
1
I

1
1
I

390

Federal Reserve Bulletin • June 1999

A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1989-98
C. Banks ranked 11th through 100th by assets
Item

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Balance sheet items as a percentage of average net consolidated assets
Interest-earning assets
Loans and leases, net
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
In domestic offices
Construction and land development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
In foreign offices
Depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
LESS: Unearned income on loans
LESS: Loss reserves'
Securities
Investment account
Debt
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage pools . . .
Collateralized mortgage obligations
Other
State and local government
Private mortgage-backed securities
Other
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Non-interest-earning assets
Revaluation gains on off-balance-sheet items 2
Other

86.91
62.61
22.75
21.23
1.53
12.97
5.82
7.16
19.09
18.85
5.25
.12
7.54
1.41
6.13
.45
5.49
.24
1.55
.88
.29
5.17
1.73
-.34
-1.48
15.21
14.38
14.15
4.10

86.81
61.22
21.76
20.44
1.33
12.25
5.48
6.76
20.21
20.04
4.91
.12
8.53
1.67
6.86
.46
6.01
.18
1.57
.52
.28
4.82
1.67
-.26
-1.60
16.19
15.32
15.14
3.42

86.88
60.08
20.53
19.30
1.24
11.66
5.04
6.62
21.51
21.37
4.00
.12
10.17
2.07
8.10
.54
6.53
.14
1.58
.39
.31
4.55
1.53
-.22
-1.76
17.38
16.25
16.02
3.78

87.97
58.30
18.83
17.78
1.05
11.72
5.16
6.56
21.89
21.78
3.02
.14
11.36
2.50
8.85
.66
6.61
.11
1.43
.33
.31
4.28
1.49
-.17
-1.79
20.38
19.24
18.99
5.88

88.36
57.33
18.03
17.05
.98
11.47
5.23
6.24
22.11
22.01
2.08
.13
12.30
2.54
9.76
.71
6.79
.10
1.30
.30
.29
4.05
1.47
-.11
-1.60
21.97
20.60
20.34
7.05

88.16
58.56
18.03
16.99
1.04
12.62
5.99
6.63
22.26
22.17
1.63
.14
12.98
2.33
10.65
.71
6.72
.09
1.49
.28
.29
3.47
1.60
-.07
-1.41
21.19
19.82
19.50
6.85

88.31
62.68
19.26
18.10
1.16
14.23
7.34
6.89
23.25
23.10
1.50
.13
14.16
2.19
11.97
.77
6.54
.15
1.59
.20
.26
3.32
1.96
-.07
-1.32
18.64
17.88
17.51
4.82

87.75
64.24
18.95
17.71
1.24
15.67
8.26
7.40
23.26
23.10
1.55
.13
14.15
2.08
12.07
.89
6.37
.16
1.50
.20
.28
3.30
2.41
-.06
-1.27
16.87
16.06
15.62
3.34

86.95
63.89
19.01
17.78
1.22
15.62
8.50
7.12
22.99
22.85
1.69
.14
13.88
2.22
11.65
.93
6.21
.15
1.27
.09
.29
3.21
2.70
-.05
-1.24
15.80
15.07
14.58
2.81

87.40
64.40
18.94
17.60
1.33
14.52
7.67
6.85
24.57
24.39
2.02
.17
14.84
2.17
12.67
1.00
6.35
.18
1.06
.06
.33
3.38
2.75
-.04
-1.16
16.65
16.12
15.57
2.24

5.01
4.03
n.a.
.98
2.70
n.a.
2.34
.23
.83
3.71
5.38
13.09
n.a.
13.09

7.42
5.32
1.56
.54
2.03
n.a.
2.27
.18
.88
4.41
4.98
13.19
n.a.
13.19

8.43
5.38
2.48
.57
1.63
1.09
1.10
.22
1.13
4.90
4.51
13.12
n.a.
13.12

9.26
5.22
3.54
.50
1.46
1.05
1.34
.25
1.14
4.78
4.52
12.03
n.a.
12.03

9.55
5.21
3.71
.63
1.31
1.06
1.37
.26
1.37
4.98
4.08
11.64
n.a.
11.64

9.28
5.30
3.07
.91
1.21
.93
1.22
.32
1.37
5.11
3.30
11.84
.57
11.28

9.40
5.06
2.82
1.51
1.11
1.02
1.16
.37
.76
4.52
2.47
11.69
.50
11.18

9.12
5.42
2.16
1.54
.99
.96
1.21
.44
.80
4.26
2.38
12.25
.51
11.75

8.98
5.17
2.13
1.68
.88
.73
1.18
.49
.73
4.38
2.88
13.05
.69
12.36

9.93
4.98
2.82
2.12
.92
.96
1.53
.55
.54
3.58
2.77
12.60
.75
11.85

Liabilities
Interest-bearing liabilities
Deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including M M D A s )
Small-denomination time deposits
Large-denomination time deposits
Gross federal funds purchased and RPs
Other
Non-interest-bearing liabilities
Demand deposits in domestic offices
Revaluation losses on off-balance-sheet items 2 .
Other

94.45
76.23
56.45
8.63
47.82
4.67
14.58
13.49
15.08
13.22
6.57
18.22
13.86
n.a.
4.36

94.35
77.02
57.46
7.84
49.62
4.75
15.50
15.59
13.78
13.03
6.53
17.33
13.23
n.a.
4.10

93.93
76.07
59.24
6.69
52.54
5.36
17.62
17.99
11.56
10.94
5.89
17.87
13.76
n.a.
4.10

93.13
74.66
56.99
6.20
50.79
6.26
20.21
15.98
8.34
11.45
6.22
18.47
14.52
n.a.
3.95

92.56
73.38
54.22
6.78
47.43
7.21
20.60
14.19
5.44
11.93
7.23
19.18
15.38
n.a.
3.80

92.47
72.86
53.03
8.05
44.98
6.91
20.13
13.26
4.68
11.48
8.34
19.62
15.27
.53
3.82

92.23
74.05
52.32
8.12
44.20
5.62
18.78
14.24
5.55
11.37
10.36
18.18
14.26
.49
3.43

92.02
73.14
51.81
7.52
44.30
3.06
20.76
14.09
6.39
10.00
11.32
18.89
14.47
.49
3.93

91.85
72.62
51.47
7.85
43.62
1.95
21.09
13.43
7.15
9.36
11.79
19.22
14.17
.68
4.37

91.63
73.46
51.52
8.16
43.36
1.75
21.42
12.83
7.36
9.48
12.46
18.17
12.41
.76
5.01

5.55

5.65

6.07

6.87

7.44

7.53

7.77

7.98

8.15

8.37

n.a.
.30
43.90

n.a.
.46
41.59

11.83
.76
35.49

11.09
.70
32.59

10.29
.47
31.76

9.69
.25
32.89

9.42
.13
35.68

9.38
.08
35.60

9.44
.06
36.60

10.09
.04
38.14

940

995

1,006

1,003

1,082

1,204

1,338

1,450

1,604

1,746

Capital account
MEMO

Commercial real estate loans
Other real estate owned
Managed liabilities
Average net consolidated assets
(billions of dollars)




Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

391

A.2.—Continued
C. Banks ranked 11th through 100th by assets
Item

1989

1990

1991

1992

1993

1994

1995

Effective interest rate (percent)

1996

1997

1998

3

Rates earned
Interest-earning assets
Taxable equivalent
Loans and leases, gross
Net of loss provisions
Securities
Taxable equivalent
Investment account
U.S. government and other debt
State and local
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories

11.10
11.27
11.74
9.87
8.76
9.36
8.77
9.09
7.41
8.73
8.66
9.35
11.35

10.46
10.55
11.09
9.08
8.86
9.18
8.92
9.18
7.32
8.09
8.01
8.15
9.72

9.30
9.39
9.96
7.98
8.23
8.57
8.37
8.51
7.23
7.36
6.46
5.80
8.15

7.97
8.07
8.75
7.45
7.00
7.30
7.12
7.16
6.80
6.71
4.73
3.70
6.76

7.35
7.45
8.25
7.46
6.05
6.32
6.14
6.14
6.30
5.20
4.74
3.11
6.50

7.29
7.37
8.22
7.68
5.70
5.92
5.70
5.69
6.04
5.00
5.75
4.31
4.69

8.31
8.37
9.10
8.49
6.38
6.56
6.34
6.38
6.05
5.68
7.27
5.91
6.78

8.16
8.23
8.87
8.05
6.42
6.66
6.41
6.50
5.84
4.84
6.53
5.31
5.82

8.31
8.36
9.03
8.11
6.50
6.70
6.52
6.63
5.58
5.07
6.05
5.45
5.77

8.10
8.16
8.82
8.01
6.21
6.46
6.22
6.31
5.36
5.26
5.86
5.47
5.57

Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large-denomination time deposits 4
Small-denomination time deposits 4
Gross federal funds purchased and RPs
Other interest-bearing liabilities

8.66
8.14
11.08
7.61
4.57
6.42
8.75
8.72
9.35
10.23

7.96
7.55
10.08
7.15
4.67
6.07
8.11
8.09
8.12
9.27

6.41
6.27
8.39
6.01
4.21
5.04
6.77
6.96
5.75
6.55

4.43
4.30
7.26
3.96
2.43
3.07
5.10
5.07
3.57
5.77

3.76
3.51
7.37
2.98
1.70
2.33
4.30
4.06
3.04
5.97

3.72
3.25
4.60
3.03
1.62
2.46
4.21
4.18
4.28
5.24

4.94
4.35
6.30
4.01
1.89
3.10
5.70
5.35
5.86
6.43

4.70
4.15
5.29
3.96
1.78
2.91
5.50
5.26
5.19
5.95

4.79
4.22
5.23
4.04
2.01
2.84
5.47
5.43
5.29
5.85

4.76
4.15
5.22
3.96
2.41
2.77
5.32
5.33
5.23
5.80

Income and expense as

percentage of average net consolidated assets

Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse RPs
Other

9.77
9.91
7.51
1.26
.36
.65

9.31
9.39
7.01
1.37
.38
.56

8.24
8.31
6.15
1.36
.28
.45

7.12
7.19
5.23
1.37
.18
.34

6.58
6.64
4.84
1.26
.15
.32

6.46
6.51
4.91
1.13
.21
.21

7.40
7.45
5.79
1.13
.27
.21

7.24
7.28
5.80
1.03
.23
.18

7.26
7.30
5.87
.98
22
.19

7.16
7.20
5.79
1.00
.19
.18

Gross interest expense
Deposits
Gross federal funds purchased and RPs
Other

6.50
4.59
1.24
.66

6.08
4.36
1.12
.60

4.80
3.75
.67
.38

3.26
2.48
.43
.35

2.74
1.93
.38
,43

2.67
1.73
.51
.43

3.62
2.29
.67
.66

3.39
2.18
.55
.66

3.41
2.23
.51
.68

3.45
2.23
.51
.71

Net interest income
Taxable equivalent

3.27
3.41

3.23
3.31

3.43
3.51

3.86
3.93

3.84
3.91

3.79
3.85

3.78
3.84

3.84
3.89

3.85
3.89

3.71
3.74

Loss provisioning

5

1.20

1.27

1.22

.78

.47

.32

.39

.54

.60

.53

Noninterest income
Service charges on deposits
Income from fiduciary activities
Trading income
Interest rate exposures
Foreian exchange exposures
Equity, commodity, and other exposures
Other

1.86
.31
.35
.08
n.a.
n.a.
n.a.
1.12

1.84
.34
.33
.08
n.a.
n.a.
n.a.
1.09

2.05
.41
.36
.10
n.a.
n.a.
n.a.
1.19

2.25
.44
.38
.09
n.a.
n.a.
n.a.
1.33

2.29
.46
.38
.14
n.a.
n.a.
n.a.
1.32

2.25
.45
.39
.08
n.a.
n.a.
n.a.
1.33

2.38
.44
.40
.09
n.a.
n.a.
n.a.
1.45

2.61
.44
.43
.08
.03
.04
.01
1.67

2.76
.44
.44
.08
.02
.05

3.07
.42
.49
.09
.03
.06

1.79

2.07

Noninterest expense
Salaries, wages, and employee benefits
Expenses of premises and fixed assets
Other

3.34
1.47
.50
1.37

3.44
1.47
.50
1.48

3.77
1.52
.51
1.74

3.98
1.53
.49
1.95

3.95
1.52
.47
1.95

3.86
1.50
.47
1.89

3.79
1.47
.47
1.85

3.85
1.51
.48
1.86

3.85
1.51
.46
1.88

4.03
1.53
.46
2.04

Net noninterest expense

.96

*

1.47

1.60

1.73

1.73

1.65

1.61

1.41

1.24

1.10

Realized gains on investment account securities .

.04

.03

.14

.15

.09

-.01

.02

.02

.02

.03

Income before taxes and extraordinary items . . . .
Taxes
Extraordinary items

.65
.18

.62
.19
.03

1.50
.48
.03

1.81
.56

1.85
.63

2.01
.70

2.09
.75

2.18
.77

2.24
.79

*

.38
.15
.01

Net income (return on assets)
Cash dividends declared
Retained income

.47
.40
.06

.24
.38
-.14

.47
.47

1.04
.46
.58

1.25
.76
.49

1.22
.86
.36

1.31
.85
.46

1.34
1.07
.26

1.42
.93
.48

1.46
.96
.50

8.41

4.18

7.71

15.16

16.86

16.27

16.84

16.78

17.36

17.42

MEMO: Return on equity

*

*

*

*

*

*

* In absolute value, less than 0.005 percent.
DEFINITIONS.
n.a. Not available.
MMDA Money market deposit account.
RP Repurchase agreement.
C D Certificate of deposit.
1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve.
2. Before 1994. the netted value of off-balance-sheet items appeared in "trading account securities"
if a gain and "other non-interest-bearing liabilities" if a loss.
3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports.
4. Before 1997. data for large time open accounts are included in small-denomination time deposits.
5. Includes provisions for loan and lease losses and for allocated transfer risk.




*

392

Federal Reserve Bulletin • June 1999

A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1989-98
D. Banks ranked 101st through 1,000th by assets
Item

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Balance sheet items as a percentage of average net consolidated assets
Interest-earning assets
Loans and leases, net
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
In domestic offices
Construction and land development
Farmland
One- to four-family residential
Home equity
Other
Multifamily residential
Nonfarm nonresidential
In foreign offices
Depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
LESS: Unearned income on loans
LESS: Loss reserves'
Securities
Investment account
Debt
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage pools . . .
Collateralized mortgage obligations
Other
State and local government
Private mortgage-backed securities
Other
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Non-interest-earning assets
Revaluation gains on off-balance-sheet items 2 . . .
Other

88.98
63.62
17.68
17.53
.15
15.49
4.83
10.66
25.97
25.95
4.82
.27
11.56
2.08
9.48
.70
8.61
.01
.92
.16
.45
3.77
.82
-.56
-1.07
18.75
18.38
18.02
5.91

88.84
63.09
16.69
16.56
.13
15.48
5.22
10.26
27.01
26.99
4.37
.28
12.49
2.31
10.18
.73
9.11
.03
1.05
.09
.47
3.16
.83
-.50
-1.20
19.34
18.87
18.54
5.44

88.91
61.03
15.04
14.88
.16
15.13
5.74
9.39
27.51
27.47
3.66
.28
13.22
2.53
10.69
.80
9.50
.05
.93
.07
.49
2.81
.85
-.40
-1.42
21.28
20.91
20.55
6.16

89.02
58.49
13.34
13.16
.18
14.18
5.37
8.80
28.11
28.07
2.86
.32
14.26
2.56
11.69
.96
9.69
.04
.80
.05
.54
2.47
.79
-.30
-1.49
24.13
23.78
23.32
7.75

89.55
57.94
12.19
12.03
.16
14.83
5.63
9.20
28.61
28.59
2.26
.34
15.17
2.50
12.67
1.07
9.75
.02
.43
.03
.56
2.16
.77
-.21
-1.44
25.92
25.64
25.16
8.64

90.09
59.75
12.07
11.90
.16
15.85
6.06
9.79
29.42
29.39
2.08
.36
16.24
2.33
13.91
1.13
9.57
.03
.40
.02
.62
2.01
.83
-.15
-1.30
25.71
25.40
24.95
8.26

90.12
62.18
12.70
12.54
.16
16.25
6.30
9.95
30.82
30.80
2.21
.40
17.49
2.36
15.13
1.21
9.48
.02
.35
.02
.69
1.80
.90
-.12
-1.22
23.09
22.89
22.43
6.49

90.13
62.63
12.79
12.61
.18
15.88
6.66
9.22
31.37
31.35
2.38
.46
17.34
2.31
15.04
1.29
9.88
.02
.48
.02
.71
1.69
1.01
-.10
-1.22
22.67
22.55
22.03
5.61

90.31
62.21
12.43
12.20
.23
13.99
5.48
8.51
33.26
33.23
2.69
.53
18.16
2.30
15.85
1.29
10.57
.02
.57
.02
.74
1.50
.99
-.10
-1.18
23.47
23.36
22.75
4.95

90.38
61.12
12.45
12.13
.32
12.29
4.48
7.81
33.97
33.95
2.89
.56
18.21
2.15
16.06
1.26
11.04
.02
.50
.02
.80
1.32
.98
-.09
-1.13
24.28
24.17
23.48
3.93

6.07
3.03
n.a.
3.04
3.50
n.a.
2.55
.35
.38
4.11
2.49
11.02
n.a.
11.02

7.75
3.83
1.72
2.19
3.11
n.a.
2.25
.32
.48
4.51
1.90
11.16
n.a.
11.16

9.35
4.51
2.73
2.11
2.65
1.16
1.23
.37
.36
4.71
1.89
11.09
n.a.
11.09

11.08
4.74
3.95
2.39
2.27
1.01
1.21
.46
.35
4.92
1.47
10.98
n.a.
10.98

12.32
4.97
4.82
2.53
2.26
.84
1.10
.48
.28
4.48
1.20
10.45
n.a.
10.45

12.67
5.57
4.39
2.71
2.29
.75
.99
.44
.31
3.64
.98
9.91
.02
9.90

12.23
5.42
3.56
3.25
2.13
.68
.89
.47
.20
3.91
.93
9.88
.05
9.83

12.66
5.68
3.12
3.85
2.24
.76
.77
.52
.12
3.87
.96
9.87
.02
9.84

13.98
6.23
3.02
4.73
2.45
.59
.78
.61
.10
3.59
1.03
9.69

15.13
6.47
3.23
5.44
2.71
.65
1.06
.69
.11
4.17
.82
9.62

9.69

9.61

Liabilities
Interest-bearing liabilities
Deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Small-denomination time deposits
Large-denomination time deposits
Gross federal funds purchased and RPs
Other
Non-interest-bearing liabilities
Demand deposits in domestic offices
Revaluation losses on off-balance-sheet items 2 .
Other

93.28
76.42
63.74
2.09
61.65
7.14
19.52
22.08
12.91
9.21
3.47
16.85
14.86
n.a.
1.99

93.07
77.04
65.05
1.65
63.40
7.31
19.69
24.09
12.31
8.43
3.56
16.03
14.07
n.a.
1.96

92.89
77.26
66.35
1.76
64.59
7.83
20.79
25.22
10.76
7.46
3.45
15.63
13.56
n.a.
2.07

92.47
75.98
65.65
1.56
64.09
9.14
23.34
23.56
8.06
7.17
3.15
16.49
14.39
n.a.
2.10

91.85
74.42
63.05
1.43
61.62
9.94
24.06
20.77
6.85
7.43
3.93
17.43
15.07
n.a.
2.36

91.62
74.77
60.38
1.69
58.69
9.70
22.92
19.29
6.78
8.45
5.94
16.85
14.58
.02
2.25

91.36
75.00
59.69
1.71
57.97
8.54
20.76
21.12
7.56
8.31
7.00
16.36
14.07
.05
2.24

91.06
75.06
59.99
1.33
58.66
6.21
22.51
21.61
8.34
8.19
6.88
16.00
13.84
.02
2.14

90.79
75.19
61.51
1.23
60.28
4.97
23.60
22.05
9.66
7.08
6.59
15.60
13.16
.01
2.44

90.54
75.44
62.45
1.29
61.16
4.24
25.66
21.25
10.01
6.16
6.83
15.10
11.89
.01
3.20

6.72

6.93

7.11

7.53

8.15

8.38

8.64

8.94

9.21

9.46

n.a.
.43
27.73

n.a.
.52
26.00

14.63
.77
23.48

13.91
.80
20.00

13.37
.57
19.69

13.05
.28
22.89

13.20
.17
24.61

13.84
.13
24.78

14.79
.11
24.63

15.40
.09
24.42

892

937

962

968

977

1,032

1,092

1,076

967

935

Capital account

*

*

MEMO

Commercial real estate loans
Other real estate owned
Managed liabilities
Average net consolidated assets
(billions of dollars)




Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

393

A.2.—Continued
D. Banks ranked 101st through 1,000th by assets
Item

1989

1990

1991

1992

1993

1994

1995

Effective interest rate (percent)
Rates earned
Interest-earning assets
Taxable equivalent
Loans and leases, gross
Net of loss provisions
Securities
Taxable equivalent
Investment account
U.S. government and other debt
State and local
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including M M D A s )
Large-denomination time deposits 4
Small-denomination time deposits 4
Gross federal funds purchased and RPs
Other interest-bearing liabilities

1996

1997

1998

3

10.75
10.96
11.61
10.45
8.34
8.97
8.35
8.64
7.28
7.00
7.61
9.05
9.21

10.42
10.57
11.21
9.48
8.52
9.00
8.49
8.76
7.33
6.94
9.92
7.99
8.52

9.55
9.70
10.43
8.72
8.11
8.54
8.12
8.30
7.25
6.02
7.19
5.64
6.82

8.14
8.25
9.11
7.83
6.88
7.19
6.90
6.95
6.83
5.08
5.61
3.47
4.61

7.43
7.55
8.57
7.76
5.78
6.10
5.79
5.76
6.30
4.95
4.74
3.02
3.51

7.58
7.68
8.64
8.11
5.69
5.93
5.69
5.68
5.92
5.30
5.29
4.06
4.28

8.42
8.51
9.43
8.76
6.23
6.49
6.24
6.28
5.80
6.05
5.55
5.45
6.09

8.40
8.49
9.38
8.59
6.31
6.59
6.31
6.40
5.50
6.30
5.94
5.24
5.54

8.50
8.59
9.48
8.60
6.42
6.69
6.42
6.55
5.36
6.35
6.37
5.41
5.49

8.32
8.44
9.37
8.61
6.22
6.57
6.22
6.36
5.16
6.36
6.48
5.30
5.75

7.72
7.36
8.98
7.31
4.88
6.13
8.70
8.31
9.01
9.08

7.26
7.05
8.12
7.02
4.75
5.98
8.04
8.03
7.86
8.28

6.11
6.06
6.38
6.05
4.28
5.14
6.64
7.08
5.62
6.78

4.19
4.17
4.25
4.17
2.67
3.33
4.76
5.35
3.46
5.28

3.33
3.26
3.35
3.25
2.02
2.58
3.90
4.40
2.95
4.44

3.57
3.31
4.31
3.28
1.87
2.64
4.23
4.40
4.12
4.92

4.64
4.26
5.94
4.21
2.02
3.24
5.62
5.53
5.61
6.27

4.57
4.26
5.43
4.23
1.96
3.11
5.47
5.57
5.16
5.89

4.66
4.34
5.42
4.32
2.17
3.08
5.56
5.57
5.21
6.12

4.59
4.28
5.54
4.26
2.16
2.97
5.50
5.64
5.13
6.00

Income and expense as

percentage of average net consolidated assets

Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse RPs
Other

9.68
9.86
7.52
1.54
.38
.25

9.38
9.51
7.21
1.60
.36
.20

8.64
8.76
6.52
1.70
.28
.15

7.36
7.46
5.46
1.64
.17
.08

6.75
6.84
5.07
1.49
.14
.06

6.90
6.99
5.26
1.45
.14
.06

7.68
7.76
5.98
1.43
.21
.07

7.67
7.75
5.99
1.42
.20
.06

7.76
7.84
6.01
1.50
.19
.06

7.64
7.72
5.86
1.50
.22
.05

Gross interest expense
Deposits
Gross federal funds purchased and RPs
Other

5.84
4.69
.83
.31

5.54
4.58
.67
.29

4.68
4.03
.42
.23

3.16
2.75
.25
.17

2.46
2.07
.22
.17

2.65
2.01
.35
.29

3.46
2.56
.46
.44

3.40
2.57
.43
.40

3.47
2.70
.37
.40

3.45
2.72
.32
.41

Net interest income
Taxable equivalent

3.84
4.02

3.83
3.97

3.96
4.08

4.19
4.30

4.28
4.38

4.25
4.34

4.23
4.31

4.27
4.35

4.29
4.37

4.19
4.28

Loss provisioning 5

.75

1.12

1.07

.77

.47

.33

.43

.50

.56

.48

1.38
.36
.25
.04
n.a.
n.a.
n.a.
.74

1.50
.37
.26
.02
n.a.
n.a.
n.a.
.84

1.65
.40
.27
.04
n.a.
n.a.
n.a.
.95

1.69
.44
.28
.02
n.a.
n.a.
n.a.
.95

1.84
.45
.29
.03
n.a.
n.a.
n.a.
1.08

1.86
.42
.28
.02
n.a.
n.a.
n.a.
1.14

1.84
.42
.27
.03
n.a.
n.a.
n.a.
1.12

1.88
.42
.28
.02
.01
.01

2.08
.40
.32
.01
.01

2.25
.39
.34
.01
.01

1.16

1.34

1.51

Noninterest expense
Salaries, wages, and employee benefits
Expenses of premises and fixed assets
Other

3.45
1.48
.49
1.49

3.50
1.47
.49
1.55

3.77
1.48
.49
1.80

3.87
1.51
.49
1.87

3.92
1.51
.48
1.93

3.78
1.49
.46
1.83

3.68
1.44
.45
1.79

3.68
1.44
.45
1.80

3.73
1.51
.46
1.76

3.87 1
1.57 1
.47
1.83 1

Net noninterest expense

2.07

2.01

2.12

2.18

2.08

1.92

1.84

1.81

1.65

1.61

1

.01

.01

.09

.10

.06

-.05

-.01

.02

.02

.04

|

1.02
.32

.72
.21

.86
.29
-.07

1.35
.44

1.96
.67

1.96
.67

1.98
.69

2.10
.73

Noninterest income
Service charges on deposits
Income from fiduciary activities
Trading income
Interest rate exposures
Foreign exchange exposures
Equity, commodity, and other exposures
Other

...

Realized gains on investment account securities .
Income before taxes and extraordinary items
Taxes
Extraordinary items
Net income (return on assets)
Cash dividends declared
Retained income
MEMO: Return on equity

*

*
*

*

*

1.78
.61
.04

.71
.48
.23

.51
.53
-.02

.49
.33
.16

.91
.49
.42

1.22
.79
.43

1.29
.81
.48

1.28
.87
.41

1.29
1.04
.25

1.37
1.10
.28

1.47
1.02
.45

10.54

7.37

6.93

12.13

14.93

15.40

14.82

14.45

14.93

15.53

*

*

*

*

*

*

* In absolute value, less than 0.005 percent.
DEFINITIONS.
n.a. Not available.
M M D A Money market deposit account.
RP Repurchase agreement.
C D Certificate of deposit.
1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve.
2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities"
if a gain and "other non-interest-bearing liabilities" if a loss.
3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports.
3. Includes provisions for loan and lease losses and for allocated transfer risk.
4. Before 1997, data for large time open accounts are included in small-denomination time deposits.
5. Includes provisions for loan and lease losses and for allocated transfer risk.




*

2.14 1
.73 1
.06 |

j
1
|

394

Federal Reserve Bulletin • June 1999

A.2.

Portfolio composition, interest rates, and income and expense, all U.S. banks, 1989-98
E. Banks not ranked among the 1.000 largest by assets
Item

1989

1990

1991

1992

1993

1994

1

1995

1996

1997

1998

91.65
58.77
10.15
10.07
.08
9.06
.91
8.15
35.51
35.50
2.82
2.68
18.15
1 ">4
16 91
.95
10.91

91.88
59.13
10.33
10.25
.08
8.48
.71
7.77
36.04
36.04
3.01
2.83
18.05
1 ">1
16 84
.93
11.21

Balance sheet items as a percentage of average net consolidated assets
Interest-earning assets
Loans and leases, net
Commercial and industrial
U.S. addressees
Foreign addressees
Consumer
Credit card
Installment and other
Real estate
In domestic offices
Construction and land development
Farmland
One- to four-family residential
Other
Multifamily residential
Nonfarm nonresidential
In foreign offices
Depository institutions
Foreign governments
Agricultural production
Other loans
Lease-financing receivables
LESS: Unearned income on loans
LESS: LOSS r e s e r v e s '

Securities
Investment account
Debt
U.S. Treasury
U.S. government agency and
corporation obligations
Government-backed mortgage pools . . .
Collateralized mortgage obligations
Other
State and local government
Private mortgage-backed securities
Other
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Non-interest-earning assets
Revaluation gains on off-balance-sheet items 2 . . .
Other
Liabilities
Interest-bearing liabilities
Deposits
In foreign offices
Other checkable deposits
Small-denomination time deposits
Large-denomination time deposits
Gross federal funds purchased and RPs
Other
Non-interest-bearing liabilities
Demand deposits in domestic offices
Revaluation losses on off-balance-sheet items 2 .
Other
Capital account

90.90
54.84
12.10
12.07
.03
11.46
.93
10.53
27.36
27.36
2.29
1.82
14.81
.94
13.86
.62
7.82

91.06
54.74
11.53
11.49
.04
11.20
1.00
10.20
28.35
28.35
2.37
1.86
15.37
1.16
14.21
.66
8.09

91.25
54.05
10.60
10.56
.04
10.44
1.02
9.42
29.34
29.33
2.18
1.93
16.00
1.29
14 71
.71
8.50

91.39
53.03
9.74
9.69
.04
9.69
1.00
8.69
30.15
30.15
1.98
2.06
16.44
1 34
15 10
.77
8.90

*

*

*

*

.26
.01
3.28
1.67
.19
-.60
-.88
27.92
27.85
27.45
8.84

.23
.01
3.30
1.41
.18
-.58
-.89
28.38
28.28
27.92
8.77

.20
.01
3.48
1.24
.17
-.51
-.93
29.99
29.94
29.56
9.24

.13
.01
3.55
.99
.17
-.43
-.96
32.10
32.04
31.60
10.25

.12
.02
3.58
.87
.18
-.36
-.97
33.06
33.00
32.55
10.48

.13
.01
3.89
.81
.20
-.31
-.95
32.90
32.86
32.42
10.81

3.95
.76
22
-.30
-.93
30.50
30.46
30.01
9.19

11.37
3.76
n.a.
7.61
4.94
n.a.
2.29
.40
.07
5.74
2.40
9.10
n.a.
9.10

12.43
4.58
.90
6.93
4.56
n.a.
2.15
.36
.10
6.13
1.81
8.94
n.a.
8.94

13.82
5.59
1.56
6.68
4.26
.89
1.34
.38
.06
5.64
1.57
8.75
n.a.
8.75

15.04
5.52
2.66
6.85
4.29
.77
1.26
.44
.05
5.10
1.16
8.61
n.a.
•8.61

15.80
5.38
3.33
7.09
4.70
.47
1.10
.45
.07
4.69
.97
8.35
n.a.
8.35

15.35
4.81
3.11
7.43
5.01
.27
.98
.44
.04
3.42
.77
8.28

15.12
4.19
2.75
8.18
4.69
.20
.81
.45
.03
3.92
.67
8.30

8.28

8.30

8.36

8.35

8.12

91.44
77.13
75.00
.06
74.93
10.38
19.S1
33.66
11.38
1.35
.78
14.31
13.09
n.a.
1.22

91.40
77.83
75.79
.07
75.72
10.45
18.73
35.37
11.17
1.36
.67
13.57
12.37
n.a.
1.21

91.37
78.39
76.40
.08
76 33
10.99
19 35
35.88
10.11
1.31
.68
12.98
11.84
n.a.
1.14

91.07
77.83
75.75
.07
75 68
12.33
22 10
32.85
8.40
1.36
.72
13.24
12.23
n.a.
1.01

90.63
76.89
74.53
.08
74 45
13.15
23 5 5
30.10
7.65
1.44
.91
13.75
12.82
n.a.
.93

90.43
76.19
73.14
.09
73 05
13.31
23 ">3
28.83
7.68
1.89
1.16
14.25
13.34

90.03
75.74
72.68
.11
7° 56
12.37
">0 40
30.91
8.88
1.78
1.28
14.29
13.22

89.81
75.58
72.47
.10
1"> 36
11.75
19 56
31.28
9.77
1.70
1.41
14.23
13.13

89.62
75.47
71.99
.09
71 90
11.37
18 98
31.05
10.49
1.68
1.80
14.15
13.09

89.53
75.35
71.76
.07
71 70
11.17
19 01
30.42
11.10
1.50
2.09
14.18
13.08

.90

1.07

1.10

1.06

1.10

8.56

8.60

8.63

8.93

9.37

9.57

9.97

10.19

10.38

10.47

n.a.
.63
13.59

n.a.
.61
13.29

11.74
.66
12.19

11.84
.65
10.56

12.22
.52
10.10

13.02
.35
10.83

13.71
.25
12.08

14.18
.20
13.00

14.78
.16
14.08

15.26
.13
14.77

662

681

694

697

688

679

666

661

648

644

91.65
52.94
9.24
9.20
.04
9.18
.93
8.25
31.09
31.08
1.93
2.20
16.81
1 V
15 54
.84
9.30

91.72
54.64
9.31
9.26
.05
9.37
.96
8.41
32.19
32.19
2.14
2.34
16.95
1 "M
15 73
.93
9.83
*

*

*

91.70
56.62
9.65
9.59
.06
9.57
1.04
8.53
33.54
33.54
2.38
2.48
17.45
1 20
16
.95
10.27

91.64
57.37
9.98
9.90
.07
9.41
1.03
8.38
34.10
34.09
2.61
2.55
17.47
1 19
16 ''S
.92
10.54

*

.16

*

.17

*

*

.17

*

.12

*

*

3.93
.72
.23
-.27
-.90
29.53
29.50
29.01
7.85

4.05
.70
.25
-.24
-.88
28.21
28.18
27.65
6.70

4.27
.69
.25
-.20
-.86
26.67
26.65
26.11
5.05

15.67
4.21
2.46
9.00
4.62
.18
.68
.49
.03
4.05
.69
8.36

15.55
4.00
2.19
9.37
4.59
.19
.61
.52
.03
3.96
.71
8.35

15.42
3.90
2.01
9.51
4.80
.16
.68
.54
.02
5.12
.96
8.12

*

*

*

*

*

*

MEMO

Commercial real estate loans
Other real estate owned
Managed liabilities
Average net consolidated assets
(billions of dollars)




Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998

395

A.2.—Continued
E. Banks not ranked among the 1,000 largest by assets
Item

1989

1990

1991

1992

1993

1994

"T
J

1995

1996

1997

1998

Effective interest rate (percent) 3
Rates earned
Interest-earning assets
Taxable equivalent
Loans and leases, gross
Net of loss provisions
Securities
Taxable equivalent
Investment account
U.S. government and other debt
State and local
Equity
Trading account
Gross federal funds sold and reverse RPs
Interest-bearing balances at depositories
Rates paid
Interest-bearing liabilities
Interest-bearing deposits
In foreign offices
In domestic offices
Other checkable deposits
Savings (including MMDAs)
Large-denomination time deposits 4
Small-denomination time deposits 4
Gross federal funds purchased and RPs
Other interest-bearing liabilities

10.50
10.72
11.76
10.87
8.37
9.01
8.36
8.53
7.57
8.12
14.84
9.25
9.11

10.31
10.52
11.60
10.65
8.42
8.99
8.41
8.59
7.46
8.30
12.13
8.12
8.55

9.64
9.82
11.02
10.08
8.04
8.53
8.04
8.20
7.17
7.14
8.41
5.66
7.35

8.43
8.59
9.83
9.05
6.99
7.40
6.99
7.06
6.70
5.64
7.14
3.51
5.59

7.62
7.78
9.14
8.63
5.92
6.33
5.92
5.91
6.09
5.16
4.83
2.95
4.53

7.57
7.72
9.00
8.65
5.61
5.99
5.61
5.59
5.69
5.52
6.03
4.08
4.64

8.41
8.56
9.85
9.42
6.09
6.49
6.09
6.17
5.64
6.26
6.12
5.95
5.91

8.35
8.49
9.74
9.31
6.10
6.52
6.10
6.23
5.44
6.06
6.48
5.39
6.10

8.50
8.63
9.81
9.36
6.25
6.65
6.25
6.43
5.32
6.40
6.60
5.51
5.70

8.33
8.50
9.70
9.22
5.98
6.47
5.98
6.16
5.14
6.11
6.45
5.36
5.68

7.16
7.10
9.35
7.10
5.09
5.82
8.35
8.03
8.52
8.31

7.02
6.96
7.57
6.96
5.02
5.73
7.92
7.88
8.03
7.84

6.17
6.15
5.95
6.15
4.61
5.18
6.72
6.98
5.72
7.06

4.44
4.44
3.97
4.44
3.14
3.62
4.90
5.36
3.74
5.01

3.54
3.53
2.91
3.53
2.42
2.91
3.96
4.39
3.17
4.64

3.49
3.44
3.92
3.44
2.29
2.83
4.12
4.28
4.12
4.98

4.47
4.39
5.73
4.39
2.50
3.32
5.55
5.51
5.62
6.87

4.49
4.44
11.43
4.43
2.41
3.24
5.49
5.59
5.10
5.84

4.61
4.54
4.77
4.54
2.46
3.37
5.53
5.67
5.23
6.15

4.61
4.53
5.08
4.53
2.45
3.39
5.54
5.64
5.05
6.44

Income and expense as a percentage of average net consolidated assets
Gross interest income
Taxable equivalent
Loans
Securities
Gross federal funds sold and reverse RPs
Other

9.65
9.85
6.53
2.33
.57
.23

9.51
9.68
6.44
2.38
.53
.17

8.91
9.06
6.04
2.41
.34
.12

7.79
7.94
5.30
2.24
.18
.07

7.05
7.19
4.91
1.95
.14
.05

7.01
7.15
4.98
1.84
.15
.04

7.80
7.93
5.66
1.86
.25
.04

7.75
7.87
5.67
1.80
.24
.04

7.89
8.01
5.85
1.76
.24
.04

7.74
7.86
5.80
1.59
.29
.06

Gross interest expense
Deposits
Gross federal funds purchased and RPs
Other

5.50
5.32
.12
.06

5.44
5.28
.11
.05

4.82
4.70
.07
.05

3.45
3.36
.05
.04

2.72
2.63
.04
.04

2.65
2.52
.07
.06

3.38
3.19
.10
.09

3.38
3.22
.08
.08

3.47
3.28
.08
.11

3.46
3.25
.07
.13

Net interest income
Taxable equivalent

4.15
4.35

4.07
4.24

4.09
4.24

4.34
4.49

4.33
4.48

4.36
4.50

4.42
4.55

4.37
4.49

4.41
4.54

4.28
4.40

Loss provisioning

5

.50

.53

.51

.42

.27

.19

.25

.25

.27

.29

1.00
.41
.14
.01
n.a.
n.a.
n.a.
.44

1.01
.42
.14
.01
n.a.
n.a.
n.a.
.44

1.07
.44
.14
.01
n.a.
n.a.
n.a.
.49

1.16
.45
.16
.01
n.a.
n.a.
n.a.
.55

1.25
.45
.16
.01
n.a.
n.a.
n.a.
.64

1.30
.44
.17

1.42
.44
.20

1.44
.44
.20

1.53
.42
.23

n.a.
n.a.
n.a.
.69

1.38
.44
.22
.01
n.a.
n.a.
n.a.
.71

Noninterest expense
Salaries, wages, and employee benefits
Expenses of premises and fixed assets
Other

3.49
1.65
.51
1.33

3.49
1.64
.49
1.36

3.59
1.64
.49
1.46

3.67
1.69
.49
1.49

3.74
1.72
.48
1.53

3.78
1.75
.49
1.55

Net noninterest expense

2.49

2.48

2.52

2.51

2.48

2.48

.06

.09

.07

-0.03

Noninterest income
Service charges on deposits
Income from fiduciary activities
Trading income
Interest rate exposures
Foreign exchange exposures
Equity, commodity, and other exposures
Other

...

Realized gains on investment account securities .
Income before taxes and extraordinary items
Taxes
Extraordinary items
Net income (return on assets)
Cash dividends declared
Retained income
MEMO: Return on equity

—

.01

*

*

*
*

*

*

*

*

*

*

*

.78

.79

.88

3.81
1.80
.50
1.51

3.70
1.77
.49
1.44

3.70
1.80
.49
1.41

3.74
1.82
.49
1.43

2.43

2.28

2.27

2.21

.01

.01

.02

1.85
.59

1.89
.59

1.80
.54

*

1.17
.37
.02

1.06
.34
.02

1.11
.35
.19

1.50
.47
.02

1.64
.51
.05

1.66
.51

.83
.52
.30

.74
.49
.25

.95
.89
.06

1.04
.50
.54

1.19
.56
.63

1.15
.57
.58

1.20
.62
.58

1.26
.64
.62

1.30
.73
.57

1.26
.83
.44

9.66

8.61

11.05

11.64

12.65

12.05

12.05

12.33

12.54

12.07

*

1.75
.55
*

*

*

* In absolute value, less than 0.005 percent.
DEFINITIONS.
n.a. Not available.
M M D A Money market deposit account.
RP Repurchase agreement.
C D Certificate of deposit.
1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve.
2. Before 1994, the netted value of olf-balance-sheet items appeared in "trading account securities"
if a gain and "other non-interest-bearing liabilities" if a loss.
3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports.
4. Before 1997, data for large time open accounts are included in small-denomination time deposits.
5. Includes provisions for loan and lease losses and for allocated transfer risk.




*

*
*

*

396

Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report describes U.S. Treasury and
System foreign exchange operations for the period
from January through March 1999. It was presented
by Peter R. Fisher, Executive Vice President, Federal
Reserve Bank of New York, and Manager, System
Open Market Account. Laura F. Ambroseno was primarily responsible for preparation of the report.
During the first quarter of 1999, the dollar appreciated 8.4 percent against the euro and 5.3 percent
against the yen. The dollar's value was largely influenced by changes in market expectations for economic growth in the United States, Europe, and
Japan. Against the euro, the dollar strengthened as
the differential between U.S. and European interest
rates moved increasingly in favor of the dollar.
Against the yen, the dollar fell to a two-and-a-halfyear low, then rebounded after the Bank of Japan
reportedly intervened to counter yen appreciation and
subsequently guided overnight interest rates to near
zero. The U.S. monetary authorities did not intervene
in the foreign exchange markets during the quarter.

PARTIAL

RECOVERY

OF RISK

APPETITE

At the outset of the new year, trading in the major
currencies was thin. Reduced activity was attributed
in part to a decline in speculative trading and a
tentative return of asset managers to higher-yielding
markets. Euro trading volumes remained below historical German mark trading volumes over comparable time frames; uncertainty regarding the behavior
of the newly established European Central Bank
(ECB) contributed to the low volume.
Although new investment supported selected
emerging markets and high-yield assets, lingering
concern about overall risk exposure resulted in
heightened differentiation and relatively high risk
premiums. The devaluation of the Brazilian real on
January 13 evoked some apprehension, but reaction
was fairly muted as a result of the position unwinding
that had already occurred after the Russian currency
devaluation and debt moratorium in August 1998.
Reflective of market sentiment, emerging-market



sovereign yield spreads over U.S. Treasuries rose
sharply after the Brazilian currency devaluation but
soon returned to early-January levels. Nonetheless,
spreads generally remained well above pre-Russian
devaluation levels, and many emerging-market
mutual funds continued to experience net outflows.
U.S. corporate high-yield spreads over U.S. Treasuries narrowed, reflecting the desire of investors to
increase risk exposure on a selective basis.

RISE OF THE DOLLAR

AGAINST

THE

EURO

The dollar depreciated to $ 1.1832 against the euro on
the first trading day of stage three of the Economic
and Monetary Union. However, the dollar then
steadily appreciated to $1.0765 by quarter-end as
"europhoria" dissipated and market participants
focused on the apparent divergence in the outlooks
for growth between the U.S. and European economies. Over the quarter, the implied yield spread
between September three-month Eurodollar and Euribor (European interbank offered rate for euro deposits) futures contracts widened 49 basis points, to 232
basis points, supported by market expectations of
divergent monetary policy responses to growth trends
by the Federal Open Market Committee (FOMC) and
the ECB Governing Council. Similarly, the spread
between yields of ten-year U.S. Treasuries and German bonds widened 62 basis points from the start of
the quarter, to a decade high of 146 basis points on
February 25.
The dollar was supported throughout most of the
quarter by expectations of a shift in U.S. monetary
policy toward a tightening bias. The change in expectations was prompted by stronger-than-expected economic growth, employment, consumer spending, and
hourly earnings data, which raised concern that the
US. economy might begin to show signs of inflationary pressures. Speculation of a near-term change in
U.S. monetary policy mounted after the HumphreyHawkins testimony on February 23, during which
Chairman Greenspan stated that the FOMC would
evaluate "whether the full extent of the policy easings undertaken last fall to address the seizing-up of

397

1.

Exchange rate of the euro against the dollar, 1999:Q1

3.

Reconstructed trade-weighted exchange rate of the euro,
1990-April 1999

Dollars per euro
Index, 1990 average = 100

—

—

A y \

1
Jan.

—

1.15

—

i.io

1
Feb.
1999

1
Mar.

NOTE. T h e data are daily.
SOURCE. B l o o m b e r g L.P.

NOTE. B e f o r e year-end 1998, the calculation is based o n weighted averages
of euro area countries' effective e x c h a n g e rates; f r o m January 1999, the calculation is based on weighted averages of bilateral euro e x c h a n g e rates. Weights are
based on 1990 manufacturing g o o d s trade and capture third-market effects.
SOURCE. European Central Bank; Bank for International Settlements.

financial markets remains appropriate as those disturbances abate." The implied yield of the federal funds
futures contract for September rose 44 basis points
from the start of the quarter, to a high of 5.09 percent
on March 1. U.S. Treasury yields rose in response to
rising short-term yields, heavy corporate bond issuance, and reported sales by Japanese financial institutions before their fiscal year-end on March 31.
Meanwhile, the euro experienced downward pressure from increasing expectations of a euro area rate
cut after several economic data releases indicated
further downside risk to European growth and by
official commentary that was interpreted as suggesting approval of current exchange rate levels. The
resignation of German Finance Minister LaFontaine
on March 11, that was perceived as having reduced
political pressure on the ECB, also contributed to
speculation that the ECB Governing Council would

2.

Spread between implied yields of September three-month
Eurodollar and Euribor futures, 1999:Q1
Basis points

F \J\__S^\A

—

—

.

—

—

J

—

240

J

230

—

220

—

210

—

200

—

190

J
1
Jan.

NOTE. T h e data are daily.
SOURCE. B l o o m b e r g L.P.




1
Feb.
1999

1
Mar.

cut rates sooner than previously expected. Implied
yield of the September three-month Euribor futures
contract fell 27 basis points, to 2.79 percent by
quarter-end.
Both the euro-dollar exchange rate and spreads
between U.S. and European yields stabilized toward
the end of the quarter, as expectations for a near-term
shift in U.S. monetary policy receded after the release
of U.S. wage data suggesting that inflationary pressures remained quiescent. On a trade-weighted basis,
the euro depreciated 5.3 percent over the quarter,
approaching the lower end of its reconstructed tenyear trading range.
STRENGTHENING OF THE
AGAINST THE YEN

DOLLAR

The dollar began the new year at ¥112.80, but soon
depreciated to a multiyear low of ¥108.22 on January 11, as Japanese investors reallocated funds from
U.S. assets to European and Japanese assets. International investors also expressed interest in Japanese
assets, as evidenced by strong foreign demand for
Japanese bonds auctioned on January 7. In addition,
the perception that Japanese monetary conditions
tightened as funding pressures abated at the calendar
year-end, along with renewed investor focus on the
U.S. current account deficit, appeared to weigh on the
dollar-yen exchange rate early in the period.
On January 12, the dollar gained more than four
yen from the day's low of ¥108.62 after the Bank
of Japan reportedly intervened by selling yen in the
foreign exchange market. Market participants interpreted the reported intervention as Japanese resis

398

Federal Reserve Bulletin • June 1999

4. Exchange rate of the dollar against the Japanese yen,
1999:Q1

6. Spread between ten-year U.S. Treasury and Japanese
government bond yields, 1999:Q1

Yen per dollar

\

—

—

—

1

1
Jan.

1
Feb.
1999

r v

120

—

115

—

110

1
Mar.

Basis points

k / \

—

J

350

—

300

—

250

1

1
Jan.

NOTE. The data are daily.
SOURCE. Bloomberg L.P.

V

Feb.
1999

Mar.

NOTE. The data are daily.
SOURCE. Bloomberg L.P.

tance to yen appreciation above ¥110. Options prices
indicated that market anxiety over the possibility of a
rapid rise in the yen's value receded after the reported
intervention, with one-month implied volatility falling from a high of more than 22 percent on January 5
to about 17 percent by quarter-end. In addition, the
premium for one-month yen call options over onemonth yen put options, as measured by risk reversal
prices, fell from a record high of nearly 4.5 percent
on January 6 to approximately 1.2 percent by quarterend, indicating less demand for protection against
further yen appreciation.
In the weeks following the reported intervention,
the dollar traded in a range between ¥110 and ¥117,
supported both by commentary from Japanese offi5. One-month dollar-yen risk reversals, 1999:Q1
Percent

cials suggesting that "excessive yen strength" would
elicit intervention and by expectations of continued
disparity between U.S. and Japanese economic
growth. However, several factors limited the dollar's
upward momentum, including narrower long-term
U.S.-Japanese interest rate differentials, concern over
U.S. equity market valuation, and nervousness surrounding the Brazilian currency devaluation. The
yield on the Japanese government benchmark bond
(ten-year) rose 35 basis points from the start of the
quarter, to a high of 2.36 percent on February 5, as
Japanese investors reduced portfolio duration and
realized profits before their fiscal year-end and as
market participants became increasingly concerned
about the Japanese government's apparent acceptance of rising yields. The spread between yields of
ten-year U.S. Treasuries and Japanese government
bonds narrowed to a three-year low of 248 basis
points by February 3.
7. Ten-year Japanese government bond yield, 1999:Q1
Percent

Jan.

Feb.
1999

Mar.

NOTE. The data are daily. A dollar-yen risk reversal is an option position
consisting of a purchased dollar call-yen put and a written dollar put-yen call
that mature on the same date and are equally out-of-the-money. The price of a
risk reversal indicates whether the dollar call or the dollar put is more valuable.
If the dollar call is at a premium, the market is willing to pay more to insure
against the risk that the dollar will rise against the yen. If the dollar put is at a
premium, the market is willing to pay more to insure against the risk that the
dollar will fall against the yen.
SOURCE. Citibank, N.A.




NOTE. The data are daily.
SOURCE. Bloomberg L.P.

Treasury and Federal Reserve Foreign Exchange Operations

The dollar began to appreciate steadily against the
yen after the Bank of Japan reduced the target for the
overnight call rate from 25 to 15 basis points on
February 12 and subsequently guided the rate to as
low as 2 basis points. The dollar was further supported by growing expectations of a shift toward
quantitative monetary targeting in Japan, official
efforts to contain the rapid rise in Japanese bond
yields, and signs of persistent strength in the U.S.
economy. On March 4, the dollar strengthened to a
period high of ¥123.75 and the spread between
ten-year U.S. and Japanese bond yields peaked at
381 basis points, up 133 basis points from its February 3 low.
Throughout March, movements in the dollar-yen
exchange rate fluctuated in response to shifting
expectations for monetary policy objectives and Japanese fiscal year-end dynamics. The dollar initially
moved lower in response to U.S. economic data
releases suggesting that inflation remained subdued.
Meanwhile, the yen was supported by commentary
from Japanese officials implying that a shift in monetary policy toward quantitative targets was unlikely
in the near term and by substantial purchases of
Japanese equities by international investors who were
increasing the weight of Japanese assets in their
portfolios. At the end of the quarter, the dollar-yen
exchange rate drifted back to ¥118.80, as purchases
of Japanese equities subsided and Japanese accounts
reportedly satisfied fiscal year-end foreign exchange
requirements.

TREASURY AND FEDERAL RESERVE FOREIGN
EXCHANGE RESERVES
The U.S. monetary authorities did not undertake any
intervention operations during the quarter. At the end
of the quarter, the current values of euro and Japanese
yen reserve holdings totaled $15.2 billion for the
Federal Reserve System and $15.2 billion for the
Exchange Stabilization Fund. The U.S. monetary
authorities invest all of their foreign currency balances in a variety of instruments that yield marketrelated rates of return and that have a high degree of
liquidity and credit quality. A significant portion of
these balances is invested in German and Japanese
government securities held directly or under repurchase agreement. As of March 31, outright holdings




399

of foreign government securities by U.S. monetary
authorities totaled $7.3 billion.
Japanese and German government securities held
under repurchase agreement are arranged either
through transactions executed directly in the market
or through agreements with official institutions. Foreign government securities held under repurchase
agreement by the U.S. monetary authorities totaled
$12.8 billion at the end of the quarter. Foreign currency reserves are also invested in deposits at the
Bank for International Settlements and in facilities at
other official institutions.
On February 3, 1999, the United States paid the
equivalent of a $14.8 billion increase in its International Monetary Fund (IMF) quota, which had been
previously approved by the Congress. The payment
was not an outlay of funds, but rather an exchange
of monetary assets. In exchange for the payment, the
United States received an increase in its IMF reserve
position, which is an interest-bearing asset. In accordance with agreed-upon IMF procedures, 25 percent
of the quota increase, equal to about $3.7 billion, was
transferred to the IMF in the form of foreign currency reserve assets, specifically euros held by the
U.S. Treasury's Exchange Stabilization Fund (ESF).
Simultaneously, the U.S. Treasury's general account
reimbursed the ESF with dollars in an amount equivalent to the value of the euro reserve transfer. The
remaining 75 percent of the quota increase, equal to
about $11.1 billion, was paid through an increase in
the U.S. letter of credit to the IMF and did not involve
a flow of funds.
Separately, the U.S monetary authorities conducted
an off-market currency transaction that was designed
to redress imbalances in their respective foreign currency holdings. Imbalances had evolved over time
both in terms of the overall level and currency composition of the foreign exchange reserves held by the
Federal Reserve and the ESF. Effective March 18, the
Federal Reserve exchanged approximately $4.8 billion of euros for $1.4 billion of Japanese yen and
$3.4 billion of U.S. dollars from the ESF. The transaction was executed at prevailing market exchange
rates. As designed, this transaction distributed the
overall level of the U.S. monetary authorities' foreign
reserve assets more evenly between the ESF and the
Federal Reserve and left the resulting balances of
euros and yen roughly equal for both accounts (see
table 1).
•

400

Federal Reserve Bulletin • June 1999

1. Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 1999:Q1
Millions of dollars
Quarterly changes in balances by source
Item

Balance,
Dec. 3 1 , 1 9 9 8

Net purchases
and sales'

Effect of
sales 2

Investment
income

Currency
valuation
adjustments 3

Interest accrual
(net) and other 4

-4,780.5
1,418.9
-3,361.6

-18.7
0
-18.7

118.7
3.0
121.7

-915.9
-318.7
-1,234.6

0
0
0

Balance.
Mar. 3 1 , 1 9 9 9

FEDERAL RESERVE
SYSTEM O P E N
MARKET ACCOUNT

E M U euro
Japanese yen
Total
Interest receivables 5
Other cash flow from investments 6 . . .
Total

12,824.0
6,846.9
19,670.9
82.8
14.8

19,768.5

-3361.6

-18.7

121.7

-1,234.6

6,494.4
9,799.4
16,293.8

1,081.1
-1,407.0
-325.9

-10.4
11.9
1.5

45.9
4.2
50.1

-374.4
-458.4
-832.8

7,227.6
7,950.1
15,177.7

-29.1
-.9

53.7
13.9

-30.0

15,245.3

0
0
0

7,236.6
7,950.1
15,186.7

U . S . TREASURY E X C H A N G E
STABILIZATION F U N D ( E S F )

EMU euro
Japanese yen
Total
Interest receivables 5
Other cash flow f r o m investments 6 . . .

44.3
21.4

16,359.5

Total

-325.9

50.1

1.5

-832.8

-12.0
-3.0

32.3
18.4

-15.0

15,237.4

NOTE. Figures may not sum to totals because of rounding.
1. Purchases and sales reflect changes in the foreign currency holdings as a
result of the rebalancing between the S O M A and ESF portfolios and a withdrawal of funds from the ESF euro portfolio to meet an IMF quota.
2. Calculated using marked-to-market exchange rates; represents the difference between the sale exchange rate and the most recent revaluation exchange
rate in addition to the gain or loss resulting from changes in the market values
of the investments sold. See table 2 for realized profits and losses on sales of
foreign currencies computed as the difference between the historic cost-ofacquisition exchange rate and the sale exchange rate, and the gain or loss resulting f r o m the changes in the market values of the investments sold.

3. Foreign currency balances are marked to market monthly at month-end
exchange rates.
4. Includes the ESF's payment to meet its IMF quota.
5. Interest receivables for the ESF are as of February 28, 1999, and are
revalued at February 28, 1999, month-end exchange rates. Interest receivables
for the S O M A are carried at cost and are not marked to market until interest is
paid. SOMA interest receivables are net of unearned interest collected.
6. Cash flow differences from payment and collection of funds on Japanese
Gensaki investments.

2. Net profits or losses (-) on U.S. Treasury
and Federal Reserve foreign exchange operations,
based on historical cost-of-acquisition exchange rates,
1999:Q1

3. Currency arrangements, March 31, 1999
Millions of dollars
Institution

Amount of
facility

Outstanding,
Mar. 3 1 , 1 9 9 9

Millions of dollars

Period and item

Valuation profits and losses on
outstanding assets and liabilities,
Dec. 31, 1998
E M U euro

Total
Realized profits and losses
from foreign currency sates,
Jan. 1, 1999-Mar. 31, 1999>
E M U euro
Japanese yen

Federal
Reserve
System Open
Market Account

U.S. Treasury
Exchange
Stabilization
Fund

998.5
1,229.8

96.6
1,766.0

2,228.3

1,862.6

0

-71.0
208.0

55.7

137.0

Valuation profits and losses on
outstanding assets and liabilities,
Mar. 31, 1999
E M U euro
Japanese yen

-10.6
911.2

1,123.3

Total

900.6

895.8

Total

55.7

1. See table 1 for an explanation of these gains.




-227.5

Federal Reserve
reciprocal currency
arrangements
Bank of Canada
Bank of Mexico

2,000
3,000

0
0

Total

5,000

0

U.S. Treasury
Exchange Stabilization Fund
currency arrangements
Bank of Mexico

3.000

0

Total

3,000

0

401

Industrial Production and Capacity Utilization
for April 1999
Released for publication May 14
Industrial production, which had been essentially flat
between October and February, accelerated in March
and April. The total index was revised upward to
show a gain of 0.5 percent in March and is estimated
to have risen 0.6 percent in April. Manufacturing

output also grew 0.6 percent in April, its third straight
monthly gain of close to
percent. Some of the
acceleration came in high-technology industries, but
many other industries showed improvement as well.
At 134.0 percent of its 1992 average, industrial production in April was 2.0 percent higher than in April
1998. Capacity utilization in manufacturing, mining,
and electric and gas utilities rose 0.2 percentage point

Industrial production and capacity utilization
P e r c e n t of capacity

Ratio scale, 1 9 9 2 = 100

Industrial production, market groups
Ratio scale, 1992 = 100

R a t i o scale, 1992 = 100

Ratio scale, 1 9 9 2 = 100

R a t i o scale, 1 9 9 2 = 100
175

Equipment

160
145
130
115
N o n d u r a b l e g o o d s and e n e r g y
D e f e n s e and space

I

I
1990

I

I
1992

85
I

I
1994

L
1996

J

L
ll

J

I
1990

L
1992

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




100

1994

1996

1998

402

Federal Reserve Bulletin • June 1999

Industrial production and capacity utilization, April 1999
Industrial production, index, 1992=100
Percentage change
Category

1999
1999'
Jan.

Feb.

Mar. r

Apr. i

Total

132.3

132.5

133.2

134.0

Previous estimate

132.3

132.6

132.8

Major market groups
Products, total 2
Consumer goods . . .
Business equipment
Construction supplies
Materials

124.5
115.2
167.3
132.4
144.9

124.6
115.5
167.2
131.7
145.3

125.0
115.3
168.3
131.5
146.5

Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities

136.4
161.4
111.3
98.5
114.7

136.9
161.7
112.0
97.7
112.3

137.5
162.8
112.0
97.0
115.5

Jan.

Apr. 1998
to
Apr. 1999

Feb/

Mar. 1

Apr. 1

.6

2.0

.0

.1

.5

-.1

.3

.1

125.5
116.0
168.9
132.0
147.9

.1
.2
-.4
1.1
-.2

.1
.3
.0
-.5
.3

.3
-.1
.7
-.2
.8

.4
.6
.3
.4
.9

1.2
-.4
4.1
5.3
3.3

138.4
164.2
112.4
97.1
116.2

-.2
-.1
-.4
-.5
2.7

.4
.2
.6
-.8
-2.1

.4
.7
.1
-.7
2.8

.6
.8
.3
.1
.7

2.5
5.1
-.6
-8.1
3.0

Capacity utilization, percent
1998
Average,
1967-98

82.1

Total

Low,
1982

71.1

Apr.

Jan.

Feb.

Mar. 1

Apr. i

85.4

82.6

80.4

80.2

80.4

80.6

4.5

80.3

80.3

80.1

85.7
84.2
88.9
88.0
92.6

81.7
80.7
84.6
88.2
89.5

79.5
78.2
83.0
81.5
90.5

79.5
78.4
82.8
80.8
88.5

79.6
78.5
82.7
80.2
90.9

79.8
78.8
83.0
80.2
91.5

5.0
6.0
2.6
1.1
.7

Previous estimate
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities

81.1
80.5
82.4
87.5
87.4

69.0
70.4
66.2
80.3
75.9

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

in April, to 80.6 percent, down from 82.6 percent a
year earlier.
MARKET

GROUPS

The production of consumer goods, which had been
little changed in March, advanced 0.6 percent in
April. The output of durable consumer goods jumped
2.1 percent, more than reversing a decline in March;
output gains were sizable for automotive products,
carpeting and furniture, and home electronics. The
production of nondurable consumer goods rose
0.2 percent, even though the output of tobacco products declined and the production of gasoline was cut
by disruptions at refineries. The advance in the production of non-energy nondurable consumer goods
was led by a continued recovery in the output of
consumer chemical products and an uptick in apparel
production.
The output of business equipment increased
0.3 percent in April after an upward-revised advance



1999

High,
1988-89

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

of 0.7 percent in March. Although the assembly of
business vehicles gained substantially, a further drop
in the production of civil transport aircraft caused the
measure for transit equipment to decline again. The
index for industrial equipment, which had fallen over
the two preceding quarters, turned up, and the index
for information processing equipment rose substantially further; the latter increased more than 3 percent
over March and April. In contrast, the production of
farm machinery and equipment fell back after some
recovery in February and March. The production of
defense and space equipment fell 2.0 percent in April,
partly because of a strike at a major shipyard.
The production of construction supplies, which had
eased in February and March from the high level in
January, resumed its growth. Over the past twelve
months, it has increased 5.3 percent. The index for
business supplies, which had been stagnant for about
a year, has picked up recently. The output of materials increased 0.9 percent in April after an upwardrevised gain of 0.8 percent in March. The indexes for

Industrial Production and Capacity Utilization

both durable goods materials and energy materials
rose more than 1 percent, with large increases in
semiconductors and computer parts for a second
month and a rebound in coal production from a dip in
March.

INDUSTRY

GROUPS

Production in manufacturing increased 0.6 percent,
compared with 0.4 percent in the two preceding
months. The factory operating rate rose 0.2 percentage point, to 79.8 percent, but was down from
81.7 percent last April. Durable goods production
rose 0.8 percent, a gain similar to that in March, and
the advances were again widespread. The increase in
the output of electrical machinery, boosted by an
acceleration of production in the semiconductor and
communications industries, rose to 2.5 percent in
April. The production of motor vehicles and parts
rose 2.3 percent, and computer output increased
nearly 2 percent. Production declined at facilities for
iron and steel, aircraft and parts, and shipbuilding.
With the solid gains in production, the rate of capacity utilization in durable manufacturing rose 0.3 percentage point, to 79.6 percent, a level close to its
1967-98 average.




403

The output of nondurable manufactured goods
advanced 0.3 percent; production has been in a slow
recovery since last fall and has increased about 1 percent over the past three months. The output of textile mill products, apparel, and paper and products
rebounded from declines in March, while the production of chemicals and products and rubber and plastics products advanced further. The operating rate in
nondurable manufacturing rose 0.2 percentage point.
But at 80.6 percent, utilization for these industries is
more than 2 percentage points below its level of April
1998 and is nearly 3 percentage points below its
long-term average.
Despite rebounds in coal and metal ores, mining
production edged up only 0.1 percent; it has dropped
10 percent over the past fifteen months. Drilling for
011 and gas wells fell back in April to a very low
level. Primarily because of the low level of oil and
gas extraction, the rate of capacity utilization in mining remained at 80.2 percent in April, down from
88.2 percent twelve months earlier.
Output at utilities, which had rebounded 2.8 percent in March, advanced another 0.7 percent and
is up 3.0 percent from the level of April 1998. The
operating rate at electric utilities is near its 1988-89
high, while utilization at gas utilities is below its
1967-98 average.
•

404

Statements to the Congress
Statement by Edward W. Kelley, Jr., Member, Board
of Governors of the Federal Reserve System, before
the Committee on Banking and Financial Services,
U.S. House of Representatives, April 13, 1999
I appreciate the opportunity to appear before this
committee to update you on Year 2000 issues. I will
describe the Federal Reserve's continuing efforts with
respect to our contingency and event management
plans as a central bank to ensure that adequate
sources of currency and liquidity are available, and
summarize the special attention being given to maintaining public confidence in the banking system. I
will also focus on the progress of the banking industry in preparing for the new millennium and our
supervisory initiatives, where considerable progress
has been made since I last testified in September.
Next, I will provide an overview of our efforts to
support the President's Year 2000 Conversion Council and the international financial regulators' Joint
Year 2000 Council, and close with our perspective on
legislative proposals relating to Year 2000.1 will also
discuss the Board's strong support for passage of
H.R. 1094, which would amend the Federal Reserve
Act to broaden the range of discount window loans
that may be used as collateral for Federal Reserve
notes.
That is a lot of material to cover, and it reflects our
extensive interest in and efforts to address the litany
of Year 2000 issues. We are approaching the last
months before the century date change (CDC) with a
keener understanding of the magnitude of the task
the banking industry, our country, and the rest of
the world have been confronting. We are continuing
our efforts to ensure that our financial system is safe
and sound and ready for the century rollover. I am
increasingly optimistic that the operational transition
will go well and have come to believe that Year 2000
technical issues will not cause major problems in the
financial markets of the United States. One issue I am
concerned about and have raised with the press is
how to ensure that the public has reliable, complete
information about the readiness of the financial services industry and the other industrial and infrastructure sectors of the country. Actions taken by the
public based upon fear or bad information rather than
upon fact-based rationality may pose a greater threat



to our economy than those caused by Year 2000
computer problems themselves. The public's perception of the Year 2000 challenge and response to that
perception relative to our banking system is of critical importance to us all. The banking agencies are
increasingly turning their attention to public education, and, in that regard, I welcome the opportunity
this hearing affords to explain the Federal Reserve's
perspective on the century date change.

CONTINGENCY
PLANNING
EVENT
MANAGEMENT

AND

Having worked extensively to correct the Year 2000
computer problems in our systems, we are confident
that we will be fully prepared for the new millennium. Nevertheless, as the nation's central bank, the
Federal Reserve is actively engaged in contingency
and event management planning for any operational
disruptions or systemic risks. The Federal Reserve's
CDC Council, a group of our most senior officials,
is coordinating contingency and event management
planning across the Federal Reserve System to ensure
a cohesive approach to our preparations. In addition,
we are completing plans for our supervision function
that provide for monitoring and responding to developments during the transition to the Year 2000,
including any disruptions that may occur at financial
institutions or in key financial markets for which we
have responsibilities. These plans are being coordinated with other federal, state, and foreign regulators
and with the Year 2000 Response Center of the
President's Council on Year 2000 Conversion.

Business

Resumption

The Federal Reserve's plans for ensuring operational
continuity build upon existing business resumption
contingency plans. As part of our standard business
processes, the Federal Reserve has long maintained
and tested comprehensive business resumption plans,
which have proved successful in providing for our
continued operations during past crisis situations
and natural disasters. Last fall, each of the Federal
Reserve's business functions completed assessments

405

of the adequacy of existing contingency plans for
addressing Year 2000 risks. These plans are being
enhanced to address issues unique to the century date
change.
For example, we are identifying problems external
to the Federal Reserve that may arise when the date
changes to 2000, such as those affecting telecommunications providers, utility companies, and key market participants. Based on available information, we
do not expect widespread problems in these areas,
but we nevertheless believe it prudent to develop
action plans to mitigate or work around them should
they occur. Between now and the century date
change, we will test and continue to refine these plans
as necessary to optimize operational effectiveness at
the century rollover. The goal of the contingency
planning process is to minimize the chance for surprise disruptions and to minimize their impact should
they occur.

Year 2000 Event Management

Plan

Over the years, the Federal Reserve has demonstrated
the ability to manage a wide range of crisis situations.
Nevertheless, we are augmenting our existing communication and control structures to enhance our
ability to collect information and react to issues as
they develop during the next six months and, particularly, during the "rollover period," that is, the last
few days or weeks of 1999 and the early days of
2000, as well as the leap year at the end of February.
The objectives of our event management plan are to
• Monitor and report the status of internal systems,
financial institutions and markets, infrastructure, and
other pertinent areas
• Maintain a consistent flow of information within
the Federal Reserve, to our business partners, and to
the public at large
• Identify potential or actual problems and resolve
them promptly.
The CDC Council has established an Event Management Planning Team that is formulating recommendations to meet these objectives. As with any
complex institution, this is challenging because it is
necessary to integrate the myriad needs and functions
of all areas of the Federal Reserve System into one
coordinated and cohesive plan.
The Event Management Planning Team presented
a number of recommendations to the CDC Council
last week and will continue to refine them in coming
months. As we finalize our plans, we will coordinate



with other federal and state regulators as well as the
President's Council on Year 2000 Conversion. This
should result in further streamlining and enhancements. Our event management plans should be substantially completed during the second quarter 1999
and will be tested during the third quarter 1999—
with September 9, 1999, scheduled as our first operational date.

Cash and Liquidity Issues
The Federal Reserve does not believe that the public
needs to hold excess cash in anticipation of the
century rollover. Although there may be isolated
problems, we expect that the usual payment methods
of checks, debit cards, and credit cards will operate.
Nevertheless, we recognize that there likely will be
some increased demand for cash during the period
surrounding the century rollover. In developing cash
and liquidity contingency plans, depository institutions have been advised and are taking steps to forecast and prepare for potential spikes in year-end cash
demands of their customers. Such plans should
address how to distribute cash to locations where it is
most needed and provide for close coordination with
armored carriers and cash suppliers (their Federal
Reserve Bank or correspondent bank). Some of the
best practices we've seen include plans to increase
cash inventories ahead of seasonal and any anticipated Year 2000-related rise in demand. They also
include advance identification of prudent trigger
points to replenish currency supplies based upon
customer demand that take into account the availability and frequency of transportation arrangements.
Equally important, they provide for a customer communication program that explains the Year 2000
problem, how the bank is preparing for it, and any
plans to work around minor disruptions in services
that could affect access to the bank. We have
reminded banks that, as part of their Year 2000 contingency cash planning, they should review their
insurance policies and blanket bond limits to ensure
they have sufficient coverage.
As I have said in previous testimony, we instituted
plans to increase our inventory of currency as a
precautionary measure, and not because we believe
the public should hold more cash because of the
Year 2000. Some observers have suggested that this
represents a contradictory message to the public. Not
so. Regardless of our view that consumers do not
need to hold excess cash during this period, the
Federal Reserve has been given the mission by the
Congress to provide currency to the public as

406

Federal Reserve Bulletin • June 1999

demanded, and we will be prepared to fulfill this
responsibility whatever the level of demand might
be.
Another related issue for the central bank is the
possibility that despite the best efforts of some
depository institutions, they may encounter problems
resulting from or affecting relationships with counterparties and customers. To the extent these problems
reduce their liquidity, and other sources of funding
may no longer be reasonably available, the Federal
Reserve is prepared to lend to provide liquidity with
adequate collateral.
Depository institutions are expected to address
liquidity issues in their contingency plans and to take
steps necessary to facilitate the process of borrowing
from the Federal Reserve, for example, by completing necessary documentation and prepositioning collateral now rather than waiting for the actual event
when there may be other organizations seeking additional funding at the same time. We have sent a letter
to all depository institutions encouraging them to
consider including the Federal Reserve, as lender of
last resort, in their funding contingency plans and,
if they do, to complete necessary documentation and
collateral arrangements as soon as possible.

PUBLIC

AFFAIRS

PROGRAM

Let me go back to an earlier comment I made regarding the public's perception of the Year 2000 issue.
We believe that the best way to engender a strong and
positive public attitude is through open and candid
discussion. The public is getting information from a
variety of sources. We believe that it is important to
ensure that the public can look to the Federal Reserve
System as a source of accurate information regarding
the readiness of the banking industry and the payments mechanisms through the century rollover. Federal Reserve communications activities have been
focused on providing accurate, consistent information to the public and keeping the media informed
about our Year 2000 activities.
The Federal Reserve has initiated a series of public
affairs activities related to the Year 2000 designed
to provide the public with the information it needs.
In this regard, the staff is working actively with the
communications team for the President's Council
on Year 2000 Conversion to develop responses to
consumer questions that come in on the Council's
Year 2000 "hotline." A Year 2000 consumer web
page is being designed to provide easy access to
the information already available on the Federal
Reserve's Year 2000 web site. A brochure describ


ing the Year 2000 issue and the Federal Reserve's
Year 2000 program will soon be available. Many
Federal Reserve officials as well as several Board
members have been giving speeches on Year 2000.
Reserve Banks have scheduled press conferences and
briefing sessions for the media, and the media kit that
we provide is updated regularly to include current
information and new materials.
There are a number of other communications programs under way, including joint programs with the
other bank regulatory agencies as well as with banking industry trade groups. In this regard, the regulatory agencies are sponsoring consumer research,
planning a consumer awareness video, developing a
consumer checklist for financial institution customers, and planning to hold joint press briefings.
Many people would like to have an ironclad guarantee that there will be no Year 2000 disruptions, but
that guarantee cannot be made. We cannot know in
advance exactly how the millennium rollover will go.
The truth is that no one can guarantee that everything
will work perfectly even later this morning, but we
have every confidence that it will. In fact, banking
systems and utilities experience brief disruptions
in service from time to time that are transparent to
consumers or present only minor inconveniences.
Public confidence does not require that everyone
believe that everything will work perfectly all the
time. Rather, the public needs to be confident that the
information it is receiving is complete, reliable, balanced, and adequate to identify actions appropriate to
their own circumstances.

BANK

SUPERVISION

Turning to our efforts with respect to the readiness of
individual banking organizations, let me emphasize
today, as I have in the past, that while the bank
supervisors have appropriately provided significant
guidance and meaningful incentives to the industry to
prepare for the Year 2000, we cannot be responsible
for ensuring the readiness of any banking organization. The boards of directors and senior management
of banks are responsible for ensuring that their organizations are able to provide uninterrupted services
and operate in a safe and sound manner after the
century date change.
With that said, over the past few months the Federal Reserve and the banking agencies have been
active in responding to requests for additional guidance about the difficult tasks of testing and contingency planning and the importance of effective customer communication programs. We also have been

Statements to the Congress

extremely active in banker outreach and education
programs across the country, and in participating
in domestic and international securities industrypayment systems work groups such as the Global
2000 Co-ordinating Group. Even more important, we
have completed a second round of on-site Year 2000
supervisory reviews of the banking organizations we
supervise to assess their progress in testing remediated systems, evaluating customer and counterparty
risk, and in developing their business resumption
contingency plans.

Issuance of Supervisory

Guidance

Shortly after my testimony to you in September, on
October 15, 1998, the Federal Financial Institutions
Examination Council (FFIEC) agencies adopted
"Interagency Guidelines Establishing Year 2000
Standards for Safety and Soundness," which apply
to all insured depository institutions. The guidelines
incorporate important elements of previously issued
FFIEC guidance, including aggressive milestone
dates for testing and implementation. The guidelines
were issued under section 39 of the Federal Deposit
Insurance Act, which authorizes the Federal Reserve
and other banking agencies to direct an insured
depository institution to prepare an acceptable corrective action plan and comply with such a plan, without
having to initiate an administrative proceeding. The
guidelines, therefore, provide an expedited enforcement tool to address serious Year 2000 deficiencies at
insured depository institutions and may be useful in
addressing any serious deficiencies over the next few
months, when time is of the essence.
On December 11, 1998, the FFIEC issued "Questions and Answers Regarding Year 2000 Contingency
Planning" to answer frequently asked questions
received by the agencies. The statement underscores
the importance of implementing an effective business
resumption plan that establishes a course of action
to resume core business processes in the event of a
system failure.
On February 17, 1999, the FFIEC issued additional
guidance to assist financial institutions with customer
communications on the Year 2000. The guidance
supplements the May 1998 FFIEC policy statement
on Year 2000 Customer Awareness Programs and
emphasizes that maintaining customer confidence
in the financial services industry needs to be a top
priority of bank management. The guidance outlines
key subject matters that could be incorporated into
bank customer communication statements. The two
papers together emphasize that it is essential for



407

banks to establish customer communication programs
and train staff so that they are able to respond to
customer inquiries about their readiness.

Outreach to Banking

Industry

We stress the importance of customer communications whenever we meet with bankers, and we do that
often. We participated in 101 programs during the
fourth quarter 1998 that were attended by 5,000
participants. We participated in a total of 497 programs during 1998 that were attended by more than
26,000 participants. So far in 1999, we have participated in more than 75 programs reaching more than
6,600 participants. We think these programs have
been extremely useful to all parties because they
provide attendees with an opportunity to hear about
our expectations "up close and personal" and to ask
questions. They also provide us with an opportunity
to hear about the concerns, problems, and accomplishments being experienced by participants and
their colleagues.

Phase II Supervision

Program

The Federal Reserve has just completed Phase II
of its Year 2000 supervision program, which ran
from July 1, 1998, through March 31, 1999. During
Phase II we performed a risk-focused Year 2000
assessment of approximately 1,500 supervised institutions, including state member banks, bank holding
companies with at least $1 billion in total assets or
with significant information processing activities, and
U.S. branches and agencies of certain foreign banking
organizations. Our Phase II program called for an
evaluation of a bank's overall Year 2000 program and
progress relative to FFIEC guidelines and milestone
dates. Based on our reviews, 95 percent of the banking organizations we supervise are making satisfactory progress in their Year 2000 programs and are
in substantial compliance with the FFIEC milestone
dates.
Any financial institution rated less than satisfactory
is required to file an acceptable corrective action plan
within thirty days of receiving a deficiency notification letter from the Federal Reserve. These institutions are placed on an intensified monthly monitoring
plan, and depending on the severity of the deficiencies identified, the use of an appropriate informal or
formal supervisory action is considered. This "watch
list" program for monitoring less-than-satisfactory
banks has proved extremely effective in bringing the

408

Federal Reserve Bulletin • June 1999

issues to the attention of boards of directors and
management and obtaining an appropriate response.
We find that most banks are able to intensify their
programs and begin making satisfactory progress
within a few months.
For the small minority of financial organizations
found to be making less-than-satisfactory progress,
the deficiencies most frequently noted during
Phase II reviews have been relatively manageable
and include delays in completing evaluations of customer risk, weaknesses or delays in completing remediation or testing programs, and insufficient communication between management and boards of
directors. The progress of institutions that lagged
behind the December 31, 1998, FFIEC milestone
for completion of internal testing is being closely
monitored.
With respect to the readiness of bank customers
and counterparties, it does appear that banks are
formulating policies for managing credit risk and are
incorporating Year 2000 considerations into their
underwriting and loan-review practices. We are just
beginning to see instances in which credit standards
and collateral requirements are being tightened when
a counterparty or customer is not able to provide
sufficient assurances of Year 2000 readiness. We
expect to see an increase in the number of banks
acting to minimize credit risks over the next few
months.
In addition to reviewing the status of banking
organizations, the Federal Reserve participates with
the other FFIEC agencies in Year 2000 reviews of
certain large national and regional data processing
service providers and software vendors serving financial institutions. Sixteen national Multiregional Data
Processing Servicers (MDPS), twelve national Shared
Application Software Review (SASR) software
vendors, and approximately 250 other independent
service providers and software vendors are in the
review program. Because of their importance to the
Year 2000 readiness of financial institutions, service
providers and software vendors subject to review by
the FFIEC agencies were reviewed on site at least
twice by December 31, 1998. Review reports for
service providers and software vendors are sent to
banks that are direct customers for their information.
These entities are also subject to quarterly reviews
and were contacted during the first quarter of 1999 to
assess the availability of testing programs for their
bank customers.
Based on reviews completed and other available
information, nearly all vendor software products have
been renovated and internally tested, and financial
institutions are actively testing these products within



their own environments. Proxy testing has been pursued by many institutions that rely on a specific
vendor software product for its core banking systems
when their hardware-software platform and operating environment are identical to the one that was used
to perform direct testing with the servicer. National
and regional service providers have also implemented
Year 2000-ready services and are testing with their
customers. Overall, the service providers and software vendors have made meaningful progress in
meeting the testing and implementation needs of their
financial institution customers. The few service providers that are not rated satisfactory are subject to
intense oversight by the FFIEC agencies, and the
review reports detailing deficiencies or problems
being experienced have been sent to their bank
customers.
While I'm on the subject of testing with service
providers, I would like to update you on the Federal
Reserve's customer testing program. As I informed
you last September, beginning June 29, 1998, the
Federal Reserve is offering customers the opportunity
to test future-dated transactions for Fedwire funds
and securities transfer, Fed Automated Clearing
House, the Integrated Accounting System, Treasury
Tax and Loan, Check, and other services with electronic data exchanges. To date, more than 8,000
institutions have tested with us, and the Financial
Management Service of the U.S. Treasury has conducted interface testing for social security payments.
We are continuing to offer testing opportunities
through the end of 1999.

Phase III Supervision

Program

In January, we distributed guidance on our Phase III
program, including intensified monitoring procedures
for institutions that are rated less than satisfactory,
and established broad criteria under which it will be
presumed that the Federal Reserve will take an informal or formal enforcement action against such an
institution. These procedures provide guidelines for
addressing problem institutions through the century
date change.
Looking forward to the critical months remaining
until the century date change, the Federal Reserve
has initiated a Phase III program for monitoring the
Year 2000 readiness of banking organizations. Our
Phase III supervision program—which began April 1
and runs through December 31, 1999—calls for riskbased Year 2000 reviews of financial institutions
during the second and third quarters of 1999 to
confirm that all FFIEC milestone dates have been

Statements to the Congress

met. Our examiners have been instructed to confirm
that every state member bank is in compliance with
FFIEC guidelines by the end of the third quarter
1999.
Financial institutions of special importance to key
financial and payment systems in the United States
will be subject to at least monthly contacts after June
1999, and the top fifty bank holding companies will
be subject to at least quarterly contacts, to ensure that
implementation is completed and that appropriate
risk-management policies and contingency plans are
up to date. Service providers and software vendors
that service large numbers of banking organizations
will continue to be subject to at least quarterly contacts to review the status of third-party testing and
contingency planning.
By June 30, 1999, financial institutions are
expected to comply with critical FFIEC milestone
dates for completing all Year 2000 internal and external testing, implementation of remediated missioncritical systems, and contingency planning. A major
emphasis of our supervision program through the
century date change will be the adequacy of contingency plans, which should incorporate not only
operational issues but liquidity, funding, customercounterparty risk, customer and community communications, and other subject matters. Through the end
of the year, financial institutions will be expected to
continue to monitor customer and counterparty credit
risk and to update contingency plans as necessary
to respond to internal and external events or other
Year 2000-related developments that could affect
operations.
I must emphasize that the FFIEC milestone dates
are not hard and fast deadlines but rather important
benchmarks for ensuring that a financial institution
is managing its Year 2000 program in a prudent
manner—one that provides a six-month cushion to tie
up loose ends, continue testing activities, complete
work on non-mission-critical systems, and observe
renovated and newly installed systems in a production environment. During Phase III reviews, we will
apply our best judgment in assessing an institution's
progress in meeting FFIEC milestones, most important the June 30 date. Let me caution, however, that
this process is very complex, and it should not be
surprising to see some testing activity prescribed by
the FFIEC policy statements extend past the milestone dates. If during our Phase III reviews we find
that it is taking an institution a little longer to complete its preparations, we will assess the risk presented and respond accordingly, either through
increased monitoring and supervision or through
intelligent use of enforcement actions and disclosure.




409

While ratings provide an objective measure of our
assessment of an organization's progress relative to
the FFIEC's milestones, during Phase III the actual
Year 2000 status of an organization through and into
the Year 2000 will be the focus of our supervisory
activities.
Our Reserve Banks will be assessing each financial
institution reviewed under the program by the end
of the third quarter 1999. Obviously we want these
assessments to reflect the Year 2000 progress and
status of each banking organization accurately, and
Reserve Banks to be consistent in assigning ratings
to organizations within their Districts. In this regard,
each Reserve Bank will have an internal review process to ensure that organizations that are similarly
situated relative to the extent of work remaining will
be comparably rated. Moreover, in our discussions
with Reserve Banks, we have established certain
parameters that limit somewhat the flexibility examiners have when rating an organization.
Our staff in Washington reviews all reports for
organizations rated less than satisfactory as well as
a sampling of "satisfactory" reports to ensure that
there is consistency across Districts. Implicit in all
of this is the understanding that our examiners have
a "hands on" understanding of each organization—
including the scope of its Year 2000 project and
status, the track record of management in responding
to challenges and meeting regulatory directives, and
the adequacy of the organization's resources. These
factors provide the depth and intelligence necessary
to formulate realistic and fair appraisals of banking
organizations.

FFIEC Contingency Planning Working Group
There is one other supervisory initiative I would like
to mention. The FFIEC agencies have established a
Year 2000 Contingency Planning Working Group to
identify and coordinate contingency planning issues
of common interest. The group has agreed upon
many areas of common interest and is considering
how contingency planning efforts in these areas can
be coordinated among the agencies. The subjects
for review include communications with the public, monitoring of large institutions, internationalpayment systems, liquidity, fraud, nonviable and
viable financial institutions, service providers and
software vendors, and resource sharing among agencies. The Conference of State Banking Supervisors
also participates. When appropriate, the group is
preparing guidance and planning how to coordinate
responses to problems that may arise in these areas.

410

Federal Reserve Bulletin • June 1999

PRESIDENT'S
CONVERSION

COUNCIL ON YEAR
FINANCIAL SECTOR

2000
GROUP

The Federal Reserve has been extremely active
in assisting the government's coordination of the
nation's Year 2000 preparations. The Federal Reserve
represents the banking industry on the President's
Council on Year 2000 Conversion, and a senior Board
official chairs the Financial Sector Group (FSG),
which is made up of twenty-seven U.S. government
agencies and corporations, government-sponsored
enterprises, and state regulatory associations that play
a role in the credit, equity, debt and exchange-traded
derivatives markets. The financial sector includes
depository institutions, credit unions, the securities
industry, stock markets, clearing and settlement firms,
and the insurance industry. The sector group also
includes more than fifty trade associations that represent U.S. financial market participants.
The FSG is charged with increasing awareness of
the importance of Year 2000 readiness in the financial services industry, as well as promoting communications and cooperation with public and private organizations within the sector. It serves as a forum for
addressing interagency issues and developing positions on important matters before the President's
Council. For example, the FSG recently took the lead
in developing a cross-sector paper examining the
pros and cons of establishing a special Year 2000
holiday and related proposals for the President's
Council. The FSG is also assisting in the Council's
event management planning and will participate in its
national communication center during the last quarter
of 1999 and the first quarter of 2000.
The FSG sponsored a trade association summit
meeting in December 1998. The theme of the meeting was infrastructure readiness, and Senator Bennett
was our keynote speaker. More than 250 trade association representatives and members of the press
attended this informative event, which significantly
expanded the dialogue and opened the door for better
coordination of Year 2000 efforts between the financial services industry and the electric power and
telecommunications sectors. The FSG is sponsoring a
second summit on April 15, addressing the themes of
contingency planning and customer awareness. Congressman Leach will be our keynote speaker.

JOINT

YEAR 2000

COUNCIL

The Joint Year 2000 Council was established in April
1998 by the Basle Committee on Banking Supervision, the G-10 Committee on Payment and Settle-




ment Systems, the International Association of Insurance Supervisors, and the International Organization
of Securities Commissions. My colleague Governor
Roger Ferguson chairs the council. The council provides a vital forum for communication among international regulatory and supervisory authorities on
Year 2000 issues. It also serves as a point of contact
with various national and international private sector
initiatives.
Among its initiatives, the council has developed
a global supervisory contact list of more than 600
financial regulators and initiated several mechanisms
for communicating with them. It is publishing a
series of bulletins on different Year 2000 topics and
has issued six guidance papers on key phases in the
Year 2000 process, including papers on testing, information sharing, and contingency planning, which are
published on its web site. The council has conducted
regional Year 2000 roundtables for regulators in
Europe, Asia-Pacific, North and South America and
the Caribbean, the Middle East, and Africa. These
conferences provide an excellent means of bringing
supervisors together to discuss common interests
within specific geographic areas. Another round of
regional meetings is being planned for this year, with
a focus on the important issues of implementing
remediated systems, information sharing, testing, and
contingency planning.
The international arena remains an area that needs
to be watched closely by all market participants and
supervisors. The Year 2000 readiness survey conducted by the Basle Committee on Banking Supervision late last year identified significant progress in the
international financial community's efforts to prepare
for the century date change and help prevent serious
problems. Of the 100 banking supervisors that
responded to the survey, all indicated that they
had contacted their banks regarding the Year 2000
issue, and the large majority—including all major
markets—had initiated supervisory programs to
ensure that banks allocate the necessary resources
to identify any potential Year 2000 problems. However, much work remains to be done, particularly in
smaller, less industrial and emerging countries.
While we do not know with certainty what the
outcome will be around the globe, the level of
Year 2000 awareness of financial services regulators
is now quite high. Moreover, the effect of applying
the FFIEC policy statements to the U.S. operations of
foreign banking organizations had a salutary effect in
making their parent organizations abroad aware of
the problem and the need to formulate Year 2000
programs. In light of the recent increase in information showing that the Year 2000 problem is receiving

Statements to the Congress

increased attention and resources, and that progress
is being made abroad, it is increasingly likely that
Year 2000 technical issues will not cause significant
problems in the most active foreign global markets.
However, to achieve that goal, it is critical that the
current momentum and level of resources be maintained. It also is essential that countries coordinate
with each other across financial and other sectors to
share information and develop contingency plans in
areas of common interest.

LEGISLATIVE

MATTERS

Federal Reserve Note Collateral
The Board strongly supports adoption of H.R. 1094,
which would amend the Federal Reserve Act to
broaden the range of discount window loans that may
be used as collateral for Federal Reserve notes. Section 16 of the Federal Reserve Act requires that the
Federal Reserve collateralize Federal Reserve notes
when they are issued. In other words, we are required
to hold certain kinds of assets in an amount at least
equal to the amount of currency in the hands of the
public. The list of eligible collateral includes Treasury and federal agency securities, gold certificates,
special drawing right certificates, foreign currencies,
and discount window loans made under section 13 of the Federal Reserve Act.
The reference to discount window loans made
under section 13 was in the original Federal Reserve
Act. Subsequently, however, when the Federal
Reserve Act, including section 13, was amended to
allow discount window loans to be made against a
wider array of collateral, section 16 was not similarly
amended. Thus, section 16 currently limits the types
of discount window loans the Federal Reserve can
use to collateralize the currency. For example, certain
discount window loans under section 10B of the act
secured by mortgages on one- to four-family residences cannot be used. The margin of available extra
currency collateral has been shrinking because of
the growth of retail sweep accounts, which reduces
reserve balances, causing a corresponding reduction in Treasury securities held by Reserve Banks. In
this context and in light of the potential for depository institutions to seek access to the discount window because of events related to the Year 2000, we
believe that it would be prudent to amend the Federal
Reserve Act to expand the types of assets eligible to
collateralize the currency to include all types of discount window loans, thereby assuring flexibility in
times of high loan demand.




411

Year 2000 Holiday
Various segments of the financial services industry,
particularly those operating abroad, have suggested
that governments adopt an additional holiday around
the century date change. There are a number of dates
proposed for a Year 2000 holiday—Friday, December 31; Monday, January 3; and even Tuesday, January 4—although there does not appear to be any
consensus on which date would be most desirable.
Adding to the uncertainty is the question whether the
holiday should be mandatory (requiring all businesses to close) or permissive (permitting but not
requiring businesses to close). In the United States
most holidays are permissive, and December 31 will
be such a federal holiday. The Federal Reserve
announced last year that the Reserve Banks will be
open for business on that day and on Monday, January 3, 2000, and we understand that most businesses
plan to be open on those days as well.
We do not support the concept of a special
Year 2000 holiday. Some have suggested that a
Year 2000 holiday facilitate the transition to the next
century. For example, a December 31, 1999, holiday
would provide additional time to complete end-ofday (December 30) as well as at least some end-ofquarter and end-of-year processing before the rollover to January 1. A January 3, 2000, holiday—as
contemplated by H.J. Res. 14—would provide an
additional day for organizations to confirm that computer, telecommunications, and embedded systems
are operating properly and to identify and resolve any
Year 2000 disruptions that may occur, although, since
the holiday would be permissive, the extent to which
organizations would take advantage of it is unclear,
and it could engender even more confusion as to who
is open and who is not. The recently proposed January 4 holiday purportedly would provide time to
process and react to any problems that appear on the
first business day of the new millennium.
In our view, the drawbacks to a Year 2000 holiday
are significant and include additional operational burdens, potential contractual and taxation issues, and
potential adverse public reaction. The adoption of
a mandatory Year 2000 holiday may require banks
to initiate additional procedural and operational
changes. Internal systems would have to be reprogrammed to include the new holiday and to treat it as
a nonbusiness day for purposes of completing transactions. Because these changes are date-related, systems that already have been remediated would require
additional Year 2000 testing to ensure that the
changes did not inadvertently create date-related processing problems. Banks would have to revise their

412

Federal Reserve Bulletin • June 1999

test scripts, create different future-dated computing
environments to simulate the new sequence of business days, generate new test data to reflect the holiday, and then retest systems that were previously
designated as Year 2000 ready. This would place
significant additional burdens on firms and may
increase, rather than reduce, the risk of disruption.
Moreover, the task would divert already scarce
resources away from the primary task of completing
Year 2000 testing, implementation, and contingency
planning. We should understand that all of this work
would have to occur long after the FFIEC milestone
dates for completion of testing and implementation of
remediated systems.
Declaring a new Year 2000 holiday would also
further increase transaction volume on the last and
first business days of the year, when volume is traditionally higher than average. This may exacerbate
workloads on adjacent days, complicating the transition and the resolution of any problems. A special
Year 2000 holiday would also affect contractual and
other payment obligations, and there would be potential tax implications attendant to any pre- or postYear 2000 payments made as a result of the new
holiday.
Finally, and equally troubling, changes to existing
holiday laws would send a signal to the public that
the government has serious concerns about the potential for significant Year 2000 problems within the
financial services industry. We do not believe significant problems will occur, and we are opposed to
taking actions that could unnecessarily erode public
confidence in the industry, where erosion of confidence can create significant destabilizing effects on
our economy.
The Federal Reserve first discussed the holiday
issue with the financial industry more than a year
ago. At that time, proponents of a Year 2000 holiday
emphasized that the decision must be made no later
than the first quarter 1998 for organizations to derive
the intended benefits without incurring undue costs
and risks. They correctly believed that declaration of
a Year 2000 holiday at a later time would impede an
organization's ability to limit changes to remediated
systems during the period surrounding the century
date change. Indeed, many institutions such as the
Federal Reserve have adopted change management
policies in order to limit the risks to information
systems posed by changes in the second half of 1999.
Changes in holidays or payment schedules at this late
date would run counter to the risk mitigation objectives of these policies.
Some agencies have asked whether rescheduling
payments from early January to late December should




be considered as part of their contingency planning.
While this initially may seem to be a prudent
approach, the premise underlying the proposal must
be that either the financial system will be unable to
deliver payments to recipients' bank accounts or that,
once payments have been delivered, recipients will
be unable to use those funds because of problems at
their banks. With respect to the ability of the financial
system to deliver payments to banks, we have a high
degree of confidence that the Federal Reserve will
continue to process payments during this period. Further, our understanding of the readiness of privatesector providers of payment services, gained through
our supervisory efforts and the efforts of the other
financial supervisory agencies, gives us confidence
that other wholesale providers of payments services
will also continue to process payments during this
period.
With respect to individuals' and businesses' ability
to use their funds at their banks, we believe that it
is reasonable to assume, based on the Year 2000
progress being made by the banking industry, that
access to those funds will continue unabated. To
assume otherwise could engender problems more
severe than the problems that people are seeking to
avoid. For example, if a large number of individuals
interpret an early payment to mean that they will be
unable to access their bank account, or make payments by other means, such as credit cards, for some
period, they may seek to withdraw large quantities of
cash. Moreover, cash is in many respects an inefficient payment vehicle—the risk of loss or theft is
great, and its delivery to remote payees can be difficult and time-consuming. While there may be particular circumstances that warrant rescheduling payments during the Year 2000 rollover period, we
would caution against actions that may themselves
lead to problems as severe or even more severe than
the problems that they are designed to avoid.

Credit Union Liquidity
In an area related to issues of cash availability and
liquidity of financial institutions, the Federal Reserve
has been working with representatives of the credit
union industry and the National Credit Union Administration to address logistical problems that might
arise because of any need for a large number of credit
unions to obtain liquidity beyond the considerable
amount they already have available. Although this
work is still in the preliminary stages, we are confident that a relatively cost-effective, efficient means
can be found to channel funds through the corporate

Statements to the Congress

credit union system to natural person credit unions in
need of liquidity. Such a structure would seek to rely
to the extent possible on existing credit relationships
and documentation.
Litigation

Issues

There has been a great deal of talk about litigation
that may arise because of Year 2000 problems. This
has led to the introduction of a number of bills
designed to limit litigation relating to Year 2000,
including H.R. 775, the proposed "Year 2000 Readiness and Responsibility Act," as well as concerns
whether existing consumer laws limiting liability for
bona fide errors should be clarified. We do not have a
position as to whether H.R. 775 should be adopted.
We do believe that no legislation should be construed
to limit the financial supervisory agencies' ability
to bring enforcement actions based on Year 2000related problems. To do so could interfere with the
agencies' ability to encourage supervised institutions
to address Year 2000 issues appropriately. Accordingly, we recommend that any legislation limiting
liability in civil actions should exclude actions
brought by a federal, state, or other public entity,
agency, or authority acting in a regulatory, supervisory, or enforcement capacity. A similar exclusion
was incorporated in the Year 2000 Information and
Readiness Disclosure Act.
The issue of banking agency enforcement authority
may be of particular significance with respect to
section 605 of H.R. 775, "Suspension of Penalties for
Certain Year 2000 Failures by Small Business Concerns." That section would provide that, as a general
rule, no agency shall impose a civil penalty on a
small business concern for a first-time error resulting
from a Year 2000 failure. Some banking institutions
and their affiliates may come within the definition
of small business concerns to which this provision
applies. Again, we are concerned that this provision
could interfere with the financial supervisory agencies' ability to encourage supervised institutions to
address Year 2000 issues appropriately and urge that
this limitation not apply to any penalty imposed by

Statement by Kenneth D. Buckley, Assistant Director,
Division of Reserve Bank Operations and Payment
Systems, Board of Governors of the Federal Reserve
System, before the Committee on Veterans' Affairs,
U.S. Senate, April 20,1999
I am pleased to appear before the committee to
discuss the arrangements the Federal Reserve is mak-




413

a federal banking agency as defined in the Federal
Deposit Insurance Act.
Finally, with respect to the bona fide error provisions contained in many consumer laws, in our view,
computer malfunctions and programming errors due
to Year 2000 problems appear to be covered by
statutory provisions dealing with "bona fide errors."
Accordingly, we do not see a need for additional
clarifying legislation.

CONCLUSION

In closing, I would like to thank the committee for
the opportunity to share this information with you.
We appreciate your concern and assistance in identifying the appropriate focus of our efforts during the
last months before the Year 2000. Financial institutions are continuing their efforts and making significant progress in renovating their systems to prepare
for the century rollover. The Federal Reserve is committed to a rigorous program of industry testing and
contingency planning and, through our supervisory
initiatives, to identifying those organizations that
most need to apply additional attention to Year 2000
readiness programs. We are committed to working
with national and international counterparts and
other groups, including the President's Council on
Year 2000 Conversion, the Joint Year 2000 Council,
and industry trade associations to assist the industry
in preparing for the rollover to the Year 2000.1
1. Important Year 2000 web sites are the following:
Federal Reserve Year 2000 web site—
http://www.federalreserve.gov/y2k/
Federal Reserve Century Date Change Project—
http://www.frbsf.org/fiservices/cdc/
Federal Financial Institutions Examination Council—
http://www.ffiec.gov/
President's Council on Year 2000 Conversion—
http://www.y2k.gov/
Bank for International Settlements and Joint Year 2000 Council-—
http://www.bis.org/
Global 2000 Co-ordinating Group—
http://www.global2k.org/

ing to ensure the timely delivery of veterans' benefit
payments made by direct deposit during the rollover
to the Year 2000. Veterans and their families depend
on Federal Reserve systems to reliably deliver their
payments electronically to their banks. We believe
that they should feel confident that their benefits will
be paid as usual during and after the rollover to the
Year 2000. I will review the Federal Reserve's role

414

Federal Reserve Bulletin • June 1999

in processing these payments and address the Federal Reserve's Year 2000 preparations. I will also be
pleased to answer any questions you may have.
The Federal Reserve Banks provide a variety of
payment services to banks and U.S. government
agencies.1 These services range from electronic payment mechanisms, such as Fed wire funds transfer
and automated clearing house (Fed ACH), to check
collection. As fiscal agents of the United States, the
Reserve Banks use these services to collect and disburse payments on behalf of government agencies.
Government payments are typically originated by
federal agencies through the Treasury Department's
Financial Management Service (FMS), which in turn
delivers payment instructions to the Federal Reserve
for subsequent delivery to banks or processors. Most
government payments are made electronically using
the Fed ACH service.
For veterans' benefit payments, the Department of
Veterans Affairs provides instructions to FMS about
the payments to be made and the method to be used.
(Currently 75 percent of veterans' payments are made
by ACH and 25 percent by check.2) FMS in turn
creates an ACH payments file that includes the payment amount, beneficiary identification, settlement
date, receiving bank routing information, and total
dollar amount for all payments in the file. FMS sends
the file electronically to the Federal Reserve three
to four days before the payment date. The Fed ACH
software edits the data for accuracy, sorts the payment information by receiving bank, sends a payment
file to each receiving bank, and initiates accounting
entries that will debit the Treasury's account and
credit the receiving banks' accounts on the payment
date. Receiving banks credit customers' accounts on
the scheduled payment date.
Because of our intermediary role as a payments
processor, the Federal Reserve's Year 2000 readiness
preparations involve both our internal systems and
our external interfaces to other organizations, such as
banks and FMS. Along with other federal banking
regulators, we have advised banks to test, at a minimum, all mission-critical systems by June 30, 1999,
and we have provided the facility for banks to test
their interfaces with us. We are also working with
US. government agencies to test their automated
interfaces with the Federal Reserve by exchanging
ACH test files.

The Federal Reserve's mission-critical systems
used to deliver veterans' benefit payments through
the ACH are Year 2000 ready and in production.
FMS has tested its interface to the Fed ACH system
and has reported no problems. In fact, the General
Accounting Office (GAO) recently reviewed critical
Federal Reserve systems, including Fed ACH, and
determined that the Federal Reserve has effective
management controls for its internal Year 2000 program. The GAO's report, which was released earlier
this month, noted no concerns about the Federal
Reserve's Year 2000 readiness.3-4
Beginning in June 1998, the Federal Reserve
offered to the Treasury, other government agencies,
banks, and processors the opportunity to test futuredated ACH transactions and related accounting functions. We are encouraging all banks, especially those
that originate a large volume of ACH payments, to
test with the Federal Reserve as soon as possible. As
of last week, about 6,400 banks, representing 67 percent of the Federal Reserve's ACH customers, had
tested their automated interfaces with the Federal
Reserve by exchanging Fed ACH test files that contain post-1999 dates. We will continue to offer testing
opportunities through early 2000.
We realize that the success of our Year 2000 program will be measured by our ability, and the public's confidence in our ability, to conduct business on
and after January 3, 2000. Thus, the Federal Reserve
will have contingency and business resumption plans
in place for ACH payments. We are coordinating
these efforts with the Treasury and other government
agencies. Backup arrangements being offered by the
Reserve Banks include magnetic tape options and
paper listings from which banks could post accounts.
We believe, however, that if there are any disruptions, they will be mild and short-lived.
Boards of directors and senior managers of banks
are working to ensure the Year 2000 readiness of
their systems. Bank regulators are providing guidance, encouragement, and strong incentives to the
banking industry to address the Year 2000 challenges, but management bears the responsibility for
their institutions' readiness. In 1997, the Federal
Reserve and the other Federal Financial Institutions
Examination Council agencies started a three-phase
Year 2000 supervision program for the banks they
oversee. This program is intended to elevate the

1. For purposes of this discussion, the term "bank" includes all
depository institutions, such as savings and loan associations and
credit unions.
2. Federal Reserve Banks pay Treasury-issued checks as fiscal
agents of the Treasury.

3. Year 2000 Computing Crisis: Federal Reserve Has Established
Effective Year 2000 Management Controls for Internal Systems Conversion (GAO/AIMD-99-78, April 9, 1999).
4. In addition, major private-sector ACH operators—the American
Clearing House Association, the New York Automated Clearing
House, and Visa USA—have reported that their computer systems are
Year 2000 ready.




Statements to the Congress

415

awareness of Year 2000 issues, monitor the progress
of banks' Year 2000 planning and readiness efforts,
and require banks that are lagging in their Year 2000
preparedness efforts to develop specific plans to remedy deficiencies. Based on the assessments of bank
supervisors at the Federal Reserve and the other
banking agencies, we believe that the industry has
made great progress in Year 2000 preparedness.
The Federal Reserve actively participates in the
President's Council on Year 2000 Conversion, and a
senior Federal Reserve official chairs the Council's
Financial Sector Group. This group comprises federal
agencies with large payment volumes, including the
Department of Veterans Affairs. We are also coordinating closely with numerous other government and
industry entities to ensure that payments flow normally as the year rolls over.
In conclusion, preparation for the Year 2000 will
continue to be one of the Federal Reserve's highest

priorities. Internal Federal Reserve systems used to
deliver veterans' benefit payments have been modified, tested, and placed into production. As I have
indicated, testing with banks and the Treasury is
continuing. Extensive business resumption plans
are being developed and reviewed. Every bank's
Year 2000 preparedness efforts have been examined
twice, and the Federal Reserve, like the other regulators, has found that the majority of institutions are
making satisfactory progress in their Year 2000 readiness programs. Those institutions identified as lagging in their Year 2000 efforts have been targeted
for additional follow-up and, if necessary, formal
enforcement actions. While we expect that the industry may experience some minor or localized problems during the rollover, the Federal Reserve fully
expects to conduct business as usual through the
Year 2000. Veterans and their families should feel
confident that their benefits will be paid as usual.

Statement by Richard A. Small, Assistant Director,
Division of Banking Supervision and Regulation,
Board of Governors of the Federal Reserve System,
before the Subcommittee on General Oversight and
Investigations and the Subcommittee on Financial
Institutions and Consumer Credit of the Committee
on Banking and Financial Services, U.S. House of
Representatives, April 20,1999

to deter money laundering through financial institutions by, among other things, redesigning the Bank
Secrecy Act examination process, developing antimoney-laundering guidance, regularly examining
the institutions we supervise for compliance with
the Bank Secrecy Act and relevant regulations, conducting money-laundering investigations, providing
expertise to the U.S. law enforcement community for
investigation and training initiatives, and providing
training to various foreign central banks and government agencies.
Ten years ago the Federal Reserve started its antimoney-laundering program and appointed a senior
official to coordinate the Federal Reserve's activities
in this area. In 1993, the Federal Reserve established
a special investigations unit, with responsibility for,
among other things, the oversight of the Federal
Reserve's anti-money-laundering program. In the
same year, each of the Federal Reserve Banks designated a senior experienced examiner to be the Bank
Secrecy Act coordinator.
We have long felt that banking organizations and
their employees are the first and strongest line of
defense against money laundering and other financial
crimes. As a result, the Federal Reserve emphasizes
the importance of financial institutions putting in
place controls to protect themselves and their customers from illicit activities.
The Congress too has long recognized that a banking organization's best protection against criminal
activities is its own policies and procedures designed
to identify and then reject potentially illegal or damaging transactions. In 1986, the Congress passed a

I am pleased to appear before the Subcommittee on
General Oversight and Investigations and the Subcommittee on Financial Institutions and Consumer
Credit to discuss the Federal Reserve's role in the
government's efforts to detect and deter money laundering and other financial crimes with a particular
emphasis on matters related to the Bank Secrecy Act
and suspicious activity reporting.
OVERVIEW

The Federal Reserve has a long-standing commitment to combating money laundering and ensuring
compliance with the Bank Secrecy Act and related
suspicious-activity reporting requirements by the
domestic and foreign banking organizations that it
supervises. Compliance with the Bank Secrecy Act
and suspicious-activity reporting requirements by
financial institutions provides timely and valuable
information to law enforcement and is the best indicator of the existence of satisfactory anti-moneylaundering and anti-fraud policies and procedures.
Over the past several years, the Federal Reserve
has been actively engaged in the government's efforts



416

Federal Reserve Bulletin • June 1999

law (section 8(s) of the Federal Deposit Insurance
Act) mandating that the Federal Reserve and the
other federal banking agencies issue regulations
requiring the domestic and foreign financial institutions that the agencies supervise establish and maintain internal procedures designed to ensure and monitor compliance with the Bank Secrecy Act.
Determining Compliance through

Examinations

To understand and properly evaluate the effectiveness
of a banking organization's Bank Secrecy Act-related
controls and procedures and compliance with the
Board's rules issued under section 8(s) of the Federal
Deposit Insurance Act, the Federal Reserve has
developed comprehensive examination procedures
and manuals. In November 1997, the Federal Reserve
issued newly revised risk-focused Bank Secrecy Act
examination procedures. These enhanced examination procedures specifically address anti-moneylaundering compliance. The examination procedures
take a multistage "top down" approach.
During every examination of a state member bank
and U.S. branch or agency of a foreign bank supervised by the Federal Reserve, specially trained examiners review the institution's previous and current
compliance with the Bank Secrecy Act. Examiners
first determine whether the institution has included
anti-money-laundering procedures in all of its operational areas, including retail operations, credit, private banking, and trust, and has adequate internal
audit procedures to detect, deter, and report moneylaundering activities, as well as other potential financial crimes. This is done through a review of the
institution's written compliance program and documentation of self-testing and training, as well as
through a review of the institution's system for capturing and reporting certain transactions pursuant to
the Bank Secrecy Act, including any suspicious or
unusual transactions possibly associated with money
laundering or other financial crimes.
In those instances in which there are deficiencies
in the written compliance program, failures to adequately document self-testing or training, obvious
breakdowns in operating systems, or failures to
implement adequate internal controls, the Federal
Reserve's examination procedures require that examiners conduct a more intensified, second-stage examination that would include the review of source documents and expanded transaction testing, among other
steps. Enforcement actions, including the assessment
of civil money penalties, are used to address situations in which deficiencies are not promptly and fully
corrected.




SUSPICIOUS ACTIVITY

REPORTING

Before I describe how the Federal Reserve uses Suspicious Activity Reports and other Bank Secrecy Act
reports, some background information regarding the
new Suspicious Activity Reporting system would be
useful.
In 1985, the five federal financial institutions
regulatory agencies—the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, the Office of
Thrift Supervision (then the Federal Home Loan
Bank Board), and the National Credit Union
Administration—developed substantially similar, but
not uniform, procedures and forms, then known as
the criminal referral process, to be used by all financial institutions operating in the United States to
report known or suspected criminal law violations.
The introduction of the concept of criminal referral
forms was the result of the efforts of the interagency
Bank Fraud Working Group, which has been addressing the problems of combating white collar financial
institution crime since 1984.1 The use of the forms
and the attendant reporting procedures, which were
jointly developed by the banking and criminal justice
agencies participating in the Working Group, enabled
financial institutions and the banking agencies to
report all instances of suspected criminal activities to
the appropriate law enforcement and supervisory
authorities.
In addition to ensuring the timely provision of
information about known or suspected criminal
activities to law enforcement authorities, the member
agencies in the Working Group recognized the importance of sharing criminal referral information among
themselves, particularly in the area of background
checks and the coordination of particular significant
matters of mutual interest. The need for an effective
interagency database of criminal referral information
was made an objective of the Working Group, and
the agency representatives explored various ways to
develop such a system.
Beginning in 1994, the Federal Reserve participated in an interagency effort to completely redesign
the criminal referral process for banking organiza-

1. The Working Group now consists of senior staff representatives
from thirteen federal agencies, including the Federal Reserve, the
other federal financial institutions regulators, the Federal Bureau of
Investigation, the U.S. Secret Service, the Departments of Justice and
the Treasury, including the Treasury's Financial Crimes Enforcement
Network, the Internal Revenue Service's Criminal Investigation Division, and the Securities and Exchange Commission. The Working
Group meets monthly, and its various subcommittees meet more
frequently when necessary.

Statements to the Congress

tions. The banking agencies worked with Treasury's
Financial Crimes Enforcement Network (FinCEN)
as the manager of the new process because of that
agency's experience in processing millions of currency transaction reports and its database management skills, and because the Congress had amended
the Bank Secrecy Act to require FinCEN to issue
suspicious-activity reporting rules for financial institutions, including banks, broker-dealers, and casinos.
The result of this effort is the existing Suspicious
Activity Report. The new Suspicious Activity Report
became effective on April 1, 1996, for all banking
organizations operating in the United States and subject to the jurisdiction of the five federal banking
agencies and FinCEN. Before the effective date of
the new Suspicious Activity Report, the Federal
Reserve, each of the other federal banking agencies,
and FinCEN issued new rules for the reporting of
suspicious activity mandating the use of the interagency Suspicious Activity Report.
Along with the enhanced reporting process,
another important improvement is the statutory protection that the Congress provided for banking organizations reporting suspicious or criminal conduct.
The statutory protection provides banking organizations and their employees with immunity from civil
liability for reporting known or suspected criminal
offenses or suspicious activities. The law also prohibited financial institutions filing Suspicious Activity Reports from notifying anyone involved with
reported transactions about the filings. These protections, long sought by the banking community and
supported by the Federal Reserve, give comfort to
banking organizations that they will not be held liable
for providing timely and useful information to law
enforcement authorities or compelled to reveal information that has been reported to law enforcement
authorities to help their crime-fighting efforts.

UTILITY OF BANK SECRECY ACT AND
SUSPICIOUS ACTIVITY REPORT INFORMATION

As more fully detailed by representatives from the
various law enforcement agencies, information collected and reported pursuant to the requirements of
the Bank Secrecy Act and the suspicious activityreporting regulations provides necessary and essential assistance to government investigators and prosecutors. Similarly, as I explained earlier, during the
course of examinations conducted by the Federal
Reserve, a review of the information collected and
reported pursuant to the Bank Secrecy Act and




417

the suspicious-activity reporting requirements assists
examiners in determining compliance with these
regulations.
You asked whether information on the Bank
Secrecy Act and Suspicious Activity Report has been
beneficial to the Federal Reserve's supervisory and
enforcement initiatives. The simple answer is that
such information has been valuable and has led
to numerous supervisory actions addressing wrongdoing by banking organizations and persons associated with them. Federal Reserve staff reviews Suspicious Activity Reports and Currency Transaction
Reports filed by banking organizations supervised
by the Federal Reserve. Our purpose in conducting
reviews of Suspicious Activity Reports is to identify
for further investigation potential problems that
would normally not be detected during the course
of an examination but that have been reported by a
financial institution as being suspicious. Likewise,
we review Currency Transaction Reports before we
conduct Bank Secrecy Act examinations in order to
better focus the scope of the examinations and, when
necessary, to more precisely target problem areas.
While the Federal Reserve's investigative initiatives resulting from our review of these reports are
not public and cannot be discussed here, two recent
events involving large banking organizations supervised by the Federal Reserve involved public court
proceedings or reported cases in which the organizations' Suspicious Activity Reports were disclosed.
For this reason, I am able to provide some details
about how Federal Reserve staff used the information
filed by the banking organizations.
As the result of a Suspicious Activity Report filed
by Bankers Trust, the Federal Reserve conducted
a targeted review of certain activities of the bank
involving escheatable funds. After our inquiry, the
staff worked extensively with federal investigators
and prosecutors, and the result was the recent guilty
plea by Bankers Trust and the imposition of a
$60 million fine. Similarly, a Suspicious Activity
Report containing information of suspected criminal
activity by a BankBoston official led to the discovery
that the individual apparently defrauded BankBoston
out of more than $73 million. After having reviewed
the circumstances surrounding the official's actions,
the Federal Reserve sought and received federal court
orders freezing all of the individual's U.S. assets. We
are continuing to work with law enforcement authorities during the course of their criminal investigation
of this matter. Additionally, on several occasions, the
Federal Reserve has commenced enforcement actions
against individuals as the result of information first
reported in a Suspicious Activity Report.

418

Federal Reserve Bulletin • June 1999

Currency transaction information provided to the
government pursuant to the Bank Secrecy Act has
also been a valuable asset for the Federal Reserve's
enforcement function. A Federal Reserve investigation that in large part relied on information reported
pursuant to the Bank Secrecy Act led to the conviction of the Bangkok Metropolitan Bank for criminal activity related to money laundering and fraud.
This foreign banking organization subsequently
was ordered by the Federal Reserve to cease all
operations in the United States. Similarly, Bank
Secrecy Act information was used during the Federal Reserve's involvement with the recently completed Operation Casablanca investigation, in which
Federal Reserve staff worked extensively with federal law enforcement agencies during the course of
their investigation of money-laundering activities
by several foreign banking organizations and their
employees.

FEDERAL RESERVE

ROLE

In addition to the Federal Reserve's efforts to develop
appropriate anti-money-laundering and anti-fraudrelated policies and procedures for the domestic and
foreign financial institutions that we supervise and
our examination for compliance with those policies
and procedures, staff of the Federal Reserve has, as I
just discussed, taken an active role among federal
bank supervisors in the law enforcement community's battle to deter money laundering by providing
expertise for law enforcement initiatives and training
to various government agencies.
The Federal Reserve routinely coordinates with
federal law enforcement agencies with regard to
potential criminal matters, including anti-moneylaundering and financial crime activities. The scope
of this coordination ranges from our work on the
development and implementation of the interagency
Suspicious Activity Reporting system to the referral
of illicit activities on a case-by-case basis to law
enforcement agencies resulting from examinations of
banking organizations and a review of Suspicious
Activity Reports. The aforementioned situations
involving Bankers Trust, BankBoston, and Operation
Casablanca are good examples of our efforts in this
area.
Training provided by Federal Reserve staff to law
enforcement agencies continues to include programs
at the U.S. Department of the Treasury's Federal Law
Enforcement Training Center and at the FBI Academy, as well as training for the U.S. Secret Service
and the U.S. Customs Service. Additionally, Federal




Reserve staff has provided training in anti-moneylaundering procedures to foreign law enforcement
officials and central bank supervisory personnel in
such countries as Russia, Poland, Hungary, the Czech
Republic, and a number of the emerging Baltic states,
as well as Brazil, Ecuador, Argentina, and several
other countries in the Middle East and Far East.
Over the years the Federal Reserve has taken the
initiative to provide timely and useful information to
banking organizations with regard to ongoing criminal conduct or potential schemes that may have an
adverse impact on them. In the past few years, the
Federal Reserve and the other federal banking supervisory agencies have issued alerts on such matters as
"Prime Bank" frauds and credit card fraud schemes.
Such notices to the banking industry are intended to
advise banking organizations and the public about the
potential dangers of such schemes and practices.
Also, from time to time, the Federal Reserve has
developed and issued policy statements with regard
to activities occurring in banking organizations that
we have determined could pose a threat to the integrity of a bank. One such example was the Federal
Reserve's development and issuance of a policy statement on "payable-through accounts." The purpose of
the policy statement was to ensure that banks that
engage in payable-through activity, which basically
involves the use of a checking account at a bank in
the United States by an individual who resides outside of this country, have appropriate procedures
in place to ensure that no illicit activities are being
conducted through these accounts. The Federal
Reserve's 1997 issuance of a sound practices paper
on private banking is another example.

CONCLUSION

As bank supervisors, the Federal Reserve believes
that it is necessary to take reasonable and prudent
steps to ensure that banking organizations are not
victims of, and also do not knowingly participate in,
illicit activities such as money laundering or other
financial crimes. For this reason, and to support our
law enforcement agencies in their efforts to combat
money laundering and other financial offenses, the
Federal Reserve's commitment to ensuring compliance with the Bank Secrecy Act and suspiciousactivity reporting requirements continues to be a high
bank supervisory priority. The Federal Reserve has
an important role in ensuring that criminal activity
does not pose a systemic threat and, as important, in
improving the ability of individual banking organizations in the United States and abroad to protect

Statements to the Congress

419

themselves from illicit activities. Both the Bank
Secrecy Act and suspicious activity reporting requirements are vital to the continued efforts of the Federal

Reserve and the government, as a whole, to combat
illicit activities through the financial system,

Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Subcommittee on Finance and Hazardous Materials
of the Committee on Commerce, U.S. House of Representatives, April 28,1999

the view that the long-term stability of U.S. financial
markets and the interests of the American taxpayer
would be better served by no financial modernization
bill rather than one that allows the proposed new
activities to be conducted by the bank, as proposed
by H.R. 10. For reasons I shall discuss shortly, the
Board is not dissuaded from this view by provisions
that have been incorporated in H.R. 10 to address our
concerns.

I would like to thank the committee for the opportunity to present the views of the Federal Reserve on
the current version of H.R. 10, the approach to financial modernization most recently approved by the
House Banking Committee. Last year, I testified at
length before this committee on many of the issues
related to your deliberations on this legislation. Our
views have not changed on the need to modernize our
banking and financial system, on consolidated supervision, on the emphasis on reduced regulation, on the
unitary thrift loophole, and especially on continuing
to prohibit banks from conducting through their subsidiaries those activities that they are prohibited to do
themselves. In the interest of time, however, I thought
it might be best if I limit my formal comments only
to the latter, that is, the setting of the underlying
structure of American banking in the twenty-first
century. The issue is whether the important new
powers being contemplated are exercised in a financial services holding company through a nonbank
affiliate or in a bank through its subsidiary. Such a
decision would be of minor significance, and decidedly not a concern of legislators and regulators, if
banks were not subsidized.
We at the Federal Reserve strongly support the
new powers that would be authorized by H.R. 10.
We believe that these powers, however, should be
financed essentially in the competitive marketplace
and not financed by the sovereign credit of the United
States. This requires that the new activities be permitted through holding companies and prohibited
through banks.

OPERATING

SUBSIDIARIES

The Board believes that any version of financial
modernization legislation that authorizes banks to
conduct in their subsidiaries any activity as principal
that is prohibited to the bank itself is potentially a
step backward to greater federal subsidization and
eventually to more regulation to contain the subsidies. I and my colleagues, accordingly, are firmly of



Subsidies
Government guarantees of the banking system—
deposit insurance and direct access to the Fed's discount window and payments system guarantees—
provide banks with a lower average cost of capital
than would otherwise be the case. This subsidized
cost of capital is achieved through lower market risk
premiums on both insured and uninsured debt and
through lower capital than would be required by the
market if there were no government guarantees. The
lower cost of funding gives banks a distinct competitive advantage over nonbank financial competitors
and permits them to take greater risks than they could
otherwise.
The safety net subsidy is reflected in lower equity
capital ratios at banks that are consistently below
those of a variety of nonbank financial institutions.
Importantly, this is true even when we compare bank
and nonbank financial institutions with the same
credit ratings: Banks with the same credit ratings as
their nonbank competitors are allowed by the market
to have lower capital ratios. While the differences in
capital ratios could reflect differences in overall asset
quality, there is little to suggest that this factor
accounts for more than a small part of the difference.
Under H.R. 10, the subsidy that the government
provides to banks as a byproduct of the safety net
would be directly transferable to their operating subsidiaries to finance powers not currently permissible
to the bank or its subsidiaries. The funds a bank uses
to invest in the equity of its subsidiaries are available to the bank at a lower cost than that of any
other potential investor, save the U.S. government,
because of the subsidy. Thus, operating subsidiaries under H.R. 10 could conduct new securities,
merchant banking, and other activities with a
government-subsidized competitive advantage over
independent firms that conduct the same activity.

420

Federal Reserve Bulletin • June 1999

That is to say, the use of the universal bank structure
envisioned in H.R. 10 means the transference of the
subsidy to a wider range of financial businesses,
producing distortions in the competitive balance
between those latter units that receive a subsidy and
identical units that do not—whether those units are
subs of holding companies or totally independent of
banking.
H.R. 10 does not contain provisions that effectively
curtail the transfer of the subsidy to operating subsidiaries or address this competitive imbalance. The
provisions of H.R. 10 that would require the deduction of such investments from the regulatory capital
of the bank (after which the bank must still meet the
regulatory definition of well capitalized) attempt, but
fail, to limit the amount of subsidized funds that an
individual bank can invest in its subsidiaries. What
matters is not regulatory capital but actual or economic capital. The vast majority of banks now hold
significantly more capital than regulatory definitions
of "well capitalized" require. This capital is not
"excess" in an economic sense that is somehow
available for use outside the bank; it is the actual
amount required by the market for the bank to conduct its own activities. The actual capital maintained
by a bank is established in order to earn the perceived
maximum risk-adjusted rate of return on equity.
Unless this optimum economic capital is equal to, or
less than, regulatory capital, deductions from regulatory capital would in no way inhibit the transfer of
the subsidy from the bank to the subsidiary.
Some have argued that the subsidy transference to
subsidiaries of banks is no different from the transfer of subsidized bank dividends through the holding company parent to holding company affiliates.
The direct upstreaming of dividends by a bank to its
holding company parent that in turn invests the proceeds in subsidiaries of the holding company, while
legally permissible, in fact does not occur—and for
good reasons, as I will explain below. In the 1990s,
dividend flows from banks to their parent holding
companies have been less than the sum of holding company dividends, interest on holding company
debt, and the cost of holding company stock buybacks, a substitute for dividends. Thus, the empirical
evidence indicates that, on net, at the largest organizations there has been no financing of a bank's holding company affiliates with subsidized equity of the
associated banks. All of that part of the subsidy
reflected in earnings has flowed to investors. (There
are a few large individual institutions that have, in
some years, upstreamed dividends in excess of investor payments, but the cumulative amounts are very
small and the conclusions are unchanged.)




That bank dividends are not used to finance holding company subsidiaries should not be surprising.
It simply is not in the interest of the consolidated
banking organization to increase bank dividend flows
beyond parent company capital-servicing cash flow
needs because the resultant decline in bank capital
would increase funding costs of the bank. Research
at the Federal Reserve indicates that, over the past
quarter of a century, for the largest banks the cost of
uninsured bank funds has tended to rise as a bank's
capital ratio fell and vice versa. This is just what one
should expect: As the risk-absorbing equity cushion
falls, the risk for uninsured creditors rises. The flow
of dividends from the bank to the parent holding
company reduces bank capital. That reduction, in
turn, reduces the risk buffer for uninsured creditors,
increasing the funding cost of the bank on all the
uninsured liabilities by more—the data show—than
the small subsidy transference of funding the additional equity investment in the affiliate.
Thus, if a bank holding company were to finance
its nonbank affiliates from bank dividends—that is, to
directly pass on the bank's subsidy to the holding
company's affiliates—the profitability of the consolidated organization would decline. If there were no
net costs to the bank from upstreaming dividends to
its parent for affiliate funding, it would be the prevalent practice today. In short, the subsidy appears to
have been effectively bottled up in the bank. The
Federal Reserve Board believes that this genie would
be irreversibly let out of the bottle, however, should
the Congress authorize wider financial activities in
operating subsidiaries. Subsidized equity investments
by banks can be made in their own subsidiaries
without increasing funding costs on all of the bank's
uninsured liabilities because the consolidated capital
of the bank would not change in the process. But
since the activities authorized to banks' subsidiaries
cannot differ from those available to the bank itself,
there is no additional profit to the overall banking
organization in shifting bank powers to a subsidiary.
But H.R. 10 would permit activities not now permitted in a bank. Those activities, when performed in
bank subsidiaries and financed with bank equity capital, would increase the potential profit to the overall
banking organization. It would also inevitably induce
the gravitation to subsidiaries of banks, not only of
the new powers authorized by H.R. 10 but all of
those powers currently financed in holding company
affiliates at higher costs of capital than those available to the bank. H.R. 10 thus effectively authorizes
all holding company powers to be funded in the bank
at funding costs significantly lower than the funding
costs of its holding company.

Statements to the Congress

For the thirty-five of the fifty largest bank holding
companies for which comparisons are available, ratings on debentures are always somewhat higher at
the bank than at the holding company parent and, of
course, higher ratings translate into lower interest
rates. As might be expected, the data show that the
value of these differences in bond ratings is higher
during periods of market stress, when subsidies are
more valuable, because the market is more risk sensitive. But even today, when losses in the financial
system are quite low, the cost of debt capital to banks
still averages 10 basis points to 12 basis points below
that of the parent holding companies. That difference
in bond ratings today between banks and bank holding companies, let alone the larger difference between
banks and other financial institutions, is a significant
part of the 20 basis point to 30 basis point gross
margin on A-rated or better investment grade business loans—more than enough significantly to change
lending behavior if it were not available.
Business loan markets are particularly competitive,
and hence there is little leeway for a competitor with
higher funding costs to pass on such costs to the
borrower. For example, the weakened credit standing
of the Japanese banks has engendered a risk premium
that these entities have paid—and today would have
to pay—to fund their U.S. affiliates; this has required
them to sharply reduce their business loan volume in
the United States. Japanese bank branches and agencies in the United States have reduced their share of
business loans from more than 16 percent of the
market in 1995 to less than 11 percent today.
In short, the subsidy is a critical competitive issue
in competitive markets. Allowing the bank to inject
federal subsidies into the proposed new activities
could distort capital markets and the efficient allocation of both financial and real resources. New affiliations, if allowed through banks, would accord them
an unfair competitive advantage over comparable
nonbank firms. The holding company structure, on
the other hand, fosters a level playing field within the
financial services industry, contributing to a more
competitive environment.

Safety and Soundness
In addition to our concern about the extension of the
safety net that would accompany the widening of
bank activities through operating subsidiaries, the
Federal Reserve Board is also sensitive to the implications of operating subsidiaries for the safety and
soundness of the parent bank. Most of the new activities contemplated by H.R. 10 would not be accompa


421

nied by unusually high risk, but they could imply
more risk. The Board believes these activities add the
potential for new profitable opportunities for banking
organizations, but it is almost always the case that the
more potentially profitable the activity, the riskier it
is. Although, to be sure, diversification can reduce
that risk, the losses that would accompany riskier
activities from time to time would fall on the insured
bank's capital if the new activities were authorized in
bank subsidiaries. Such losses at holding company
affiliates would, of course, fall on the uninsured holding company. This is an important distinction for the
deposit insurance funds and potentially the taxpayer.
This potential for loss and bank capital depletion is
another reason for urging that the new activities be
conducted in a holding company affiliate rather than
in a banking subsidiary.
H.R. 10 is supposed to virtually eliminate this
concern. As I earlier noted, the bank's equity investment in the bank subsidiary under H.R. 10 would be
deducted from the bank's regulatory capital, with the
requirement that the remaining regulatory capital still
meet the well-capitalized standard. At the same time,
the Office of the Comptroller of the Currency has
asserted that it would order an operating sub immediately to be sold or declared bankrupt and closed
before its cumulative losses exceeded the bank's
equity investment in the failing sub. Combined with
the provision of H.R. 10 adjusting regulatory capital
for investment in subs, this provision is intended to
cap the effect on the bank of subsidiary losses to the
amount of the bank's original investment. Because
that amount would have already been deducted from
the bank's regulatory capital, the failure of the subsidiary, it is maintained, could not affect the regulatory capital of the bank.
The Board is concerned that this regulatory
accounting approach, which does not address the
actual capital of a bank, could provide a false sense
of security. We had extensive experience with
attempts to redefine reality by redefining regulatory
capital in the thrift industry in the 1980s. This
approach was widely viewed as a major mistake
whose echoes we are still dealing with today. Regulatory capital at the time soon began to mean nothing to
the market, and, as a consequence, the Congress in
the Federal Deposit Insurance Corporation Improvement Act of 1991 ordered the banking agencies to
follow Generally Accepted Accounting Principles
(GAAP) whenever possible. In the current context,
there is—as in the 1980s—no reason to believe the
new regulatory definitions will change the reality of
the market place. Economic, as opposed to regulatory, capital of the bank would not, as I have noted,

422

Federal Reserve Bulletin • June 1999

be changed by this special regulatory capital accounting, and such deductions from equity capital would
not be reflected under GAAP. It is the economically
more relevant GAAP statements to which uninsured
creditors of banks look when deciding to deal with a
bank, and they will continue to do so after financial
modernization. Bank creditors will, in any event,
continue to view the investment in the bank subsidiary as part of the capital protecting their position—
for the simple reason that it does. If they see the
economic and GAAP capital at the bank declining as
operating subsidiary losses occur, they will react as
any prudential creditor should—regardless of artificial regulatory accounting adjustments or regulatory
measures of capital adequacy.
Perhaps more to the point, it seems to me particularly relevant to underline that losses in financial
markets—large losses—can occur so quickly that
regulators would be unable to close the failing operating subsidiary as contemplated by H.R. 10 before the
subsidiaries' capital ran out. Indeed, losses might
even continue to build, producing negative net worth
in the subsidiary. At the time of closure of a subsidiary, there is nothing to prevent the total charges for
losses against the parent bank's regulatory capital
from exceeding the prior deduction required by
H.R. 10.1 Our experience after the stock market crash
of 1987—when a subsidiary of a major bank not only
lost more than the bank's investment in its subsidiary
but the bank was unable to dispose of the subsidiary
for several years—underscores the seriousness of
such concerns.
H.R. 10 would exclude from permissible bank
subsidiaries only insurance underwriting and real
estate development. One of the permissible activities
is merchant banking, which does not have a long or
significant twentieth century history in this country.
Merchant banking currently means the negotiated
private purchase of equity investments by financial
institutions, with the objective of selling these positions at the end of some interval, usually measured in
years. Merchant banking has become so important an
element of full service investment banking in this
country, so much so that to prohibit bank-related
investment banks from participating in these activities would put them at a competitive disadvantage.
1. Moreover, should creditors of the subsidiary choose to attempt
to recover their funds from the bank parent, the removal of the loss
charged against the bank's capital could occur only when a court has
affirmed both the bankruptcy and the rejection of the claims on the
bank made by the subsidiary's creditors. This process could and
would take some time, during which, even if the court eventually
found for the bank and/or the regulator, further losses by the subsidiary could continue to impinge on the bank's capital. And, again, the
point is that the bank would have been at risk during that interval.




The Board has consequently supported merchant
banking as an activity of a holding company subsidiary, but believes it is potentially the most risky activity that would be authorized by H.R. 10 and would be
especially risky if permitted to be conducted in bank
subsidiaries.
Existing law permits some limited exceptions to
the otherwise prohibited outright ownership of equity
by banks and their subsidiaries, but these are quite
limited both in the aggregate and in the kinds of
businesses in which equity can be purchased, as well
as in the scale of each investment. True merchant
banking, as envisioned by H.R. 10, would place no
such limits—either per firm or in total. The potential
rewards for such equity investments are substantial,
but such potential gains are the mirror image of the
potential for substantial loss. In addition, poor equity
performance generally occurs during periods of weak
nationwide economic performance, the same intervals over which bank loan portfolios are usually
under pressure, raising concerns about the compounding of bank problems during such periods.

FUNCTIONAL

REGULATION

The holding company structure—especially for the
new activities—also has the significant benefit of
promoting effective supervision and the functional
regulation of different activities. The holding company structure, along with the so-called "Fed-lite"
provisions in H.R. 10, focuses on and enhances the
functional regulation of securities firms, insurance
companies, insured depository institutions, and their
affiliates by relying on the expertise and supervisory
strengths of different functional regulators, reducing
the potential burdensome overlap of regulation and
providing for increased coordination and reduced
potential for conflict among functional regulators.

EXECUTIVE BRANCH

PREROGATIVES

There is a final point I want to make because it
appears to have driven the Treasury's recent opposition to financial modernization legislation that has
not adopted the universal bank model. It is not necessary to adopt the universal bank model in order to
preserve the executive branch's supervisory authority
for national banks or federal savings associations; nor
is it necessary in order to preserve the share of this
nation's banking assets controlled by national banks
and federal savings associations. In fact, the share of
assets controlled by national banks is predominant

Statements to the Congress

and growing, in part the result of the enactment of
interstate branching authorities, an initiative the Federal Reserve fully supported. As shown in the tables
in the appendix to my statement, national bank assets
have increased in each of the past three years while
state bank assets have declined over the past two
years.2 As of year-end 1998, 58.5 percent of all
banking assets were under the supervision of the
Comptroller of the Currency, up from a little more
than 55 percent at the end of 1996. As the second
table clearly suggests, the largest banks, especially
those with large branching systems, tend to be
national banks, providing a distinct advantage to
national banks in an environment of interstate
branching.
Furthermore, the Congress for sound public policy
reasons has purposefully apportioned responsibility
for this nation's financial institutions among the
elected executive branch and independent regulatory
agencies. Action to alter these responsibilities would
be contrary to the deliberate steps that the Congress
2. The attachment to this statement is available from Publications
Services, Mail Stop 127, Board of Governors of the Federal Reserve
System, Washington, DC 20551, and on the Board's site on the World
Wide Web at http://www.federalreserve.gov.




423

has taken to ensure a proper balance in the regulation
of this nation's dual banking system.

SUMMING UP

The Board is a strong advocate of financial modernization in order both to eliminate the inefficiencies of
the current Great Depression regulatory structure and
to create a system more in keeping with the technology and markets of the twenty-first century. We
strongly support the thrust of H.R. 10 to accomplish
these objectives. Equally as strongly, however, we
also believe that the new activities should not be
authorized for banks through operating subsidiaries.
We believe that the holding company structure is the
most appropriate and effective one for limiting transfer of the federal subsidy to new activities and fostering a level playing field both for financial firms
affiliated with banks and independent firms. It will
also, in our judgment, foster the protection of the
safety and soundness of our insured banking system
and the taxpayers, enhance functional regulation,
and achieve all of the benefits of financial modernization for the consumer and the financial services
industry.
•

424

Announcements
LAUNCH OF A NEW DESIGN FOR THE FEDERAL
RESERVE BOARD WEB SITE

ISSUANCE BY THE BASLE COMMITTEE
OF A PAPER ON CREDIT-RISK
MODELING

The Federal Reserve Board on May 3, 1999, unveiled
a new design for its web site on the Internet.
The new design is constructed to make Federal
Reserve information on the Internet easier to navigate
through an improved format accompanied by an
attractive presentation.
New features include the following:

The Basle Committee on Banking Supervision (Basle
Committee) recently issued for comment a paper
entitled Credit Risk Modelling: Current Practices
and Applications.
The paper describes the structure of various creditrisk models used by commercial banks worldwide
and identifies related supervisory issues pertaining to
the use of such models as a basis for regulatory
capital standards. Comments are requested by October 1, 1999. The paper is available on the BIS Internet site at http://www.bis.org
The Committee was established by the central bank
governors of the Group of Ten countries in 1975 and
operates under the auspices of the Bank for International Settlements (BIS) in Basle, Switzerland. It
consists of senior supervisory authorities representing the world's largest banking systems and works to
strengthen bank supervisory and regulatory practices
worldwide.

• "Breaking News," with direct links to announcements, statements, and documents released in the past
day or two
• "What's New," which lists the items carried
under Breaking News as well as information about
statistical releases and other items posted over the
past two weeks
• "Publications Schedule," which shows what is
expected to be posted on the web site during the next
two months, including speeches, congressional testimony, Federal Open Market Committee material, and
statistical releases
• "Site Map," featuring a complete list of the links
found immediately under the main subject categories.
Some categories have also been consolidated. The
"Monetary Policy" site now contains Federal Open
Market Committee information, the Beige Books,
and Humphrey-Hawkins reports and testimony. The
"Banking" site combines the material listed under
Regulation and Supervision and under Supervision
Manuals. "Research and Data" contains articles from
the Federal Reserve Bulletin along with material
listed under Domestic and International Research.
The broad range of information available on the
Board's web site also includes Board actions, press
releases, consumer topics, reports to Congress, and
connections to other banking regulators and to the
Federal Reserve Banks.
The web site was inaugurated in March 1996 and
now contains more than 13,000 documents. The site
averages 80,000 daily requests during the week and
45,000 daily requests on weekends. The Internet
address is http://www.federalreserve.gov




ENFORCEMENT

ACTIONS

The federal financial institution regulators (the Board
of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the National
Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision) and First Data Corporation reached agreement on March 30, 1999, that the provider of data
processing services to banks, thrift institutions, and
credit unions will complete Year 2000 testing of the
last of six merchant processing systems that serve
banking and credit union clients by June 30, 1999,
and fully implement the system in a Y2K production
mode by July 11, 1999.
The agreement covers a single credit card processing platform at the Nashville (Tennessee) Data Center of First Data Merchant Services, a subsidiary of
the corporation. Within fifteen days, First Data will
submit to the agencies and its financial institution
clients a written report of how it will fulfill the

425

agreement and then update progress regularly. On
this system, which is known as the Envoy processing
system, First Data services more than 200 banks,
thrift institutions, and credit unions.
First Data committed to the federal agencies that it
will have ample time to make the necessary adjustments to the Envoy system and to carry out appropriate testing. The agreement covers only the Envoy
system, which, according to First Data, represents
approximately 2 percent of its entire Y2K remediation effort. An on-site examination by an interagency
team of examiners found that the Envoy system was
lagging in meeting testing and implementation milestones, which are part of the interagency guidance.
This is the second time regulators have taken action
against a service provider. The agencies will continue
to monitor financial institutions and service providers
for compliance with Year 2000 guidelines.

Bank of Chicago, and the Illinois Office of Banks and
Real Estate.

CHANGES IN BOARD

STAFF

The Board of Governors announced the retirement
of Betsy Riggs, Assistant Director in the Division
of Information Resources Management, effective
May 31, 1999, after thirty-two years of service to the
Board.
On May 20, 1999, the Board of Governors
announced the following official staff actions, also in
the Division of Information Resources Management:

The Federal Reserve Board on April 16, 1999,
announced the issuance of a combined order to cease
and desist and order of assessment of a civil money
penalty against Paul P. Piper, Jr., a former institutionaffiliated party of First National Summit Bankshares,
Crested Butte, Colorado, a former registered bank
holding company, and the First National Summit
Bank, Gunnison, Colorado, a former national bank.
Mr. Piper, without admitting to any allegations,
consented to the issuance of the order in connection
with his alleged involvement in the acquisition of
control of more than 25 percent of the outstanding
voting shares of First National Summit Bankshares
without prior approval from the Board of Governors.
Mr. Piper paid a fine of $25,000.

The appointment of Richard C. Stevens to the position of Director of the Division of Information
Technology. Mr. Stevens joined the Board's staff
in 1973. In July 1998, he was promoted to the
position of Deputy Director for the Division of
Information Resources Management.
The appointment of Marianne M. Emerson to the
position of Deputy Director. Ms. Emerson was
appointed Assistant Director in 1990 and is ending a two-year assignment as technical adviser
to the Division of Banking Supervision and
Regulation.
The appointment of Tillena G. Clark to the position
of Assistant Director. Ms. Clark joined the
Board's staff in 1994 and is currently serving
as manager in the division's Year 2000 Program Office. She holds a B.A. from the University of Rochester and an M.A. from Catholic
University.

The Federal Reserve Board on April 22, 1999,
announced the execution of a written agreement by
and among Foxdale Bancorp, Inc., the Foxdale Bank,
both of South Elgin, Illinois, the Federal Reserve

Finally, the name of the division has been changed
from Information Resources Management to Information Technology to more accurately reflect the
division's responsibilities.
•




426

Minutes of the
Federal Open Market Committee Meeting
Held on February 2-3, 1999
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, February 2, 1999, at 2:30 p.m. and continued on Wednesday, February 3, 1999, at 9:00 a.m.

Messrs. Madigan and Simpson, Associate Directors,
Divisions of Monetary Affairs and Research and
Statistics respectively, Board of Governors

Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Boehne
Mr. Ferguson
Mr. Gramlich
Mr. Kelley
Mr. McTeer
Mr. Meyer
Mr. Moskow
Ms. Rivlin
Mr. Stern

Mr. Dennis,2 Assistant Director, Division of Reserve
Bank Operations and Payment Systems, Board
of Governors

Mr. Reinhart, Deputy Associate Director, Division of
Monetary Affairs, Board of Governors

Messrs. Reifschneider 3 and Small,3 Section Chiefs,
Divisions of Research and Statistics and
Monetary Affairs respectively, Board of
Governors
Ms. Kole,4 Messrs. English 4 and Rosine,4 Senior
Economists, Divisions of International Finance,
Monetary Affairs, and Research and Statistics
respectively

Messrs. Broaddus, Guynn, Jordan, and Parry,
Alternate Members of the Federal Open
Market Committee

Ms. Garrett, Economist, Division of Monetary Affairs,
Board of Governors

Ms. Minehan, Messrs. Poole and Hoenig, Presidents
of the Federal Banks of Boston, St. Louis, and
Kansas City respectively

Mr. Evans,2 Manager, Division of Reserve Bank
Operations and Payment Systems, Board of
Governors

Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Ms. Fox, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Baxter, Deputy General Counsel
Mr. Prell, Economist

Ms. Low, Open Market Secretariat Assistant, Division
of Monetary Affairs, Board of Governors

Messrs. Alexander, Cecchetti, Hooper, Hunter, Lang,
Lindsey, Rolnick, Rosenblum, Slifman, and
Stockton, Associate Economists
Mr. Fisher, Manager, System Open Market Account

Mr. Conrad, First Vice President, Federal Reserve
Bank of Chicago
Messrs. Beebe, Eisenbeis, Goodfriend, Hakkio, and
Rasche, Senior Vice Presidents, Federal Reserve
Banks of San Francisco, Atlanta, Richmond,
Kansas City, and St. Louis respectively
Messrs. Altig, Bentley, and Rosengren,
Vice Presidents, Federal Reserve Banks of
Cleveland, New York, and Boston respectively

Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Mr. Winn,1 Assistant to the Board, Office of
Board Members, Board of Governors

1. Attended Wednesday's session only.




2. Attended portions of meeting relating to the examination of the
System Open Market Account and changes to the domestic securities
lending program.
3. Attended portions of meeting relating to the discussion of the
Committee's consideration of its monetary and debt ranges for 1999.
4. Attended portion of meeting relating to the Committee's review
of the economic outlook and consideration of its monetary and debt
ranges for 1999.

427

In the agenda for this meeting, it was reported that
advices of the election of the following members and
alternate members of the Federal Open Market Committee for the period commencing January 1, 1999,
and ending December 31, 1999, had been received
and that these individuals had executed their oaths of
office.
The elected members and alternate members are as
follows:
William J. McDonough, President of the Federal Reserve
Bank of New York.5
Edward G. Boehne, President of the Federal Reserve
Bank of Philadelphia, with J. Alfred Broaddus, Jr.,
President of the Federal Reserve Bank of Richmond,
as alternate.
Michael H. Moskow, President of the Federal Reserve
Bank of Chicago, with Jerry L. Jordan, President
of the Federal Reserve Bank of Cleveland, as
alternate.
Robert D. McTeer, Jr., President of the Federal Reserve
Bank of Dallas, with Jack Guynn, President of the
Federal Reserve Bank of Atlanta, as alternate.
Gary H. Stern, President of the Federal Reserve Bank of
Minneapolis, with Robert T. Parry, President of the
Federal Reserve Bank of San Francisco, as alternate.

By unanimous vote, the following officers of the
Federal Open Market Committee were elected to
serve until the election of their successors at the first
meeting of the Committee after December 31, 1999,
with the understanding that in the event of the discontinuance of their official connection with the Board of
Governors or with a Federal Reserve Bank, they
would cease to have any official connection with the
Federal Open Market Committee:
Alan Greenspan
William J. McDonough
Donald L. Kohn
Normand R.V. Bernard
Lynn S. Fox
Gary P. Gillum
J. Virgil Mattingly, Jr.
Thomas C. Baxter, Jr.
Michael J. Prell
Karen H. Johnson

Chairman
Vice Chairman
Secretary and Economist
Deputy Secretary
Assistant Secretary
Assistant Secretary
General Counsel
Deputy General Counsel
Economist
Economist

Lewis S. Alexander, Stephen G. Cecchetti,
Peter Hooper, III, William C. Hunter,
Richard W. Lang, David E. Lindsey,
Arthur J. Rolnick, Harvey Rosenblum,
Larry Slifman, and David J. Stockton,
Associate Economists
5. Mr. Jamie B. Stewart, Jr., incoming First Vice President of the
Federal Reserve Bank of New York, took his oath of office as alternate
member for Mr. McDonough on February 18, 1999.




By unanimous vote, the Federal Reserve Bank of
New York was selected to execute transactions for
the System Open Market Account until the adjournment of the first meeting of the Committee after
December 31, 1999.
By unanimous vote, Peter R. Fisher was selected to
serve at the pleasure of the Committee as Manager,
System Open Market Account, on the understanding
that his selection was subject to being satisfactory to
the Federal Reserve Bank of New York.
Secretary's note: Advice subsequently was received that
the selection of Mr. Fisher as Manager was satisfactory to
the board of directors of the Federal Reserve Bank of
New York.

The Report of Examination of the System Open
Market Account, conducted by the Board's Division
of Reserve Bank Operations and Payment Systems as
of the close of business on November 5, 1998, was
accepted.
On the recommendation of the Manager of the
System Open Market Account, the Committee
amended paragraph 2 of the Authorization for
Domestic Open Market Operations relating to the
Treasury securities lending program. The revised
facility introduces the auction technique for awarding
borrowed securities to dealer firms on a competitive
basis. The new facility is designed to implement
more effectively the objective of providing a shortterm "last resort" source of Treasury securities to the
dealer market and thereby to facilitate the smooth
clearing of Treasury securities and to ease liquidity
strains in the market as they arise. The amended
Authorization for Domestic Open Market Operations
was approved unanimously in the form shown below:
AUTHORIZATION
OPEN MARKET

FOR DOMESTIC
OPERATIONS

Amended February 2, 1999
1. The Federal Open Market Committee authorizes and
directs the Federal Reserve Bank of New York, to the
extent necessary to carry out the most recent domestic
policy directive adopted at a meeting of the Committee:
(a) To buy or sell U.S. Government securities, including securities of the Federal Financing Bank, and securities
that are direct obligations of, or fully guaranteed as to
principal and interest by, any agency of the United States in
the open market, from or to securities dealers and foreign
and international accounts maintained at the Federal
Reserve Bank of New York, on a cash, regular, or deferred
delivery basis, for the System Open Market Account at
market prices, and, for such Account, to exchange maturing U.S. Government and Federal agency securities with
the Treasury or the individual agencies or to allow them to

428

Federal Reserve Bulletin • June 1999

mature without replacement; provided that the aggregate
amount of U.S. Government and Federal agency securities
held in such Account (including forward commitments)
at the close of business on the day of a meeting of the
Committee at which action is taken with respect to a
domestic policy directive shall not be increased or
decreased by more than $12.0 billion during the period
commencing with the opening of business on the day
following such meeting and ending with the close of business on the day of the next such meeting;
(b) To buy U.S. Government securities and obligations that are direct obligations of, or fully guaranteed as to
principal and interest by, any agency of the United States,
from dealers for the account of the Federal Reserve Bank
of New York under agreements for repurchase of such
securities or obligations in 60 calendar days or less, at rates
that, unless otherwise expressly authorized by the Committee, shall be determined by competitive bidding, after
applying reasonable limitations on the volume of agreements with individual dealers; provided that in the event
Government securities or agency issues covered by any
such agreement are not repurchased by the dealer pursuant
to the agreement or a renewal thereof, they shall be sold in
the market or transferred to the System Open Market
Account.
2. In order to ensure the effective conduct of open
market operations, the Federal Open Market Committee
authorizes the Federal Reserve Bank of New York to lend
on an overnight basis U.S. Government securities held in
the System Open Market Account to dealers at rates that
shall be determined by competitive bidding but that in no
event shall be less than 1.0 percent per annum of the
market value of the securities lent. The Federal Reserve
Bank of New York shall apply reasonable limitations on
the total amount of a specific issue that may be auctioned
and on the amount of securities that each dealer may
borrow. The Federal Reserve Bank of New York may
reject bids which could facilitate a dealer's ability to control a single issue as determined solely by the Federal
Reserve Bank of New York.
3. In order to ensure the effective conduct of open
market operations, while assisting in the provision of shortterm investments for foreign and international accounts
maintained at the Federal Reserve Bank of New York, the
Federal Open Market Committee authorizes and directs the
Federal Reserve Bank of New York (a) for System Open
Market Account, to sell U.S. Government securities to such
foreign and international accounts on the bases set forth in
paragraph 1(a) under agreements providing for the resale
by such accounts of those securities within 60 calendar
days on terms comparable to those available on such
transactions in the market; and (b) for New York Bank
account, when appropriate, to undertake with dealers, subject to the conditions imposed on purchases and sales of
securities in paragraph 1(b), repurchase agreements in U.S.
Government and agency securities, and to arrange corresponding sale and repurchase agreements between its own
account and foreign and international accounts maintained
at the Bank. Transactions undertaken with such accounts
under the provisions of this paragraph may provide for a
service fee when appropriate.

On the Manager's recommendation, the Committee also amended the Foreign Currency Authorization



and the Foreign Currency Directive to reflect changes
triggered by the launch of the euro. Specifically, it
dropped from the Authorization those European currencies that now exist as denominations of the euro
(Austrian schillings, Belgian francs, French francs,
Italian lire, Netherlands guilders, and German marks).
The amendments also removed the central banks of
Austria, Belgium, Denmark, England, France, Germany, Italy, Japan, Netherlands, Norway, Sweden,
and Switzerland, and the Bank for International
Settlements from the list of institutions with which
the Federal Reserve Bank of New York was authorized to maintain reciprocal currency arrangements
(swap facilities). In keeping with the Committee's
decision at the November 1998 meeting and after
consultations with officials at the foreign institutions,
the reciprocal currency arrangements in question
were not renewed after they matured on various dates
in December.
Accordingly, the amended Authorization for Foreign Currency Operations and the Foreign Currency
Directive were unanimously approved in the forms
shown below:

AUTHORIZATION
OPERATIONS

FOR FOREIGN

CURRENCY

Amended February 2, 1999
1. The Federal Open Market Committee authorizes and
directs the Federal Reserve Bank of New York, for System
Open Market Account, to the extent necessary to carry out
the Committee's foreign currency directive and express
authorizations by the Committee pursuant thereto, and in
conformity with such procedural instructions as the Committee may issue from time to time:
A. To purchase and sell the following foreign currencies in the form of cable transfers through spot or forward
transactions on the open market at home and abroad,
including transactions with the U.S. Treasury, with the U.S.
Exchange Stabilization Fund established by Section 10 of
the Gold Reserve Act of 1934, with foreign monetary
authorities, with the Bank for International Settlements,
and with other international financial institutions:
Canadian dollars
Danish kroner
Euro
Pounds sterling
Japanese yen

Mexican pesos
Norwegian kroner
Swedish kronor
Swiss francs

B. To hold balances of, and to have outstanding forward contracts to receive or to deliver, the foreign currencies listed in paragraph A above.
C. To draw foreign currencies and to permit foreign
banks to draw dollars under the reciprocal currency
arrangements listed in paragraph 2 below, provided that

Minutes of the Federal Open Market Committee

drawings by either party to any such arrangement shall be
fully liquidated within 12 months after any amount outstanding at that time was first drawn, unless the Committee, because of exceptional circumstances, specifically
authorizes a delay.
D. To maintain an overall open position in all foreign
currencies not exceeding $25.0 billion. For this purpose,
the overall open position in all foreign currencies is defined
as the sum (disregarding signs) of net positions in individual currencies. The net position in a single foreign
currency is defined as holdings of balances in that currency, plus outstanding contracts for future receipt, minus
outstanding contracts for future delivery of that currency,
i.e., as the sum of these elements with due regard to sign.
2. The Federal Open Market Committee directs the Federal Reserve Bank of New York to maintain reciprocal
currency arrangements ("swap" arrangements) for the System Open Market Account for periods up to a maximum of
12 months with the following foreign banks, which are
among those designated by the Board of Governors of the
Federal Reserve System under Section 214.5 of Regulation
N, Relations with Foreign Banks and Bankers, and with the
approval of the Committee to renew such arrangements on
maturity:

Foreign bank

Amount of arrangement
(millions of dollars
equivalent)
2,000
3,000

Any changes in the terms of existing swap arrangements, and the proposed terms of any new arrangements
that may be authorized, shall be referred for review and
approval to the Committee.
3. All transactions in foreign currencies undertaken
under paragraph 1A. above shall, unless otherwise
expressly authorized by the Committee, be at prevailing
market rates. For the purpose of providing an investment
return on System holdings of foreign currencies, or for the
purpose of adjusting interest rates paid or received in
connection with swap drawings, transactions with foreign
central banks may be undertaken at non-market exchange
rates.
4. It shall be the normal practice to arrange with foreign
central banks for the coordination of foreign currency
transactions. In making operating arrangements with foreign central banks on System holdings of foreign currencies, the Federal Reserve Bank of New York shall not
commit itself to maintain any specific balance, unless
authorized by the Federal Open Market Committee. Any
agreements or understandings concerning the administration of the accounts maintained by the Federal Reserve
Bank of New York with the foreign banks designated
by the Board of Governors under Section 214.5 of Regulation N shall be referred for review and approval to the
Committee.
5. Foreign currency holdings shall be invested to ensure
that adequate liquidity is maintained to meet anticipated
needs and so that each currency portfolio shall generally
have an average duration of no more than 18 months
(calculated as Macaulay duration). When appropriate in
connection with arrangements to provide investment facilities for foreign currency holdings, U.S. Government securi


429

ties may be purchased from foreign central banks under
agreements for repurchase of such securities within 30 calendar days.
6. All operations undertaken pursuant to the preceding
paragraphs shall be reported promptly to the Foreign Currency Subcommittee and the Committee. The Foreign Currency Subcommittee consists of the Chairman and Vice
Chairman of the Committee, the Vice Chairman of the
Board of Governors, and such other member of the Board
as the Chairman may designate (or in the absence of
members of the Board serving on the Subcommittee, other
Board members designated by the Chairman as alternates,
and in the absence of the Vice Chairman of the Committee,
his alternate). Meetings of the Subcommittee shall be
called at the request of any member, or at the request of the
Manager, System Open Market Account ("Manager"), for
the purposes of reviewing recent or contemplated operations and of consulting with the Manager on other matters
relating to his responsibilities. At the request of any member of the Subcommittee, questions arising from such
reviews and consultations shall be referred for determination to the Federal Open Market Committee.
7. The Chairman is authorized:
A. With the approval of the Committee, to enter into
any needed agreement or understanding with the Secretary
of the Treasury about the division of responsibility for
foreign currency operations between the System and the
Treasury;
B. To keep the Secretary of the Treasury fully advised
concerning System foreign currency operations, and to
consult with the Secretary on policy matters relating to
foreign currency operations;
C. From time to time, to transmit appropriate reports
and information to the National Advisory Council on International Monetary and Financial Policies.
8. Staff officers of the Committee are authorized to
transmit pertinent information on System foreign currency operations to appropriate officials of the Treasury
Department.
9. All Federal Reserve Banks shall participate in the
foreign currency operations for System Account in accordance with paragraph 3 G(l) of the Board of Governors'
Statement of Procedure with Respect to Foreign Relationships of Federal Reserve Banks dated January 1, 1944.

FOREIGN CURRENCY

DIRECTIVE

Amended February 2, 1999
1. System operations in foreign currencies shall generally be directed at countering disorderly market conditions,
provided that market exchange rates for the U.S. dollar
reflect actions and behavior consistent with the IMF Article IV, Section 1.
2. To achieve this end the System shall:
A. Undertake spot and forward purchases and sales
of foreign exchange.
B. Maintain reciprocal currency ("swap") arrangements with selected foreign central banks.
C. Cooperate in other respects with central banks
of other countries and with international monetary
institutions.
3. Transactions may also be undertaken:

430

Federal Reserve Bulletin • June 1999

A. To adjust System balances in light of probable
future needs for currencies.
B. To provide means for meeting System and Treasury commitments in particular currencies and to facilitate
operations of the Exchange Stabilization Fund.
C. For such other purposes as may be expressly
authorized by the Committee.
4. System foreign currency operations shall be
conducted:
A. In close and continuous consultation and cooperation with the United States Treasury;
B. In cooperation, as appropriate, with foreign monetary authorities; and
C. In a manner consistent with the obligations of the
United States in the International Monetary Fund regarding
exchange arrangements under the IMF Article IV.

By unanimous vote, the Procedural Instructions
with Respect to Foreign Currency Operations shown
below were reaffirmed.
PROCEDURAL INSTRUCTIONS WITH RESPECT TO
FOREIGN CURRENCY OPERATIONS

Reaffirmed February 2, 1999
In conducting operations pursuant to the authorization and
direction of the Federal Open Market Committee as set
forth in the Authorization for Foreign Currency Operations
and the Foreign Currency Directive, the Federal Reserve
Bank of New York, through the Manager, System Open
Market Account ("Manager"), shall be guided by the
following procedural understandings with respect to consultations and clearances with the Committee, the Foreign
Currency Subcommittee, and the Chairman of the Committee. All operations undertaken pursuant to such clearances
shall be reported promptly to the Committee.
1. The Manager shall clear with the Subcommittee (or
with the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time
available):
A. Any operation that would result in a change in
the System's overall open position in foreign currencies
exceeding $300 million on any day or $600 million since
the most recent regular meeting of the Committee.
B. Any operation that would result in a change on
any day in the System's net position in a single foreign
currency exceeding $150 million, or $300 million when the
operation is associated with repayment of swap drawings.
C. Any operation that might generate a substantial
volume of trading in a particular currency by the System,
even though the change in the System's net position in that
currency might be less than the limits specified in l.B.
D. Any swap drawing proposed by a foreign bank not
exceeding the larger of (i) $200 million or (ii) 15 percent of
the size of the swap arrangement.
2. The Manager shall clear with the Committee (or with
the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible in the time
available, or with the Chairman, if the Chairman believes
that consultation with the Subcommittee is not feasible in
the time available):
A. Any operation that would result in a change in the



System's overall open position in foreign currencies
exceeding $1.5 billion since the most recent regular meeting of the Committee.
B. Any swap drawing proposed by a foreign bank
exceeding the larger of (i) $200 million or (ii) 15 percent of
the size of the swap arrangement.
3. The Manager shall also consult with the Subcommittee or the Chairman about proposed swap drawings by the
System and about any operations that are not of a routine
character.

On January 27, 1999, the continuing rules, regulations, and other instructions of the Committee had
been distributed with the advice that, in accordance
with procedures approved by the Committee, they
were being called to the Committee's attention before
the February 2-3 meeting to give members an opportunity to raise any questions they might have concerning them. Members were asked to indicate if they
wished to have any of the instruments in question
placed on the agenda for consideration at this meeting, and no requests for consideration were received.
Accordingly, all of these instruments remained in
effect in their existing form.
The Committee discussed proposed changes to the
Program for Security of FOMC Information to update
the document with regard to certain security classifications and access to confidential FOMC information. The Committee decided to continue its discussion at a later meeting.
By unanimous vote, the minutes of the meeting of
the Federal Open Market Committee held on December 22, 1998, were approved.
The Manager of the System Open Market Account
reported on recent developments in foreign exchange
markets. There were no open market operations in
foreign currencies for the System's account in the
period since the previous meeting, and thus no vote
was required of the Committee.
The Manager also reported on developments in
domestic financial markets and on System open market transactions in government securities and federal
agency obligations during the period December 22,
1998, through February 2, 1999. By unanimous vote,
the Committee ratified these transactions.
The Committee then turned to a discussion of the
economic and financial outlook and the implementation of monetary policy over the intermeeting period
ahead. A summary of the economic and financial
information available at the time of the meeting and
of the Committee's discussion is provided below,
followed by the domestic policy directive that was
approved by the Committee and issued to the Federal
Reserve Bank of New York.
The information reviewed at this meeting suggested that the economy expanded rapidly in the

Minutes of the Federal Open Market Committee

closing months of 1998. Widespread strength in
domestic final demand and a diminished drag from
net exports underpinned further solid gains in production, employment, and income. Inflation remained
subdued despite very tight labor markets.
Nonfarm payroll employment recorded robust
increases in November and December. Although
manufacturing experienced further sizable job losses
over the two months, strong employment gains were
achieved in construction, retail trade, and the services
industries. The civilian unemployment rate fell to
4.3 percent in December, and other measures of labor
conditions also indicated that labor markets remained
quite tight through year-end.
Industrial production rebounded in December from
a small November decline. Industrial output strengthened for the fourth quarter as a whole, largely reflecting a surge in the production of motor vehicles and
parts that more than offset sizable reductions in mining and utility output. The manufacture of high-tech
equipment surged further and the production of construction supplies stayed on a brisk upward trend,
while activity in other manufacturing categories
remained weak. On balance, output in manufacturing
expanded at about the same pace as capacity, leaving
the factory operating rate unchanged at a relatively
low level.
Consumer spending, supported by further sizable
gains in income and net worth, remained robust
through year-end. Retail sales rose sharply in the
fourth quarter. Expenditures for durable goods, particularly motor vehicles, were very strong. Outlays
for nondurable goods were brisk despite sluggish
growth in spending for apparel. Unseasonably mild
weather held down spending for energy services in
November and December, but purchases of other
types of services recorded moderate increases. Surveys in early 1999 indicated buoyant consumer sentiment, reflecting optimism about personal finances
and the employment outlook.
Residential housing activity continued to display
substantial strength in the fourth quarter. Singlefamily housing starts remained at a very high level
in December, and sales of new homes in that month
were only slightly below the record established
in November. Sales of existing homes hit a record
high in December. Unseasonably favorable weather
extended the construction season in some areas of the
country, but low mortgage rates, rapid employment
growth, rising net worth, and special financing programs designed to broaden opportunities for homeownership were important factors in the strength
of home sales. Multifamily housing starts edged
lower in the fourth quarter as a December increase



431

partially reversed a November decline; rents have
continued to rise in real terms over the last several
years, but vacancy rates have changed little.
Business fixed investment picked up markedly in
the fourth quarter after the small decline of the previous quarter. Much of the surge in spending on
producers' durable equipment was attributable to a
pickup in purchases of motor vehicles and aircraft.
Elsewhere, investment in high-tech equipment
expanded rapidly further, while spending for other
types of durable equipment decelerated somewhat.
Nonresidential construction activity apparently rose
moderately in the fourth quarter. Office construction
picked up further in an environment of falling
vacancy rates and rising rental costs, but other building activity remained sluggish.
The pace of business inventory investment in October and November was slightly above that of the third
quarter, but in comparison with strong sales inventory positions were relatively lean in most industries.
In manufacturing, stocks increased moderately in the
October-November period, and the aggregate stockshipments ratio was in the middle of its narrow range
for the past year. Inventory investment in the wholesale sector slowed considerably, but much of the
swing reflected the unusually early harvest of farm
products. The inventory-sales ratio for this sector
was still at the top of its range for the last year, and
inventory overhangs persisted in metals and minerals,
machinery, and chemicals. Retailers stepped up their
inventory accumulation in the October-November
period. However, sales were robust and the
inventory-sales ratio for this sector continued to trend
downward.
The average deficit on U.S. trade in goods and
services for October and November was a little
smaller than the rate for the third quarter. The value
of exports for the two-month period rose considerably, with the largest gains occurring in automotive
products shipped to Canada, aircraft, machinery, agricultural products, and services. The value of imports
also moved up, but by less than the value of exports.
While the increases in imports were widespread
across trade categories, particularly large advances
were recorded for automotive products from Canada
and Mexico and for computers. The available data
suggested a weaker economic performance in most of
the major foreign industrial countries in the fourth
quarter; economic activity likely fell further in Japan,
and economic growth apparently slowed in most
countries of the euro bloc. Activity in most Asian
developing countries remained depressed, though
some seemed to be approaching a trough and Korea
appeared to be in the early stages of a recovery.

432

Federal Reserve Bulletin • June 1999

Moreover, economic conditions worsened in most
Latin American economies.
Inflation remained low in 1998. Consumer prices
changed little in December, reflecting a sizable drop
in energy prices that offset the large increase in
tobacco prices put in place after a settlement was
reached between the states and the tobacco makers.
For 1998 as a whole, CPI inflation was slightly lower
than in 1997; a substantial decline in energy prices
more than offset a sizable pickup in food inflation
and a small increase in core inflation. At the producer
level, prices of finished goods edged down in 1998
following an appreciable decline in 1997. While finished energy prices fell by more in 1998, finished
food prices were down only slightly and prices of
core finished goods turned up after having been
unchanged in 1997. Growth of hourly compensation
of private industry workers slowed considerably in
the fourth quarter of 1998, and the increase in hourly
compensation for the year was little changed from
that of 1997.
At its meeting on December 22,1998, the Committee adopted a directive that called for maintaining
conditions in reserve markets that were consistent
with an unchanged federal funds rate of about
43A percent and that did not contain any bias with
regard to the direction of possible adjustments to
policy during the intermeeting period. In the Committee's view, the stance of policy appeared to be consistent with its objectives of fostering sustained low
inflation and high employment, and the risks to this
outlook were reasonably well balanced over the near
term.
Open market operations during the intermeeting
period were directed toward maintaining the federal
funds rate at the Committee's desired level. In the
event, however, the rate averaged a little below its
intended level, largely reflecting the efforts of the
Trading Desk to keep reserve pressures around yearend to a minimum. Other short-term market rates
declined somewhat on balance, partly owing to the
disappearance of year-end pressures. Most long-term
interest rates changed little over the intermeeting
period, but Treasury bond yields moved up slightly
on balance, apparently in response to incoming data
suggesting stronger-than-expected economic growth.
In foreign exchange markets, the trade-weighted
value of the dollar appreciated slightly on balance
over the period. A small decline in the dollar relative
to other major currencies was more than offset by the
dollar's appreciation in terms of the currencies of a
broader group of countries that also are important
trading partners of the United States. The dollar
appreciated against the euro following the release of



data confirming a slowdown of economic growth in
much of the euro area and the absence of inflationary
pressures, and it rose against the British pound after
the Bank of England unexpectedly cut its repo rate.
Moreover, the economic crisis in Brazil apparently
contributed to an increase in the dollar relative to
some emerging market currencies. Against the yen,
however, the dollar fell in early January to its lowest
level in more than two years, evidently in response to
sharp increases in yields on Japanese bonds, but the
decline was partially reversed subsequently.
M2 and M3 continued to expand rapidly in December, with their liquid components, especially money
market funds, registering particularly large increases.
The effects of recent monetary policy easings in
reducing the opportunity costs of these components,
strong growth in GDP, and perhaps continued heightened demands for liquid and safe assets seemed to
have contributed to this performance. Available data
for January pointed to appreciable moderation in the
growth of both aggregates. From the fourth quarter of
1997 to the fourth quarter of 1998, M2 and M3 rose
at rates well above their annual ranges, while total
domestic nonfinancial debt expanded at a pace somewhat above the middle of its range.
The staff forecast prepared for this meeting pointed
to a substantial moderation in the expansion to a rate
commensurate with the growth of the economy's
potential. Growth of private final demand would be
damped by the anticipated waning of positive wealth
effects stemming from earlier large increases in
equity prices and by slow growth of spending on
consumer durables, housing units, and business capital goods after the earlier buildup in the stocks of
these items. Subdued expansion of foreign economic
activity and the lagged effects of the earlier rise in the
foreign exchange value of the dollar were expected to
place continuing, though diminishing, restraint on the
demand for U.S. exports for some period ahead and
to lead to further substitution of imports for domestic
products. Pressures on labor resources were likely to
remain near current levels and inflation was projected
to rise somewhat over the projection horizon, largely
as a result of an expected upturn in energy prices.
In the Committee's discussion of current and prospective economic conditions, members referred to
continuing indications of an exceptional economic
performance that was characterized by the persistence of quite low inflation despite very high and
rapidly rising levels of overall output and employment. The members currently saw few signs that the
economic expansion had moderated to a more sustainable rate, but most continued to anticipate substantial slowing over the year ahead to a pace close to

Minutes of the Federal Open Market Committee

or somewhat above that of the economy's long-run
potential. While many agreed that such an outlook
was subject to greater upside risk than they had
anticipated a few months ago—given the abatement
of market turmoil and positive business and consumer sentiment—such factors as the waning effects
of the earlier increases in stock market wealth on
consumer spending and some slowing in the extraordinary growth in business expenditures for equipment were likely to exert a moderating effect on the
expansion. Moreover, potentially greater weakness
in foreign economies and possible disruption to foreign financial markets remained a downside risk to
the outlook. Against this background, the members generally anticipated some pickup in inflation,
though to a still relatively low rate, primarily as last
year's declines in oil and other import prices were
not repeated. A number referred, however, to the
experience of recent years, which suggested that the
inflation process was not well understood and that
inflation forecasts were subject to a wide range of
uncertainty.
In keeping with the practice at meetings just before
the Federal Reserve's semiannual monetary policy
report to the Congress and the Chairman's associated
testimony, the members of the Committee and the
Federal Reserve Bank presidents not currently serving as members had provided individual projections
of the growth in real and nominal GDP, the rate of
unemployment, and the rate of inflation for the year
1999. Their forecasts of the rate of expansion in real
GDP in 1999 had a central tendency of 2Vi to 3 percent and a full range of 2 to VA percent. Such growth
was expected to be associated with a civilian unemployment rate in a range centering on AVA to AVI percent in the fourth quarter of this year, implying little
or no change from the current level. With regard to
nominal GDP growth in 1999, the forecasts were
mainly in a range of 4 to ALH percent, with an overall
range of 33A to 5 percent. Projections of the rate of
inflation, as measured by the consumer price index,
had a central tendency of 2 to 2Vi percent, somewhat
above the outcome for 1998 when the rise in the
index was held down by a marked decline in energy
prices and reduced prices of non-oil imports.
In their review of developments across the nation,
members reported a mix of high overall levels of
economic activity in every region but softness in a
number of specific business activities, notably those
affected by foreign competition. In particular, many
manufacturing firms along with businesses engaged
in agriculture, mining, and energy were being
adversely affected by weak demand in foreign markets, strong import competition, and depressed oil



433

and other commodity prices in world markets. Foreign developments were seen as a continuing element
of weakness for the U.S. economy and also as a major
source of uncertainty in the outlook for the year
ahead. In this regard many members referred in particular to the problems facing Brazil and the risk that
further financial and economic instability in that
nation would spread to other Latin American countries, with repercussions on the U.S. economy. Markets in the major trading nations around the world
were likely to remain on the soft side, with Japan
struggling to recover from its ongoing recession and
economic growth in Europe showing signs of becoming more sluggish.
Robust domestic demand clearly had offset weakness in net exports by a large margin in 1998, and
while the growth in such demand was projected to
slow this year it was expected to remain sufficient to
support appreciable further expansion in overall economic activity. Consumer spending had exhibited
considerable vigor during the recent holiday season,
and anecdotal reports from several regions suggested
that the momentum in such spending had carried into
the opening weeks of this year. Further, though prospectively moderating, growth in jobs and incomes,
supportive credit conditions, and upbeat consumer
sentiment suggested that consumer expenditures were
likely to be well maintained over coming quarters.
Even so, members anticipated at least some moderation in the growth of consumption after an extended
period of sizable accumulation of consumer durable
goods. Among other factors, the positive effects on
consumer spending of the large accumulation of stock
market wealth in recent years were likely to abate
over time in the absence of a further and unanticipated surge in stock market prices.
Growth in business capital spending also was
expected to moderate as the year progressed to a pace
well below that experienced in recent years. Members commented in this regard that slowing growth in
overall spending normally fostered reduced capital
investment, and indeed developments in the second
half of 1998 suggested that such investment might
already be on a less strong uptrend. Moreover, the
prospects of reduced growth in profits and a less
ebullient stock market could also be expected to
damp business fixed investment. Nonetheless, growth
in such investment likely would continue to exceed
that of overall spending, reflecting ongoing efforts
to improve efficiency and hold down labor costs in
highly competitive markets and more generally to
take advantage of the declining costs of business
equipment and the rapid pace of technological innovation. Members also cited reports from contacts in

434

Federal Reserve Bulletin • June 1999

various sectors of the economy and areas of the
country that business plans continued to call for
substantial outlays for business equipment. Nonresidential building activity remained robust in several
regions, but given already ample capacity in many
sectors, the prospects for such construction were relatively weak.
Housing activity had continued to display impressive strength in many parts of the country, evidently
reflecting rapid growth in employment and incomes,
rising household net worth, and low mortgage interest rates. With the affordability of new homes
expected to remain unusually attractive, the members
anticipated that housing activity would be sustained
at a high level. Some moderation in housing starts
from recent peak levels appeared likely, however, in
the context of the slowing in job and income gains
associated with the members' overall forecasts.
With regard to the outlook for inflation, the members saw no evidence of accelerating price inflation
despite high levels of business activity and very tight
labor markets across most of the nation. Indeed, the
conjuncture over an extended period of strong economic growth, very low rates of unemployment, and
the absence of any buildup of inflation could not be
explained in terms of normal historical relationships.
While temporary factors, such as declining oil prices,
had played a role in depressing inflation, the persistence of very low inflation under these conditions
most likely also resulted from more lasting changes
in economic relationships. These were perhaps best
evidenced by the widespread inability of business
firms to raise prices because of strong competitive
pressures in domestic and global markets and the
related efforts to hold down costs, including labor
costs. Contributing importantly to the success of
those cost-saving efforts were the continued rapid
growth of increasingly efficient business capital. The
accumulation of such capital evidently had greatly
enhanced productivity in a broad range of economic
activities. In this regard, available indicators suggested that productivity gains had essentially matched
increases in labor costs for nonfinancial corporations
over the past year. Members also cited widespread
expectations of low inflation as an important underlying factor in moderating wage and price increases.
Looking ahead, an abatement or reversal of some
of the temporary factors reducing prices was likely to
raise measured inflation. The course of underlying
inflation pressures was more difficult to gauge, however. If growth slowed to trend, as many expected,
uncertainty about evolving relationships among economic activity, productivity growth, and wages made
it unclear whether the enhanced competitiveness in



many markets and greater cost reducing efforts of
businesses would be sufficient to continue to hold
price increases in check at the current degree of
tautness in labor markets. Members generally agreed
that if labor markets continued to tighten, cost and
price pressures would begin to pick up. Some members also expressed concern that rapid money growth,
should it persist, would suggest that monetary policy
was too accommodative to contain inflation pressures. On balance, while a somewhat less favorable
inflation performance was viewed as likely over the
year ahead, the members did not anticipate any substantial deterioration in the inflation climate if growth
in economic activity approximated the central tendency of their forecasts.
In keeping with the requirements of the Full
Employment and Balanced Growth Act of 1978 (the
Humphrey-Hawkins Act), the Committee reviewed
the ranges for growth of the monetary and debt
aggregates in 1999 that it had established on a tentative basis in early July 1998. Those ranges included
expansion of 1 to 5 percent for M2 and 2 to 6 percent
for M3, measured from the fourth quarter of 1998 to
the fourth quarter of 1999. The associated range for
growth of total domestic nonfinancial sector debt was
provisionally set at 3 to 7 percent for 1999. The
tentative ranges for 1999 were unchanged from the
ranges that had been adopted for the past several
years.
All the members endorsed a proposal to adopt the
growth ranges for M2 and M3 in 1999 that had been
established on a provisional basis in July of last year.
According to a staff analysis, growth of these aggregates would moderate considerably this year but was
likely to remain above the tentative ranges, especially
in the case of M3. The rapid growth of M2 and M3
in 1998 was associated with outsized declines in their
velocities that appeared to have resulted in part from
the turbulent behavior of financial markets and
related efforts by the public to move funds to relatively safe and liquid assets and to turn to banks
for credit. Other factors appear to have included
some rechanneling of financial flows into moneytype balances after an extended period of surging
stock market prices and the drop in the opportunity
cost of holding money as market interest rates fell
over the latter part of the year. The expansion of M3
was further stimulated by the ongoing strength in
institution-only money market funds whose popularity as a cash management tool continued to grow.
The calming of financial markets and forecasts of
moderating nominal GDP growth pointed to reduced
growth in the broad monetary aggregates this year.
However, it was clear that substantial uncertainty still

Minutes of the Federal Open Market Committee

surrounded any projection of monetary expansion
and the linkage between particular rates of money
growth over a year and the basic objectives of monetary policy. In these circumstances, the members did
not see any firm basis for deviating from the practice
in recent years of setting ranges that, assuming velocity behavior consistent with average historical patterns, would serve as benchmarks for monetary
expansion consistent with longer-run price stability
and a sustainable rate of real economic growth.
Domestic nonfinancial debt, which had grown at a
rate in the upper part of its 3 to 7 percent range in
1998, was thought likely to remain within that range
this year, indeed near the midpoint of the range
according to a staff analysis. Outstanding federal debt
was expected to contract by a larger amount this year
and, given current economic forecasts, the debt of the
major nonfinancial sectors of the economy seemed
likely to grow a bit more slowly. Thus, the members
saw no reason to depart from the tentative range for
nonfinancial debt, which was expected to readily
encompass the likely rate of growth in this aggregate.
At the conclusion of this review, the Committee
voted to approve without change the ranges for 1999
that it had established on a tentative basis on July 1,
1998. Accordingly, the following statement of longerrun policy and growth ranges for 1999 was approved
for inclusion in the domestic policy directive:
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 this meeting established
ranges for growth of M2 and M3 of 1 to 5 percent and 2 to
6 percent respectively, measured from the fourth quarter of
1998 to the fourth quarter of 1999. The range for growth of
total domestic nonfinancial debt was set at 3 to 7 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.
Votes for this action: Messrs. Greenspan, McDonough,
Boehne, Ferguson, Gramlich, Kelley, McTeer, Meyer,
Moskow, Ms. Rivlin, and Mr. Stern. Votes against this
action: None.

In the Committee's discussion of policy for the
intermeeting period ahead, all the members favored
an unchanged policy stance. Many were concerned
that the odds were tilted toward rising inflation over
time, especially if the expansion did not slow to a
more sustainable rate. Members commented that the
market unsettlement that had in large measure
prompted the Committee's easing actions during the
fall had now lessened appreciably. In the view of
some, those actions might need to be reversed, at



435

least in part, to restore what they regarded as a policy
stance that seemed most likely to prove consistent
with desirable economic trends. Still, the persistence
of subdued inflation and the absence of current evidence of accelerating inflation were seen as arguing
against a policy tightening move at this point. Moreover, it was clear that the outlook for economic
activity was subject to considerable uncertainty and
that some shortfall from current forecasts, perhaps in
conjunction with unexpectedly adverse trade and
financial influences stemming from developments
abroad, might materialize and damp inflationary
demand pressures. Even in the absence of greaterthan-anticipated slowing in the economic expansion,
the experience of recent years had amply demonstrated that the relationship between demand pressures on resources and inflation was not following
historical patterns, and developments exerting a more
lasting moderating effect on inflation, such as more
productive capital investment and effective access to
spare capacity overseas, could help to contain inflation for some time. Against this background, the
members agreed on the need to continue to monitor
the economy with care for signs either of a potential
upturn in inflation or greater softness in the expansion than they were currently forecasting and to be
prepared to respond promptly in either direction.
In light of the uncertainties and diversity of risks
surrounding the economic outlook, most members
were in favor of retaining the existing symmetry of
the directive. In one view, however, the risks of rising
inflation were strong enough to warrant consideration
of an asymmetrical directive that was tilted toward
restraint. Nonetheless, since inflation was difficult to
predict and any needed adjustment to policy in the
period ahead could readily be implemented even with
a symmetrical directive, all the members indicated
that they could accept such a directive.
At the conclusion of this discussion, the Committee voted to authorize and direct the Federal Reserve
Bank of New York, until it was instructed otherwise,
to execute transactions in the System Account in
accordance with the following domestic policy
directive:
The information reviewed at this meeting suggests that
the economy expanded rapidly in the closing months of
1998. Nonfarm payroll employment posted strong gains in
November and December, and the civilian unemployment
rate fell to 4.3 percent in December. Total industrial production strengthened in the fourth quarter, owing in large
measure to a surge in the production of motor vehicles and
parts. Total retail sales rose sharply in the fourth quarter,
and home sales and housing starts increased appreciably.
Available indicators suggest that business capital spending
picked up markedly in the fourth quarter after a lull in the

436

Federal Reserve Bulletin • June 1999

third. In November, the nominal deficit on U.S. trade in
goods and services was somewhat larger than in October,
but the combined October-November deficit was slightly
smaller than its third-quarter average. Inflation has
remained subdued despite very tight labor markets.
Most short-term interest rates have declined somewhat
on balance since the meeting on December 22, while
longer-term rates have changed little. Share prices in equity
markets have posted further sizable gains on balance over
the intermeeting period. In foreign exchange markets, the
trade-weighted value of the dollar has depreciated slightly
over the period in relation to other major currencies but it
has appreciated somewhat in terms of the currencies of a
broader group that also includes other important trading
partners of the United States.
M2 and M3 continued to record very large increases in
late 1998, but available data pointed to some moderation in
January. From the fourth quarter of 1997 to the fourth
quarter of 1998, both aggregates rose at rates well above
the Committee's annual ranges. Total domestic nonfinancial debt expanded at a pace somewhat above the middle of
its range in 1998.
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 this meeting established
ranges for growth of M2 and M3 of 1 to 5 percent and 2 to
6 percent respectively, measured from the fourth quarter of
1998 to the fourth quarter of 1999. The range for growth of
total domestic nonfinancial debt was set at 3 to 7 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.
To promote the Committee's long-run objectives of price
stability and sustainable economic growth, the Committee
in the immediate future seeks conditions in reserve markets
consistent with maintaining the federal funds rate at an
average of around 43A percent. In view of the evidence
currently available, the Committee believes that prospective developments are equally likely to warrant an increase
or a decrease in the federal funds rate operating objective
during the intermeeting period.
Votes for this action: Messrs. Greenspan, McDonough,
Boehne, Ferguson, Gramlich, Kelley, McTeer, Meyer,
Moskow, Ms. Rivlin, and Mr. Stern. Votes against this
action: None.




SUNSET LEGISLATION RELATING TO
HUMPHREY-HAWKINS
REPORTS

The Committee discussed the Federal Reports Elimination and Sunset Act of 1995, which provides for
the termination of the legal requirements for semiannual Humphrey-Hawkins reports to the Congress
after 1999. At this meeting, the members agreed that
the semiannual reports and associated congressional
hearings had been quite useful and should be continued. They had given the Committee an effective
means to explain its policies and communicate its
views on a variety of issues and had enhanced its
accountability to the public and the Congress.

SALE OF EURO

RESERVES

In a notation vote completed on March 22, 1999,
the Committee unanimously approved an off-market
sale of approximately $4.8 billion equivalent of the
System's euro reserves to the Exchange Stabilization Fund (ESF). In return, the System received
$3.4 billion in dollars and $1.4 billion equivalent of
Japanese yen from the ESF. The transaction reduced
the System's overall holdings of foreign currencies
to the level of those held by the ESF and left the
resulting balances of euro and yen equal in both the
System and ESF accounts.
It was agreed that the next meeting of the Committee would be held on Tuesday, March 30, 1999.
The meeting adjourned at 11:40 a.m. on February 3, 1999.
Donald L. Kohn
Secretary

437

Legal Developments
JOINT FINAL RULE—AMENDMENT TO RISK-BASED
CAPITAL STANDARDS FOR MARKET RISK
The Office of the Comptroller of the Currency (OCC), the
Board of Governors of the Federal Reserve System
(Board), and the Federal Deposit Insurance Corporation
(FDIC) (collectively, the agencies) are adopting as a final
rule an interim rule amending their respective risk-based
capital standards for market risk applicable to certain banks
and bank holding companies with significant trading activities. The interim rule implemented a revision to the Basle
Accord adopted in 1997. Prior to the revision, an institution that measured specific risk with an internal model that
adequately measured such risk was subject to a minimum
capital charge. An institution's capital charge for specific
risk had to be at least as large as 50 percent of a specific
risk charge calculated using the standardized approach.
The rule will finalize the interim rule, which reduced
regulatory burden for institutions with qualifying internal
models because they no longer must calculate a standardized specific risk capital charge.
Effective July 1, 1999, 12 C.F.R. Parts 3, 208, 225, and
325 are amended as follows.

Appendix E to Part 208—Capital Adequacy
Guidelines for State Member Banks; Market Risk
Measure
3. In Appendix E to Part 208, section 2., paragraph (b)(2)
is revised to read as follows:

Section 2.—Definitions
(b) * * *
(2) Specific risk means changes in the market value of
specific positions due to factors other than broad market movements and includes event and default risk as
well as idiosyncratic variations.

4. In Appendix E to Part 208, section 5., paragraphs (a),
(b), and the introductory text of paragraph (c) are revised to read as follows:

Part 3—Risk-Based Capital Standards: Market Risk
For the reasons set out in the joint preamble, the OCC's
portion of the joint interim rule with request for comment
amending 12 C.F.R. parts titled Risk-Based Capital Standards: Market Risk, published on December 30, 1997, at
62 Federal Register 68,067 is adopted as final without
change.

Part 208—Membership of State Banking
Institutions in the Federal Reserve System
(Regulation H)
1. The authority citation for Part 208 continues to read as
follows:
Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1818,
1823(j), 1828(o), 1831o, 1831p-l, 1831r-l, 1835a, 1882,
2901-2907, 3105, 3310, 3331-3351, and 3906-3909;
15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o-4(c)(5), 78q,
78q-l, and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a,
4104b, 4106, and 4128.
2. In Appendix E to Part 208, the appendix heading is
revised to read as follows:



Section 5.—Specific Risk
(a) Modeled specific risk. A bank may use its internal
model to measure specific risk. If the bank has demonstrated to the Federal Reserve that its internal model measures the specific risk, including event and default risk as
well as idiosyncratic variation, of covered debt and equity
positions and includes the specific risk measures in the
VAR-based capital charge in section 3(a)(2)(i) of this appendix, then the bank has no specific risk add-on for
purposes of section 3(a)(2)(ii) of this appendix. The model
should explain the historical price variation in the trading
portfolio and capture concentration, both magnitude and
changes in composition. The model should also be robust
to an adverse environment and have been validated through
backtesting which assesses whether specific risk is being
accurately captured.
(b) Partially modeled specific risk.
(1) A bank that incorporates specific risk in its internal
model but fails to demonstrate to the Federal Reserve that its internal model adequately measures
all aspects of specific risk for covered debt and
equity positions, including event and default risk,
as provided by section 5(a) of the appendix, must

438

Federal Reserve Bulletin • June 1999

calculate its specific risk add-on in accordance
with one of the following methods:
(i) If the model is susceptible to valid separation
of the VAR measure into a specific risk portion
and a general market risk portion, then the
specific risk add-on is equal to the previous
day's specific risk portion.
(ii) If the model does not separate the VAR measure into a specific risk portion and a general
market risk portion, then the specific risk
add-on is the sum of the previous day's VAR
measures for subportfolios of covered debt and
equity positions that contain specific risk.
(2) If a bank models the specific risk of covered debt
positions but not covered equity positions (or vice
versa), then the bank may determine its specific
risk charge for the included positions under section
5(a) or 5(b)(1) of this appendix, as appropriate.
The specific risk charge for the positions not included equals the standard specific risk capital
charge under paragraph (c) of this section.

movements and includes event and default risk as well as
idiosyncratic variations.

4. In Appendix E to Part 225, section 5., paragraphs (a),
(b), and the introductory text of paragraph (c) are revised to
read as follows:

Section 5.—Specific Risk

(b) * * *

(a) Modeled specific risk. A bank holding company may
use its internal model to measure specific risk. If the
organization has demonstrated to the Federal Reserve that
its internal model measures the specific risk, including
event and default risk as well as idiosyncratic variation, of
covered debt and equity positions and includes the specific
risk measures in the VAR-based capital charge in section
3(a)(2)(i) of this appendix, then the organization has no
specific risk add-on for purposes of section 3(a)(2)(ii) of
this appendix. The model should explain the historical
price variation in the trading portfolio and capture concentration, both magnitude and changes in composition. The
model should also be robust to an adverse environment and
have been validated through backtesting which assesses
whether specific risk is being accurately captured.
(b) Partially modeled specific risk.
(1) A bank holding company that incorporates specific
risk in its internal model but fails to demonstrate to
the Federal Reserve that its internal model adequately measures all aspects of specific risk for
covered debt and equity positions, including event
and default risk, as provided by section 5(a) of this
appendix, must calculate its specific risk add-on in
accordance with one of the following methods:
(i) If the model is susceptible to valid separation
of the VAR measure into a specific risk portion
and a general market risk portion, then the
specific risk add-on is equal to the previous
day's specific risk portion.
(ii) If the model does not separate the VAR measure into a specific risk portion and a general
market risk portion, then the specific risk
add-on is the sum of the previous day's VAR
measures for subportfolios of covered debt and
equity positions that contain specific risk.
(2) If a bank holding company models the specific risk
of covered debt positions but not covered equity
positions (or vice versa), then the bank holding
company may determine its specific risk charge for
the included positions under section 5(a) or 5(b)(1)
of this appendix, as appropriate. The specific risk
charge for the positions not included equals the
standard specific risk capital charge under paragraph (c) of this section.

(2) Specific risk means changes in the market value of
specific positions due to factors other than broad market

(c) Specific risk not modeled. If a bank holding company
does not model specific risk in accordance with section

(c) Specific risk not modeled. If a bank does not model
specific risk in accordance with section 5(a) or 5(b) of this
appendix, then the bank's specific risk capital charge shall
equal the standard specific risk capital charge, calculated as
follows:

Part 225—Bank Holding Companies and Change in
Bank Control (Regulation Y)
1. The authority citation for Part 225 continues to read as
follows:
Authority. 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i,
1831p-l, 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310,
3331-3351, 3907, and 3909.
2. In Appendix E to part 225, the appendix heading is
revised to read as follows:

Appendix E to Part 225—Capital Adequacy
Guidelines for Bank Holding Companies: Market
Risk Measure
3. In Appendix E to Part 225, section 2., paragraph (b)(2) is
revised to read as follows:

Section 2.—Definitions




Legal Developments

5(a) or 5(b) of this appendix, then the organization's specific risk capital charge shall equal the standard specific
risk capital charge, calculated as follows:

Part 325—Capital Maintenance
1. The authority citation for Part 325 continues to read as
follows:
Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a),
1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d),
1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808;
Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C.
183In note); Pub. L. 102- 242, 105 Stat. 2236, 2355, 2386
(12 U.S.C. 1828 note).
2. In Appendix C to Part 325, the appendix heading is
revised to read as follows:

Appendix C to Part 325—Risk-Based Capital For
State Non-Member Banks: Market Risk
3. In Appendix C to Part 325, section 2., paragraph (b)(2)
is revised to read as follows:

Section 2.—Definitions.
(b) * * *

(2) Specific risk means changes in the market value of
specific positions due to factors other than broad
market movements and includes event and default
risk as well as idiosyncratic variations.

4. In Appendix C to Part 325, section 5., paragraphs (a),
(b), and (c) introductory text are revised to read as follows:

439

explain the historical price variation in the trading portfolio
and capture concentration, both magnitude and changes in
composition. The model should also be robust to an adverse environment and have been validated through backtesting which assesses whether specific risk is being accurately captured.
(b) Add-on charge for modeled specific risk. A bank that
incorporates specific risk in its internal model but fails to
demonstrate to the FDIC that its internal model adequately
measures all aspects of specific risk for covered debt and
equity positions, including event and default risk, as provided by section 5(a) of this appendix, must calculate
the bank's specific risk add-on for purposes of section 3(a)(2)(ii) of this appendix as follows:
(1) If the model is capable of valid separation of the
VAR measure into a specific risk portion and a
general market risk portion, then the specific risk
add-on is equal to the previous day's specific risk
portion.
(2) If the model does not separate the VAR measure
into a specific risk portion and a general market
risk portion, then the specific risk add-on is the
sum of the previous day's VAR measures for subportfolios of covered debt and equity positions.
(c) Add-on charge if specific risk is not modeled. If a bank
does not model specific risk in accordance with paragraph
(a) or (b) of this section, the bank's specific risk add-on
charge for purposes of section 3(a)(2)(h) of this appendix
equals the sum of the components for covered debt and
equity positions. If a bank models, in accordance with
paragraph (a) or (b) of this section, the specific risk of
covered debt positions but not covered equity positions (or
vice versa), then the bank's specific risk add-on charge for
the positions not modeled is the component for covered
debt or equity positions as appropriate:

ORDERS ISSUED UNDER BANK HOLDING COMPANY
ACT

Orders Issued Under Section 3 of the Bank Holding
Company Act
ANB Corporation
Muncie, Indiana

Section 5.—Specific Risk.
(a) Modeled specific risk. A bank may use its internal
model to measure specific risk. If the bank has demonstrated to the FDIC that its internal model measures the
specific risk, including event and default risk as well as
idiosyncratic variation, of covered debt and equity positions and includes the specific risk measure in the VARbased capital charge in section 3(a)(2)(i) of this appendix,
then the bank has no specific risk add-on for purposes of
section 3(a)(2)(ii) of this appendix. The model should




Order Approving the Acquisition of a Bank Holding
Company
ANB Corporation ("ANB"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has requested the Board's approval under
section 3 of the BHC Act (12 U.S.C. § 1842) to acquire
Farmers State Bancorp ("Bancorp") and thereby to acquire
The Farmers State Bank of Union City ("Bank"), both in
Union City, Ohio.

440

Federal Reserve Bulletin • June 1999

Notice of proposal, affording interested persons an opportunity to submit comments, has been published (64
Federal Register 6361 (1999)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set
forth in section 3 of the BHC Act.
ANB is the 33rd largest depository institution in Indiana,
controlling deposits of approximately $417.5 million, representing less than 1 percent of total deposits in depository
institutions in Indiana ("state deposits").1 Bank is the
179th largest depository institution in Ohio, controlling
deposits of $63.3 million, representing less than 1 percent
of state deposits. Bank also is the 112th largest depository
institution in Indiana, controlling approximately $18.2 million in deposits, representing less than 1 percent of state
deposits.2 On consummation of the proposal, ANB would
become the 32nd largest depository institution in Indiana,
controlling $435.7 million, representing less than 1 percent
of state deposits.
Interstate Analysis
Section 3(d) of the BHC Act allows the Board to approve
an application by a bank holding company to acquire
control of a bank located in a state other than the home
state3 of such bank holding company, provided that certain
conditions are met. For purposes of the BHC Act, the home
state of ANB is Indiana, and ANB proposes to acquire a
bank in Ohio. The proposed transaction meets all of the
conditions for an interstate acquisition that are enumerated
in section 3(d).4 In view of all the facts of record, the Board
is permitted to approve the proposal under section 3(d) of
the BHC Act.
Competitive Considerations
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly or would be in furtherance of
any attempt to monopolize the business of banking. The
BHC Act also prohibits the Board from approving a pro-

1. Deposit data are as of June 30, 1998. In this context, depository
institutions include commercial banks, savings banks, and savings
associations.
2. Bank controls total deposits of $81.5 million, $18.2 million of
which are booked in its branch office in Indiana. The balance of the
bank's deposits are booked in its main office in Ohio.
3. 12U.S.C. § 1842(d). A bank holding company's home state is
that state in which the total deposits of all banking subsidiaries of such
company were the largest on July 1, 1966, or on the date on which the
company became a bank holding company, whichever is later.
12 U.S.C. 1841(o)(4)(C).
4. See 12 U.S.C. §§ 1842(d)(1)(A) & (B) and 1842(d)(2)(A) & (B).
ANB is adequately capitalized and adequately managed, as defined by
applicable law. Bank has been in existence and operated continuously
during the five-year minimum statutory period. On consummation of
the proposal, ANB would control less than 10 percent of the total
amount of deposits of insured depository institutions in the United
States. All other requirements of section 3(d) of the BHC Act would
be met on consummation of the proposal.




posed combination that would substantially lessen competition or tend to create a monopoly in any relevant banking
market, unless the Board finds that the anticompetitive
effects of the proposal are clearly outweighed in the public
interest by the probable effect of the proposal in meeting
the convenience and needs of the community to be served.
ANB and Bank compete in the Muncie, Indiana, banking
market ("Muncie banking market"). 5 The Board has carefully reviewed the competitive effects of the proposal in the
Muncie banking market in light of all of the facts of record,
including the characteristics of the market and the projected increase in the concentration of total deposits in
insured depository institutions in this market ("market
deposits") as measured by the Herfindahl-Hirschman Index ("HHI") under the Department of Justice Merger
Guidelines ("DOJ Guidelines"). The Board also has carefully considered the number of competitors that would
remain in the market after consummation of the proposal.
ANB is the second largest depository institution in the
Muncie banking market, controlling $355.5 million in deposits, representing 23 percent of market deposits.6 Bank is
the seventh largest depository institution in the market,
controlling $81.5 million in deposits, representing 5.3 percent of market deposits. On consummation of the proposal,
ANB would remain the second largest depository institution in the market, controlling deposits of $437 million,
representing 28.3 percent of market deposits. The HHI
would increase by 243 points to 2450.7
The Board believes that several characteristics of the
Muncie banking market mitigate the proposal's potential
anticompetitive effects. First, a significant number of other
depository institutions would have the market share and
resources to compete effectively in the banking market.
Eight bank and thrift institutions, including ANB, would
remain in the market after consummation of the proposal,
including several multistate banking organizations. Four of
5. The Muncie banking market is defined as Delaware County
excluding Salem township; Randolph County excluding Washington
and Greensfork townships; Licking and Johnson townships in Blackford County, all in Indiana; and Jackson township in Darke County,
Ohio.
6. Market share data are reported as of June 30, 1998. Market share
data are based on calculations that include the deposits of thrift
institutions at 50 percent. The Board previously has indicated that
thrift institutions have become, or have the potential to become,
significant competitors of commercial banks. See, e.g., Midwest
Financial Group, 75 Federal Reserve Bulletin 386 (1989); National
City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the
Board has regularly included thrift deposits in the calculation of
market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991).
7. Under the revised DOJ Guidelines, 49 Federal Register 26,823
(June 29, 1984), a market in which the post-merger HHI exceeds 1800
is considered highly concentrated. The Department of Justice has
informed the Board that a bank merger or acquisition generally will
not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the
merger increases the HHI by more than 200 points. The Department
of Justice has stated that the higher than normal HHI thresholds for
screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other nondepository financial entities.

Legal Developments

these institutions, including ANB, would each control market shares of 9 percent or more of market deposits and
several large regional bank holding companies would continue to operate in the market.
The Muncie banking market also is attractive for entry.
Data for the year ending June 30, 1998 show that the
Muncie Metropolitan Statistical Area ("MSA"), which encompasses most of the population of the Muncie banking
market, has had a larger increase in total deposits and per
capita income than the increase on average in these statistics for other MSAs in Indiana. The market also has
recently experienced de novo entry and entry by acquisition, including two entries by acquisition in 1998. Indiana,
moreover, permits unrestricted intrastate branching.8
The Department of Justice reviewed the proposal and
advised the Board that consummation of the proposal
would not likely have any significantly adverse competitive effects in the Muncie banking market or any other
relevant banking market. The Federal Deposit Insurance
Corporation has been consulted and has not objected to the
proposal.
Based on all the facts of record, and for the reasons
discussed above, the Board concludes that consummation
of the proposal is not likely to result in any significantly
adverse effects on competition or on the concentration of
banking resources in the Muncie banking market or any
other relevant banking market, and that competitive factors
are consistent with approval of the proposal.
Other Considerations
The BHC Act also requires the Board, in acting on an
application, to consider the financial and managerial resources and future prospects of the companies and banks
involved, the convenience and needs of the communities to
be served, and certain supervisory factors. The Board has
reviewed these factors in light of all the facts of record,
including supervisory reports of examination assessing the
financial and managerial resources of the organizations.
Based on all the facts of record, the Board concludes that
the financial and managerial resources and future prospects
of ANB, its subsidiary banks, and Bank are consistent with
approval, as are the other supervisory factors the Board
must consider under section 3 of the BHC Act. Considerations related to the convenience and needs of communities to be served, including the records of performance of
the institutions involved under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.), also are consistent
with approval of the proposal.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved. Approval of the application is specifically conditioned on compliance by ANB

8. Ind. Code Ann. §§ 28-2-13-19 & 28-2-16-15 (West 1998).




441

with all the commitments made in connection with the
application. For the purposes of this order, the commitments and conditions relied on by the Board in reaching its
decision are deemed to be conditions imposed in writing
by the Board in connection with its findings and decision
and, as such, may be enforced in proceedings under applicable law.
The transaction shall not be consummated before the
fifteenth calendar day after the effective date of this order,
or later than three months after the effective date of this
order, unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Chicago, acting
pursuant to delegated authority.
By order of the Board of Governors, effective April 1,
1999.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
JENNIFER J. JOHNSON

Secretary of the Board

Banco Santander, S.A.
Madrid, Spain
Order Approving Acquisition of a Bank Holding
Company
Banco Santander, S.A. ("Santander"), a bank holding company within the meaning of the Bank Holding Company
Act ("BHC Act"), has requested the Board's approval
under section 3 of the BHC Act (12 U.S.C. § 1842) to
acquire BCH-USA, New York, New York ("Bank"), a
wholly owned subsidiary bank of Banco Central Hispanoamericano, S.A., Madrid, Spain ("BCH"). 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(64 Federal Register 9995 (1999)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
Santander, with total consolidated assets of approximately $181 billion, is the largest banking organization in
Spain.2 In the United States, Santander operates a branch in
New York, New York; and an agency and an Edge corporation in Miami, Florida. Santander also controls Banco
Santander Puerto Rico, San Juan, Puerto Rico ("Santander-

1. Santander and BCH are two large foreign banks headquartered in
Spain, each with modest operations in the United States. This application involves a review of the proposed combination of the U.S.
operations of these banks as part of a merger of BCH with and into
Santander, in which Santander would be the surviving corporation. On
consummation, Santander would change its corporate name to "Banco Santander Central Hispano, S.A." Santander also has applied under
the International Banking Act, 12 U.S.C. § 3101 et seq., to retain
BCH's direct U.S. branches and other offices. That application will be
considered separately.
2. Asset data are as of December 31, 1998, using exchange rates
then in effect. Ranking data are as of December 31, 1997.

442

Federal Reserve Bulletin • June 1999

PR"), a subsidiary bank that also maintains a branch in
New York, New York. Santander also has an indirect
interest in Citizens Financial Group, Inc., Providence,
Rhode Island, a registered bank holding company.3 In
addition, Santander engages directly and through subsidiaries in a number of permissible nonbanking activities in the
United States.
BCH, with total consolidated assets of approximately
$95 billion, is the third largest banking organization in
Spain. In addition to Bank, BCH's U.S. banking operations
consist of branches in New York, New York, and Miami,
Florida.

would result in an increase of less than one point in the
Herfindahl-Hirschman Index ("HHI") for the Metropolitan New York-New Jersey banking market. The banking
market would remain unconcentrated with numerous competitors operating in the market.8 Based on all the facts of
record, the Board concludes that consummation of the
proposal would not have a significantly adverse effect on
competition or on the concentration of banking resources
in the Metropolitan New York-New Jersey banking market
or any other relevant banking market.

Interstate Analysis

The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
the companies and banks involved in the proposal. Santander's capital ratios exceed the minimum levels that
would be required under the Basle Capital Accord, and are
considered equivalent to the capital that would be required
of a U.S. banking organization. Bank's capital ratios exceed the "well capitalized" thresholds and would be unchanged by this transaction. Based on these and all the
other facts of record, including confidential examination
and other supervisory information concerning the foreign
banks involved in the proposal and their existing U.S.
operations and the commitments provided in this case, the
Board concludes that financial and managerial factors are
consistent with approval.9

Section 3(d) of the BHC Act allows the Board to approve
an application by a bank holding company to acquire
control of a bank located in a state other than the home
state of such bank holding company if certain conditions
are met.4 For purposes of the BHC Act, the home state of
Santander is Rhode Island and Santander proposes to acquire control of a bank in New York.5 All the conditions
for an interstate acquisition under section 3(d) are met in
this case.6 In light of all the facts of record, the Board is
permitted to approve the proposal under section 3(d) of the
BHC Act.
Competitive Considerations
As noted above, Santander and BCH operate various banking entities that compete in the Metropolitan New YorkNew Jersey banking market.7 Each of these banking entities is relatively small and consummation of the proposal

3. Santander owns its indirect minority interest in Citizens Financial
Group, Inc. ("Citizens") through The Royal Bank of Scotland Group
pic and its subsidiary, The Royal Bank of Scotland pic, both of
Edinburgh, Scotland. See Banco de Santander, S.A. de Credito, 78
Federal Reserve Bulletin 60 (1992).
4. 12 U.S.C. § 1842(d). A bank holding company's home state is
that state in which the total deposits of all banking subsidiaries of such
company were the largest on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
12 U.S.C. § 1841(o)(4)(C).
5. For purposes of section 3(d) of the BHC Act, the home state of
Santander is Rhode Island by virtue of Santander's indirect ownership
interest in Citizens, a bank holding company in Providence, Rhode
Island. See The Royal Bank of Scotland Group pic, 82 Federal
Reserve Bulletin 428 (1996).
6. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
Santander meets the capital and managerial requirements established
by applicable law. On consummation of the proposal, Santander and
its affiliates would control less than 10 percent of the total amount of
deposits of insured depository institutions in the United States, and
less than 30 percent of the total amount of deposits in New York. See
N.Y. Banking Law § 142-a (McKinney 1999). All other requirements
of section 3(d) of the BHC Act also would be met on consummation
of the proposal.
7. The Metropolitan New York-New Jersey banking market includes New York City; Nassau, Orange, Putnam, Rockland, Suffolk,
Sullivan, and Westchester Counties in New York; Bergen, Essex,
Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic,
Somerset, Sussex, Union, Warren Counties, and a portion of Mercer




Financial and Managerial Considerations

County in New Jersey; Pike County in Pennsylvania; and portions of
Fairfield and Litchfield Counties in Connecticut.
8. Market share data used to analyze the competitive effects of the
proposal are as of June 30, 1997, and are based on calculations in
which the deposits of thrift institutions are included at 50 percent. The
HHI for the Metropolitan New York-New Jersey banking market
would remain at 761 after consummation of the proposal. Under the
revised Department of Justice Merger Guidelines, 49 Federal Register
26,823 (1984), a market in which the post-merger HHI is less than
1000 is considered to be unconcentrated. The Department of Justice
has informed the Board that a bank merger or acquisition generally
will not be challenged (in the absence of other factors indicating
anticompetitive effects) unless the post-merger HHI is at least 1800
and the merger increases the HHI by more than 200 points. The
Department of Justice has stated that the higher than normal HHI
thresholds for screening bank mergers and acquisitions for anticompetitive effects implicitly recognize the competitive effects of limitedpurpose lenders and other nondepository financial entities.
9. On May 18, 1998, the Board issued a temporary cease and desist
order (the "Order") pursuant to section 8(c) of the Federal Deposit
Insurance Act (12 U.S.C. § 1818(c)) against Santander to address deficiencies in its anti-money laundering programs. See Issuance of Enforcement Actions, 84 Federal Reserve Bulletin 539 (1998). The Order
arose out of an investigation into the improper activities of two
employees of Santander's subsidiary bank in Mexico, Banco Santander Mexicano, S.A. In response to the Order, Santander completed
an internal investigation of the subject accounts and transactions and
reported its findings to the appropriate U.S. and Mexican authorities.
In addition, Santander, with the assistance of outside counsel and
independent auditors, conducted a review of its anti-money laundering
policies and on June 30, 1998, submitted a confidential report to the
Board on the adequacy of its procedures and a plan designed to ensure
that the conduct described in the Order would not occur in the future.
The Board received a comment from Inner City Press/Community on
the Move ("Protestant") stating that the issues raised by the Order

Legal Developments

Convenience and Needs Considerations
The Board also has carefully considered the effect of the
proposal on the convenience and needs of the communities
to be served in light of all the facts of record. The Board
has long held that consideration of the convenience and
needs factor includes a review of the records of the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). An institution's most recent CRA performance evaluation is a
particularly important consideration in the applications process because it represents a detailed on-site evaluation of
the institution's overall record of performance under the
CRA by the appropriate federal financial supervisory
agency.
CRA Performance Examinations. Santander-PR, the only
Santander banking operation that is subject to the CRA,
received an "outstanding" rating at its most recent CRA
performance evaluation from its primary federal financial
supervisory agency, the Federal Deposit Insurance Corporation ("FDIC"), as of October 14, 1997.10 Bank received
a "satisfactory" rating from the FDIC at its most recent
CRA performance evaluation, as of December 31, 1998.11
Santander's CRA Performance Record. According to
examiners, Santander-PR's lending activities reflected responsiveness to credit needs in the bank's assessment
area.12 From January 1 through September 30, 1997,
Santander-PR originated more than 3,200 small business
loans, totaling more than $247 million, and more than 100
small farm loans, totaling more than $9 million. Of these
loans, Santander originated more than 400 of the small
business loans, totaling more than $36 million, and 16 of
the small farm loans, totaling more than $700,000 in lowand moderate-income ("LMI") census tracts.
Examiners stated that from October 1, 1996, through
September 30, 1997, Santander-PR originated 180 Small

were grounds on which the application should be denied. In light of
Santander's compliance with the Order to date, and its other efforts,
the Board concludes that these matters do not warrant denial of the
proposal.
10. Santander-PR also received an "outstanding" rating at its CRA
performance evaluation by the FDIC, as of September 18, 1995.
Examiners noted in the October 14, 1997, CRA performance evaluation that Santander-PR's branch in New York, New York, does not
generally engage in domestic retail deposit or lending activities. The
examiners found that the branch had performed in a satisfactory
manner under the CRA when the branch was compared to similar
institutions in the assessment area.
11. Bank received "needs to improve" ratings from the FDIC in
two prior CRA performance evaluations, as of July 15, 1996, and
May 31, 1995. Protestant argues that these earlier CRA ratings support a denial of the proposal. Bank's current CRA performance
evaluation was recently completed by the FDIC, and its rating of
"satisfactory" was announced by the bank after the date of Protestant's comment letter.
12. Examiners noted that Santander-PR did not engage in residential
mortgage lending, but that Bank's affiliate, Santander Mortgage Corporation ("SMC"), offered affordable and first-time buyer programs
sponsored by the Government National Mortgage Association. In
addition, examiners stated that SMC offered Federal Housing Administration and Veterans Administration mortgage products.




443

Business Administration ("SBA") loans totaling more than
$26 million. Examiners noted that Santander-PR had been
designated a "Preferred Lender" and "Certified Lender"
by the SBA. Examiners also commended the bank on the
distribution of its loans to businesses of different sizes. Of
the small business loans made by Santander-PR since its
last CRA evaluation, 22 percent were to businesses with
gross annual revenues of less than $50,000, and 74 percent
were to businesses with gross annual revenues of less than
$250,000.
Examiners also noted that Santander-PR had made
$81 million in qualified community development loans
since its October 1995 CRA evaluation, including a loan to
a consortium of small poultry processors under the Rural
Housing and Community Development Service guarantee
program to construct a poultry processing facility in a
low-income census tract in Salinas, Puerto Rico; a loan to a
builder under the affordable housing guidelines set by the
Government Development Bank of Puerto Rico to construct 49 single-family homes in a moderate-income census
tract in Barceloneta, Puerto Rico; and a loan to construct a
condominium project in a moderate-income census tract in
Rio Piedras, Puerto Rico, with one-third of the units designated for affordable housing.
Bank's CRA Performance Record. On May 21, 1998, the
FDIC granted Bank's request for designation as a "wholesale institution" for purposes of evaluation under the CRA,
and Bank's CRA activities have been focused on lending
to community development intermediaries operating in its
assessment area.13 At Bank's December 31, 1998 examination, examiners noted that Bank's CRA performance had
improved since its previous CRA performance evaluation
because the bank had improved its ascertainment and financial support of local community development initiatives
consistent with its resources and capabilities.
Examiners noted that Bank's community development
lending (including new originations from January 1997
through December 1998 and prior loans funded with outstanding balances) totaled more than $1 million. Examiners stated that, since its last CRA examination, Bank has
increased its community development lending by providing six commitments totaling $900,000, representing a
600 percent increase in funding.14 Examiners also stated
that Bank's levels of qualified investments and community
development service since its prior CRA evaluation were
adequate.

13. See 12 C.F.R. 345.25 (community development test for wholesale institutions).
14. These commitments included a $150,000 three-year term loan to
a nonprofit community development financial institution to assist with
the construction of affordable housing; a three-year, low-interest
$200,000 loan to a nonprofit community development support organization that acts as an intermediary by channeling grants, loans, and
equity investments to underserved communities; and a two-year, lowinterest $150,000 loan to the capitalization program of a nonprofit
association that assists community development credit unions serving
low-income communities and community groups seeking to form
credit unions.

444

Federal Reserve Bulletin • June 1999

Conclusion on Convenience and Needs Considerations.
The Board has carefully considered all the facts of record,
including the comments received and the public CRA
performance records of the institutions involved. In particular, the Board has considered the efforts by Bank to
improve its CRA performance, as verified by the FDIC in a
recently concluded CRA performance examination, and
the fact that this proposal represents an acquisition by an
applicant that has maintained a consistently outstanding
CRA performance record. Based on a review of the entire
record, including the relevant reports of examination, the
Board concludes that considerations relating to the convenience and needs of the communities to be served are
consistent with approval.
Other Supervisory Considerations
Under section 3 of the BHC Act, the Board may not
approve an application involving a foreign bank unless the
bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities
in the bank's home country."15 The Board previously determined that Santander was subject to such supervision and
regulation,16 and based on all the facts of record, the Board
has concluded that Santander continues to be subject to
comprehensive supervision and regulation on a consolidated basis by its home country supervisor.
The BHC Act also requires the Board to determine that
the foreign bank has provided adequate assurances that it
will make available to the Board such information on its
operations and activities and those of its affiliates that the
Board deems appropriate to determine and enforce compliance with the BHC Act and the International Banking Act
("IBA") (12 U.S.C. § 3101 et seq.). The Board has reviewed restrictions on disclosure in jurisdictions where
Santander has material operations and has communicated
with relevant banking authorities concerning access to
information. Santander has committed that, to the extent
not prohibited by applicable law, it will make available to
the Board such information on the operations of Santander
and any of its affiliates that the Board deems necessary to
determine and enforce compliance with the BHC Act, the
IBA, and other applicable federal law. Santander also has
committed to cooperate with the Board to obtain any
waivers or exemptions that may be necessary to enable
Santander to make any such information available to the

15. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the
Board determines whether a foreign bank is subject to consolidated
home country supervision under the standards set forth in Regulation
K. See 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign
bank may be considered subject to consolidated supervision if the
Board determines that the bank is supervised or regulated in such a
manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the
relationship of the bank and its affiliates, to assess the foreign bank's
overall financial condition and compliance with law and regulation.
See 12 C.F.R. 211.24(c)(l)(ii).
16. See, e.g., Banco Santander, S.A., 82 Federal Reserve Bulletin
833 (1996).




Board. In light of these commitments and other facts of
record, the Board has concluded that Santander has provided adequate assurances of access to any appropriate
information that the Board may request. For these reasons,
and based on all the facts of record, the Board has concluded that the supervisory factors it is required to consider
under section 3(c) of the BHC Act are consistent with
approval.17
Conclusion
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 of the proposal
is expressly conditioned on Santander's compliance with
all the commitments made in connection with the application. The commitments and conditions relied on by the
Board in reaching this decision are deemed to be conditions imposed in writing by the Board in connection with
its findings and decision and, as such, may be enforced in
proceedings under applicable law.
The proposal shall not be consummated before the fifteenth calendar day after the effective date of this order, or
later than three months after the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of New York, acting
pursuant to delegated authority.
By order of the Board of Governors, effective April 1,
1999.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
JENNIFER J. JOHNSON

Secretary of the Board

Community Capital Bancshares, Inc.
Albany, Georgia
Order Approving Formation of a Bank Holding
Company
Community Capital Bancshares, Inc. ("CCB") has requested the Board's approval under section 3(a)(1) of the
Bank
Holding
Company
Act
("BHC
Act")
(12 U.S.C. § 1842(a)(1)) to become a bank holding company by acquiring all the voting shares of Albany Bank &
Trust, N.A., Albany, Georgia ("Bank"), a de novo bank.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(64 Federal Register 9155 (1999)). The time for filing
17. Protestant argues that the Board should deny Santander's application because the matters described by the Order referred to in
footnote 9 raise questions about whether Santander is subject to
comprehensive consolidated supervision by its home country supervisor under section 3 of the BHC Act. As noted above, in light of
Santander's compliance with the Order to date, and its other efforts,
the Board does not believe that these matters warrant denial of the
subject proposal.

Legal Developments

comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
CCB is a corporation formed for the purpose of acquiring control of Bank.1 The Board previously has noted that
establishment of a de novo bank enhances competition in
the relevant banking market and is a positive consideration
in an application under section 3 of the BHC Act.2 Accordingly, the Board concludes that consummation of the proposal would not have a significantly adverse effect on
competition or on the concentration of banking resources
in any relevant banking market and that competitive considerations are consistent with approval. Based on all the
facts of record, the Board also concludes that the financial
and managerial resources and future prospects of CCB and
Bank are consistent with approval of the proposal, as are
the other supervisory factors the Board must consider
under section 3 of the BHC Act.
The Board also has considered carefully the effect of the
proposal on the convenience and needs of the communities
to be served in light of all the facts of record, including a
comment submitted on behalf of Business Research and
Development, Albany, Georgia ("Commenter"). Commenter contends that Bank will not adequately serve the
credit and banking needs of minorities nor of low- and
moderate-income ("LMI") individuals and neighborhoods
in the Albany area. Commenter also contends that Bank
has not sufficiently marketed its proposed products and
services to African Americans in Albany.3
Bank is a de novo insured depository institution and,
accordingly, has no record of performance under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). Bank, however, has established a comprehensive CRA plan that details the products and services that
Bank intends to offer to assist in meeting the credit, service
and investment needs of Bank's entire community, including LMI neighborhoods. For example, Bank plans to offer
a variety of housing-related loans, including first- and
second-mortgages, home equity, and home improvement
loans. Bank also plans to originate small business loans
guaranteed by the Small Business Administration and lines
of credit to help agricultural borrowers meet seasonal demand for credit. In addition, Bank intends to make avail-

1. The Office of the Comptroller of the Currency ("OCC") recently
approved Bank's application for a national bank charter, subject to the
Board's approval of this application. See Letter from John O. Stein, II,
Corporate Manager, Southeastern District Office, to Robert E. Lee,
dated February 9, 1999.
2. See CFBanc Holdings, Inc., 85 Federal Reserve Bulletin 52
(1999); Wilson Bank Holding Co., 82 Federal Reserve Bulletin 568
(1996).
3. Commenter also contends that African Americans are not fairly
represented in the management of CCB and Bank. The racial composition of an applicant's management is not a factor the Board is
permitted to consider in acting on an application under section 3 of the
BHC Act. The Board notes that the Equal Employment Opportunity
Commission has jurisdiction to determine whether banking organizations such as CCB and Bank are in compliance with Federal equal
employment opportunity statutes under the regulations of the Department of Labor. See 41 C.F.R. 60-1.7(a), 60-1.40.




445

able consumer loans and student loans to assist in meeting
the credit needs of its local community, and to offer workshops in LMI neighborhoods on basic money management
skills and the fundamentals of maintaining a bank account.
Bank also would offer several types of deposit accounts,
including a checking account with a $100 minimum balance, no monthly maintenance fees, and unlimited checkwriting privileges.4
Bank's CRA plan provides that Bank will actively market its products and services throughout its community,
including LMI neighborhoods, in several ways, including
direct mail and telemarketing programs and the sponsorship of community programs. Bank also has held three
public forums in the Albany area to inform members of the
local community about Bank's proposed products and services,5 and Bank plans to hold an additional three public
forums in the Albany area before commencing operations.
The Board notes, moreover, that Bank's President and
Chief Executive Officer and Bank's Executive Vice President and Senior Loan Officer recently served in management positions at insured depository institutions that received "outstanding" ratings at their most recent CRA
performance evaluation by their appropriate federal supervisory agency.
As noted above, the OCC recently approved Bank's
application for a national bank charter after considering
Bank's proposed assessment area and plans to meet the
credit needs of the local community, including LMI areas,
in light of substantially similar comments filed by Commenter. Consistent with the CRA, Bank has delineated a
local assessment area within which the OCC, Bank's appropriate federal supervisory agency, will evaluate the performance of Bank under the CRA in future examinations. 6
Bank's delineated assessment area includes all of Dougherty County and the southern half of Lee County, both in
Georgia. Bank's assessment area includes all of Albany
and does not arbitrarily exclude LMI areas.
Based on all the facts of record, and for reasons discussed above, the Board concludes that considerations
relating to the convenience and needs factor are consistent
with approval of the application. The Board notes that the
OCC will evaluate Bank's actual record of meeting the
credit needs of the Albany community, including LMI
neighborhoods, in future CRA performance examinations
of Bank, and the Board will carefully consider that record
in acting on future applications by CCB to acquire an
insured depository institution.
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application

4. Bank also plans to establish an additional branch in downtown
Albany during its third year of operation. This branch would further
increase Bank's ability to serve the banking and credit needs of its
community, including African-American and LMI residents of Albany.
5. Before holding these public forums, Bank advertised the date,
location, and purpose of the forums in a newspaper of general circulation in the Albany area.
6. See 12 C.F.R. 25.41(a).

446

Federal Reserve Bulletin • June 1999

should be, and hereby is, approved.7 The Board's approval
is specifically conditioned on compliance by CCB with all
the commitments made in connection with the application.
For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decision are
deemed to be conditions imposed in writing by the Board
in connection with its findings and decision and, as such,
may be enforced in proceedings under applicable law.8
The acquisition of Bank shall not be consummated before the fifteenth calendar day after the effective date of
this order, or later than three months after the effective date
of this order, and Bank shall be open for business within
six months following the effective date of this order, unless
such periods are extended for good cause by the Board or
the Federal Reserve Bank of Atlanta, acting pursuant to
delegated authority.
By order of the Board of Governors, effective April 12,
1999.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON

Associate Secretary of the Board

7. Commenter has requested that the Board hold public meetings or
hearings on the proposal. Section 3(b) of the BHC Act does not
require the Board to hold a public hearing on an application unless the
appropriate supervisory authority for the bank to be acquired makes a
timely written recommendation of denial. The Board has not received
such a recommendation from the OCC.
Under its rules, the Board also may, in its discretion, hold a public
meeting or hearing on an application to acquire a bank if a meeting or
hearing is necessary or appropriate to clarify factual issues related to
the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 225.16(e). The Board has carefully considered Commenter's request in light of all the facts of record. In the Board's view,
Commenter has had ample opportunity to submit its views, and did
submit written comments that have been carefully considered by the
Board in acting on the proposal. Commenter's request fails to demonstrate why its written comments do not adequately present its evidence
and fails to identify disputed issues of fact that are material to the
Board's decision that would be clarified by a public meeting or
hearing. For these reasons, and based on all the facts of record, the
Board has determined that a public meeting or hearing is not required
or warranted in this case.
8. Commenter also has requested that the Board delay action on the
proposal for at least 90 days. The Board is required under applicable
law and its processing procedures to act on applications submitted
under the BHC Act within a specified time. The Board has reviewed
Commenter's request in light of these requirements and the record
compiled in this case. As noted above, Commenter was afforded
ample opportunity to comment and its comments were carefully
considered. Based on a review of all the facts of record, the Board
concludes that the record in this case is sufficient to warrant Board
action on the proposal at this time, and further delay is not warranted.




ORDERS ISSUED UNDER INTERNATIONAL BANKING
ACT

Banco de Credito e Inversiones S.A.
Santiago, Chile
Order Approving Establishment of an Agency
Banco de Credito e Inversiones S.A. ("Bank"), Santiago,
Chile, a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 7(d)
of the IBA (12 U.S.C. § 3105(d)) to establish an agency in
Miami, Florida. The Foreign Bank Supervision Enhancement Act of 1991 ("FBSEA"), which amended the IBA,
provides that a foreign bank must obtain the approval of
the Board to establish an agency in the United States.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published in a
newspaper of general circulation in Miami, Florida (The
Miami Herald, April 23, 1998). The time for filing comments has expired, and the Board has considered the application and all comments received.
Bank, with total consolidated assets of approximately
$5.9 billion,1 is the sixth largest bank in Chile. Approximately 70 percent of the shares of Bank are held by related
parties.2 Mr. Yarur directly owns less than 1 percent of
Bank's shares, and persons related to Mr. Yarur directly
and indirectly own another 15 percent of Bank's shares.
The remaining shares of Bank are widely held, with no
single shareholder owning more than 5 percent of shares.3
Bank engages in a full range of wholesale, retail, and
investment banking activities, including deposit-taking,
private-sector lending, foreign exchange trading, and traderelated financing. Bank operates 139 branches or offices in
Chile. In addition, Bank operates six subsidiaries in Chile,
which engage in stock brokerage, mutual fund administration, financial consulting, collections, insurance brokerage,
and marketing activities, and owns a one-third equity interest in an unincorporated association that engages in electronic funds clearing activities. At present, Bank does not
operate any foreign branches, agencies, or subsidiaries.
Bank's primary purposes for establishing the proposed
agency in Florida are to enhance its ability to serve existing
customers and to expand its international customer base.

1. Asset data are as of June 30, 1998.
2. Empresas Juan Yarur S.A.C., Santiago, Chile ("Empresas"),
which owns 54.7 percent of Bank's shares, is the only shareholder that
directly owns more than 5 percent of Bank's shares. Mr. Luis Enrique
Yarur Rey, chairman of Bank's board, controls Empresas through two
holding companies: Inversiones Petro S.A., Santiago, Chile ("Petro"),
which directly owns 55.2 percent of Empresas; and Inversiones
Baquio S.A., Santiago, Chile ("Baquio"), which directly owns
5.7 percent of Empresas's shares and directly owns 53 percent of
Petro. Together, Mr. Yarur and his wife own all of the shares of
Baquio.
3. Approximately 12 percent of Bank's shares are held in custodial
accounts by Deposito Central de Valores ("DCV"), the clearinghouse
for the Santiago stock exchange. DCV acts only as a clearinghouse
and custodian of securities and does not exercise any voting authority
over shares in its custody.

Legal Developments

The agency would provide correspondent banking, corporate banking, private banking, and investment advisory and
fund management services. Bank does not engage directly
or indirectly in any nonbanking activities in the United
States. Bank would be a qualifying foreign banking organization within the meaning of Regulation K (12 C.F.R.
211.23(b)).
The Superintendencia de Bancos e Instituciones Financieras ("SBIF"), Bank's primary home country supervisor,
has indicated that it has no objection to establishment of
the proposed agency.
In order to approve an application by a foreign bank to
establish an agency in the United States, the IBA and
Regulation K require the Board to determine that the
foreign bank applicant engages directly in the business of
banking outside of the United States and has furnished to
the Board the information it needs to assess the application
adequately. The Board generally also must determine that
the foreign bank is subject to comprehensive supervision or regulation on a consolidated basis by its home
country supervisor (12 U.S.C. § 3105(d)(2); 12 C.F.R.
211.24). The Board also may take into account additional standards as set forth in the IBA and Regulation K
(12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)).
As noted above, Bank engages directly in the business of
banking outside of the United States. Bank also has provided the Board with information necessary to assess the
application through submissions that address the relevant
issues.
Regulation K provides that a foreign bank will be considered to be subject to comprehensive supervision or
regulation on a consolidated basis if the Board determines
that the bank is supervised and regulated in such a manner
that its home country supervisor receives sufficient information on the foreign bank's worldwide operations, including the relationship of the foreign bank to any affiliate, to
assess the overall financial condition of the foreign bank
and its compliance with law and regulation (12 C.F.R.
211.24(c)(1)).4
With respect to the issue of supervision by home country
authorities, the Board has considered the following information. Bank is supervised and regulated by the SBIF. The

4. In determining whether this standard is met, the Board considers,
among other factors, the extent to which the home country supervisor:
(a) Ensures that the bank has adequate procedures for monitoring
and controlling its activities worldwide;
(b) Obtains information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit
reports, or otherwise;
(c) Obtains information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic;
(d) Receives from the bank financial reports that are consolidated on
a worldwide basis, or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis;
(e) Evaluates prudential standards, such as capital adequacy and risk
asset exposure, on a worldwide basis. These are indicia of
comprehensive, consolidated supervision. No single factor is
essential, and other elements may inform the Board's determination.




447

Board previously determined that another Chilean credit
institution was subject to comprehensive supervision on a
consolidated basis by the SBIF.5 The Board has determined
that Bank is supervised on substantially the same terms and
conditions as that other institution. Moreover, there have
been recent enhancements to Chilean supervision in a
number of areas, including increasing risk-based capital
requirements and promoting information exchanges with
foreign supervisory authorities. Based on all the facts of
record, the Board concludes that Bank is subject to comprehensive supervision and regulation on a consolidated basis
by its home country supervisor.
The Board also has taken into account the additional
standards set forth in section 7 of the IBA (see
12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). As
noted above, the SBIF has indicated no objection to establishment of the proposed agency.
Chile's risk-based capital standards conform to those
established by the Basle Capital Accord ("Accord").
Bank's capital is in excess of the minimum levels that
would be required by the Accord and is considered equivalent to capital that would be required of a U.S. banking
organization. Managerial and other financial resources of
Bank also are considered consistent with approval of the
proposed agency. Bank does not currently have operations
outside Chile. Nevertheless, in view of the experience of
the proposed agency manager, and given the fact that Bank
has had extensive experience conducting the types of activities in which the proposed agency would be engaged,
Bank appears to have the experience and capacity to support the activities to be conducted by the proposed agency.
Bank has established controls and procedures for the proposed agency to ensure compliance with U.S. law and for
its operations in general.
Finally, the Board has reviewed the restrictions on disclosure in relevant jurisdictions in which Bank operates
and has communicated with relevant government authorities about access to information. Bank and Baquio have
committed to make available to the Board such information on the operations of Bank and any affiliate of Bank
that the Board deems necessary to determine and enforce
compliance with the IBA, the Bank Holding Company Act
of 1956, as amended, and other applicable Federal law. To
the extent that the provision of such information is prohibited or impeded by law, Bank and Baquio have committed
to cooperate with the Board to obtain any necessary consents or waivers that might be required from third parties in
connection with disclosure of such information. In addition, subject to certain conditions, the SBIF may share
information on Bank's operations with other supervisors,
including the Board. In light of these commitments and
other facts of record, and subject to the condition described
below, the Board concludes that Bank and Baquio have
provided adequate assurances of access to any necessary
information the Board may request.

5. See Banco de Chile, 80 Federal Reserve Bulletin 179 (1994).

448

Federal Reserve Bulletin • June 1999

On the basis of all the facts of record, and subject to the
commitments made by Bank and Baquio and the terms and
conditions set forth in this order, the Board has determined
that Bank's application to establish a state-licensed agency
should be, and hereby is, approved. Should any restrictions
on access to information on the operations or activities of
Bank or its affiliates subsequently interfere with the
Board's ability to obtain information to determine and
enforce compliance by Bank or its affiliates with applicable
federal statutes, the Board may require termination of any
of Bank's direct or indirect activities in the United States.
Approval of this application is also specifically conditioned
on Bank's compliance with the commitments made in
connection with this application, and with the conditions in
this order.6 The commitments and conditions referred to
above are conditions imposed in writing by the Board in
connection with its decision, and may be enforced in
proceedings under 12 U.S.C. § 1818 or 12 U.S.C. § 1847
against Bank, its offices, and its affiliates.
By order of the Board of Governors, effective April 12,
1999.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON

Associate Secretary of the Board

ING Bank, N.V.
Amsterdam, The Netherlands
Order Approving Establishment of a Representative
Office
ING Bank, N.V. ("Bank"), Amsterdam, The Netherlands,
a foreign bank within the meaning of the International
Banking Act ("IBA"), has applied under section 10(a) of
the IBA (12 U.S.C. § 3107(a)) to establish a representative
office in New York, New York. The Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA,
provides that a foreign bank must obtain the approval of
the Board to establish a representative office in the United
States.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published in a
newspaper of general circulation in New York, New York
(New York Times, September 14, 1998). The time for filing
comments has expired, and the Board has considered the
application and all comments received.

6. The Board's authority to approve the establishment of the proposed agency parallels the continuing authority of the Florida Department of Banking and Finance to license offices of a foreign bank. The
Board's approval of the application does not supplant the authority of
the State of Florida and its agent, the Florida Department of Banking
and Finance, to license the proposed agency of Bank in accordance
with any terms or conditions that the Florida Department of Banking
and Finance may impose.




Bank, with assets of $298.5 billion,1 is the third largest
bank in The Netherlands. Bank has 380 offices in The
Netherlands, and approximately 125 offices in more than
50 countries.
Bank's parent company, ING Groep, N.V. ("ING
Group"), 2 Amsterdam, The Netherlands, with total assets
of $460.6 billion,3 is one of the world's largest financial
services providers, offering life and non-life insurance,
commercial and investment banking, asset management
and related products and services. ING Group has operations in Europe, North America, South America, Africa,
Asia, and Australia.
The proposed representative office's activities would
include marketing the products of Bank, maintaining relationships with U.S. corporate clients, and supporting
Bank's Latin American offices on such matters as product
development and marketing.
In acting on an application to establish a representative
office, the IBA and Regulation K provide that the Board
shall take into account whether the foreign bank engages
directly in the business of banking outside of the United
States, and has furnished to the Board the information it
needs to assess the application adequately. The Board also
shall take into account whether the foreign bank and any
foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home
country supervisor (12 U.S.C. § 3107(a)(2); 12 C.F.R.
211.24(d)(2)).4 In addition, the Board also may take into
account additional standards as set forth in the IBA and
Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R.
211.24(c)(2)).
As noted above, Bank engages directly in the business of
banking outside the United States. Bank also has provided
the Board with information necessary to assess the application through submissions that address the relevant issues.

1. Unless otherwise indicated, data are as of January 5, 1998.
2. Ninety-nine percent of the outstanding voting shares of ING
Group are owned by a Dutch trust, Stichting Administratiekantoor
ING Groep (the "Trust"). The Trust engages in no activity other than
holding shares of ING Group. Interests in the Trust are evidenced by
bearer receipts which carry no voting rights. Other than the Trust, no
person owns more than 10 percent of the voting shares or bearer
receipts.
3. Data as of December 31, 1998.
4. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring
and controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit
reports, or otherwise;
(iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic;
(iv) Receive from the bank financial reports that are consolidated
on a worldwide basis or comparable information that permits
analysis of the bank's financial condition on a worldwide
consolidated basis;
(v) Evaluate prudential standards, such as capital adequacy and
risk asset exposure, on a worldwide basis. These are indicia of
comprehensive, consolidated supervision. No single factor is
essential, and other elements may inform the Board's determination.

Legal Developments

With respect to supervision by home country authorities,
the Board previously has determined, in connection with
applications involving other banks in The Netherlands, that
those banks were subject to home country supervision on a
consolidated basis.5 Bank is supervised by De Nederlandsche Bank (the "Central Bank") on substantially the same
terms and conditions as those other banks.6 Based on all
the facts of record, the Board has determined that Bank is
subject to comprehensive supervision and regulation on a
consolidated basis by its home country supervisor.
The Board also has taken into account the additional
standards set forth in section 7 of the IBA and Regulation K
(see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). The
Central Bank has no objection to the establishment of the
proposed representative office.
With respect to the financial and managerial resources of
Bank, taking into consideration Bank's record of operations in its home country, its overall financial resources,
and its standing with its home country supervisors, the
Board has also determined that financial and managerial
factors are consistent with approval of the proposed representative office. Bank appears to have the experience and
capacity to support the proposed representative office and
has established controls and procedures for the proposed
representative office to ensure compliance with U.S. law.
With respect to access to information about Bank's
operations, the Board has reviewed the restrictions on
disclosure in relevant jurisdictions in which Bank operates
and has communicated with relevant government authorities, regarding access to information. Bank and its parents
have committed to make available to the Board such information on the operations of Bank and any of its affiliates
that the Board deems necessary to determine and enforce
compliance with the IBA, the Bank Holding Company Act
of 1956, as amended, and other applicable federal law. To
the extent that the provision of such information to the
Board may be prohibited by law, Bank and its parents have
committed to cooperate with the Board to obtain any
necessary consents or waivers that might be required from
third parties for disclosure of such information. In addition,
subject to certain conditions, the Central Bank may share
information on Bank's operations with other supervisors,
including the Board. In light of these commitments and
other facts of record, and subject to the condition described
below, the Board concludes that Bank has provided adequate assurances of access to any necessary information
that the Board may request.
On the basis of all the facts of record, and subject to the
commitments made by Bank and its parents, as well as the
terms and conditions set forth in this order, the Board has

5. See MeesPierson, N.V., 80 Federal Reserve Bulletin 662 (1994);
Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., Rabobank
Nederland, 80 Federal Reserve Bulletin 947 (1994).
6. The Central Bank also receives information on ING Group with
regard to its nonbanking operations. The Central Bank and the Insurance Supervisory Board have entered into a protocol for the purpose
of jointly regulating groups with interests in both banks and insurance
companies.




449

determined that Bank's application to establish the representative office should be, and hereby is, approved. Should
any restrictions on access to information on the operations
or activities of Bank and its affiliates subsequently interfere
with the Board's ability to obtain information to determine
and enforce compliance by Bank or its affiliates with
applicable federal statutes, the Board may require termination of any of Bank's activities in the United States.
Approval of this application also is specifically conditioned
on compliance by Bank and its parents with the commitments made in connection with this application and with
the conditions in this order.7 The commitments and conditions referred to above are conditions imposed in writing
by the Board in connection with its decision and may be
enforced in proceedings under 12 U.S.C. § 1818 against
Bank and its affiliates.
By order of the Board of Governors, effective April 19,
1999.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
ROBERT DEV. FRIERSON

Associate Secretary of the Board

Paribas
Paris, France
Order Approving Establishment of a Representative
Office
Paribas, Paris, France, a foreign bank within the meaning
of the International Banking Act ("IBA"), has applied
under section 10(a) of the IBA (12 U.S.C. § 3107(a)) to
establish a representative office in Atlanta, Georgia. The
Foreign Bank Supervision Enhancement Act of 1991,
which amended the IBA, provides that a foreign bank must
obtain the approval of the Board to establish a representative office in the United States.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published in a
newspaper of general circulation in Atlanta, Georgia
(Atlanta Journal and Constitution, October 23, 1998). The
time for filing comments has expired, and the Board has
considered the application and all comments received.
Paribas, with total consolidated assets of approximately
$309 billion,1 is the surviving entity resulting from the
merger into Banque Paribas of its parent company, Compagnie Financie re de Paribas, and certain other subsidiaries and affiliated companies in May 1998.

7. The Board's authority to approve the establishment of the proposed representative office parallels the continuing authority of the
State of New York to license offices of a foreign bank. The Board's
approval of this application does not supplant the authority of the
State of New York and the New York State Banking Department
("Department") to license the proposed office of Bank in accordance
with any terms or conditions that the Department may impose.
1. Data are as of December 31, 1998.

450

Federal Reserve Bulletin • June 1999

Paribas, which primarily engages in investment banking,
asset management, and retail financial services, is the fifth
largest banking group in France and has offices in more
than 60 countries. In the United States, Paribas operates
branches in New York, New York, and Chicago, Illinois;
agencies in Houston, Texas, and Los Angeles, California;
and representative offices in Dallas, Texas, and San Francisco, California. Paribas also owns several U.S. subsidiaries
that engage in nonbanking activities. The proposed representative office would market Paribas's products and services.
In acting on an application to establish a representative
office, the IBA and Regulation K provide that the Board
shall take into account whether the foreign bank engages
directly in the business of banking outside the United
States, and has furnished to the Board the information it
needs to assess the application adequately. The Board also
shall take into account whether the foreign bank and any
foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home
country supervisor (12 U.S.C. § 3107(a)(2); 12 C.F.R.
211.24(d)(2)).2 In addition, the Board may take into account
additional standards set forth in the IBA and Regulation K
(12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)).
As noted above, Paribas engages directly in the business
of banking outside the United States. Paribas also has
provided the Board with information necessary to assess
the application through submissions that address the relevant issues. With respect to supervision by home country
authorities, the Board previously has determined, in connection with applications involving other banks in France,
that those banks were subject to home country supervision
on a consolidated basis.3 Paribas is supervised by the
French regulators on substantially the same terms and
conditions as those other banks. Based on all the facts of
record, the Board has determined that Paribas is subject to
comprehensive supervision and regulation on a consolidated basis by its home country supervisors.4 The Board

2. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring
and controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit
reports, or otherwise;
(iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic;
(iv) Receive from the bank financial reports that are consolidated
on a worldwide basis or comparable information that permits
analysis of the bank's financial condition on a worldwide
consolidated basis;
(v) Evaluate prudential standards, such as capital adequacy and
risk asset exposure, on a worldwide basis. These are indicia of
comprehensive, consolidated supervision. No single factor is
essential, and other elements may inform the Board's determination.
3. See Banque Nationale de Paris, 81 Federal Reserve Bulletin 515
(1995); Caisse Nationale de Credit Agricole, 81 Federal Reserve
Bulletin 1055 (1995); Credit Agricole Indosuez, 83 Federal Reserve
Bulletin 1025 (1997).
4. On February 1, 1999, Societe Generale ("SoGen") announced its
intention to make a stock-for-stock exchange offer for all of the shares




also has taken into account the additional standards set
forth in section 7 of the IBA and Regulation K (see
12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). The
Commission Bancaire has no objection to the establishment of the proposed representative office.
With respect to the financial and managerial resources of
Paribas, taking into consideration Paribas's record of operations in its home country, its overall financial resources,
and its standing with its home country supervisors, the
Board has also determined that financial and managerial
factors are consistent with approval of the proposed representative office. Paribas appears to have the experience and
capacity to support the proposed representative office and
has established controls and procedures for the proposed
representative office to ensure compliance with U.S. law.
With respect to access to information about Paribas's
operations, the Board has reviewed the restrictions on
disclosure in relevant jurisdictions in which Paribas operates and has communicated with relevant government authorities regarding access to information. Paribas has committed to make available to the Board such information on
the operations of Paribas and any of its affiliates that the
Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of
1956, as amended, and other applicable federal law. To the
extent that the provision of such information to the Board
may be prohibited by law, Paribas has committed to cooperate with the Board to obtain any necessary consents or
waivers that might be required from third parties for disclosure of such information. In addition, subject to certain
conditions, the Commission Bancaire may share information on Paribas's operations with other supervisors, including the Board. In light of these commitments and other
facts of record, and subject to the conditions described
below, the Board concludes that Paribas has provided
adequate assurances of access to any necessary information
that the Board may request.
On the basis of all the facts of record, and subject to the
commitments made by Paribas, as well as the terms and
conditions set forth in this order, the Board has determined
that Paribas's application to establish a representative office should be, and hereby is, approved. Should any restrictions on access to information on the operations or activities of Paribas and its affiliates subsequently interfere with
the Board's ability to obtain information to determine and
enforce compliance by Paribas or its affiliates with applicable federal statutes, the Board may require termination of
any of Paribas's direct or indirect activities in the United
States. Approval of this application is also specifically
conditioned on Paribas's compliance with the commitments made in connection with this application and with
the conditions in this order.5 The commitments and condi-

of Paribas. The Board previously determined that the home country
supervision of SoGen was consistent with the approval of a representative office. See Societe Generale, 80 Federal Reserve Bulletin 665
(1994).
5. The Board's authority to approve the establishment of the proposed office parallels the continuing authority of the State of Georgia

Legal Developments

tions referred to above are conditions imposed in writing
by the Board in connection with its decision and may be

to license offices of a foreign bank. The Board's approval of this
application does not supplant the authority of the State of Georgia and
the State of Georgia Department of Banking and Finance ("Department") to license the proposed office of Paribas in accordance with
any terms of conditions that the Department may impose.

451

enforced in proceedings under 12 U.S.C. § 1818 against
Paribas and its affiliates.
By order of the Board of Governors, effective April 1,
1999.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Meyer, Ferguson, and Gramlich.
JENNIFER J. JOHNSON

Secretary of the Board

ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
(JANUARY I, 1999-MARCH 31,1999)

Applicant
Arizona Bank,
Tucson, Arizona
The Banc Corporation,
Birmingham, Alabama

BankAmerica Corporation,
Charlotte, North Carolina
BancWest Corporation,
Honolulu, Hawaii
BB&T Corporation,
Winston-Salem, North Carolina
First Union Corporation,
Charlotte, North Carolina
SunTrust Banks, Inc.,
Atlanta, Georgia
Wachovia Corporation,
Winston-Salem, North Carolina
Zions Bancorporation,
Salt Lake City, Utah
Bay Port Financial Corporation,
Bay Port, Michigan
C-B-G, Inc.,
Wilton, Iowa

Commerzbank AG,
Frankfurt am Main, Germany

First Banks, Inc.,
Creve Coeur, Missouri
First Banks America, Inc.,
Clayton, Missouri
First Security Corporation,
Salt Lake City, Utah




Date of Approval

Bulletin
Volume
and Page

To acquire 15 branches in Arizona

March 3, 1999

85, 343

Emerald Coast Bancshares, Inc.,
Panama City Beach, Florida
Emerald Coast Bank,
Panama City Beach, Florida
Honor Technologies, Inc.,
Maitland, Florida
Star Systems, Inc.,
San Diego, California

February 1, 1999

85, 269

February 1, 1999

85, 271

March 22, 1999

85, 333

March 29, 1999

85, 335

March 15, 1999

85, 336

February 12, 1999

85, 268

January 25, 1999

85, 207

Merged or Acquired Bank
or Activity

Bay Port State Bank,
Bay Port, Michigan
Peoples National Corporation,
Columbus Junction, Iowa
Community Bank,
Muscatine, Iowa
Korea Exchange Bank,
Seoul, Korea
California Korea Bank,
Los Angeles, California
Redwood Bancorp,
San Francisco, California
Redwood Bank,
San Francisco, California
Van Kasper & Company,
San Francisco, California
Redwood Securities Group, Inc.,
San Francisco, California

452

Federal Reserve Bulletin • June 1999

Index of Orders—Continued

Applicant
The Fuji Bank, Limited,
Tokyo,Japan

Istituto Bancario San Paolo
di Torino-Istituto Mobiliare
Italiano S.p.A.,
Turin, Italy
Union Planters Corporation,
Memphis, Tennessee
Union Planters Holding Corporation,
Memphis, Tennessee

Wachovia Corporation,
Winston-Salem, North Carolina

Westdeutsche Immobilienbank,
Mainz, Germany

Date of Approval

Bulletin
Volume
and Page

The Yasuda Trust and Banking Co., Ltd.
Tokyo,Japan
Yasuda Bank and Trust Company,
New York, New York
Mabon Securities Corp.,
New York, New York
Cedar Street Securities Corp.,
New York, New York

March 15, 1999

85, 338

February 1, 1999

85, 275

First Mutual Bancorp, Inc.,
Decatur, Illinois
First Mutual Bank, S.B.,
Decatur, Illinois
Interstate/Johnson Lane, Inc.,
Charlotte, North Carolina
Interstate/Johnson Lane Corporation,
Charlotte, North Carolina
To establish a representative office in
New York, New York

January 11, 1999

85, 205

March 17, 1999

85, 340

March 1, 1999

85, 346

Merged or Acquired Bank
or Activity

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Section 3
Applicant(s)

Bank(s)

Effective Date

BancTenn Corporation,
Kingsport, Tennessee
Capital City Group, Inc.
Tallahassee, Florida

Paragon Commercial Bank,
Raleigh, North Carolina
Grady Holding Company,
Cairo, Georgia
First National Bank of Grady County,
Cairo, Georgia
Commerce Financial Corporation,
Fort Worth, Texas
Bank of Commerce,
Fort Worth, Texas

April 22, 1999

Cullen/Frost Bankers, Inc.
San Antonio, Texas




April 7, 1999

April 23, 1999

Legal Developments

453

By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Section 3
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

1st Constitution Bancorp,
Cranbury, New Jersey
1st State Bancorp, Inc.,
Burlington, North Carolina
1st State Bank Foundation, Inc.
Burlington, North Carolina

1st Constitution Bank,
Cranbury, New Jersey
1st State Bank,
Burlington, North Carolina
1st State Bancorp, Inc.,
Burlington, North Carolina
1st State Bank,
Burlington, North Carolina
Otoe County Bancorporation, Inc.,
Nebraska City, Nebraska
D Bancorp, Inc.,
DeSoto, Texas
Bank of DeSoto, N.A.,
DeSoto, Texas
Heartland Bancshares, Inc.,
Herrin, Illinois
Heartland National Bank,
Herrin, Illinois
Somerville Bank and Trust Company,
Somerville, Tennessee
The California Community Financial
Institutions Fund Limited Partnership,
San Francisco, California
California Financial Bancorp,
Newport Beach, California
Security First Bank,
Fullerton, California
The Bank of Orange County,
Fountain Valley, California
Downey National Bank,
Downey, California
National Business Bank,
Torrance, California
Walthall Capital Group, Ltd.,
Tylertown, Mississippi
Walthall Citizens Bank,
Tylertown, Mississippi
Chelsea Bancshares, Inc.,
Chelsea, Oklahoma
Community Commercial Bank,
Germantown, Tennessee

New York

March 26, 1999

Richmond

April 8, 1999

Richmond

April 8, 1999

Kansas City

April 5, 1999

Dallas

April 15, 1999

St. Louis

April 5, 1999

St. Louis

April 14, 1999

San Francisco

April 15, 1999

Atlanta

March 26, 1999

Kansas City

April 13, 1999

St. Louis

April 16, 1999

Atlanta

April 14, 1999

Kansas City

March 31, 1999

Ameriwest Corporation,
Omaha, Nebraska
Bank of DeSoto, N.A., Employee
Stock Ownership Trust,
DeSoto, Texas
Banterra Corp.,
Eldorado, Illinois

Barret Bancorp, Inc.,
Barretville, Tennessee
Belvedere Capital Partners LLC,
San Francisco, California

Citizens Corporation,
Columbia, Mississippi

Commerce Bancshares, Inc.,
Adair, Oklahoma
Community Commercial
Bancshares, Inc.,
Germantown, Tennessee
Community First Bancshares, Inc.,
New Iberia, Louisiana
Community State Bancshares, Inc..
Wichita, Kansas




Community First Bank,
New Iberia, Louisiana
Community Bank of Wichita, Inc.,
Wichita, Kansas

454

Federal Reserve Bulletin • June 1999

Section 3—Continued
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

First Capital Bank Holding
Corporation,
Fernandina Beach, Florida
First Financial Bancorp,
Hamilton, Ohio
Goodenow Bancorporation,
Okoboji, Iowa
Greater Community Bancorp,
Totowa, New Jersey
Habersham Bancorp,
Cornelia, Georgia
Horizon Financial Corp.,
Bellingham, Washington

First National Bank of Nassau County,
Fernandina Beach, Florida

Atlanta

March 26, 1999

Hebron Bancorp, Inc.,
Hebron, Kentucky
Southwest State Bank,
Windom, Minnesota
Rock Community Bank,
Glen Rock, New Jersey
CB Financial Corp.,
Warrenton, Georgia
Bellingham Bancorporation,
Bellingham, Washington
Bank of Bellingham,
Bellingham, Washington
Crawford Financial Corporation,
Indianapolis, Indiana
Marengo State Bank,
Marengo, Indiana
Union-Adams Bancorp.,
Creston, Iowa
Iowa State Savings Bank,
Creston, Iowa
The Mahopac National Bank,
Mahopac, New York

Cleveland

April 15, 1999

Chicago

April 9, 1999

New York

April 8, 1999

Atlanta

April 2, 1999

San Francisco

April 15, 1999

St. Louis

April 2, 1999

Chicago

April 21, 1999

New York

April 6, 1999

First Mercantile Bank, N.A.,
Dallas, Texas

Dallas

April 13, 1999

Southwest State Bank,
Windom, Minnesota
Morgantown Deposit Bancorp, Inc.,
Morgantown, Kentucky
RCB Holding Company,
Roseville, Minnesota
Roseville Community Bank, N.A.,
Roseville, Minnesota
Norwood Bancshares, Inc.,
Norwood Young America, Minnesota
Citizens State Bank of Norwood,
Norwood Young America, Minnesota
Springfield Investment Company,
Springfield, Minnesota
Farmers and Merchants State Bank of
Springfield,
Springfield, Minnesota
Reliance Bank,
Des Peres, Missouri
St. John National Bank,
St. John, Kansas
Southeast Security Bank,
Mediapolis, Iowa

Chicago

April 9, 1999

St. Louis

April 7, 1999

Minneapolis

March 30, 1999

Minneapolis

April 8, 1999

St. Louis

April 1, 1999

Kansas City

April 15, 1999

Chicago

April 15, 1999

Independence Bancorp,
New Albany, Indiana

Iowa Community Bancorp, Inc.,
Creston, Iowa

Letchworth Independent Bancshares
Corporation,
Castile, New York
Mercantile Bancorp, Inc.,
Dallas, Texas
Mercantile Delaware Bancorp, Inc.,
Dover, Delaware
Midwest Bancorporation, Inc.,
Okoboji, Iowa
M.R. Melton Limited Partnership,
Mt. Sterling, Kentucky
Northfield Bancshares, Inc.,
Northfield, Minnesota

Piesco, Inc.,
Springfield, Minnesota

Reliance Bancshares, Inc.,
Des Peres, Missouri
SJN Banc Co.,
St. John, Kansas
Southeast Bancshares, Inc.,
Mediapolis, Iowa




Legal Developments

Section 3—Continued
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

Stearns Financial Services, Inc.
Employee Stock Ownership Plan
and Trust,
St. Cloud, Minnesota
Suncoast Bancorp, Inc.,
Sarasota, Florida
Swedish-American Bancshares, Inc.,
Courtland, Kansas
Violeta Investments, Ltd.,
Hebbronville, Texas

Stearns Financial Services, Inc.
St. Cloud, Minnesota

Minneapolis

April 7, 1999

Suncoast National Bank,
Sarasota, Florida
Swedish-American State Bank,
Courtland, Kansas
Hebbronville State Bank,
Hebbronville, Texas

Atlanta

April 8, 1999

Kansas City

April 21, 1999

Dallas

April 15, 1999

Section 4
Applicant(s)

Nonbanking Activity/Company

Reserve Bank

Effective Date

Centennial Bank Holdings, Inc.,
Eaton, Colorado
Citigroup, Inc.,
New York, New York

Centennial Bankers Mortgage, LLC,
Eaton, Colorado
Associates Corporation of North
America,
Irving, Texas

Kansas City

March 24, 1999

New York

March 31, 1999

Kansas City

March 30, 1999

Dallas

March 31, 1999

Kansas City

March 30, 1999

Chicago

April 16, 1999

New York

April 1, 1999

Kansas City

March 29, 1999

New York

April 19, 1999

San Francisco

April 15. 1999

San Francisco

March 30, 1999

Commercial Credit Corporation,
Baltimore, Maryland
Consolidated Equity Corporation,
Purcell, Oklahoma
Lubbock National Bancshares, Inc.
Lubbock, Texas
McClain County Bancorporation,
Purcell, Oklahoma
National Australia Bank Limited,
Melbourne, Australia
Homeside Lending, Inc.,
Jacksonville, Florida
Standard Chartered PLC,
London, England
Standard Chartered Bank,
London, England
Stockgrowers Banc Corporation,
Ashland, Kansas
UBS AG,
Basle, Switzerland
Wells Fargo & Company,
San Francisco, California
Norwest Financial Services, Inc.,
Des Moines, Iowa
Norwest Financial, Inc.,
Des Moines, Iowa

Wells Fargo & Company,
San Francisco, California




Heart of Oklahoma Community
Development Corporation,
Purcell, Oklahoma
Commerce Southwest Mortgage, L.L.C.
Lubbock, Texas
Heart of Oklahoma Community
Development Corporation,
Purcell, Oklahoma

First Chicago NBD Mortgage Company,
Troy, Michigan
UBS AG,
Basle, Switzerland

Howell Insurance Agency of Ashland,
Ashland, Kansas
Warburg Dillon Read, LLC,
New York, New York

TCF National Bank Minnesota
Minneapolis, Minnesota
TCF Consumer Financial Services, Inc.
Minneapolis, Minnesota
TCF Financial Services, Inc.,
Minneapolis, Minnesota
ATI Title Agency of Ohio, Inc.,
Cleveland, Ohio

455

456

Federal Reserve Bulletin • June 1999

Section 4—Continued
Applicant(s)
Norwest Insurance, Inc.,
West Des Moines, Iowa
Wells Fargo & Company,
San Francisco, California

Nonbanking Activity/Company

Reserve Bank

Effective Date

PaymentNet, Inc.,
Pleasanton, California
Norwest Services, Inc.,
Minneapolis, Minnesota

San Francisco

March 29, 1999

APPLICATIONS APPROVED UNDER BANK MERGER ACT

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

Bank(s)

Reserve Bank

Effective Date

Farmers Bank of Maryland,
Annapolis, Maryland
First Interstate Bank,
Billings, Montana
The Northwestern Bank,
Chippewa Falls, Wisconsin
Premier Bank,
Lenexa, Kansas
WestStar Bank,
Vail, Colorado

First Virginia Bank-Maryland,
Upper Marlboro, Maryland
First National Bank of Montana,
Libby, Montana
M&I Community State Bank,
Eau Claire, Wisconsin
Bank of Craig,
Craig, Missouri
World Savings Bank, FSB,
Oakland, California

Richmond

April 6, 1999

Minneapolis

April 15, 1999

Minneapolis

March 30, 1999

Kansas City

March 30, 1999

Kansas City

April 12, 1999

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.
Sedgwick v. Board of Governors, No. Civ 99 0702 (D. Arizona, filed April 14, 1999). Action under Federal Tort
Claims Act alleging violation of bank supervision requirements.
Hunter v. Board of Governors, No. 1:98CV02994 (TFH)
(D.D.C., filed December 9, 1998). Action under the Freedom of Information Act and the Privacy Act.
Folstad v. Board of Governors, No. 1:99 CV 124 (W.D. Mich.,
filed February 17, 1999). Freedom of Information Act complaint. On March 23, 1999, the Board filed a motion to
dismiss or for summary judgment.
Nelson v. Greenspan, No. 1:99CV00215 (EGS) (D.D.C., filed
January 28, 1999). Employment discrimination complaint.
On March 29, 1999, the Board filed a motion to dismiss the
action.
Fraternal Order of Police v. Board of Governors, No.
1:98CV03116 (D. D.C., filed December 22, 1998). Declaratory judgment action challenging Board labor practices. On
February 26, 1999, the Board filed a motion to dismiss the
action.



Inner City Press/Community on the Move v. Board of Governors, No.98-9604 (2d Cir., filed December 3, 1998). Appeal of district court order dated October 6, 1998, granting
summary judgment for the Board in a Freedom of Information Act case.
Independent Bankers Association of America v. Board of Governors, No. 98-1482 (D.C. Cir., filed October 21, 1998).
Petition for review of a Board order dated September 23,
1998, conditionally approving the applications of Travelers
Group, Inc., New York, New York, to become a bank
holding company by acquiring Citicorp, New York,
New York, and its bank and nonbank subsidiaries.
Clarkson v. Greenspan, No.98-5349 (D.C. Cir., filed July 29,
1998). Appeal of district court order granting Board's motion for summary judgment in a Freedom of Information
Act case. On March 2, 1999, the Court granted the Board's
motion for summary affirmance of the district court dismissal.
Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK)
(S.D.N.Y., filed May 15, 1998). Action to freeze assets of
individual pending administrative adjudication of civil
money penalty assessment by the Board. On May 26, 1998,
the court issued a preliminary injunction restraining the

Legal Developments

transfer or disposition of the individual's assets and appointing the Federal Reserve Bank of New York as receiver for
those assets.
Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed
May 4, 1998). Appeal and cross-appeal of district court
order granting in part and denying in part the Board's
motion for summary judgment seeking prejudgment interest
and a statutory surcharge in connection with a civil money
penalty assessed by the Board. On February 24, 1999, the
court granted the Board's appeal and denied the crossappeal, and remanded the matter to the district court for
determination of prejudgment interest due to the Board.
Fenili u Davidson, No. C-98-01568-CW (N.D. California,
filed April 17, 1998). Tort and constitutional claim arising
out of return of a check. On June 5, 1998, the Board filed its
motion to dismiss.
Logan v. Greenspan, No. 1:98CV00049 (D.D.C., filed January 9, 1998). Employment discrimination complaint.
Goldman v. Department of the Treasury, No. 98-9451 (11th
Circuit, filed November 10, 1998). Appeal from a District
Court order dismissing an action challenging Federal
Reserve notes as lawful money.
Kerr v. Department of the Treasury, No. CV-S-97-01877DWH (D. Nev., filed December 22, 1997). Challenge to
income taxation and Federal Reserve notes. On September 3, 1998, a motion to dismiss was filed on behalf of all
federal defendants. The court dismissed the action on
March 31, 1999.
Bettersworth v. Board of Governors, No. 97-CA-624 (W.D.
Tex., filed August 21, 1997). Privacy Act case.




457

FINAL ENFORCEMENT ORDERS ISSUED BY THE
BOARD OF GOVERNORS

Paul P. Piper
Crested Butte, Colorado
The Federal Reserve Board announced on April 16, 1999,
the issuance of a Combined Order to Cease and Desist and
Order of Assessment of a Civil Money Penalty against
Paul P. Piper, Jr., a former institution- affiliated party of
first National Summit Bankshares, Crested Butte, Colorado, a former registered bank holding company, and the
First National Summit Bank, Gunnison, Colorado, a former
national bank.

WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS

Foxdale Bancorp, Inc.
South Elgin, Illinois
The Federal Reserve Board announced on April 22, 1999,
the execution of a Written Agreement by and among
Foxdale Bancorp, Inc., the Foxdale Bank, both of South
Elgin, Illinois, the Federal Reserve Bank of Chicago, and
the Illinois Office of Banks and Real Estate.

1

Financial and Business Statistics
A3

DOMESTIC FINANCIAL STATISTICS

Money Stock and Bank Credit
A4
A5
A6

Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions and Reserve Bank
credit
Reserves and borrowings—Depository
institutions

Policy Instruments
A7
A8
A9

Federal Finance—Continued

GUIDE TO TABULAR PRESENTATION

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

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

All

Gross public debt of U.S. Treasury—
Types and ownership
A28 U.S. government securities
dealers—Transactions
A29 U.S. government securities dealers—
Positions and financing
A30 Federal and federally sponsored credit
agencies—Debt outstanding

Securities Markets and Corporate Finance
A31 New security issues—Tax-exempt state and local
governments and corporations
A32 Open-end investment companies—Net sales
and assets
A32 Corporate profits and their distribution
A32 Domestic finance companies—Assets and
liabilities
A33 Domestic finance companies—Owned and managed
receivables

Real Estate
Monetary and Credit Aggregates
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures

Commercial Banking Institutions—
Assets and Liabilities
A15
A16
A17
A19
A20

All commercial banks in the United States
Domestically chartered commercial banks
Large domestically chartered commercial banks
Small domestically chartered commercial banks
Foreign-related institutions

A34 Mortgage markets—New homes
A35 Mortgage debt outstanding

Consumer Credit
A3 6 Total outstanding
A3 6 Terms

Flow of Funds
A37
A39
A40
A41

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

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

Federal Finance
A25 Federal fiscal and financing operations
A26 U.S. budget receipts and outlays
All Federal debt subject to statutory limitation




DOMESTIC NONFINANCIAL STATISTICS

Selected Measures
A42
A42
A43
A44
A46
A47
A48
A49

Nonfinancial business activity
Labor force, employment, and unemployment
Output, capacity, and capacity utilization
Industrial production—Indexes and gross value
Housing and construction
Consumer and producer prices
Gross domestic product and income
Personal income and saving

95

Federal Reserve Bulletin • June 1999

INTERNATIONAL STATISTICS
Summary

Reported by Nonbanking
Enterprises in the United

Statistics

A50
A51
A51
A51

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

by Banks in the United

A52
A53
A55
A56

States

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




Business
States

A58 Liabilities to unaffiliated foreigners
A59 Claims on unaffiliated foreigners
Securities

Holdings

and

Transactions

A60 Foreign transactions in securities
A61 Marketable U.S. Treasury bonds and
notes—Foreign transactions
Interest and Exchange

Rates

A62 Foreign exchange rates
A63 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
A64 INDEX TO STATISTICAL TABLES

3

Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
p
r

ABBREVIATIONS

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

Corrected
Estimated
Not available
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
5 0 0 , 0 0 0 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Community Reinvestment Act of 1977
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven

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




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

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

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

A4
1.10

DomesticNonfinancialStatistics • June 1999
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted 1
1998

1999

1999

1998

Monetary or credit aggregate

1
2
3
4

Reserves of depository institutions1
Total
Required
Nonborrowed
Monetary base 3

5
6
7
8

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

Nontransaction
9 In M2 5
10 In M3 only 6

Nov.

Dec.

Jan.

Feb.r

Mar.

-2.3
-.1
-2.3
8.9

5.0
3.8
7.5
8.9

9.0
10.5
8.1
8.3

-.5
.8
-2.9
8.4

-14.4
-6.0
-12.0
9.5

-13.1
-16.1
-11.8
9.8

5.0
11.0
12.9
6.4r

2.5
7.2
7.1
n.a.

9.6
10.6
13.4
7.4r

4.7
10.1
12.0
6.r

-3.0r
6.5
3.9r
5.r

1.4
5.6
8.8
4.8

9.8
2.8
-3.0
n.a.

9.9
13.5

13.0
18.4

8.7
6.9

11.0
21.2

11.8
17.3

9.6
—3.2r

7.1
17.6

.4
-18.8

Q2

Q3

04

Q1

-3.8
-2.5
-4.3
5.3

-7.4
-9.0
-8.4
6.8

-1.6
-2.3
-.4
8.9

1.0
7.5
10.1
6.0

-2.0
6.9
8.6
6.ff

9.8
17.8

components

Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time 7
Large time 8 ' 9
Thrift institutions
14
Savings, including MMDAs
15
Small time 7
16
Large time8

13.4
.1
16.4

15.8
.1
3.5

17.6
.4
3.9

11.4
-5.4
-3.6

16.4
1.5
8.1

19.2
-4.2
8.0

12.3
-7.9
10.6

5.1
-7.5
-27.0

.0
-3.5
-34.2

10.8
-4.4
-4.5

9.0
-7.3
.5

10.1
-6.7
10.4

12.7
-6.4
7.4

10.9
-10.5
2.7

10.8
—5.9r
16.4

14.7r
-5.2
25.6

14.6
-5.9
-14.5

7.3
-8.2
-16.0

Money market mutual funds
17 Retail
18 Institution-only

20.9
34.7

19.0
26.6

28.4
41.8

21.0
17.9

20.5
42.2

22.3
29.5

23.2
-2.8

23.7
34.7

4.0
-1.8

Repurchase agreements and Eurodollars
19 Repurchase agreements10
20 Eurodollars10

14.5
-3.3

11.7
21.7

16.4
7.6

11.2
-.4

25.4
1.5

34.0
-20.0

-25.0
-28.1 r

68.7
42.4

-50.2
36.3

Debt components4
21 Federal
22 Nonfederal

-1.4
8.4r

-1.5
8.4r

-2.0
9.1r

n.a.
n.a.

-.5
9.9r

-.4
8.1r

-2.1
7.3r

-7.3
8.4

n.a.
n.a.

11
12
13

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




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

Money Stock and Bank Credit
1.11

A5

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

Average of daily figures for week ending on date indicated

1999
Feb. 17

Feb. 24

Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding

504,486

501,636r

507,920

501,302

507,119

507,613

508,369

453,333
7,056

458,706
3,310

464,000
6,499

458,088
2,292

459,973
4,829

461,317
4,805

462,738
5,832

464,197
4,497

464,809
8,006

337
4,670

336
3,222

318
3,408

336
3,359

336
3,542

336
3,478

332
2,739

311
3,690

311
3,944

201
6

118
10

32
17

107
10

12
14

5
14

4
16

87
20

2,313
36,570

446r
35,488r

210
33,436

1,229
35,891

375
34,536

-320
34,218

1,134
34,326

62
34,837

-453
31,646

11,046
9,200
26,329

11,049
9,200
26,454r

11,048
8,329
26,540

11,049
9,200
26,453r

11,049
9,200
26,480r

11,047
9,200
26,508

11,047
8,343
26,522

11,049
8,200
26,536

11,048
8,200
26,550

510,137
87

510,631'
114

514,694
132

511,75 l r
125

512,217r
117

512,507
121

513,872
131

514,742
132

515,057
134

6,597
186
7,618
443
16,711
9,281

4,800
202
7,129r
270
16,686
8,507r

5,463
177
6,981
247
17,002
9,141

4,223
204
6,865
288
16,838
7,710

4,998
186
6,944'
279
16,942
8,755'

4,974
188
7,030
254
16,520
9,019

5,087
190
6,958
251
16,855
9,688

6,313
180
6,896
261
17,117
7,758

5,309
166
7,232
236
17,184
8,851

0

0

0

0

0

0

0

0

0
0

0

0

0

0

0

0

0

0

ABSORBING RESERVE FUNDS

15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and adjustments . .
20
Other
21 Other Federal Reserve liabilities and capital .
22 Reserve balances with Federal Reserve Banks4

Wednesday figures

End-of-month figures
Mar. 3

Mar. 10

Mar. 17

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding

498,740

503,077'

454,439
4,485

461,036
3,558

336
2,535

516,531

514,187

505,212

514,527

465,686
12,730

456,987
4,101

461,106
9,870

461,998
5,562

463,621
9,498

464,506
4,495

464,744
17,013

311
5,606

336
3,314

336
7,223

336
2,047

311
5,402

311
3,840

311
4,533

0

0

0

0
1
16
0

0

0
1
20
0

0

0

0

55
5

4
12

223
22

164
36,721

39r
34,208r

32,690

3,552
34,176

35,275

1,372
33,881

935
34,745

163
34,893

-305
30,217

11,048
9,200
26,397

11,047
9,200
26,508'

11,049
8,200
26,564

11,049
9,200
26,453'

11,048
9,200
26,480'

11,047
9,200
26,508

11,047
8,200
26,522

11,049
8,200
26,536

11,047
8,200
26,550

505,528

511,709'
120

517,716
135

513,043'
117

512,884'
120

514,036
131

515,272
131

515,737
134

516,122
134

7,623
234
7,828
246
16,269
7,558

4,538
200
7,030'
225
16,460
9,551'

5,374
166
6,817
235
16,805
14,952

4,893
185
6,865
291
16,695
7,145

4,753
218
6,944'
271
16,858
18,867'

5,050
185
7,030
265
16,257
9,013

4,722
165
6,958
250
16,982
15,816

6,318
173
6,896
247
16,906
7,602

5,199
169
7,229
220
17,089

0

0

0

-882

0

433
12

0

-68

4
12

0

2
17

0

ABSORBING RESERVE FUNDS

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

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




16,166

3. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.
4. Excludes required clearing balances and adjustments to compensate for float.

A6

Domestic Financial Statistics • June 1999

1.12

RESERVES AND BORROWINGS

Depository Institutions1

Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification

1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks 2
Total vault cash3
Applied vault cash 4
Surplus vault cash 5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit9

1996

1997

1998

1999

Dec.

Dec.

Dec.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.r

Mar.

13,395
44,525
37,848
6,678
51,242
49,819
1,423
155
68
0

10,673
44,740
37,206
7,534
47,880
46,196
1,683
324
79
0

9,022
44,305
35,997
8,308
45,019
43,435
1,584
117
15
0

9,284
42,524
34,909
7,614
44,193
42,509
1,684
251
178
0

9,026
43,268
35,090
8,178
44,115
42,544
1,572
174
107
0

8,855
43,104
35,297
7,807
44,152
42,527
1,624
84
37
0

9,022
44,305
35,997
8,308
45,019
43,435
1,584
117
15
0

9,659
45,499
36,687
8,812r
46,346
44,811
1,535
206
7
0

8,578
46,468
36,660
9,809
45,237
44,022
1,215
116
9
0

8,854
42,898
34,271
8,627
43,125
41,817
1,308
65
18
0

1998

Biweekly averages of daily figures for two week periods ending on dates indicated
1998

1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks
Total vault cash 3
Applied vault cash4
Surplus vault cash 5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9

1999

Dec. 2

Dec. 16

Dec. 30

Jan. 13

Jan. 27

Feb. 10

Feb. 24

Mar. 10r

Mar. 24

Apr. 7

9,028
43,313
35,853
7,460
44,880
43,221
1,659
79
20
0

8,949
43,230
35,273
7,957
44,222
42,917
1,304
26
13
0

9,057
45,470
36,748
8,722
45,805
43,999
1,806
195
18
0

9,551
45,023
35,911
9,113
45,462
43,240
2,221
370
9
0

10,019
44,837r
36,847
7,990r
46,866
45,878
988
68
5
0

8,750
49,363r
38,649
10,714r
47,399
46,181
1,217
158
8
0

8,233
45,597 r
35,997
9,60a1
44,230
43,040
1,189
112
9
0

9,356
42,284
34,007
8,277
43,362
42,062
1,300
22
14
0

8,309
43,524
34,521
9,004
42,830
41,613
1,217
63
18
0

9,229
42,525
34,149
8,376
43,377
41,874
1,503
130
24
0

1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For
ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted.
2. Excludes required clearing balances and adjustments to compensate for float and
includes other off-balance-sheet "as-of' adjustments.
3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by
those banks and thrifts that are not exempt from reserve requirements. Dates refer to the
maintenance periods in which the vault cash can be used to satisfy reserve requirements.
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
with traditional short-term adjustment credit, the money market effect of extended credit is
similar to that of nonborrowed reserves.

Policy Instruments
1.14

A7

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

Federal Reserve
Bank

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta

On
5/7/99
4.50

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

4.50

1

Extended credit3

Seasonal credit2

Effective date

Previous rate

On
5/7/99

Effective date

Previous rate

On
5/7/99

Effective date

Previous rate

11/18/98
11/17/98
11/17/98
11/19/98
11/18/98
11/18/98

4.75

4.85

5/6/99

4.75

5.35

5/6/99

5.25

4.75

4.85

5/6/99

4.75

5.35

5/6/99

5.25

11/19/98
11/19/98
11/19/98
11/18/98
11/17/98
11/17/98

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

F.R. Bank
of
N.Y,

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

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

6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5

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

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

1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
1981—May 5
8
Nov. 2
6
Dec. 4

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

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

10-11

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

10
10.5
10.5
11
11
12
12
13
13
13
12
11
11
10
10
11
12
13
13
14
14
13
13
12

Range (or
level)—All
F.R. Banks

F.R. Bank
of
N.Y.

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

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

9
13
Nov. 21
26
Dec. 24

8.5-9
9
8.5-9
8.5
8

9
9
8.5
8.5
8

1985—May 20
24

7.5-8
7.5

7.5
7.5

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

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

7
7
6.5
6.5
6
5.5
5.5

1987—Sept. 4
11

5.5-6
6

1988—Aug. 9
11
1989—Feb. 24
27

1982—July 20
23
Aug. 2
3

16

27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
1984—Apr.

Effective date

Range (or
level)—All
F.R. Banks

F.R. Bank
of
N.Y.

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
3.5^1.5
3.5

6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5

2
7

3-3.5
3

1994—May 17
18
Aug. 16
18
Nov. 15
17

3-3.5
3.5
3.5^1
4
4-4.75
4.75

3.5
3.5
4
4
4.75
4.75

1
9

4.75-5.25
5.25

5.25
5.25

1996—Jan. 31
Feb. 5

5.00-5.25
5.00

5.00
5.00

1998—Oct. 15
Oct. 16

4.75-5.00
4.75

4.75
4.75

6
6

1998—Nov. 17
Nov. 19

4.50-4.75
4.50

4.50
4.50

6-6.5
6.5

6.5
6.5

In effect May 7, 1999

4.50

4.50

6.5-7
7

7
7

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

1995—Feb.

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




4

3
3

of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
flexible rate somewhat above rates charged on market sources of funds is charged. The rate
ordinarily is reestablished on the first business day of each two-week reserve maintenance
period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis
points.
4. For earlier data, see the following publications of the Board of Governors: Banking and
Monetary Statistics, 1914-1941, and 1941-1970-, and the Annual Statistical Digest, 19701979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit
borrowings by institutions with deposits of $500 million or more that had borrowed in
successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was
in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed
on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to
4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981,
and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period. The
surcharge was eliminated on Nov. 17, 1981.

A8

DomesticNonfinancialStatistics • June 1999

1.15

RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1

Type of deposit

Net transaction accounts2
$0 million-$46.5 million 3 .
More than $46.5 million 4 .

12/31/98
12/31/98

3

Nonpersonal time deposits ;

12/27/90

4

Eurocurrency liabilities 6 . . .

12/27/90

1
2

1. Required reserves must be held in the form of deposits with Federal Reserve Banks
or vault cash. Nonmember institutions may maintain reserve balances with a Federal
Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For
previous reserve requirements, see earlier editions of the Annual Report or the Federal
Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions
include commercial banks, savings banks, savings and loan associations, credit unions,
agencies and branches of foreign banks, and Edge Act corporations.
2. Transaction accounts include all deposits against which the account holder is permitted
to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized transfers for the purpose of making payments to third
persons or others. However, accounts subject to the rules that permit no more than six
preauthorized, automatic, or other transfers per month (of which no more than three may be
by check, draft, debit card, or similar order payable directly to third parties) are savings
deposits, not transaction accounts.
3. The Monetary Control Act of 1980 requires that the amount of transaction accounts
against which the 3 percent reserve requirement applies be modified annually by 80 percent of
the percentage change in transaction accounts held by all depository institutions, determined
as of June 30 of each year. Effective with the reserve maintenance period beginning
December 31, 1998, for depository institutions that report weekly, and with the period
beginning January 14, 1999, for institutions that report quarterly, the amount was decreased
from $47.8 million to $46.5 million.
Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the
amount of reservable liabilities subject to a zero percent reserve requirement each year for the




succeeding calendar year by 80 percent of the percentage increase in the total reservable
liabilities of all depository institutions, measured on an annual basis as of June 30. No
corresponding adjustment is made in the event of a decrease. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve
maintenance period beginning December 31, 1998, for depository institutions that report
weekly, and with the period beginning January 14, 1999, for institutions that report quarterly,
the exemption was raised from $4.7 million to $4.9 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on
Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that
report quarterly.
5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits
with an original maturity of less than 1 '/2 years was reduced from 3 percent to 1Vz percent for
the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that
began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on
nonpersonal time deposits with an original maturity of less than 1 l /l years was reduced from 3
percent to zero on Jan. 17, 1991.
The reserve requirement on nonpersonal time deposits with an original maturity of l ' / i
years or more has been zero since Oct. 6, 1983.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero
in the same manner and on the same dates as the reserve requirement on nonpersonal time
deposits with an original maturity of less than 1V6 years (see note 5).

Policy Instruments

A9

1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
M i l l i o n s o f dollars
1999

1998
Type of transaction
and maturity

1996

1997

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

U.S. TREASURY SECURITIES2

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Outright transactions (excluding
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
For new bills
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions

matched

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

9,901
0
426,928
426,928
0

9,147
0
436,257
435,907
0

3,550
0
450,835
450,835
2,000

0
0
34,607
34,607
0

0
0
33,140
33,140
0

0
0
40,712
40,712
0

0
0
34,957
34,957
0

0
0
41,393
41,393
0

0
0
35,069
35,069
0

0
0
36,862
36,862
0

524
0
30,512
-41,394
2,015

5,549
0
41,716
-27,499
1,996

6,297
0
46,062
-49,434
2,676

986
0
6,367
-8,964
0

1,038
0
2,301
-2,242
0

741
0
2,423
-400
602

662
0
5,444
-8,093
0

0
0
2,539
-2,555
0

0
0
2,865
-400
492

2,103
0
5,578
-7,458
0

3,898
0
-25,022
31,459

19,680
0
-37,987
20,274

12,901
0
-37,777
37,154

535
0
-2,168
5,828

3,989
0
-2,301
2,242

725
0
-2,423
0

2,397
0
-4,574
6,013

0
0
-2,539
2,555

0
0
-2,865
0

2,752
0
-4,928
4,778

1,116
0
-5,469
6,666

3,849
0
-1,954
5,215

2,294
0
-5,908
7,439

303
0
-3,411
1,364

351
0
0
0

0
0
0
400

862
0
718
1,135

0
0
0
0

0
0
0
400

335
0
-650
1,340

1,655
0
-20
3,270

5,897
0
-1,775
2,360

4,884
0
-2,377
4,842

1,769
0
-789
1,772

0
0
0
0

1,674
0
0
0

698
0
-1,589
945

0
0
0
0

615
0
0
0

0
0
0
1,340

17,094
0
2,015

44,122
0
1,996

29,926
0
4,676

3,593
0
0

5,377
0
0

3,140
0
602

4,619
0
0

0
0
0

615
0
492

5,190
0
0

3,092,399
3,094,769

3,577,954
3,580,274

4,395,430
4,399,330

346,245
348,318

380,594
382,063

402,581
400,995

358,438
359,256

418,538
420,397

365,779
363,604

324,078
322,669

457,568
450,359

810,485
809,268

512,671
514,186

39,078
38,402

63,924
59,731

40,823
48,672

23,884
19,200

49,296
38,592

21,968
37,157

26,098
27,025

19,919

41,022

19,835

2,196

8,101

-3,725

8,484

8,845

-12,891

5,672

0
0
409

0
0
1,540

0
25
322

0
25
50

0
0
48

0
0
15

0
0
20

0
0
30

0
0
2

0
0
0

75,354
74,842

160,409
159,369

284,316
276,266

33,431
30,625

18,486
19,953

51,471
50,032

51,419
48,785

48,815
44,285

23,577
31,744

37,416
36,067

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

103

-500

7,703

2,731

-1,515

1,424

2,614

4,500

-8,169

1,349

20,021

40,522

27,538

4,927

6,586

-2,301

11,098

13,345

-21,060

7,021

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




2. Transactions exclude changes in compensation for the effects of inflation on the principal
of inflation-indexed securities.

A10
1.18

DomesticNonfinancialStatistics • June 1999
FEDERAL RESERVE BANKS

Condition and Federal Reserve Note Statements1

M i l l i o n s o f dollars

Account
Mar. 3

Mar. 10

Wednesday

End of month

1999

1999

Mar. 17

Mar. 24

Mar. 31

Jan. 31

Feb. 28

Mar. 31

Consolidated condition statement

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

11,047
9,200
435

11,047
8,200
441

11,049
8,200
450

11,047
8,200
446

11,049
8,200
428

11,048
9,200
459

11,047
9,200
464

11,049
8,200
428

17
0
0

16
0
0

21
0
0

18
0
0

246
0
0

60
0
0

16
0
0

246
0
0

336
2,047

311
5,402

311
3,840

311
4,533

311
5,606

336
2,535

336
3,884

311
5,606

467,560

473,119

469,001

481,757

478,416

458,924

464,594

478,416

10 Bought outright 2
11
Bills
12
Notes
13
Bonds
14 Held under repurchase agreements

461,998
199,319
191,126
71,553
5,562

463,621
199,366
191,474
72,781
9,498

464,506
199,231
192,493
72,781
4,495

464,744
197,733
193,554
73,457
17,013

465,686
196,759
194,968
73,959
12,730

454,439
196,948
187,403
70,089
4,485

461,036
198,357
191,126
71,553
3,558

465,686
196,759
194,968
73,959
12,730

15 Total loans a n d securities

9 Total U.S. Treasury securities

469,960

478,847

473,172

486,619

484,578

461,855

468,830

484,578

16 Items in process of collection
17 Bank premises

10,059
1,302

8,235
1,302

7,350
1,303

6,555
1,304

7,097
1,303

5,325
1,299

5,176
1,302

7,097
1,303

Other assets
18 Denominated in foreign currencies 3
19 All other 4

18,707
14,117

18,715
14,844

18,722
14,889

15,360
16,393

15,171
16,126

19,235
16,165

18,702
14,313

15,171
16,126

534,826

541,630

535,135

545,923

543,952

524,586

529,034

543,952

20 Total assets
LIABILITIES

488,094

489,322

489,785

490,152

491,715

479,689

485,784

491,715

22 Total deposits

22,023

27,994

20,877

31,955

28,316

23,682

21,798

28,316

23
24
25
26

16,524
5,050
185
265

22,857
4,722
165
250

14,138
6,318
173
247

26,366
5,199
169
220

22,541
5,374
166
235

15,577
7,623
234
246

16,835
4,538
200
225

22,541
5,374
166
235

8,452
4,087

7,332
4,403

7,568
4,277

6,727
4,449

7,117
4,328

4,948
4,183

4,992
4,205

7,117
4,328

522,656

529,051

522,507

533,284

531,475

512,501

516,779

531,475

6,076
5,894
200

6,074
5,937
568

6,077
5,952
600

6,090
5,952
598

6,122
5,944
411

5,955
5,943
188

6,063
5,872
320

6,122
5,944
411

534,826

541,630

535,135

545,923

543,952

524,586

529,034

543,952

n.a.

n.a.

n.a.

n.a.

n.a.

600,443

n.a.

n.a.

21 Federal Reserve notes

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

27 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities a n d capital accounts

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

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

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

643,700
155,606
488,094

648,379
159,057
489,322

654,316
164,531
489,785

660,570
170,418
490,152

665,942
174,228
491,715

625,230
145,541
479,689

641,086
155,302
485,784

665,942
174,228
491,715

11,047
9,200
0
467,847

11,047
8,200
0
470,075

11,049
8,200
0
470,536

11,047
8,200
0
470,905

11,049
8,200
0
472,466

11,048
9,200
0
459,441

11,047
9,200
0
465,537

11,049
8,200
0
472,466

488,094

489,322

489,785

490,152

491,715

479,689

485,784

491,715

1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical
release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with
Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on
the principal of inflation-indexed securities. Excludes securities sold and scheduled to be
bought back under matched sale-purchase transactions.




3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury
bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at market
exchange rates of foreign exchange commitments.

Federal Reserve Banks
1.19

FEDERAL RESERVE BANKS

All

Maturity Distribution of Loan and Security Holding

Millions of dollars

Type of holding and maturity

Wednesday

End of month

1999

1999
Mar. 31

Jan. 29

18

246

143

445

65

18

243
3

143
0

445
0

64
1

481,757

478,416

458,924

470,976

478,416

18,333
99,462
134,895
110,865
46,595
58,851

29,788
99,537
135,444
110,866
46,596
59,527

26,785
98,303
134,439
112,263
46,598
60,029

10,051
110,149
130,178
107,040
45,222
56,284

24,996
98,522
133,298
110,291
46,246
57,623

26,785
98,303
134,439
112,263
46,598
60,029

5,713

4,151

4,844

5,917

2,871

7,559

5,917

5,402

3,840
23
83
30
175

4,533
23
83
30
175

5,606
27
79
30
175

2,535
25
81
55
175
0

7,248
0
106
30
175
0

5,606
27
79
30
175

Mar. 3

Mar. 10

Mar. 17

Mar. 24

1 Total loans

17

16

21

2 Within fifteen days1
3. Sixteen days to ninety days

2
14

4
12

18
3

467,560

473,119

469,001

19,073
104,811
129,960
109,847
46,246
57,623

17,348
105,319
135,160
109,848
46,594
58,851

11 Total federal agency obligations

2,383

12
13
14
15
16
17

2,072

4 Total U.S. Treasury securities 2
5
6
7
8
9
10

Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years

Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years

—

—

106
30
175

106
30
175

—

—

1. Holdings under repurchase agreements are classified as maturing within fifteen days in
accordance with maximum maturity of the agreements.




—

—

—

—

Feb. 26

Mar. 31

—

2. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.

A12 Domestic Financial Statistics • June 1999
1.20

AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1998
Item

1995
Dec.

1996
Dec.

1997
Dec.

Aug.

Total reserves3
Nonborrowed reserves4
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 6

Sept.

Nov.

Dec.

Jan.

Feb.r

Mar.

44.57
44.49
44.49
42.95
509.50

44.91
44.79
44.79
43.32
513.04

44.89
44.68
44.68
43.35
516.64

44.35
44.23
44.23
43.13
520.73

43.86
43.80
43.80
42.56
524.96

Oct.

Seasonally adjusted

ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1
2
3
4
5

1999

1998
Dec.

56.40
56.14
56.14
55.12
434.03

50.08
49.93
49.93
48.66
451.60

46.67
46.35
46.35
44.99
479.39

44.91
44.79
44.79
43.32
513.04

45.00
44.73
44.73
43.48
498.17

44.59
44.33
44.33
42.90
502.24

44.39
44.21
44.21
42.81
505.77

Not seasonally adjusted
6
7
8
9
10

Total reserves7
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves8
Monetary base9

58.02
57.76
57.76
56.74
439.02

51.52
51.37
51.37
50.10
456.71

47.97
47.65
47.65
46.29
485.05

45.17
45.06
45.06
43.59
518.33

44.81
44.54
44.54
43.30
497.49

44.31
44.06
44.06
42.63
500.99

44.24
44.07
44.07
42.67
504.51

44.29
44.21
44.21
42.67
510.19

45.17
45.06
45.06
43.59
518.33

46.34
46.13
46.13
44.81
520.01

45.25
45.13
45.13
44.03
519.70

43.14
43.08
43.08
41.83
523.32

57.90
57.64
57.64
56.62
444.44
1.28
.26

51.24
51.09
51.09
49.82
463.48
1.42
.16

47.88
47.56
47.56
46.20
491.86
1.68
.32

45.02
44.90
44.90
43.44
525.06
1.58
.12

44.71
44.44
44.44
43.19
504.39
1.51
.27

44.19
43.94
43.94
42.51
507.80
1.68
.25

44.12
43.94
43.94
42.54
511.36
1.57
.17

44.15
44.07
44.07
42.53
516.96
1.62
.08

45.02
44.90
44.90
43.44
525.06
1.58
.12

46.35
46.14
46.14
44.81
527.59
1.54
.21

45.24
45.12
45.12
44.02
526.85
1.22
.12

43.13
43.06
43.06
41.82
530.27
1.31
.07

NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS'0
11
12
13
14
15
16
17

Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 12
Excess reserves' 3
Borrowings from the Federal Reserve

1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly
statistical release. Historical data starting in 1959 and estimates of the effect on required
reserves of changes in reserve requirements are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory
changes in reserve requirements. (See also table 1.10.)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted,
break-adjusted total reserves (line 1) less total borrowings of depository institutions from the
Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under the terms and
conditions established for the extended credit program to help depository institutions deal
with sustained liquidity pressures. Because there is not the same need to repay such
borrowing promptly as with traditional short-term adjustment credit, the money market effect
of extended credit is similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters
whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess
reserves (line 16).




8. To adjust required reserves for discontinuities that are due to regulatory changes in
reserve requirements, a multiplicative procedure is used to estimate what required reserves
would have been in past periods had current reserve requirements been in effect. Breakadjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus
(2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no
adjustments to eliminate the effects of discontinuities associated with regulatory changes in
reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve
requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total
reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float
at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for
all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current reserve
requirements. Since February 1984, currency and vault cash figures have been measured over
the computation periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).

Monetary and Credit Aggregates
1.21

A13

MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1999

1998
Item

1995
Dec.

1996
Dec.

1997
Dec.

1998
Dec.
Dec.

Jan.

Feb.

Mar.

Seasonally adjusted

1
2
3
4

Measures2
Ml
M2
M3
Debt

5
6
7
8

Ml components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6

1,126.7
3,649.1
4,618.5
13,703.2

1,081.3
3,823.9
4,955.6
14,425.3r

1,074.9
4,046.6
5,404.7
15,141.3r

1,093.3
4,401.9r
5,999.6
16,087.3r

1,093.3
4,401.9r
5,999.6
16,087.3r

l,090.6 r
4,425.6r
6,019.0"
16,155.4r

l,091.9 r
4,446.4r
6,063.3r
16,219.8

1,100.8
4,456.6
6,048.1
n.a.

372.3
8.3
389.4
356.7

394.1
8.0
403.0
276.2

424.5
7.7
396.5
246.2

459.2
7.8
377.5
248.7

459.2
7.8
377.5
248.7

462.7
7.8
371.0r
249.2

467.7 r
7.7
371.6r
244.9

472.0
7.8
373.8
247.1

2,522.4
969.4

2,742.6
1,131.7

2,971.8
1,358.0

3,308.6
1,597.7

3,308.6
1,597.7

3,335.0
l,593.4 r

3,354.6
1,616.8r

3,355.8
1,591.5

Commercial banks
11 Savings deposits, including MMDAs
12 Small time deposits9
13 Large time deposits' 0, 11

775.3
575.0
346.6

905.2
593.7
414.8

1,022.9
626.1
490.2

1,189.8
626.1
541.1

1,189.8
626.1
541.1

1,202.0
622.0
545.9

1,207.1
618.1r
533.6r

1,207.1
616.3
518.4

Thrift institutions
14 Savings deposits, including MMDAs
15 Small time deposits9
16 Large time deposits 10

359.8
356.7
74.5

367.1
353.8
78.4

377.3
343.2
85.9

415.2
325.9r
89.1

415.2
325.9r
89.1

420.3 r
324.5r
91.0

425.4
322.9
89.9r

428.0
320.7
88.7

Money market mutual funds
17 Retail
18 Institution-only

455.5
255.9

522.8
313.3

602.3
379.9

751.6
516.2

751.6
516.2

766.1
515.0

781.2
529.9

783.8
529.1

Repurchase agreements and Eurodollars
19 Repurchase agreements12
20 Eurodollars 12

198.7
93.7

211.3
113.9

252.8
149.2

297.7
153.6

297.7
153.6

291.5
150.0r

308.2
155.3r

295.3
160.0

3,638.9
10,064.2

3,780.6
10,644.7

3,798.4
ll,342.9 r

3,747.4
12,339.9r

3,747.4
12,339.9r

3,740.9
12,414.5r

3,718.2
12,501.6

n.a.
n.a.

1,098.0
4,429.0"
6,027.2r
16,138.9r

l,082.6 r
4,440.8r
6,072.1r
16,191.1

1,096.0
4,480.1
6,087.1
n.a.

Nontransaction
9 In M27
10 In M3 only8

components

Debt components
21 Federal debt
22 Nonfederal debt

Not seasonally adjusted

23
24
25
26

Measures2
Ml
M2
M3
Debt

27
28
29
30

Ml components
Currency3
Travelers checks 4
Demand deposits5
Other checkable deposits6

1,152.4
3,671.7
4,638.0
13,704.6

1,104.9
3,843.7
4,972.5
14,425.3r

1,097.4
4,064.8
5,420.8
15,140.9r

1,115.3
4,418.7r
6,015.7r
16,087.7r

1,115.3
4,418.7r
6,015.7r
16,087.7r

376.2
8.5
407.2
360.5

397.9
8.3
419.9
278.8

428.9
7.9
412.3
248.3

464.2
8.0
392.4
250.7

464.2
8.0
392.4
250.7

462.5
7.9
375.7
251.9

466.6 r
7.9
364.6r
243.6

471.3
7.9
368.6
248.1

2,519.3
966.4

2,738.9
1,128.8

2,967.4
1,356.0

3,303.5
1,597.0

3,303.5
1,597.0

3,331.1
l,598.2 r

3,358.1
l,631.3 r

3,384.1
1,607.0

Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits9
35 Large time deposits10, 11

774.1
573.8
345.8

903.3
592.7
413.3

1,020.4
625.3
487.7

1,186.7
625.4
537.5

1,186.7
625.4
537.5

1,197.0
622.7
532.2

1,203.2
619.4
529.0"

1,216.7
617.1
522.8

Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits9
38 Large time deposits10

359.2
355.9
74.3

366.3
353.2
78.1

376.4
342.8
85.4

414.1
325.6
88.5

414.1
325.6
88.5

418.6
324.9
88.7r

424.0
323.6
89.1

431.5
321.1
89.5

Money market mutual funds
39 Retail
40 Institution-only

456.1
257.7

523.2
316.0

602.5
384.5

751.6
523.3

751.6
523.3

767.8
529.3

787.9
547.3

797.7
537.9

Repurchase agreements and Eurodollars
41 Repurchase agreements 12
42 Eurodollars 12

193.8
94.9

205.7
115.7

246.1
152.3

290.3
157.4

290.3
157.4

292.9
155.1r

307.7
158.1r

297.9
159.0

3,645.9
10,058.7

3,787.9
10,637.3r

3,805.8
11,335. l r

3,754.9
12,332.8r

3,754.9
12,332.8r

3,736.6
12,402.2r

3,721.8
12,469.3

Nontransaction
31 In M2 7
32 In M3 only8

components

Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.




n.a.
n.a.

A14

DomesticNonfinancialStatistics • June 1999

NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly
statistical release. Historical data starting in 1959 are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
M l : (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted M l is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time
deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3)
balances in retail money market mutual funds. Excludes individual retirement accounts
(IRAs) and Keogh balances at depository institutions and money market funds. Seasonally
adjusted M2 is calculated by summing savings deposits, small-denomination time deposits,
and retail money fund balances, each seasonally adjusted separately, and adding this result to
seasonally adjusted M l .
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds, (3) RP
liabilities (overnight and term) issued by all depository institutions, and (4) Eurodollars
(overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and
at all banking offices in the United Kingdom and Canada. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign banks and
official institutions. Seasonally adjusted M3 is calculated by summing large time deposits,
institutional money fund balances, RP liabilities, and Eurodollars, each seasonally adjusted
separately, and adding this result to seasonally adjusted M2.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enter-




prises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository
institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers.
Travelers checks issued by depository institutions are included in demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other than those
owed to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions, credit union
share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees.
9. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are
subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
12. Includes both overnight and term.

Commercial Banking Institutions—Assets and Liabilities
1.26

COMMERCIAL BANKS IN THE UNITED STATES

A15

Assets and Liabilities 1

A. All commercial banks
Billions of dollars
Wednesday figures

Monthly averages
1998r

1998

Account

Mar.r

Sept.

Oct.

1999

1999
Nov.

Dec.

Jan. r

Feb.r

Mar.

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Seasonally adjusted
Assets
1 Bank credit
Securities in bank credit
7
U.S. government securities
Other securities
4
Loans and leases in bank credit2 . . .
Commercial and industrial
6
Real estate
7
8
Revolving home equity
9
Other
in
Consumer
Security3
u
Other loans and leases
i?
n Interbank loans
14 Cash assets4
15 Other assets5

4,215.8
1,125.1
777.1
348.0
3,090.7
871.1
1,265.3
98.0
1,167.3
500.2
115.9
338.1
215.0
272.1
299.5

4,387.5
1,172.4
771.0
401.5
3,215.0
915.3
1,284.2
97.7
1,186.5
496.0
142.9
376.7
217.0
253.4
326.2

4,486.5
1,214.8
776.4
438.4
3,271.7
938.2
1,292.1
96.7
1,195.4
498.0
157.6
385.8
218.8
247.7
326.9

4,526.7
1,218.8
789.6
429.2
3,307.9
948.8
1,315.2
96.9
1,218.2
501.1
150.9
391.8
217.6
255.0
334.9

4,545.8
1,222.8
791.4
431.4
3,323.0
946.7
1,329.8
96.7
1,233.1
503.0
151.3
392.2
217.3
257.6
336.1

4,529.5
1,214.5
792.4
422.2
3,315.0
943.7
1,333.4
96.6
1,236.8
504.7
146.8
386.3
222.4
264.5
348.7

4,515.5
1,204.2
789.6
414.7
3,311.3
943.9
1,335.6
96.2
1,239.4
504.2
139.1
388.5
225.7
262.3
354.2

4,482.9
1,185.2
797.2
388.0
3,297.7
947.5
1,335.9
96.3
1,239.7
503.1
119.2
392.0
219.1
262.6
353.7

4,488.2
1,186.5
791.8
394.7
3,301.8
943.5
1,340.6
96.1
1,244.5
502.4
124.5
390.8
220.0
265.3
356.5

4,472.7
1,175.4
790.0
385.4
3,297.3
949.4
1,338.3
96.2
1,242.0
503.4
116.0
390.1
216.2
251.1
359.7

4,479.0
1,185.2
801.7
383.5
3,293.9
953.1
1,331.6
96.3
1,235.3
502.9
112.7
393.6
232.9
265.1
350.9

4,484.0
1,187.6
806.9
380.8
3,296.3
944.6
1,334.1
96.5
1,237.6
503.5
120.4
393.7
207.8
269.9
347.6

16 Total assets 6

4,945.5

5,126.6

5,221.9

5,276.2

5,298.9

5307.1

5,299.6

5059.9

5,271.7

5,241.5

5,269.6

5,250.4

3,197.4
689.8
2,507.6
687.0
1,820.6
889.9
306.3
583.5
205.4
258.5

3,264.2
675.2
2,589.1
702.0
1,887.1
945.0
304.9
640.1
206.4
296.5

3,289.7
673.4
2,616.3
716.4
1,899.9
983.7
315.0
668.6
220.9
310.9

3,324.9
670.7
2,654.2
727.8
1,926.4
1,017.5
323.9
693.6
214.4
297.8

3,341.0
672.3
2,668.7
719.4
1,949.4
1,023.1
323.2
699.8
213.9
301.0

3,363.9
667.2
2,696.7
724.9
1,971.7
1,004.1
318.0
686.2
213.5
300.7

3,372.4
662.0
2,710.5
728.2
1,982.3
990.0
315.9
674.1
217.4
294.8

3,360.6
668.7
2,691.9
718.1
1,973.8
983.7
318.0
665.7
217.1
271.3

3,362.4
651.1
2,711.3
724.4
1,986.9
1,000.9
324.6
676.3
217.8
269.9

3,358.3
658.1
2,700.2
722.3
1,977.9
974.1
312.5
661.6
215.2
266.8

3,342.3
674.9
2,667.4
710.7
1,956.6
983.6
324.9
658.8
225.8
270.2

3,364.7
694.3
2,670.4
710.5
1,959.9
973.9
312.9
661.0
218.3
272.5

4,551.2

4,7122

4,805.2

4,854.7

4,878.9

4,882.1

4,874.7

4,832.7

4,851.1

4,814.4

4,821.9

4,8293

394.3

414.4

416.7

421.6

419.9

424.9

425.0

427.3

420.6

427.1

447.7

421.1

17
18
19
70
?1
77
73
?4
75
26

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

27 Total liabilities
28 Residual (assets less liabilities)7

Not seasonally adjusted
Assets
79 Bank credit
Securities in bank credit
31
U.S. government securities
Other securities
37
33
Loans and leases in bank credit2 . . .
Commercial and industrial
34
35
Real estate
Revolving home equity
36
Other
37
38
Consumer
39
Security3
40
Other loans and leases
41 Interbank loans
47 Cash assets4
43 Other assets5

4,213.7
1,131.7
783.4
348.3
3,082.0
873.9
1,259.3
97.2
1,162.1
495.3
119.3
334.2
218.0
263.8
295.7

4,379.6
1,163.1
762.3
400.8
3,216.5
912.1
1,287.6
98.4
1,189.2
498.9
139.0
378.8
213.1
250.9
328.4

4,491.6
1,212.7
771.7
441.0
3,278.9
937.9
1,295.6
97.5
1,198.1
498.5
159.2
387.8
216.7
248.1
324.7

4,540.2
1,225.0
792.0
433.0
3,315.2
948.3
1,319.1
97.7
1,221.4
501.5
153.4
392.9
227.0
261.8
333.3

4,561.4
1,224.5
792.2
432.3
3,336.9
946.7
1,331.7
97.1
1,234.7
508.3
153.5
396.7
225.5
273.1
336.9

4,538.7
1,217.1
792.7
424.5
3,321.6
942.6
1,332.5
96.7
1,235.8
511.0
146.9
388.7
225.3
277.8
341.4

4,513.2
1,209.7
793.8
416.0
3,303.5
945.3
1,329.9
95.9
1,234.1
504.0
138.8
385.3
225.4
263.4
351.0

4,481.2
1,191.9
803.6
388.3
3,289.3
951.0
1,329.4
95.4
1,234.0
498.3
122.5
388.1
222.2
255.0
349.1

4,485.5
1,195.1
799.0
396.1
3,290.4
944.0
1,335.3
95.4
1,239.9
497.7
127.8
385.6
225.5
256.2
350.5

4,472.3
1,182.4
796.2
386.2
3,290.0
953.3
1,331.6
95.4
1,236.1
498.8
120.9
385.4
219.8
247.4
352.0

4,469.4
1,188.2
806.3
381.9
3,281.2
956.5
1,323.5
95.3
1,228.2
497.9
115.9
387.4
228.5
246.8
343.6

4,486.9
1,195.0
814.5
380.5
3,291.9
950.5
1,328.3
95.5
1,232.8
497.8
122.2
393.2
214.1
268.6
348.3

44 Total assets 6

4,9343

5,1143

5,2233

53043

5339.0

5325.6

534.9

5,249.2

5,2593

5,2333

5,230.0

5,2593

Liabilities
45 Deposits
Transaction
46
Nontransaction
47
48
49
Other
50 Borrowings
51
From banks in the U.S
57
From others
53 Net due to related foreign offices . . . .
54 Other liabilities

3,192.0
682.7
2,509.3
688.7
1,820.6
885.3
306.4
578.9
203.8
259.2

3,261.9
668.8
2,593.1
703.7
1,889.4
940.8
301.7
639.1
203.1
295.5

3,289.2
663.3
2,625.9
718.0
1,907.9
985.9
313.1
672.7
223.4
309.4

3,350.7
681.0
2,669.7
732.7
1,937.0
1,023.1
327.6
695.5
216.3
298.2

3,374.8
706.5
2,668.4
723.9
1,944.4
1,025.7
329.2
696.4
219.1
301.8

3,363.2
682.0
2,681.2
723.1
1,958.1
1,020.4
323.0
697.4
216.4
301.6

3,349.5
657.1
2,692.4
728.9
1,963.5
993.1
316.4
676.6
227.1
297.2

3,355.2
662.2
2,693.0
720.1
1,972.9
978.0
317.9
660.2
215.1
272.0

3,357.7
645.0
2,712.7
726.9
1,985.8
986.6
321.4
665.1
212.6
271.5

3,352.1
653.9
2,698.2
724.2
1,974.0
974.2
313.1
661.1
210.0
267.5

3,317.7
647.9
2,669.8
713.0
1,956.8
982.9
326.2
656.7
230.5
270.3

3,379.7
702.5
2,677.2
711.4
1,965.8
964.8
313.8
651.1
215.1
272.1

55 Total liabilities

4,540.2

4,7013

4,807.9

4,888.2

4,9213

4,901.6

4,866.8

4,8203

4,8283

4,803.8

4,801.4

4,831.8

394.0

413.0

415.3

416.1

417.7

424.1

428.1

428.8

431.0

429.4

428.6

427.5

88.1

109.4

130.7

111.2

113.2

111.9

108.1

86.5

91.4

83.5

82.1

82.9

109.3

128.0

110.1

111.4

108.1

106.6

85.2

89.6

81.5

82.4

80.7

56 Residual (assets less liabilities)

7

MEMO
57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items8
Footnotes appear on p. A21.




89.7

A16
1.26

Domestic Financial Statistics • June 1999
COMMERCIAL BANKS IN THE UNITED STATES

Assets and Liabilities 1 —Continued

B. Domestically chartered commercial banks
Billions of dollars

Monthly averages

Account

1998R

1998

Mar.

r

Wednesday

Sept.

Oct.

1999

Nov.

Dec.

Jan.

r

Feb/

figures

1999

Mar.

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving h o m e equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5

16 Total a s s e t s 6

17
18
19
20
21
22
23
24
25
26

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
F r o m others
Net due to related foreign offices
Other liabilities

....

27 Total liabilities
28 Residual (assets less liabilities) 7

3,651.9
927.6
688.6
239.1
2,724.2
651.7
1,239.5
98.0
1,141.4
500.2
65.8
267.0
191.9
237.7
263.5

3,789.4
960.6
687.7
272.9
2,828.8
698.5
1,260.6
97.7
1,162.9
496.0
76.2
297.6
189.7
219.1
288.8

3,866.8
996.2
695.6
300.5
2,870.6
714.7
1,268.6
96.7
1,171.9
498.0
87.8
301.5
193.1
212.0
288.4

3,916.1
1,003.6
708.2
295.4
2,912.5
724.8
1,292.5
96.9
1,195.6
501.1
86.1
308.0
190.4
220.1
298.0

3,948.0
1,009.9
709.8
300.2
2,938.1
728.5
1,308.1
96.7
1,211.4
503.0
85.6
312.9
189.3
221.8
297.7

3,946.4
1,003.6
709.0
294.5
2,942.9
730.0
1,311.6
96.6
1,215.0
504.7
84.3
312.3
192.9
228.1
310.2

3,946.7
1,000.1
707.1
293.1
2,946.5
731.5
1,314.0
96.2
1,217.7
504.2
80.6
316.3
193.8
226.1
316.6

3,928.5
986.9
713.4
273.5
2,941.7
736.7
1,314.2
96.3
1,218.0
503.1
69.3
318.3
192.8
225.4
315.9

3,930.4
985.6
708.6
277.1
2,944.7
734.5
1,319.1
96.1
1,223.0
502.4
73.3
315.4
195.6
226.0
318.7

3,920.5
979.1
708.2
270.9
2,941.4
735.9
1,316.6
96.2
1,220.4
503.4
69.6
315.8
189.7
213.9
321.0

3,927.6
987.1
717.5
269.6
2,940.6
740.4
1,309.7
96.3
1,213.5
502.9
66.1
321.5
207.5
227.1
313.8

3,928.1
990.0
719.9
270.1
2,938.1
737.1
1,312.1
96.5
1,215.6
503.5
65.3
320.1
179.9
235.1
310.3

4,288.4

4,429.8

4,502.7

4,566.8

4,599.1

4,619.9

4,625.1

4,604.5

4,612.6

4,587.2

4,617.9

4,594.8

2,907.7
678.1
2,229.6
410.3
1,819.3
718.0
279.3
438.7
81.7
188.2

2,948.9
659.8
2,289.1
404.6
1,884.4
739.7
276.5
463.3
108.4
220.6

2,971.9
658.0
2,313.9
415.9
1,898.1
768.4
284.5
484.0
115.3
231.8

3,009.4
657.9
2,351.6
426.9
1,924.6
802.9
291.8
511.2
115.2
221.7

3,032.4
660.7
2,371.7
423.0
1,948.7
819.3
296.0
523.3
112.4
224.3

3,045.6
654.3
2,391.3
420.7
1,970.7
810.5
296.5
514.0
111.7
226.4

3,051.5
648.0
2,403.4
422.3
1,981.1
809.3
298.0
511.4
117.3
224.4

3,049.3
655.6
2,393.7
421.0
1,972.7
809.5
293.6
515.9
117.7
203.2

3,044.5
637.8
2,406.7
420.8
1,985.9
824.0
300.7
523.2
118.5
201.2

3,044.2
644.4
2,399.9
422.6
1,977.3
801.3
287.8
513.6
115.5
198.5

3,037.4
662.5
2,374.8
418.4
1,956.4
814.2
300.4
513.8
126.8
203.1

3,060.7
681.5
2,379.2
421.4
1,957.8
797.0
286.9
510.1
116.0
204.5

3,895.6

4,017.6

4,087.4

4,149.3

4,188.5

4,194.2

4,202.6

4,179.7

4,188.2

4,159.5

4,181.4

4,178.3

392.8

412.2

415.3

417.5

410.7

425.6

422.6

424.7

424.4

427.7

436.5

416.5

Not seasonally adjusted

29
30
31
32
33
34
35
36
37
38
39
40
41
42
43

Assets
B a n k credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in hank credit 2
Commercial and industrial
Real estate
Revolving h o m e equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5

4 4 Total a s s e t s 6

45
46
47
48
49
50
51
52
53
54

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
F r o m banks in the U.S
F r o m others
Net due to related foreign offices
Other liabilities

....

55 T o t a l liabiUties
56 Residual (assets less liabilities) 7
MEMO
57 Revaluation gains on off-balance-sheet
items 8
58 Revaluation losses on off-balancesheet items 8
59 Mortgage-backed securities 9
Footnotes appear on p. A21.




3,647.3
932.8
693.9
238.9
2,714.5
654.1
1,233.4
97.2
1,136.2
495.3
68.1
263.6
194.9
230.4
259.2

3,782.3
951.8
679.8
272.0
2,830.5
695.8
1,264.0
98.4
1,165.6
498.9
72.1
299.7
185.8
216.9
290.6

3,867.7
991.0
690.9
300.0
2,876.7
713.5
1,271.8
97.5
1,174.3
498.5
89.6
303.3
191.0
212.0
286.5

3,926.4
1,006.6
710.1
296.4
2,919.8
723.0
1,296.3
97.7
1,198.6
501.5
89.1
309.9
199.8
226.3
296.2

3,960.9
1,013.1
710.4
302.6
2,947.8
725.7
1,310.0
97.1
1,212.9
508.3
87.3
316.5
197.5
235.8
297.1

3,952.2
1,005.9
709.7
296.3
2,946.2
727.0
1,310.4
96.7
1,213.8
511.0
84.4
313.4
195.8
241.0
302.6

3,940.5
1,003.9
710.9
293.0
2,936.5
731.1
1,307.9
95.9
1,212.1
504.0
80.6
312.9
193.5
227.9
312.2

3,925.2
992.4
718.9
273.5
2,932.9
739.9
1,307.7
95.4
1,212.2
498.3
72.1
314.9
195.8
219.0
310.7

3,926.0
991.9
714.9
277.0
2,934.1
735.4
1,313.6
95.4
1,218.1
497.7
76.4
311.0
201.1
218.4
310.7

3,917.6
983.6
712.9
270.7
2,934.0
739.4
1,309.8
95.4
1,214.3
498.8
73.9
312.1
193.3
211.5
312.5

3,918.6
991.0
721.4
269.6
2,927.6
743.7
1,301.7
95.3
1,206.4
497.9
68.5
315.8
203.1
209.9
306.7

3,929.9
997.4
727.0
270.4
2,932.5
742.2
1,306.6
95.5
1,211.1
497.8
66.2
319.7
186.2
234.2
311.7

4,275.3

4,418.1

4,499.5

4,590.9

4,633.5

4,634.2

4,616.2

4,592.6

4,598.2

4,576.8

4,580.2

4,603.7

2,899.6
670.8
2,228.8
410.1
1,818.6
713.4
279.3
434.1
82.1
188.7

2,946.8
652.8
2,294.0
404.1
1,889.9
735.5
273.3
462.3
106.8
220.0

2,971.0
647.9
2,323.1
417.6
1,905.4
770.6
282.6
488.1
115.5
231.0

3,035.6
668.2
2,367.4
432.4
1,935.0
808.5
295.4
513.0
113.7
221.1

3,062.6
694.5
2,368.1
425.5
1,942.6
821.9
302.0
519.9
111.4
223.7

3,047.5
669.0
2,378.5
422.3
1,956.2
826.8
301.6
525.2
112.0
227.0

3,029.8
643.4
2,386.4
424.8
1,961.6
812.4
298.5
513.9
123.4
225.2

3,040.7
649.0
2,391.8
420.8
1,971.0
803.9
293.5
510.4
117.6
203.8

3,038.6
631.8
2,406.8
422.9
1,983.9
809.6
297.6
512.1
119.4
202.1

3,034.9
640.2
2,394.7
422.7
1,972.0
801.4
288.3
513.1
113.8
199.0

3,007.3
635.3
2,372.0
417.1
1,954.9
813.5
301.7
511.7
129.3
203.5

3,071.7
689.3
2,382.4
418.5
1,963.9
787.9
287.8
500.2
113.7
204.9

3,883.8

4,009.1

4,088.2

4,178.9

4,219.6

4,213.3

4,190.7

4,165.9

4,169.7

4,149.2

4,153.5

4,178.3

391.4

409.0

411.4

412.0

413.9

420.9

425.5

426.7

428.4

427.6

426.8

425.4

47.2

61.7

78.7

62.7

65.2

66.0

64.5

46.3

49.0

44.1

43.0

43.6

49.6
299.8

65.1
313.2

80.5
335.8

65.1
346.0

66.8
345.4

65.8
341.3

65.3
339.3

46.0
333.3

48.4
332.8

43.5
332.0

44.3
332.3

42.3
334.9

Commercial Banking Institutions—Assets and Liabilities
1.26

A17

Assets and Liabilities 1 —Continued

COMMERCIAL BANKS IN THE UNITED STATES
C. Large domestically chartered commercial banks
Billions of dollars

Monthly averages
Account

1998
Mar. r

Wednesday figures
1999

1998'
Sept.

Oct.

Nov.

Dec.

Jan. r

Feb/

1999
Mar.

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Seasonally adjusted
Assets
1 Bank credit
2
Securities in bank credit
3
U.S. government securities
4
Trading account
5
Investment account
6
Other securities
7
Trading account
8
Investment account
9
State and local government .
10
Other
11
Loans and leases in bank credit2 . . .
12
Commercial and industrial
13
Bankers acceptances
14
Other
15
Real estate
16
Revolving home equity
17
Other
18
Consumer
19
Security 3
20
Federal funds sold to and
repurchase agreements
with broker-dealers
21
Other
22
State and local government
23
Agricultural
24
Federal funds sold to and
repurchase agreements
with others
25
All other loans
26
Lease-financing receivables
27 Interbank loans
28
Federal funds sold to and
repurchase agreements with
commercial banks
29
Other
30 Cash assets 4
31 Other assets5
32 Total assets 6
33
34
35
36
37
38
39
40
41
42

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

43 Total liabilities
44 Residual (assets less liabilities)7
Footnotes appear on p. A21.




2,259.1
530.1
377.8
25.1
352.7
152.3
73.1
79.1
22.6
56.5
1,729.0
472.6
1.2
471.3
698.1
69.7
628.4
300.2
59.8

2,337.5
545.6
369.8
22.2
347.6
175.8
86.4
89.4
23.4
66.0
1,791.9
507.9
1.3
506.6
689.3
68.9
620.4
298.8
69.9

2,395.4
573.6
373.2
21.0
352.2
200.5
108.8
91.7
23.9
67.8
1,821.7
521.4
1.3
520.1
689.2
68.0
621.2
300.7
81.3

2,416.5
572.0
379.1
22.3
356.9
192.9
96.8
96.1
24.5
71.7
1,844.5
528.5
1.3
527.2
700.4
67.8
632.6
302.0
79.3

2,428.0
571.1
376.7
23.0
353.7
194.4
97.4
97.0
24.8
72.2
1,856.8
529.3
1.3
528.0
705.9
67.6
638.3
302.4
79.2

2,420.7
562.6
375.1
25.1
350.1
187.5
90.9
96.6
24.6
71.9
1,858.0
529.3
1.3
528.1
704.3
67.6
636.8
305.3
78.1

2,414.4
556.5
372.4
17.5
354.9
184.1
87.5
96.7
24.7
72.0
1,857.8
530.5
1.2
529.3
703.5
67.5
636.1
304.3
74.5

2,387.2
540.0
376.1
22.2
353.8
163.9
66.4
97.5
24.9
72.7
1,847.2
534.7
1.1
533.6
700.1
67.4
632.7
301.9
63.2

2,391.2
539.6
372.0
19.5
352.4
167.6
70.2
97.4
24.8
72.6
1,851.6
532.6
1.1
531.5
705.5
67.4
638.2
302.8
67.0

2,379.5
532.9
371.3
18.9
352.4
161.6
64.3
97.3
24.9
72.3
1,846.6
534.0
1.1
532.9
702.7
67.5
635.3
301.9
63.5

2,385.8
539.9
380.1
26.0
354.1
159.8
62.7
97.1
24.9
72.2
1,845.8
538.6
1.1
537.5
695.4
67.4
628.0
301.0
60.1

2,383.5
541.6
381.1
25.5
355.6
160.5
61.6
98.9
24.9
74.1
1,841.9
534.6
1.2
533.4
696.2
67.5
628.7
301.3
59.4

42.0
17.8
11.6
10.0

51.5
18.5
11.6
10.0

63.3
17.9
11.6
10.0

61.8
17.5
11.9
10.1

62.5
16.7
11.6
10.2

61.4
16.7
11.6
10.2

57.6
16.9
11.5
10.2

46.1
17.1
11.5
10.2

50.0
17.0
11.5
10.1

46.1
17.4
11.5
10.1

43.3
16.8
11.5
10.1

42.4
17.0
11.6
10.2

7.4
81.3
88.0
131.6

12.4
92.0
99.9
118.7

12.9
92.9
101.7
120.3

12.4
96.1
103.8
120.6

16.2
95.7
106.4
123.1

12.6
97.7
108.8
125.2

12.0
97.8
113.4
126.7

12.0
97.8
115.9
128.9

10.3
96.9
114.8
131.6

11.7
95.4
115.6
125.5

12.9
99.7
116.4
142.7

13.1
98.3
117.2
119.0

82.1
49.5
174.5
205.9

65.4
53.3
151.0
223.9

74.3
46.0
144.1
220.8

74.6
46.0
149.8
225.8

73.9
49.2
151.2
223.3

78.5
46.7
157.1
232.4

78.6
48.0
155.0
239.0

81.6
47.2
153.5
238.9

84.2
47.5
155.6
241.6

79.9
45.5
145.0
243.1

93.6
49.0
154.1
236.6

72.5
46.5
159.5
233.9

2,733.4

2,793.5

2,842.5

2^74.7

2^87.6

2,8973

2^70.1

2381.7

2£54£

2^80.8

2357.1

1,652.6
394.7
1,257.9
229.5
1,028.4
567.0
209.1
357.9
77.6
160.7

1,640.5
373.7
1,266.8
213.8
1.053.0
574.0
199.2
374.8
104.6
191.1

1,651.0
371.9
1,279.1
223.1
1,056.0
596.2
203.5
392.7
110.6
201.5

1,667.0
369.4
1,297.7
229.9
1,067.8
622.4
207.1
415.3
111.6
190.7

1,671.6
369.4
1,302.1
228.2
1,074.0
633.6
209.0
424.6
108.8
193.0

1,672.6
364.3
1,308.3
227.5
1,080.7
627.8
213.3
414.5
108.7
195.4

1,668.1
357.9
1,310.2
226.8
1,083.4
622.9
213.5
409.4
114.1
193.9

1,666.5
362.0
1,304.5
224.2
1,080.3
619.0
208.2
410.8
113.2
172.6

1,664.3
353.7
1,310.6
225.2
1,085.4
632.5
214.7
417.8
114.6
170.6

1,663.4
356.4
1,307.0
226.2
1,080.8
609.0
201.4
407.6
111.7
168.1

1,656.3
364.1
1,292.2
221.0
1,071.3
621.4
213.4
408.1
121.6
172.5

1,674.6
375.7
1,298.9
223.1
1,075.8
610.9
204.8
406.1
110.2
173.5

2,457.9

2,510.2

2,5593

2^91.8

2,606.9

2,604.5

2^98.9

2^71.4

2382.1

2£522

2^71.9

2^69.2

275.4

283.3

283.2

282.9

280.7

292.8

297.8

298.8

299.6

302.6

308.8

288.0

A18
1.26

Domestic Financial Statistics • June 1999
COMMERCIAL BANKS IN THE UNITED STATES

Assets and Liabilities 1 —Continued

C. Large domestically chartered commercial banks—Continued
Monthly averages
Account

1998r

1998
Feb.'

Wednesday figures

Sept.

Oct.

1999
Nov.

Dec.

Jan. r

Feb. r

1999
Mar.

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Not seasonally adjusted
Assets
45 Bank credit
46
Securities in bank credit
47
U.S. government securities
48
Trading account
49
Investment account
50
Mortgage-backed securities . .
51
Other
52
One year or less
53
One to five years
54
More than five years . . .
55
Other securities
56
Trading account
57
Investment account
58
State and local government . .
59
Other
60
Loans and leases in bank credit 2 . .
61
Commercial and industrial
62
Bankers acceptances
63
Other
64
Real estate
65
Revolving home equity
66
Other
67
Commercial
68
Consumer
69
Security 3
70
Federal funds sold to and
repurchase agreements
with broker-Sealers . . . .
71
Other
72
State and local government . . . .
73
Agricultural
74
Federal funds sold to and
repurchase agreements
with others
75
All other loans
76
Lease-financing receivables . . . .
77 Interbank loans
78
Federal funds sold to and
repurchase agreements
with commercial banks
79
Other
80 Cash assets 4
81 Other assets 5
82 Total assets 6
83
84
85
86
87
88
89
90
91
92

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . . .
Other liabilities

93 Total liabilities
94 Residual (assets less liabilities) 7

....

2,260.4
533.9
381.7
26.6
355.2
232.9
122.3
31.8
54.7
35.8
152.2
73.1
79.0
22.7
56.3
1,726.5
474.4
1.2
473.2
695.4
69.0
386.4
240.0
297.5
62.0

2,327.0
538.7
363.4
22.0
341.4
236.4
105.0
27.7
44.3
33.0
175.3
86.4
88.9
23.2
65.6
1,788.3
506.3
1.3
505.0
689.6
69.3
381.0
239.2
300.8
65.9

2,397.1
571.3
371.2
21.9
349.3
255.3
94.0
26.1
37.2
30.6
200.1
108.8
91.3
24.0
67.4
1,825.9
521.5
1.3
520.2
691.0
68.6
382.9
239.5
300.6
83.1

2,429.6
577.3
383.4
24.6
358.9
258.2
100.7
27.2
38.2
35.2
193.9
96.8
97.1
24.6
72.5
1,852.3
528.1
1.3
526.8
703.7
68.3
394.1
241.3
301.6
82.3

2,442.5
574.6
377.4
23.7
353.7
253.5
100.2
26.6
38.4
35.2
197.2
97.4
99.8
25.0
74.8
1,867.9
527.4
1.3
526.1
709.5
67.8
398.6
243.0
305.7
80.9

2,432.9
565.7
376.4
25.2
351.2
250.1
101.1
27.5
37.6
36.0
189.3
90.9
98.4
24.8
73.6
1,867.2
527.1
1.3
525.8
707.1
67.6
394.1
245.4
310.7
78.2

2,418.9
562.6
377.8
18.2
359.6
247.9
111.7
25.6
46.8
39.3
184.7
87.5
97.3
24.8
72.5
1,856.3
530.4
1.2
529.3
702.2
67.2
386.7
248.4
304.7
74.5

2,389.6
544.0
380.1
23.2
356.9
241.4
115.5
23.8
52.1
39.6
163.9
66.4
97.5
24.9
72.6
1,845.7
537.3
1.1
536.2
697.1
66.8
381.1
249.3
299.2
66.0

2,395.7
545.9
378.1
21.9
356.2
241.5
114.7
23.5
51.6
39.5
167.8
70.2
97.6
24.9
72.7
1,849.8
533.5
1.1
532.4
704.2
66.8
389.3
248.1
300.3
70.1

2,383.2
536.3
374.7
20.4
354.3
239.5
114.8
23.7
51.9
39.2
161.6
64.3
97.2
24.9
72.3
1,847.0
536.8
1.1
535.7
700.0
66.8
383.7
249.5
299.4
67.8

2,380.6
541.0
381.4
25.8
355.5
240.1
115.4
24.2
51.3
39.9
159.6
62.7
96.9
24.9
72.0
1,839.7
540.8
1.1
539.7
690.9
66.6
374.3
250.0
298.3
62.5

2,386.7
545.4
385.2
25.1
360.1
242.6
117.5
23.8
54.0
39.8
160.2
61.6
98.7
24.9
73.8
1,841.3
538.8
1.2
537.7
692.8
66.8
376.0
250.0
297.8
60.4

44.1
17.9
11.6
9.6

47.6
18.3
11.7
10.3

65.2
17.9
11.7
10.1

65.0
17.3
12.0
10.1

63.7
17.1
11.7
10.1

62.0
16.2
11.6
10.1

58.1
16.4
11.5
9.9

48.7
17.3
11.5
9.8

53.4
16.7
11.5
9.8

50.3
17.5
11.5
9.8

45.3
17.2
11.5
9.8

42.8
17.5
11.5
9.9

7.4
79.8
88.7
131.5

12.4
92.5
98.9
116.8

12.9
93.8
101.0
116.7

12.4
99.2
102.8
122.0

16.2
100.4
106.0
126.3

12.6
99.3
110.5
128.1

12.0
96.3
114.7
126.5

12.0
96.0
116.8
129.0

10.3
94.2
115.9
130.9

11.7
93.5
116.4
126.3

12.9
95.8
117.2
138.6

13.1
99.1
118.0
122.7

81.9
49.6
168.7
202.7

63.9
52.9
150.0
225.2

71.3
45.4
144.8
218.7

77.3
44.7
153.9
222.7

77.7
48.5
161.7
222.8

82.1
46.0
166.8
227.9

79.2
47.3
155.8
235.9

81.4
47.6
148.6
235.1

83.4
47.5
148.9
235.2

79.6
46.6
142.9
238.5

89.3
49.3
142.3
231.3

75.7
47.0
159.2
233.7

2,725.6

2,781.1

2^393

2390.1

2^)15.4

2^)17.9

2398.9

2,863.9

2,8723

2352.6

2354.6

2364.0

1,650.2
389.0
1,261.2
229.3
1,031.9
566.9
211.0
355.8
78.0
160.7

1,636.0
369.7
1,266.3
213.3
1,053.0
567.7
195.6
372.1
103.0
191.1

1,647.4
364.9
1,282.6
224.8
1,057.7
596.0
199.9
396.2
110.9
201.5

1,681.0
376.1
1,304.9
235.4
1,069.6
625.8
209.0
416.8
110.1
190.7

1,695.7
392.4
1,303.3
230.7
1,072.6
634.2
213.0
421.2
107.8
193.0

1,681.8
374.6
1,307.2
229.2
1,078.1
643.6
217.7
425.9
109.0
195.4

1,663.8
354.9
1,308.9
229.3
1,079.6
628.5
215.2
413.3
120.2
193.9

1,664.9
356.7
1,308.2
224.0
1,084.2
618.9
210.5
408.4
113.0
172.6

1,664.7
346.4
1,318.3
227.3
1,091.0
626.5
215.2
411.3
115.6
170.6

1,663.5
352.8
1,310.7
226.3
1,084.4
615.0
204.5
410.6
110.0
168.1

1,638.2
346.0
1,292.2
219.6
1,072.5
624.8
216.3
408.5
124.1
172.5

1,683.9
381.4
1,302.5
220.2
1,082.3
605.8
207.3
398.5
107.8
173.5

2,455.8

2,497.8

2^553

2,607.7

2,630.8

2,629.8

2,606/4

2,569.5

2377.4

2,556.6

2,559.7

2^71.1

269.8

283.3

283.5

282.4

284.7

288.1

292.5

294.4

294.9

295.9

294.9

292.9

47.2

61.7

78.7

62.7

65.2

66.0

64.5

46.3

49.0

44.1

43.0

43.6

49.6
253.9
171.0

65.1
260.5
167.3

80.5
280.7
189.5

65.1
287.0
196.6

66.8
284.0
194.7

65.8
279.6
191.9

65.3
276.7
187.3

46.0
269.8
180.3

48.4
269.4
179.6

43.5
268.9
179.5

44.3
268.6
179.7

42.3
270.8
180.9

82.9

93.2

91.2

90.4

89.3

87.7

89.4

89.5

89.7

89.3

88.9

90.0

2.9
35.2

3.7
36.8

4.4
38.5

3.1
39.1

3.0
38.5

3.0
38.9

2.4
38.9

1.5
39.0

1.5
39.1

1.6
40.0

1.5
39.5

1.6
37.6

MEMO

95 Revaluation gains on off-balancesheet items 8
96 Revaluation losses on off-balancesheet items 8
97 Mortgage-backed securities 9
98
Pass-through securities
99
CMOs, REMICs, and other
mortgage-backed securities . .
100 Net unrealized gains (losses) on
available-for-sale securities 10 . . .
101 Offshore credit to U.S. residents 11 . . .
Footnotes appear on p. A21.




Commercial Banking Institutions—Assets and Liabilities
1.26

A19

Assets and Liabilities 1 —Continued

COMMERCIAL BANKS IN THE UNITED STATES
D. Small domestically chartered commercial banks
Billions of dollars

Wednesday figures

Monthly averages

Account

1998

1998
Mar. r

Sept.

Oct.

r

1999

1999
Nov.

Dec.

Jan. r

Feb/

Mar.

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5

16 Total assets 6
17
18
19
20
21
22
23
24
25
26

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

....

27 Total liabilities
28 Residual (assets less liabilities) 7

1,392.7
397.5
310.7
86.8
995.3
179.1
541.3
28.3
513.0
200.1
6.0
68.7
60.4
63.2
57.6

1,451.8
414.9
317.9
97.0
1,036.9
190.6
571.3
28.8
542.5
197.2
6.2
71.6
71.0
68.1
64.9

1,471.4
422.5
322.5
100.1
1,048.9
193.3
579.4
28.7
550.7
197.3
6.5
72.4
72.8
67.9
67.6

1,499.6
431.6
329.0
102.6
1,068.0
196.3
592.1
29.1
563.0
199.1
6.8
73.7
69.8
70.3
72.2

1,520.0
438.8
333.0
105.8
1,081.2
199.2
602.2
29.1
573.1
200.6
6.4
72.8
66.2
70.7
74.3

1,525.8
441.0
333.9
107.1
1,084.8
200.7
607.3
29.0
578.2
199.4
6.2
71.4
67.7
71.0
77.8

1,532.3
443.6
334.7
108.9
1,088.7
201.1
610.4
28.8
581.7
199.9
6.1
71.3
67.1
71.1
77.6

1,541.3
446.9
337.3
109.5
1,094.5
202.0
614.1
28.8
585.3
201.2
6.1
71.0
63.9
71.9
77.0

1,539.2
446.1
336.6
109.5
1,093.1
201.9
613.5
28.7
584.8
199.7
6.3
71.8
64.0
70.4
77.1

1,541.0
446.2
336.8
109.3
1,094.9
201.9
613.9
28.8
585.1
201.5
6.1
71.4
64.3
68.9
77.9

1,541.9
447.1
337.4
109.8
1,094.7
201.8
614.4
28.9
585.5
201.9
6.0
70.8
64.9
73.0
77.2

1,544.6
448.4
338.8
109.6
1,096.2
202.5
615.9
29.0
587.0
202.2
5.8
69.7
60.9
75.5
76.4

1,555.0

1,636-3

1,660.2

1,692.1

1,7113

1,722.6

1,728.4

1,7343

1,730.9

1,7323

1,737.1

1,737.6

1,255.0
283.3
971.7
180.8
790.9
151.0
70.2
80.8
4.1
27.5

1,308.4
286.1
1,022.3
190.8
831.5
165.7
77.2
88.5
3.7
29.5

1,320.9
286.1
1,034.9
192.8
842.1
172.2
81.0
91.2
4.7
30.3

1,342.4
288.5
1,053.9
197.0
856.9
180.5
84.7
95.8
3.6
30.9

1,360.9
291.3
1,069.5
194.8
874.7
185.7
87.0
98.8
3.6
31.3

1,373.0
289.9
1,083.1
193.2
889.9
182.7
83.2
99.5
3.0
31.0

1,383.4
290.2
1,093.2
195.5
897.7
186.4
84.4
102.0
3.2
30.6

1,382.8
293.6
1,089.2
196.8
892.4
190.5
85.3
105.1
4.5
30.6

1,380.2
284.1
1,096.1
195.6
900.5
191.5
86.0
105.4
3.9
30.6

1,380.8
288.0
1,092.8
196.4
896.5
192.3
86.4
106.0
3.8
30.3

1,381.0
298.5
1,082.6
197.4
885.1
192.8
87.0
105.7
5.1
30.5

1,386.1
305.8
1,080.3
198.3
882.0
186.1
82.1
104.0
5.9
31.0

1,437.6

1307.4

1328.1

13573

13813

1389.8

1,603.6

1,608.4

1,606.1

1,6073

1,6093

1,609.1

117.4

128.9

132.0

134.6

130.0

132.8

124.8

126.0

124.8

125.0

127.6

128.5

Not seasonally adjusted

29
30
31
32
33
34
35
36
37
38
39
40
41
42
43

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5

44 Total assets 6
45
46
47
48
49
50
51
52
53
54

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

55 Total liabilities
56 Residual (assets less liabilities)
MEMO
57 Mortgage-backed securities®
Footnotes appear on p. A21.




7

....

1,386.9
398.9
312.1
86.8
988.0
179.7
538.0
28.2
509.8
197.8
6.0
66.5
63.4
61.7
56.6

1,455.3
413.1
316.4
96.7
1,042.2
189.5
574.4
29.1
545.4
198.1
6.2
73.9
69.0
66.9
65.3

1,470.5
419.7
319.7
99.9
1,050.8
191.9
580.8
28.9
551.9
197.9
6.5
73.7
74.3
67.2
67.8

1,496.8
429.3
326.7
102.6
1,067.5
194.9
592.6
29.3
563.2
199.9
6.8
73.4
77.8
72.4
73.5

1,518.3
438.4
333.0
105.5
1,079.9
198.3
600.5
29.3
571.2
202.6
6.4
72.0
71.2
74.1
74.2

1,519.3
440.2
333.3
106.9
1,079.0
199.9
603.4
29.0
574.3
200.3
6.2
69.3
67.7
74.2
74.7

1,521.6
441.4
333.1
108.3
1,080.2
200.7
605.7
28.7
577.0
199.3
6.1
68.5
67.0
72.1
76.3

1,535.6
448.4
338.9
109.6
1,087.2
202.6
610.5
28.7
581.9
199.1
6.1
68.9
66.9
70.4
75.6

1,530.3
446.0
336.8
109.2
1,084.3
201.9
609.4
28.6
580.7
197.4
6.3
69.3
70.3
69.5
75.4

1,534.3
447.3
338.2
109.1
1,087.0
202.6
609.7
28.6
581.1
199.4
6.1
69.1
67.1
68.6
74.0

1,537.9
450.0
340.1
110.0
1,087.9
202.8
610.8
28.7
582.1
199.7
6.0
68.6
64.4
67.6
75.4

1,543.2
452.0
341.9
110.1
1,091.2
203.4
613.8
28.7
585.1
199.9
5.8
68.2
63.5
74.9
78.0

1349.7

1,637.0

1,660.2

1,700.8

1,718.1

1,716.2

1,7173

1,728.7

1,725.9

1,7243

1,725.6

1,739.7

1,249.4
281.8
967.5
180.8
786.7
146.6
68.3
78.3
4.1
28.0

1,310.8
283.2
1,027.6
190.8
836.8
167.8
77.6
90.2
3.7
28.9

1,323.6
283.1
1,040.5
192.8
847.7
174.6
82.7
91.9
4.7
29.6

1,354.6
292.2
1,062.5
197.0
865.4
182.6
86.4
96.2
3.6
30.3

1,366.9
302.1
1,064.8
194.8
870.0
187.7
89.0
98.7
3.6
30.7

1,365.7
294.4
1,071.3
193.2
878.1
183.1
83.9
99.2
3.0
31.7

1,366.0
288.4
1,077.5
195.5
882.0
183.8
83.3
100.6
3.2
31.4

1,375.8
292.3
1,083.5
196.8
886.7
184.9
83.0
101.9
4.5
31.1

1,373.9
285.4
1,088.5
195.6
892.9
183.1
82.4
100.7
3.9
31.5

1,371.4
287.4
1,084.1
196.4
887.7
186.4
83.9
102.5
3.8
30.9

1,369.1
289.3
1,079.8
197.4
882.4
188.6
85.4
103.3
5.1
31.0

1,387.7
307.9
1,079.9
198.3
881.6
182.1
80.4
101.7
5.9
31.4

1,428.1

1,511.3

1332.4

1,571.2

1388.9

13833

1384.4

13963

1392.4

1392.6

13933

1,607.1

131.9

132.6

63.6

64.1

121.6

125.7

127.8

129.6

129.2

132.7

133.0

132.3

133.5

131.7

45.9

52.7

55.2

59.0

61.4

61.7

62.6

63.5

63.4

63.1

A20
1.26

Domestic Financial Statistics • June 1999
COMMERCIAL BANKS IN THE UNITED STATES

Assets and Liabilities 1 —Continued

E. Foreign-related institutions
Billions of dollars
Monthly averages
Account

1998r

1998
Mar/

Wednesday figures

Sept.

Oct.

1999
Nov.

Dec.

Jan/

Feb/

1999
Mar.

Mar. 10

Mar. 17

Mar. 24

Mar. 31

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5

13 Total assets 6
14
15
16
17
18
19
20
21

Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

22 Total liabilities
23 Residual (assets less liabilities)7

564.0
197.5
88.6
109.0
366.4
219.4
25.9
50.1
71.1
23.1
34.4
36.0

598.1
211.9
83.3
128.6
386.2
216.8
23.6
66.7
79.1
27.3
34.3
37.3

619.7
218.6
80.8
137.8
401.1
223.5
23.5
69.8
84.3
25.7
35.7
38.5

610.6
215.2
81.4
133.8
395.4
224.1
22.6
64.9
83.8
27.2
34.9
36.9

597.7
212.8
81.6
131.2
384.9
218.2
21.7
65.7
79.4
28.0
35.8
38.4

583.1
211.0
83.3
127.6
372.1
213.7
21.8
62.6
74.0
29.5
36.4
38.5

568.9
204.1
82.5
121.6
364.8
212.4
21.6
58.5
72.3
31.9
36.2
37.7

554.4
198.4
83.8
114.5
356.0
210.8
21.7
49.9
73.7
26.4
37.2
37.8

557.9
200.8
83.2
117.6
357.1
209.0
21.5
51.2
75.4
24.4
39.3
37.8

552.2
196.3
81.8
114.5
355.9
213.5
21.6
46.4
74.3
26.5
37.2
38.7

551.4
198.1
84.2
113.9
353.3
212.7
21.8
46.6
72.1
25.4
38.1
37.1

555.8
197.6
87.0
110.6
358.2
207.5
21.9
55.1
73.6
27.9
34.9
37.3

657.1

696.7

7193

709.4

699.7

687.2

674.5

655.5

659.1

6543

651.7

655.6

289.7
11.8
278.0
171.9
27.1
144.8
123.7
70.3

315.3
15.3
300.0
205.3
28.4
176.8
98.1
75.9

317.8
15.4
302.4
215.3
30.6
184.7
105.6
79.1

315.4
12.8
302.6
214.6
32.1
182.5
99.2
76.2

308.6
11.5
297.1
203.7
27.2
176.5
101.5
76.7

318.3
12.9
305.3
193.6
21.5
172.2
101.7
74.3

321.0
13.9
307.0
180.7
18.0
162.7
100.1
70.4

311.2
13.1
298.1
174.2
24.4
149.8
99.4
68.1

317.9
13.3
304.6
177.0
23.9
153.1
99.3
68.7

314.0
13.7
300.3
172.8
24.7
148.0
99.7
68.4

305.0
12.4
292.6
169.4
24.5
145.0
99.0
67.1

304.0
12.7
291.2
176.9
26.0
150.9
102.2
67.9

655.6

694.6

717.8

705.4

690.5

687.9

672.1

652.9

662.9

654.9

640.5

651.0

1.4

2.1

1.5

4.0

9.2

-.7

2.4

2.5

-3.8

-.6

11.2

4.6

Not seasonally adjusted

24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39

Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment account
Other securities
Trading account
Investment account
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5

40 Total assets 6
41
42
43
44
45
46
47
48

Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices . . . .
Other liabilities

49 Total liabilities
50 Residual (assets less liabilities)

7

MEMO
51 Revaluation gains on off-balance-sheet
items8
52 Revaluation losses on off-balancesheet items8
Footnotes appear on p. A21.




566.4
198.9
89.5
17.5
72.1
109.3
66.0
43.3
367.5
219.8
25.9
51.2
70.6
23.1
33.4
36.4

597.3
211.3
82.5
20.7
61.8
128.8
84.2
44.6
386.0
216.3
23.6
66.8
79.2
27.3
34.1
37.8

623.9
221.7
80.7
16.6
64.2
141.0
91.6
49.3
402.2
224.4
23.7
69.6
84.5
25.7
36.1
38.3

613.8
218.4
81.8
14.1
67.7
136.6
84.8
51.8
395.4
225.3
22.9
64.3
83.0
27.2
35.5
37.1

600.6
211.4
81.8
15.2
66.6
129.6
78.9
50.8
389.1
221.0
21.8
66.2
80.3
28.0
37.3
39.9

586.5
211.2
83.0
17.5
65.5
128.2
79.1
49.1
375.3
215.5
22.0
62.5
75.3
29.5
36.9
38.8

572.7
205.8
82.9
18.5
64.4
122.9
75.4
47.5
366.9
214.2
22.0
58.2
72.5
31.9
35.5
38.8

556.0
199.5
84.7
19.9
64.8
114.8
71.8
43.1
356.5
211.1
21.8
50.5
73.1
26.4
36.1
38.4

559.5
203.1
84.0
19.7
64.3
119.1
74.3
44.8
356.3
208.6
21.8
51.4
74.6
24.4
37.8
39.8

554.8
198.8
83.3
19.1
64.2
115.5
72.0
43.5
356.0
213.9
21.8
47.0
73.3
26.5
35.9
39.5

550.8
197.2
84.9
19.9
65.0
112.3
69.9
42.4
353.6
212.9
21.8
47.4
71.5
25.4
36.9
36.9

557.0
197.6
87.5
21.5
66.0
110.2
70.1
40.0
359.4
208.3
21.7
56.0
73.5
27.9
34.4
36.6

659.0

6962

723.7

713.4

7055

691.4

678.7

656.5

661.2

656.4

649.7

655.6

292.4
11.9
280.5
171.9
27.1
144.8
121.7
70.4

315.1
16.0
299.1
205.3
28.4
176.8
96.3
75.5

318.2
15.4
302.8
215.3
30.6
184.7
107.8
78.4

315.0
12.7
302.3
214.6
32.1
182.5
102.6
77.1

312.2
11.9
300.3
203.7
27.2
176.5
107.7
78.1

315.7
13.0
302.7
193.6
21.5
172.2
104.4
74.5

319.7
13.7
306.0
180.7
18.0
162.7
103.7
71.9

314.5
13.2
301.3
174.2
24.4
149.8
97.6
68.2

319.1
13.2
306.0
177.0
23.9
153.1
93.2
69.3

317.2
13.7
303.5
172.8
24.7
148.0
96.2
68.5

310.5
12.6
297.9
169.4
24.5
145.0
101.3
66.8

308.0
13.3
294.8
176.9
26.0
150.9
101.4
67.2

656.4

692.2

719.7

709.4

701.7

688.2

676.0

654.4

658.6

654.6

648.0

653.6

2.6

4.0

4.0

4.0

3.8

3.2

2.6

2.1

2.6

1.8

1.8

2.1

40.9

47.7

52.0

48.6

48.1

45.9

43.6

40.3

42.4

39.4

39.1

39.3

40.2

44.2

47.5

44.9

44.5

42.2

41.3

39.1

41.2

38.0

38.2

38.4

Commercial Banking Institutions—Assets and Liabilities

A21

NOTES TO TABLE 1.26
NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8
statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table
1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28,
"Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer
being published in the Bulletin. Instead, abbreviated balance sheets for both large and small
domestically chartered banks have been included in table 1.26, parts C and D. Data are both
merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S.
branches and agencies of foreign banks have been replaced by balance sheet estimates of all
foreign-related institutions and are included in table 1.26, part E. These data are breakadjusted,
The not-seasonally-adjusted data for all tables now contain additional balance sheet items,
which were available as of October 2, 1996.
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of condition
(large domestic); other domestically chartered commercial banks (small domestic); branches
and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related
institutions). Excludes International Banking Facilities. Data are Wednesday values or pro
rata averages of Wednesday values. Large domestic banks constitute a universe; data for
small domestic banks and foreign-related institutions are estimates based on weekly samples
and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications
of assets and liabilities.
The data for large and small domestic banks presented on pp. A17-19 are adjusted to
remove the estimated effects of mergers between these two groups. The adjustment for
mergers changes past levels to make them comparable with current levels. Estimated
quantities of balance sheet items acquired in mergers are removed from past data for the bank




group that contained the acquired bank and put into past data for the group containing the
acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a
ratio procedure is used to adjust past levels.
2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks
in the United States, all of which are included in "Interbank loans."
3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry
securities.
4. Includes vault cash, cash items in process of collection, balances due from depository
institutions, and balances due from Federal Reserve Banks.
5. Excludes the due-from position with related foreign offices, which is included in "Net
due to related foreign offices."
6. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
7. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the
seasonal patterns estimated for total assets and total liabilities.
8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and
equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39.
9. Includes mortgage-backed securities issued by U.S. government agencies, U.S.
government-sponsored enterprises, and private entities.
10. Difference between fair value and historical cost for securities classified as availablefor-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are
restated to include an estimate of these tax effects.
11. Mainly commercial and industrial loans but also includes an unknown amount of credit
extended to other than nonfinancial businesses.

A22
1.32

DomesticNonfinancialStatistics • June 1999
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
A. Commercial Paper
Millions of dollars, seasonally adjusted, end of period
Year ending December

1998

1999

Item

1 All issuers

1994

1995

1996

1997

1998

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

595,382

674,904

775,371

966,699

1,163,303

1,119,816

1,152,337

1,150,213

1,159,027

1,163,303

1,178,168

223,038
207,701

275,815
210,829

361,147
229,662

513,307
252,536

614,142
322,030

606,355
281,927

639,571
271,526

627,170
289,184

621,246
304,545

614,142
322,030

629,569
314,601

164,643

188,260

184,563

200,857

227,132

231,534

241,239

233,859

233,236

227,132

233,998

Financial companies'
2
3

Dealer-placed paper, total 2
Directly placed paper, total 3

4 Nonfinancial companies4

1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales,
personal, and mortgage financing; factoring, finance leasing, and other business lending;
insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.

3. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.

B. Bankers Dollar Acceptances 1
Millions of dollars, not seasonally adjusted, year ending September 2
Item

1995

1996

1997

1998

1 Total amount of reporting banks' acceptances in existence

29,242

25,832

25,774

14,363

2 Amount of other banks' eligible acceptances held by reporting banks
3 Amount of own eligible acceptances held by reporting banks (included in item 1)
4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries
(included in item 1)

1,249
10,516

709
7,770

736
6,862

523
4,884

11,373

9,361

10,467

5,413

1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United
States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks;
that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal
Reserve Act (12 U.S.C. §372).

1.33

PRIME RATE CHARGED BY BANKS

2. Data on bankers dollar acceptances are gathered from approximately 65 institutions;
includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and
agencies of foreign banks, and Edge and agreement corporations. The reporting group is
revised every year.

Short-Term Business Loans 1

Percent per year

Date of change
1996—Jan.
Feb.

1
1

Rate
8.50
8.25

1997—Mar. 26

8.50

1998—Sept. 30
Oct. 16
Nov. 18

8.25
8.00
7.75

Period

Average
rate

1996
1997
1998
1996—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.

1. The prime rate is one of several base rates that banks use to price short-term business
loans. The table shows the date on which a new rate came to be the predominant one quoted
by a majority of the twenty-five largest banks by asset size, based on the most recent Call




Average
rate
1997—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.

1998—Jan. .
Feb.
Mar
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
1999—Jan
Feb.
Mar.

Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415)
monthly statistical releases. For ordering address, see inside front cover,

Financial Markets
1.35

INTEREST RATES

A23

Money and Capital Markets

Percent per year; figures are averages of business day data unless otherwise noted
1998
Item

1996

1997

1999, week ending

1999

1998
Dec.

Jan.

Feb.

Mar.

Feb. 26

Mar. 5

Mar. 12

Mar. 19

Mar. 26

MONEY MARKET INSTRUMENTS
1 Federal funds 1,2 ' 3
2 Discount window borrowing 2 ' 4

5.30
5.02

5.46
5.00

5.35
4.92

4.68
4.50

4.63
4.50

4.76
4.50

4.81
4.50

4.75
4.50

4.85
4.50

4.80
4.50

4.79
4.50

4.79
4.50

3
4
5

Commercial paper!'5'6
Nonfinancial
1-month
2-month
3-month

n.a.
n.a.
n.a.

5.57
5.57
5.56

5.40
5.38
5.34

5.24
5.12
5.00

4.80
4.78
4.77

4.80
4.80
4.79

4.82
4.82
4.81

4.81
4.82
4.81

4.83
4.83
4.83

4.82
4.82
4.81

4.81
4.82
4.81

4.82
4.80
4.81

6
7
8

Financial
1-month
2-month
3-month

n.a.
n.a.
n.a.

5.59
5.59
5.60

5.42
5.40
5.37

5.31
5.13
5.04

4.83
4.81
4.81

4.82
4.82
4.82

4.84
4.83
4.84

4.83
4.84
4.83

4.84
4.85
4.86

4.84
4.84
4.84

4.83
4.83
4.83

4.83
4.83
4.82

5.43
5.41
5.42

5.54
5.58
5.62

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

(historical)3'5,7

9
10
11

Commercial paper
1-month
3-month
6-month

12
13
14

Finance paper, directly placed (historicalJ3,5'8
1-month
3-month
6-month

5.31
5.29
5.21

5.44
5.48
5.48

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

15
16

Bankers acceptances3'5"9
3-month
6-month

5.31
5.31

5.54
5.57

5.39
5.30

5.08
4.91

4.80
4.73

4.79
4.74

4.82
4.82

4.81
4.79

4.82
4.80

4.82
4.82

4.82
4.81

4.82
4.82

17
18
19

Certificates of deposit, secondary market
1-month
3-month
6-month

5.35
5.39
5.47

5.54
5.62
5.73

5.49
5.47
5.44

5.47
5.14
5.01

4.89
4.89
4.90

4.86
4.90
4.95

4.88
4.91
4.98

4.87
4.92
4.99

4.89
4.93
5.03

4.88
4.90
4.98

4.86
4.89
4.96

4.87
4.90
4.97

5.38

5.61

5.45

5.13

4.88

4.86

4.88

4.88

4.88

4.88

4.88

4.88

5.01
5.08
5.22

5.06
5.18
5.32

4.78
4.83
4.80

4.39
4.40
4.32

4.34
4.33
4.31

4.44
4.44
4.48

4.44
4.47
4.53

4.53
4.51
4.58

4.52
4.56
4.63

4.48
4.51
4.53

4.42
4.48
4.50

4.39
4.38
4.50

5.02
5.09
5.23

5.07
5.18
5.36

4.81
4.85
4.85

4.42
4.43
4.31

4.34
4.36
4.34

4.45
4.43
4.37

4.48
4.52
4.67

4.53
4.43
n.a.

4.57
4.59
4.67

4.51
4.54
n.a.

4.47
4.53
n.a.

4.38
4.42
n.a.

5.52
5.84
5.99
6.18
6.34
6.44
6.83
6.71

5.63
5.99
6.10
6.22
6.33
6.35
6.69
6.61

5.05
5.13
5.14
5.15
5.28
5.26
5.72
5.58

4.52
4.51
4.48
4.45
4.65
4.65
5.36
5.06

4.51
4.62
4.61
4.60
4.80
4.72
5.45
5.16

4.70
4.88
4.90
4.91
5.10
5.00
5.66
5.37

4.78
5.05
5.11
5.14
5.36
5.23
5.87
5.58

4.82
5.05
5.09
5.11
5.29
5.18
5.80
5.49

4.89
5.18
5.25
5.29
5.47
5.38
5.93
5.65

4.77
5.05
5.10
5.13
5.35
5.21
5.86
5.56

4.74
5.00
5.03
5.05
5.27
5.14
5.78
5.50

4.75
5.02
5.07
5.11
5.34
5.20
5.87
5.58

6.80

6.67

5.69

5.29

5.39

5.60

5.81

5.74

5.88

5.80

5.73

5.81

5.52
5.79
5.76

5.32
5.50
5.52

4.93
5.14
5.09

4.83
5.17
4.98

4.85
5.21
5.01

4.80
5.21
5.03

4.96
5.32
5.10

4.75
5.19
5.08

5.00
5.35
5.14

4.97
5.32
5.11

4.92
5.29
5.07

4.95
5.31
5.08

7.66

7.54

6.87

6.72

6.76

6.89

7.07

6.99

7.14

7.05

7.01

7.06

40
41 Aa
47 A
43 Baa

7.37
7.55
7.69
8.05

7.27
7.48
7.54
7.87

6.53
6.80
6.93
7.22

6.22
6.65
6.80
7.23

6.24
6.68
6.84
7.29

6.40
6.79
6.97
7.39

6.62
6.98
7.14
7.53

6.51
6.89
7.07
7.47

6.69
7.03
7.22
7.61

6.60
6.96
7.13
7.52

6.55
6.92
7.08
7.47

6.62
6.97
7.12
7.53

MEMO
Dividend-price ratio
44 Common stocks

2.19

1.77

1.49

1.37

1.30

1.32

1.30

1.31

1.34

1.28

1.28

1.30

3 11
20 Eurodollar deposits, 3-month '

24
25
26

U.S. Treasury bills
Secondary market 3,5
3-month
6-month
1-year
Auction high 3,5,12
3-month
6-month
1-year

27
28
29
30
31
32
33
34

Constant maturities13
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year

?1
??
23

U.S. TREASURY NOTES AND BONDS

Composite
35 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series14
36
37 Baa
38 Bond Buyer series
CORPORATE BONDS
39 Seasoned issues, all industries16
Rating group

1. The daily eifective federal funds rate is a weighted average of rates on trades through
New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday of the
current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. Interest rates interpolated from data on certain commercial paper trades settled by the
Depository Trust Company. The trades represent sales of commercial paper by dealers or
direct issuers to investors (that is, the offer side). See Board's Commercial Paper Web pages
(http://www.federalreserve.gov/releases/cp) for more information.
7. An average of offering rates on commercial paper for firms whose bond rating is AA or
the equivalent. Series ended August 29, 1997.
8. An average of offering rates on paper directly placed by finance companies. Series
ended August 29, 1997.
9. Representative closing yields for acceptances of the highest-rated money center banks.
10. An average of dealer offering rates on nationally traded certificates of deposit.




11. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for
indication purposes only.
12. Auction date for daily data; weekly and monthly averages computed on an issue-date
basis. On or after October 28, 1998, data are stop yields from uniform-price auctions. Before
that, they are weighted average yields from multiple-price auctions.
13. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Department of the Treasury.
14. General obligation bonds based on Thursday figures; Moody's Investors Service.
15. State and local government general obligation bonds maturing in twenty years are used
in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'
A1 rating. Based on Thursday figures.
16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected
long-term bonds.
17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in
the price index.
NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and
G.13 (415) monthly statistical releases. For ordering address, see inside front cover.

A24
1.36

DomesticNonfinancialStatistics • June 1999
STOCK MARKET

Selected Statistics
1998

Indicator

1996

1997

1999

1998
July

Sept.

Aug.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Prices and trading volume (averages of daily figures) 1
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
Finance
5

357.98
453.57
327.30
126.36
303.94

456.99
574.97
415.08
143.87
424.84

550.65
684.35
468.61
190.52
516.65

586.39
718.54
503.89
189.95
579.67

539.16
665.66
441.36
186.24
511.22

506.56
629.51
408.75
186.17
454.28

511.49
636.62
396.61
195.09
448.12

564.26
704.46
442.95
206.29
501.45

576.05
717.14
456.70
215.57
510.31

595.43
741.43
479.72
224.75
523.38

588.70
736.20
477.47
218.24
514.75

603.69
751.93
491.25
218.11
544.08

6 Standard & Poor's Corporation
( 1 9 4 1 - 4 3 = 10)2

670.49

873.43

1,085.50

1,156.58

1,074.62

1,020.64

1,032.47

1,144.43

1,190.05

1,248.77

1,246.58

1,281.66

7 American Stock Exchange
(Aug. 31, 1973 = 50) 3

570.86

628.34

682.69

724.83

655.67

621.48

607.16

667.60

660.76

704.22

699.15

711.08

409,740
22,567

523,254
24,390

666,534
28,870

639,744
26,473

712,710
32,721

790,238
33,331

808,816
31,946

668,932
27,266

680,397
28,756

847,135
31,015

756,932
31,774

776,538
29,563

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'

97,400

126,090

140,980

154,370

147,800

137,540

130,160

139,710

140,980

153,240

151,530

156,440

Free credit balances at brokers5
11 Margin accounts 6
12 Cash accounts

22,540
40,430

31,410
52,160

40,250
62,450

31,820
53,780

38,460
53,850

41,970
54,240

43,500
54,610

40,620
56,170

40,250
62,450

36,880
59,600

38,850
57,910

40,120
59,435

Margin requirements (percent of market value and effective date) 7

13 Margin stocks
14 Convertible bonds
15 Short sales

Mar. 11, 1968

June 8, 1968

May 6, 1970

Dec. 6, 1971

Nov. 24, 1972

70
50
70

80
60
80

65
50
65

55
50
55

65
50
65

1. Daily data on prices are available upon request to the Board of Governors. For ordering
address, see inside front cover.
2. In July 1976 a financial group, composed of banks and insurance companies, was added
to the group of stocks on which the index is based. The index is now based on 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and
40 financial.
3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has
included credit extended against stocks, convertible bonds, stocks acquired through the
exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds, and subscription issues was discontinued in
April 1984.
5. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.




Jan. 3, 1974
50
50
50

6. Series initiated in June 1984.
7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant
to the Securities Exchange Act of 1934, limit the amount of credit that can be used to
purchase and carry "margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities are the difference between the
market value (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.

Federal Finance
1.38

A25

FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year

Fiscal year
Type of account or operation

1998
1996

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

1997

1999

1998
Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

1,453,062
1,085,570
367,492
1,560,512
1,259,608
300,904
-107,450
-174,038
66,588

1,579,292
1,187,302
391,990
1,601,235
1,290,609
310,626
-21,943
-103,307
81,364

1,721,798
1,305,999
415,799
1,652,552
1,335,948
316,604
69,246
-29,949
99,195

119,974
90,064
29,910
152,436
123,687
28,749
-32,462
-33,623
1,161

113,978
81,836
32,142
131,095
100,078
31,017
-17,117
-18,242
1,125

178,646
143,337
35,309
184,056
149,401
34,655
-5,410
-6,064
654

171,722
129,921
41,801
101,386
102,489
-1,103
70,336
27,432
42,904

99,414
65,058
34,356
142,281
111,007
31,274
-42,867
-45,949
3,082

130,292
92,425
37,867
152,707
122,005
30,702
-22,415
-29,580
7,165

129,712
-6,276
-15,986

38,171
604
-16,832

-51,049
4,743
-22,940

15,330
2,661
14,471

22,364
20,335
-25,582

-5,390
-1,621
12,421

-31,249
-39,567
480

1,688
52,432
-11,253

37,013
-16,988
2,390

44,225
7,700
36,525

43,621
7,692
35,930

38,878
4,952
33,926

36,217
4,440
31,776

15,882
5,219
10,663

17,503
6,086
11,417

57,070
7,623
49,446

4,638
4,538
100

21,626
5,374
16,252

MEMO

13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
Tax
and loan accounts
15

1. Since 1990, off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on gold;




net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold.
SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, fiscal year totals: U.S. Office of Management
and Budget, Budget of the U.S. Government.

A26
1.39

DomesticNonfinancialStatistics • June 1999
U.S. BUDGET RECEIPTS AND OUTLAYS1
Millions of dollars

Fiscal year

Calendar year

Source or type

1997
1997

1998

1999

1998
HI

H2

HI

H2

Jan.

Feb.

Mar.

RECEIPTS
1 All sources
2 Individual income taxes, net
3
Withheld
4
Nonwithheld
5
Refunds
Corporation income taxes
6
Gross receipts
Refunds
8 Social insurance taxes and contributions, net . . .
9
Employment taxes and contributions2
10
Unemployment insurance
11
Other net receipts3

1

12
13
14
15

Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts4

1,579,292

1,721,798

845,527

773,812

922,632

825,055

171,722

99,414

130,292

737,466
580,207
250,753
93,560

828,586
646,483
281,527
99,476

400,436
292,252
191,050
82,926

354,072
306,865
58,069
10,869

447,514
316,309
219,136
87,989

392,332
339,144
65,204
12,032

99,857
58,527
42,324
994

42,792
59,055
2,949
19,219

50,468
69,559
7,245
26,351

204,493
22,198
539,371
506,751
28,202
4,418

213,249
24,593
571,831
540,014
27,484
4,333

106,451
9,635
288,251
268,357
17,709
2,184

104,659
10,135
260,795
247,794
10,724
2,280

109,353
14,220
312,713
293,520
17,080
2,112

104,163
14,250
268,466
256,142
10,121
2,202

7,185
2,055
54,928
53,725
867
337

3,641
2,465
46,683
43,735
2,594
353

23,131
4,578
49,216
48,592
269
355

56,924
17,928
19,845
25,465

57,673
18,297
24,076
32,658

28,084
8,619
10,477
12,866

31,133
9,679
10,262
13,348

29,922
8,546
12,971
15,829

33,366
9,838
12,359
18,735

4,806
1,286
2,206
3,509

3,892
1,403
1,600
1,868

5,880
1,546
2,172
2,457

OUTLAYS
16 All types

1,601,235

1,652,552

797,418

824,370

815,886

877,026

101,386

142,281

152,707

17
18
19
20
21
22

National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture

270,473
15,228
17,174
1,483
21,369
9,032

268,456
13,109
18,219
1,270
22,396
12,206

132,698
5,740
8,938
803
9,628
1,465

140,873
9,420
10,040
411
11,106
10,590

129,351
4,610
9,426
957
10,051
2,387

140,196
8,297
10,142
699
12,671
16,757

19,270
1,179
1,398
-107
1,458
3,939

20,909
1,372
1,312
-189
1,919
1,074

25,469
949
1,663
588
1,862
1,046

23
24
25
26

Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services

-14,624
40,767
11,005

1,014
40,332
9,720

-7,575
16,847
5,678

-3,526
20,414
5,749

-2,483
16,196
4,863

4,046
20,834
6,972

745
2,558
709

-1,237
2,259
720

-1,474
2,636
1,148

27 Health
28 Social security and Medicare
29 Income security
30
31
32
33
34

Veterans benefits and services
Administration of justice
General government
Net interest5
Undistributed offsetting receipts6

53,008

54,919

25,080

26,851

25,928

28,216

5,136

5,429

6,641

123,843
555,273
230,886

131,440
572,047
233,202

61,809
278,863
124,034

63,552
283,109
106,353

65,053
286,305
125,196

67,836
316,809
109,481

10,984
15,248
17,349

11,100
46,727
29,856

11,988
49,846
26,749

39,313
20,197
12,768
244,013
-49,973

41,781
22,832
13,444
243,359
-47,194

17,697
10,670
6,623
122,655
-24,235

22,077
10,212
7,302
122,620
-22,795

19,615
11,287
6,139
122,345
-21,340

22,750
12,041
9,136
116,954
-25,795

1,828
2,090
188
19,947
-2,530

3,574
1,832
274
18,049
-2,700

3,693
2,180
1,130
19,970
-3,376

1. Functional details do not sum to total outlays for calendar year data because revisions to
monthly totals have not been distributed among functions. Fiscal year total for receipts and
outlays do not correspond to calendar year data because revisions from the Budget have not
been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Federal employee retirement contributions and civil service retirement and
disability fund.




4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust funds.
6. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the US.
Government, Fiscal Year 2000; monthly and half-year totals: U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the V.S. Government.

Federal Finance
1.40

A27

FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1997

1997

1998

1999

Item
Mar. 31

June 30

1 Federal debt outstanding

5,415

5,410

5,446

5,536

5,573

2 Public debt securities
3
Held by public
4
Held by agencies

5,381
3,874
1,507

5,376
3,805
1,572

5,413
3,815
1,599

5,502
3,847
1,656

5,542
3,872
1,670

34
26
8

34
26
7

33
26
7

34
27
7

31
26
5

5 Agency securities
6
Held by public
7
Held by agencies

Sept. 30

Dec. 31

Mar. 31

Sept. 30

Dec. 31

Mar. 31

5,578

5,556

5,643

5,726

5,548
3,790
1,758

5,526
3,761
1,766

5,614
3,787
1,827

5,652
n.a.
n.a.

30
26
4

29
26
4

29
29
1

74
n.a.
n.a.

June 30

5,294

5,290

5,328

5,417

5,457

5,460

5,440

5,530

5,566

9 Public debt securities
10 Other debt1

5,294
0

5,290
0

5,328
0

5,416
0

5,456
0

5,460
0

5,439
0

5,530
0

5,566
0

MEMO
11 Statutory debt limit

5,500

5,500

5,950

5,950

5,950

5,950

5,950

5,950

5,950

8 Debt subject to statutory limit

1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District of Columbia stadium bonds.

1.41

GROSS PUBLIC DEBT OF U S . TREASURY

SOURCE. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.

Types and Ownership

Billions of dollars, end of period
1998
Type and holder

1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
15

By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Inflation-indexed notes and bonds1
Nonmarketable2
State and local government series
Foreign issues3
Government
Public
Savings bonds and notes
Government account series4
Non-interest-bearing

By holder 5
16 U.S. Treasury and other federal agencies and trust funds
17 Federal Reserve Banks
18 Private investors
19
Commercial banks
20
Money market funds
21
Insurance companies
22
Other companies
23
State and local treasuries6'7
Individuals
24
Savings bonds
25
Other securities
26
Foreign and international8
27
Other miscellaneous investors7'9

1995

1997

1999

1998
Q2

Q3

Q4

Q1

4,988.7

5,323.2

5,502.4

5,614.2

5,547.9

5,526.2

5,614.2

5,651.6

4,964.4
3,307.2
760.7
2,010.3
521.2
n.a.
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3

5,317.2
3,459.7
777.4
2,112.3
555.0
n.a.
1,857.5
101.3
37.4
47.4
.0
182.4
1,505.9
6.0

5,494.9
3,456.8
715.4
2,106.1
587.3
33.0
2,038.1
124.1
36.2
36.2
.0
181.2
1,666.7
7.5

5,605.4
3,355.5
691.0
1,960.7
621.2
50.6
2,249.9
165.3
34.3
34.3
.0
180.3
1,840.0
8.8

5,540.2
3,369.5
641.1
2,064.6
598.7
50.1
2,170.7
155.0
36.0
36.0
.0
180.7
1,769.1
7.7

5,518.7
3,331.0
637.7
2,009.1
610.4
41.9
2,187.7
164.4
35.1
35.1
.0
180.8
1,777.3
7.5

5,605.4
3,355.5
691.0
1,960.7
621.2
50.6
2,249.9
165.3
34.3
34.3
.0
180.3
1,840.0
8.8

5,643.1
3,361.3
725.5
1,912.0
632.5
59.2
2,281.8
167.5
33.5
33.5
.0
180.6
1,870.2
8.5

1,304.5
391.0
3,294.9
278.7
71.5
241.5
228.8
469.6

1,497.2
410.9
3,411.2
261.8
91.6
214.1
258.5
482.5

1,655.7
451.9
3,393.4
269.8
88.9
224.9
265.0
493.0

1,826.8
471.7
3,334.0
215.0
105.8
186.0
267.9
490.0

1,757.6
458.4
3,330.6
263.6
82.7
183.6
267.2
470.0

1,765.6
458.1
3,301.0
219.8
84.2
186.1
271.4
487.4

1,826.8
471.7
3,334.0
215.0
105.8
186.0
267.9
490.0

185.0
162.7
835.2
825.9

187.0
169.6
1,102.1
678.9

186.5
168.4
1,241.6
552.0

186.7
164.9
1,276.3
441.4

186.0
165.0
1,256.0
456.5

186.0
166.4
1,221.8
477.9

186.7
164.9
1,276.3
441.4

1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of
1997.
2. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
3. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners.
4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds.
5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual
holdings; data for other groups are Treasury estimates.
6. Includes state and local pension funds.




1996

n a.

7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable
federal securities was removed from "Other miscellaneous investors" and added to "State and
local treasuries." The data shown here have been revised accordingly.
8. Consists of investments of foreign balances and international accounts in the United
States.
9. Includes savings and loan associations, nonprofit institutions, credit unions, mutual
savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury
deposit accounts, and federally sponsored agencies.
SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the
Public Debt of the United States; data by holder, Treasury Bulletin.

A28
1.42

DomesticNonfinancialStatistics • June 1999
U.S. GOVERNMENT SECURITIES DEALERS

Transactions1

M i l l i o n s o f dollars, daily a v e r a g e s

1998

1999

1999, week ending

Item
Dec.

Jan.

Feb.

Feb. 3

Feb. 10

Feb. 17

Feb. 24

Mar. 3

Mar. 10

Mar. 17

Mar. 24

Mar. 31

OUTRIGHT TRANSACTIONS2
By type of security
1 U.S. Treasury bills
Coupon securities, by maturity
2
Five years or less
3
More than five years
4 Inflation-indexed
Federal agency
5 Discount notes
Coupon securities, by maturity
One year or less
6
7
More than one year, but less than
or equal to five years
More than five years
8
9 Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
U.S. Treasury
13
Federal agency
14
15
Mortgage-backed

10
11
12

30,397

32,211

31,811

31,081

28,338

30,512

29,067

51,699

28,431

26,936

25,567

46,405

76,147
47,464
415

100,641
68,441
1,552

107,777
71,489
772

112,778
70,930
934

113,895
79,070
471

91,824
68,136
991

108,612
62,772
776

122,778
83,554
727

99,358
73,684
548

79,570
51,433
276

97,269
54,205
264

92,383
55,781
323

38,998

43,028

41,355

39,619

41,477

43,823

39,499

42,125

40,996

41,217

37,095

39,828

716

1,098

1,796

867

1,579

2,715

1,764

1,515

1,009

1,176

1,281

672

3,491
2,413
59,167

6,150
4,079
82,210

7,446
3,633
75,923

6,254
4,984
66,974

9,021
3,639
100,554

5,200
3,118
69,208

6,995
3,459
61,462

12,035
3,312
80,707

4,829
5,367
94,031

8,518
3,068
68,385

8,832
1,974
50,182

5,743
2,052
58,892

84,186
2,193
20,854

113,084
3,806
24,932

117,230
3,791
25,301

117,573
3,965
21,099

123,277
3,623
31,935

103,664
4,064
22,694

114,347
3,229
23,967

142,719
4,677
24,875

112,829
3,908
31,902

87,756
5,290
24,202

98,164
3,853
16,254

106,251
3,099
21,281

70,237
43,424
38,314

89,761
50,548
57,278

94,620
50,438
50,622

98,150
47,758
45,875

98,497
52,093
68,620

87,798
50,791
46,515

86,880
48,487
37,495

116,038
54,311
55,832

89,192
48,293
62,129

70,459
48,689
44,183

79,140
45,329
33,928

88,640
45,195
37,611

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

FUTURES TRANSACTIONS3
16
17
18
19
20
21
22
23
24

By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed

108

0

0

2,731
10,292
0

2,225
15,953
0

2,512
17,132
0

2,234
16,756
0

2,587
16,565
0

1,618
15,906
0

2,457
16,597
0

5,110
23,513
0

3,180
19,329
0

n.a.

n.a.

2,399
12,912
0

2,048
13,793
0

1,492
13,116
0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

OPTIONS TRANSACTIONS4
By type of underlying security
25 U.S. Treasury bills
Coupon securities, by maturity
26
Five years or less
27
More than five years
28 Inflation-indexed
Federal agency
29 Discount notes
Coupon securities, by maturity
30
One year or less
31
More than one year, but less than
or equal to five years
32
More than five years
33 Mortgage-backed

0

0

0

0

0

0

0

0

0

0

0

0

934
3,004
0

1,673
4,712
0

1,153
5,798
0

1,327
4,838
0

1,005
6,564
0

783
5,688
0

1,710
5,854
0

797
5,483
0

1,442
5,276
0

1,929
5,257
0

1,105
4,763
0

1,972
4,662
0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0
0
806

0
0
1,309

0
0
844

0
0
529

0
0
1,121

0
0
839

0
0
650

0
0
1,123

0
0
650

0
0
832

0
0
1,184

0
0
431

1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Monthly averages are based on the number of trading days in the month.
Transactions are assumed to be evenly distributed among the trading days of the report week.
Immediate, forward, and futures transactions are reported at principal value, which does not
include accrued interest; options transactions are reported at the face value of the underlying
securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other than mortgage-backed federal agency securities) for which delivery is scheduled in five business days or less and "when-issued"
securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities are reported at market value by maturity of coupon or corpus.




Forward transactions are agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
3. Futures transactions are standardized agreements arranged on an exchange. All futures
transactions are included regardless of time to delivery.
4. Options transactions are purchases or sales of put and call options, whether arranged on
an organized exchange or in the over-the-counter market, and include options on futures
contracts on U.S. Treasury and federal agency securities.
NOTE, "n.a." indicates that data are not published because of insufficient activity.

Federal Finance
1.43

U.S. GOVERNMENT SECURITIES DEALERS

A29

Positions and Financing 1

M i l l i o n s o f dollars

1998

1999, week ending

1999

Dec.

Feb.

Jan.

Feb. 3

Feb. 10

Feb. 17

Feb. 24

Mar. 3

Mar. 10

Mar. 17

Mar. 24

Positions 2

NET OUTRIGHT POSITIONS
1
2
3
4
5
6
7
8
9

By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed

-4,551

1,346

4,509

1,248

1,023

4,804

-2,884

25,480

25,042

20,081

17,666

-5,388
3,180
1,186

-8,148
432
1,973

-12,028
1,465
1,931

-10,856
-391
1,869

-3,817
2,950
1,900

-15,331
5,354
1,980

-12,089
121
1,811

-21,390
-4,195
2,157

-21,756
-5,998
2,160

-19,183
-5,538
1,849

-13,623
-6,597
1,754

20,788

18,818

18,671

19,092

20,929

20,165

16,897

14,894

20,544

17,653

19,310

2,075

2,858

3,450

2,727

3,899

3,340

3,429

3,439

2,744

3,060

2,361

3,093
3,499
38,689

4,441
4,545
23,961

5,044
3,146
17,432

5,350
3,325
19,792

3,949
2,847
12,377

3,411
2,918
16,853

5,772
3,941
19,918

8,311
2,544
21,168

6,820
4,670
17,990

3,150
5,455
15,397

5,669
3,710
18,817

NET FUTURES POSITIONS4
By type of deliverable security
10 U.S. Treasury bills
Coupon securities, by maturity
11
Five years or less
12
More than five years
13 Inflation-indexed
Federal agency
14 Discount notes
Coupon securities, by maturity
15
One year or less
16
More than one year, but less than
or equal to five years
17
More than five years
18 Mortgage-backed

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

-4,012
-24,757
0

-777
-20,814
0

459
-14,876
0

144
-18,225
0

23
-12,831
0

161
-16,884
0

1,776
-15,464
0

-328
-11,398
0

-576
-11,713
0

-1,329
-12,930
0

-791
-15,466
0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

507

NET OPTIONS POSITIONS

19
20
21
22
23
24
25
26
27

By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed

0

0

0

0

0

0

0

0

0

0

0

-3,155
-1,387
0

-1,090
-1,004
0

-1,960
-1,487
0

-3,481
122
n.a.

-2,858
-2,984
n.a.

-1,209
-1,024
n.a.

-1,284
-1,299
n.a.

-1,743
-1,215
n.a.

-1,893
-982
n.a.

-854
380
n.a.

-970
826
n.a.

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

n.a.
1,213

n.a.
3,410

n.a.
5,873

n.a.
3,850

n.a.
4,936

n.a.
5,607

n.a.
6,204

n.a.
8,918

n.a.
6,829

n.a.
6,304

n.a.
6,720

Financing 5
Reverse repurchase
agreements
28 Overnight and continuing
29 Term

242,653
807,304

239,627
799,672

261,190
788,073

248,218
862,566

249,836
898,988

276,427
709,335

253,860
738,485

276,948
762,673

258,279
783,478

250,927
800,575

247,536
829,709

Securities borrowed
30 Overnight and continuing
31 Term

205,654
112,684

222,768
105,788

225,926
100,463

228,350
101,670

227,431
103,907

228,684
98,571

219,436
101,781

228,006
94,536

232,396
92,844

236,084
93,192

223,042
97,864

2,952
67

2,509
n.a.

2,380
n.a.

2,477
n.a.

2,403
n.a.

2,306
n.a.

2,389
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

Repurchase
agreements
34 Overnight and continuing
35 Term

608,988
713,037

633,520
695,303

666,536
674,687

634,074
745,088

661,367
782,905

683,030
589,106

661,472
635,295

679,928
651,208

659,715
668,923

677,844
686,985

654,994
719,778

Securities loaned
36 Overnight and continuing
37 Term

9,369
3,567

10,040
n.a.

11,753
5,776

9,616
0

10,997
n.a.

12,722
n.a.

12,265
n.a.

12,090
5,776

11,998
6,242

12,304
6,142

11,226
6,129

Securities pledged
38 Overnight and continuing
39 Term

47,565
5,075

48,487
5,776

48,945
5,896

50,497
6,076

49,509
6,015

49,112
4,567

47,693
6,747

48,696
6,388

47,985
6,843

49,625
6,890

49,795
8,249

Collateralized
40 Total

21,850

17,735

18,388

20,727

19,414

18,259

16,775

17,885

19,168

19,349

17,296

Securities received as pledge
32 Overnight and continuing
33 Term

loans

1. Data for positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar
days of the report week are assumed to be constant. Monthly averages are based on the
number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that
have been delivered or are scheduled to be delivered in five business days or less and
"when-issued" securities that settle on the issue date of offering. Net immediate positions for
mortgage-backed agency securities include securities purchased or sold that have been
delivered or are scheduled to be delivered in thirty business days or less.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt




2,555
n.a.

securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
4. Futures positions reflect standardized agreements arranged on an exchange. All futures
positions are included regardless of time to delivery.
5. Overnight financing refers to agreements made on one business day that mature on the
next business day; continuing contracts are agreements that remain in effect for more than one
business day but have no specific maturity and can be terminated without advance notice by
either party; term agreements have a fixed maturity of more than one business day. Financing
data are reported in terms of actual funds paid or received, including accrued interest.
NOTE, "n.a." indicates that data are not published because of insufficient activity.

A30
1.44

DomesticNonfinancialStatistics • June 1999
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES

Debt Outstanding

M i l l i o n s o f dollars, end o f p e r i o d

1999

1998
1995

Agency

844,611

1 Federal a n d federally sponsored agencies
2 Federal agencies
3
Defense Department'
4
Export-Import Bank 2 , 3
5
Federal Housing Administration 4
Government National Mortgage Association certificates of
6
participation 5
7
Postal Service 6
Tennessee Valley Authority
8
9
United States Railway Association 6
10 Federally sponsored agencies 7
11
Federal Home Loan Banks
12
Federal Home Loan Mortgage Corporation
13
Federal National Mortgage Association
14
Farm Credit Banks 8
15
Student Loan Marketing Association 9
16
Financing Corporation 10
17
Farm Credit Financial Assistance Corporation"
Resolution Funding Corporation 12
18
MEMO
19 Federal Financing B a n k debt 1 3
20
21
22
23
24

Lending to federal and federally sponsored
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6

Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other

1996

925,823

1998
Sept.

Oct.

Nov.

Dec.

Jan.

1,022,609

1,296,477

1,172,575

1,207,495

1,255,412

1,296,477

26,691
6
n.a.
174

26,350
6
n.a.
188

26,315
6
n.a.
205

26,502
6
n.a.
205

26,355
6
n.a.
70

n.a.

37,347
6
2,050
97

29,380
6
1,447
84

27,792
6
552
102

26,502
6
n.a.
205

n.a.
5,765
29,429
n.a.

n.a.
n.a.
27,853
n.a.

n.a.
n.a.
27,786
n.a.

n.a.
n.a.
26,496
n.a.

n.a.
n.a.
26,685
n.a.

n.a.
n.a.
26,344
n.a.

n.a.
n.a.
26,309
n.a.

n.a.
n.a.
26,496
n.a.

n.a.
n.a.
26,349
n.a.

807,264
243,194
119,961
299,174
57,379
47,529
8,170
1,261
29,996

896,443
263,404
156,980
331,270
60,053
44,763
8,170
1,261
29,996

994,817
313,919
169,200
369,774
63,517
37,717
8,170
1,261
29,996

1,269,975
382,131
287,396
460,291
63,488
35,399
8,170
1,261
29,996

1,145,884
343,188
232,994
430,582
64,332
33,760
8,170
1,261
29,996

1,181,145
367,274
246,708
431,300
60,720
33,981
8,170
1,261
29,996

1,229,097
373,755
267,890
446,377
66,086
33,928
8,170
1,261
29,996

1,269,975
382,131
287,396
460,291
63,488
35,399
8,170
1,261
29,996

n.a.
383,572
300,927
461,157
61,292
n.a.
8,170
1,261
29,996

78,681

58,172

49,090

44,129

45,955

44,952

44,824

44,129

43,803

2,044
5,765
n.a.
3,200
n.a.

1,431
n.a.
n.a.
n.a.
n.a.

552
n.a.
n.a.
n.a.
n.a.

F
1
n.a.
I
1

F
1
n.a.
1
i

F
1
n.a.
I

1
n.a.
1
1

F
1
n.a.
I
1

21,015
17,144
29,513

18,325
16,702
21,714

13,530
14,898
20,110

9,500
14,091
20,538

9,500
14,166
22,289

9,500
14,191
21,261

9,500
14,199
21,125

9,500
14,091
20,538

agencies

1. Consists of mortgages assumed by the Defense Department between 1957 and 1963
under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration insurance
claims. Once issued, these securities may be sold privately on the securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government National
Mortgage Association acting as trustee for the Farmers Home Administration, the Department
of Health, Education, and Welfare, the Department of Housing and Urban Development, the
Small Business Administration, and the Veterans Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes
Federal Agricultural Mortgage Corporation, therefore details do not sum to total. Some data
are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
shown on line 17.
9. Before late 1982, the association obtained financing through the Federal Financing Bank
(FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.




1997

•

1
n.a.
1
1
9,500
14,101
20,202

10. The Financing Corporation, established in August 1987 to recapitalize the Federal
Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January 1988 to
provide assistance to the Farm Credit System, undertook its first borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations
issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the
purpose of lending to other agencies, its debt is not included in the main portion of the table to
avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans
guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally
being small. The Farmers Home Administration entry consists exclusively of agency assets,
whereas the Rural Electrification Administration entry consists of both agency assets and
guaranteed loans.

Securities Markets and Corporate Finance
1.45

NEW SECURITY ISSUES

A31

Tax-Exempt State and Local Governments

Millions of dollars
1998
Type of issue or issuer,
or use

1 All issues, new and refunding

1996

1

1997

1999

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

171,222

214,694

262,342

20,344

17,526

19,528

19,325

24,288

16,926

16,233

24,323

By type of issue
2 General obligation
3 Revenue

60,409
110,813

69,934
134,989

87,015
175,327

5,812
14,532

5,619
11,907

6,791
12,737

5,433
13,892

8,632
15,656

6,925
10,001

6,786
9,446

8,323
16,000

By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township

13,651
113,228
44,343

18,237
134,919
70,558

23,506
178,421
60,173

1,483
14,233
4,628

1,280
12,490
3,756

1,865
12,924
4,739

778
13,473
5,073

2,561
15,937
5,790

318
12,929
3,679

1,837
11,145
3,251

1,895
14,604
7,825

7 Issues for new capital

112,298

135,519

160,568

11,258

9,106

12,736

12,452

14,517

11,917

10,674

16,201

26,851
12,324
9,791
24,583
6,287
32,462

31,860
13,951
12,219
27,794
6,667
35,095

36,904
19,926
21,037
n.a.
8,594
42,450

2,435
1,982
1,179
n.a.
709
2,764

2,041
918
831
n.a.
315
2,726

2,605
1,598
2,785
n.a.
471
3,359

2,353
806
2,225
n.a.
638
3,242

2,766
1,800
984
n.a.
1,376
4,477

2,936
1,706
672
n.a.
452
4,439

3,751
628
394
n.a.
343
3,207

3,537
1,640
2,839
n.a.
1,084
3,918

8
9
10
11
12
13

By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes

1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.

1.46

NEW SECURITY ISSUES

SOURCE. Securities Data Company beginning January 1990; Investment
Digest before then.

Dealer's

U.S. Corporations

Millions of dollars
1998r
Type of issue, offering,
or issuer

1 All issues

1

1996

1997

1999

1998
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.r

Feb.

n.a.

n.a.

77,750

60,708

85,833

70,907

104,288

73,414

89,632

n.a.

n.a.

n.a.

68,133

57,145

81,352

62,692

95,910

65,374

82,523

n.a.

By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad

465,489
n.a.
83,433

537,880
n.a.
103,188

54,266
7,600
6,267

45,745
7,600
3,800

71,134
7,600
2,618

48,256
7,600
6,837

80,556
7,600
7,754

54,513
7,600
3,261

64,905
7,600
10,018

67,528
7,600
8,376

By industry group
6 Nonfinancial
7 Financial

n.a.
429,157

n.a.
510,953

24,821
43,313

20,399
36,746

16,562
64,790

16,632
46,060

31,911
63,999

21,397
43,977

19,853
62,670

n.a.
63,049

8 Stocks 2

2 Bonds 2

n.a.

122,006

117,880

126,755

9,772

3,725

4,640

8,655

8,902

8,670

7,136

10,066

By type of offering
9 Public
10 Private placement3

122,006
n.a.

117,880
n.a.

126,755
n a.

9,772
n.a.

3,725
n.a.

4,640
n.a.

8,655
n.a.

8,902
n.a.

8,670
n.a.

7,136
n.a.

10,066
n.a.

By industry group
11 Nonfinancial
12 Financial

80,460
41,546

60,386
57,494

74,113
52,642

6,390
3,382

2,560
1,165

2,266
2,374

5,879
2,776

6,145
2,757

7,559
1,111

3,701
3,435

8,911
1,155

1. Figures represent gross proceeds of issues maturing in more than one year; they are the
principal amount or number of units calculated by multiplying by the offering price. Figures
exclude secondary offerings, employee stock plans, investment companies other than closedend, intracorporate transactions, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.




2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of
the Federal Reserve System.

A32
1.47

DomesticNonfinancialStatistics • June 1999
Net Sales and Assets 1

OPEN-END INVESTMENT COMPANIES
M i l l i o n s o f dollars

1998
Item

1997

Sept.

Aug.

1 Sales of own shares 2

1999

1998
Nov.

Oct.

Dec.

Feb. r

Jan.

Mar.

1,190,900

1,461,430

111,587

118,478

116,471

112,627

140,700

161,889

132,199

164,681

918,728
272,172

1,217,022
244,408

118,812
-7,225

107,049
11,429

108,838
7,633

89,702
22,925

134,289
6,412

135,713
26,176

128,125
4,074

146,567
18,114

4 Assets 4

3,409,315

4,173,531

3,479,401

3,625,841

3,804,591

4,002,089

4,173,531

4,298,071

4,180,115

4,330,269

5 Cash 5
6 Other

174,154
3,235,161

191,393
3,982,138

194,435
3,284,967

211,253
3,414,588

210,026
3,594,565

207,422
3,794,667

191,393
3,982,138

203,470
4,094,601

198,134
3,981,982

199,742
4,130,526

2 Redemptions of own shares
3 Net sales 3

1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual
funds.
2. Excludes reinvestment of net income dividends and capital gains distributions and share
issue of conversions from one fund to another in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of money
market mutual funds within the same fund family.

1.48

4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership, which
comprises substantially all open-end investment companies registered with the Securities and
Exchange Commission. Data reflect underwritings of newly formed companies after their
initial offering of securities.

CORPORATE PROFITS AND THEIR DISTRIBUTION
B i l l i o n s o f dollars; quarterly data at seasonally adjusted annual rates

1997
Account

1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-tax liability
4 Profits after taxes
5 Dividends
6 Undistributed profits
7 Inventory valuation
8 Capital consumption adjustment
SOURCE. U.S. Department of Commerce, Survey of Current

1.51

DOMESTIC FINANCE COMPANIES

1996

1997

1998

1998
Ql

Q2

Q3

Q4

Ql

Q2

Q3

Q4

750.4
680.2
226.1
454.1
261.9
192.3

817.9
734.4
246.1
488.3
275.1
213.2

824.6
717.8
240.1
477.7
279.2
198.5

794.3
712.4
238.8
473.6
274.1
199.5

815.5
729.8
241.9
487.8
274.7
213.2

840.9
758.9
254.2
504.7
275.1
229.5

820.8
736.4
249.3
487.1
276.4
210.6

829.2
719.1
239.9
479.2
277.3
201.8

820.6
723.5
241.6
481.8
278.1
203.7

827.0
720.5
243.2
477.3
279.0
198.3

821.7
708.1
235.6
472.5
282.3
190.2

-1.2
71.4

6.9
76.6

14.5
92.3

8.1
73.8

10.3
75.5

4.8
77.2

4.3
80.1

25.3
84.9

7.8
89.4

11.7
94.8

13.4
100.2

Business.

Assets and Liabilities1

B i l l i o n s o f dollars, e n d o f period; not s e a s o n a l l y adjusted

1997
Account

1996

1997

1998

1998
Q2

Q3

Q4

Ql

Q2

Q3

Q4

ASSETS
1 Accounts receivable, gross 2
2
Consumer
3
Business
4
Real estate

637.1
244.9
309.5
82.7

663.3
256.8
318.5
87.9

727.1
265.4
355.5
106.2

651.6
255.1
311.7
84.8

660.5
254.5
319.5
86.4

663.3
256.8
318.5
87.9

667.2
251.7
325.9
89.6

676.0
251.3
334.9
89.9

688.6
254.9
335.1
98.5

727.1
265.4
355.5
106.2

55.6
13.1

52.7
13.0

53.6
13.3

57.2
13.3

54.6
12.7

52.7
13.0

52.1
13.1

53.2
13.2

52.4
13.2

53.6
13.3

7 Accounts receivable, net
8 All other

568.3
290.0

597.6
312.4

660.3
321.1

581.2
306.8

593.1
289.1

597.6
312.4

601.9
329.7

609.6
340.1

622.9
313.7

660.3
321.1

9 Total assets

858.3

910.0

981.4

887.9

882.3

910.0

931.6

949.7

936.6

981.4

19.7
177.6

24.1
201.5

25.0
232.3

18.8
193.7

20.4
189.6

24.1
201.5

22.0
211.7

22.3
225.9

24.9
226.9

25.0
232.3

60.3
332.5
174.7
93.5

64.7
328.8
189.6
101.3

64.6
358.4
194.6
106.6

60.0
345.3
171.4
98.7

61.6
322.8
190.1
97.9

64.7
328.8
189.6
101.3

64.6
338.2
193.1
102.1

60.0
348.7
188.9
103.9

58.3
337.6
185.4
103.6

64.6
358.4
194.6
106.6

858.3

910.0

981.4

887.9

882.3

910.0

931.6

949.7

936.6

981.4

5 LESS: Reserves for unearned income
6
Reserves for losses

LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper

12
13
14
15

Debt
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits

16 Total liabilities a n d capital

1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.




2. Before deduction for unearned income and losses,

Securities Market and Corporate Finance
1.52

DOMESTIC FINANCE COMPANIES

A3 3

Owned and Managed Receivables 1

Billions of dollars, amounts outstanding
1998
Type of credit

1996

1997

1999

1998
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Seasonally adjusted
1 Total

761.9

809.8

874.9

852.6

865.9

871.1

874.9

888.5 r

899.1

2
3
4

307.7
111.9
342.4

327.7
121.1
361.0

352.5
131.4
391.0

343.0
128.8
380.7

350.4
132.3
383.2

352.1
134.3
384.7

352.5
131.4
391.0

356.8r
135.7
396.0

361.3
135.7
402.0

Consumer
Real estate
Business

Not seasonally adjusted

5 Total
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36

Consumer
Motor vehicles loans
Motor vehicle leases
Revolving2
Other3
Securitized assets4
Motor vehicle loans
Motor vehicle leases
Revolving
Other
Real estate
One- to four-family
Other
Securitized real estate assets4
One- to four-family
Other
Business
Motor vehicles
Retail loans
Wholesale loans5
Leases
Equipment
Loans
Leases
Other business receivables6
Securitized assets4
Motor vehicles
Retail loans
Wholesale loans
Leases
Equipment
Loans
Leases
Other business receivables6

769.7

818.1

884.0

849.0

864.2

872.8

884.0

888.7 r

898.4

310.6
86.7
92.5
32.5
33.2

330.9
87.0
96.8
38.6
34.4

356.1
103.1
93.3
32.3
33.1

344.0
96.2
94.9
28.4
34.6

350.0
97.6
94.6
33.3
34.6

352.2
99.0
94.4
33.1
34.6

356.1
103.1
93.3
32.3
33.1

356.1r
102.8r
93.9r
32.4r
32.1r

358.1
105.0
94.5
32.2
32.5

36.8
8.7
0.0
20.1
111.9
52.1
30.5

44.3
10.8
0.0
19.0
121.1
59.0
28.9

54.8
12.7
8.7
18.1
131.4
75.7
26.6

51.8
14.2
5.3
18.8
128.8
68.4
30.1

51.6
14.4
5.3
18.6
132.3
72.2
30.2

53.4
14.2
5.3
18.4
134.3
74.1
30.7

54.8
12.7
8.7
18.1
131.4
75.7
26.6

56.0r
12.5
8.6
17.9
135.7
80.1
26.9

54.9
12.3
8.7
18.1
135.7
80.3
27.1

28.9
.4
347.2
67.1
25.1
33.0
9.0
194.8
59.9
134.9
47.6

33.0
.2
366.1
63.5
25.6
27.7
10.2
203.9
51.5
152.3
51.1

29.0
.1
396.5
79.6
28.1
32.8
18.7
198.0
50.4
147.6
69.9

30.2
.1
376.2
65.5
30.0
24.2
11.3
210.8
47.9
162.9
58.9

29.8
.1
382.0
68.5
30.4
27.0
11.1
211.5
47.2
164.3
59.6

29.4
.1
386.3
70.9
29.4
30.3
11.2
212.0
47.8
164.2
60.4

29.0
.1
396.5
79.6
28.1
32.8
18.7
198.0
50.4
147.6
69.9

28.6
.1
396.9
79.1
28.4
31.9
18.9
197.6
49.7
147.8
72.5

28.3
.1
404.6
82.1
28.9
34.3
18.9
200.7
51.0
149.8
73.3

24.0
2.7
21.3
.0
11.3
4.7
6.6
2.4

33.0
2.4
30.5
.0
10.7
4.2
6.5
4.0

29.2
2.6
24.7
1.9
13.0
6.6
6.4
6.8

24.5
2.0
22.5
.0
11.3
4.9
6.4
5.3

25.0
1.9
23.2
.0
12.0
5.6
6.4
5.2

25.8
2.4
23.4
.0
11.8
5.4
6.4
5.3

29.2
2.6
24.7
1.9
13.0
6.6
6.4
6.8

28.2
2.5
23.8
1.9
12.7
6.3
6.4
6.8

28.8
2.4
24.6
1.9
12.9
6.2
6.7
6.8

NOTE. This table has been revised to incorporate several changes resulting from the
benchmarking of finance company receivables to the June 1996 Survey of Finance Companies. In that benchmark survey, and in the monthly surveys that have followed, more detailed
breakdowns have been obtained for some components. In addition, previously unavailable
data on securitized real estate loans are now included in this table. The new information has
resulted in some reclassification of receivables among the three major categories (consumer,
real estate, and business) and in discontinuities in some component series between May and
June 1996.
Includes finance company subsidiaries of bank holding companies but not of retailers and
banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For
ordering address, see inside front cover.
1. Owned receivables are those carried on the balance sheet of the institution. Managed
receivables are outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator. Data are shown




before deductions for unearned income and losses. Components may not sum to totals
because of rounding.
2. Excludes revolving credit reported as held by depository institutions that are subsidiaries of finance companies.
3. Includes personal cash loans, mobile home loans, and loans to purchase other types of
consumer goods such as appliances, apparel, boats, and recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Credit arising from transactions between manufacturers and dealers, that is, floor plan
financing.
6. Includes loans on commercial accounts receivable, factored commercial accounts, and
receivable dealer capital; small loans used primarily for business or farm purposes; and
wholesale and lease paper for mobile homes, campers, and travel trailers.

A34
1.53

DomesticNonfinancialStatistics • June 1999
MORTGAGE MARKETS

Mortgages on New Homes

M i l l i o n s o f dollars e x c e p t as n o t e d

1999

1998
1996

Item

1997

1998
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

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-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2

Yield (percent per year)
6 Contract rate 1
7 Effective rate 1 , 3
8 Contract rate (HUD series) 4

182.4
139.2
78.2
27.2
1.21

180.1
140.3
80.4
28.2
1.02

195.2
151.1
80.0
28.4
.89

192.7
150.8
80.9
28.7
.85

201.4
155.8
79.8
28.6
.86

192.1
148.1
79.5
28.3
.76

206.0
159.0
79.4
28.7
.98

202.3
153.3
78.0
28.4
1.01

204.1
155.4
78.2
28.7
.92

211.0
162.9
79.4
28.8
.82

7.56
7.77
8.03

7.57
7.73
7.76

6.95
7.08
7.00

6.85
6.98
6.64

6.72
6.85
6.86

6.68
6.80
6.84

6.80
6.94
6.83

6.81
6.96
6.80

6.78
6.92
7.02

6.74
6.86
7.03

8.19
7.48

7.89
7.26

7.04
6.43

6.53
6.05

7.07
6.10

7.02
6.25

7.06
6.18

7.08
6.18

7.10
6.42

7.07
6.58

418,323
33,483
384,840'

SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203) 5
10 GNMA securities 6

Activity in secondary markets

FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12
FHA/VA insured
13
Conventional

287,052
30,592
256,460

316,678
31,925
284,753

414,515
33,770
380,745

375,665
32,903
342,762

386,452
32,814
353,638

399,804
33,420
366,384

414,515
33,770
380,745

14 Mortgage transactions purchased (during period)

68,618

70,465

188,448

15,681

18,967

23,557

26,222

Mortgage commitments
15 Issued 7
16 To sell 8

65,859
130

69,965
1,298

193,795
1,880

16,282
249

30,551
393

17,994
0

Mortgage holdings (end of period)8
17 Total
18
FHA/VA insured
19
Conventional

137,755
220
137,535

164,421
177
164,244

255,010
785
254,225

216,521
569
215,952

231,458
569
230,889

Mortgage transactions
20 Purchases
21 Sales

125,103
119,702

117,401
114,258

267,402
250,565

25,366
24,294

128,995

120,089

281,899

23,375

(during

431,836
34,000
397,836

440,139
34,870
405,269

14,005

22,029

16,923

16,803
434

20,754
0

26,509
0

16,891
266

242,270
602
241,668

255,010
785
254,225

257,062
387
256,675

262,921
755 r
262,166 r

277,624
750
276,874

20,629
19,472

23,986
22,660

34,299
28,024

27,672
31,431

25,225
24,232 r

29,921
28,740

25,025

28,903

29,703

23,900

24,829

32,546

period)

FEDERAL HOME LOAN MORTGAGE CORPORATION

(during

period)

22 Mortgage commitments contracted (during period) 9

1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups for purchase of newly built homes; compiled by the Federal Housing
Finance Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the
seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built homes,
assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S.
Department of Housing and Urban Development (HUD). Based on transactions on the first
day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured
by the Federal Housing Administration (FHA) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month.




6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year mortgages insured by the
Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments
converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal Home Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity
under mortgage securities swap programs, whereas the corresponding data for FNMA
exclude swap activity.

Real Estate
1.54

A3 5

MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1997
Type of holder and property

1 All holders
2
3
4
5

By type of property
One- to four-family residences
Multifamily residences
Nonfarm, nonresidential
Farm

By type of holder
6 Major financial institutions
7
Commercial banks2
8
One- to four-family
9
Multifamily
10
Nonfarm, nonresidential
11
Farm
12
Savings institutions3
13
One- to four-family
14
Multifamily
15
Nonfarm, nonresidential
16
Farm
17
Life insurance companies
18
One- to four-family
19
Multifamily
20
Nonfarm, nonresidential
21
Farm
22 Federal and related agencies
23
Government National Mortgage Association
24
One- to four-family
25
Multifamily
26
Farmers Home Administration4
27
One- to four-family
28
Multifamily
29
Nonfarm, nonresidential
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
Nonfarm, nonresidential
38
Farm
39
Federal Deposit Insurance Corporation
40
One- to four-family
41
Multifamily
42
Nonfarm, nonresidential
43
Farm
44
Federal National Mortgage Association
45
One- to four-family
46
Multifamily
47
Federal Land Banks
48
One- to four-family
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
52
Multifamily
53 Mortgage pools or trusts5
54
Government National Mortgage Association
55
One- to four-family
56
Multifamily
57
Federal Home Loan Mortgage Corporation
58
One- to four-family
59
Multifamily
60
Federal National Mortgage Association
61
One- to four-family
62
Multifamily
63
Farmers Home Administration4
64
One- to four-family
65
Multifamily
66
Nonfarm, nonresidential
67
Farm
68
Private mortgage conduits
69
One- to four-family 6
70
Multifamily
71
Nonfarm, nonresidential
72
Farm
73 Individuals and others7
74
One- to four-family
75
Multifamily
76
Nonfarm, nonresidential
77
Farm

1995

1996

Q4

Q1

Q2

Q3

Q4P

4,610,350

4,928,367

5,257,422

5,257,422

5,371,196

5,487,535

5,623,695

5,782,027

3,532,977
286,875
705,937
84,561

3,755,719
309,321
776,193
87,134

3,998,763
329,733
838,627
90,299

3,998,763
329,733
838,627
90,299

4,082,959
338,439
858,641
91,157

4,163,964
347,449
883,476
92,646

4,268,149
353,546
908,192
93,808

4,375,730
362,092
949,230
94,974

1,900,089
1,090,189
669,434
43,837
353,088
23,830
596,763
482,353
61,987
52,135
288
213,137
8,890
28,714
165,876
9,657

1,981,885
1,145,389
698,508
46,675
375,322
24,883
628,335
513,712
61,570
52,723
331
208,161
6,977
30,750
160,314
10,120

2,083,978
1,245,315
762,533
50,651
405,144
26,986
631,822
520,672
59,543
51,252
354
206,841
7,187
30,402
158,780
10,472

2,083,978
1,245,315
762,533
50,651
405,144
26,986
631,822
520,672
59,543
51,252
354
206,841
7,187
30,402
158,780
10,472

2,114,528
1,271,037
779,941
51,688
411,949
27,458
637,012
527,036
59,074
50,532
369
206,480
7,174
31,156
157,696
10,454

2,121,939
1,281,849
785,019
52,077
416,434
28,319
632,359
522,088
58,908
50,978
386
207,730
7,218
31,849
158,146
10,517

2,137,412
1,295,768
784,987
53,049
429,045
28,688
634,244
525,842
56,706
51,297
399
207,399
7,206
31,661
158,032
10,500

2,193,378
1,337,664
810,680
53,586
444,363
29,034
643,773
533,680
56,806
52,871
417
211,940
7,364
32,354
161,492
10,730

308,757
2
2
0
41,791
17,705
11,617
6,248
6,221
9,809
5,180
4,629
1,864
691
647
525
0
4,303
492
428
3,383
0
178,807
163,648
15,159
28,428
1,673
26,755
43,753
39,901
3,852

295,192
2
2
0
41,596
17,303
11,685
6,841
5,768
6,244
3,524
2,719
0
0
0
0
0
2,431
365
413
1,653
0
168,813
155,008
13,805
29,602
1,742
27,860
46,504
41,758
4,746

286,167
8
8
0
41,195
17,253
11,720
7,370
4,852
3,821
1,767
2,054
0
0
0
0
0
724
109
123
492
0
161,308
149,831
11,477
30,657
1,804
28,853
48,454
42,629
5,825

286,167
8
8
0
41,195
17,253
11,720
7,370
4,852
3,821
1,767
2,054
0
0
0
0
0
724
109
123
492
0
161,308
149,831
11,477
30,657
1,804
28,853
48,454
42,629
5,825

286,877
8
8
0
40,972
17,160
11,714
7,369
4,729
3,694
1,641
2,053
0
0
0
0
0
786
118
134
534
0
160,048
149,254
10,794
31,005
1,824
29,181
50,364
44,440
5,924

287,161
8
8
0
40,921
17,059
11,722
7,497
4,644
3,631
1,610
2,021
0
0
0
0
0
564
85
96
384
0
159,816
149,383
10,433
31,352
1,845
29,507
50,869
44,597
6,272

287,125
7
7
0
40,907
17,025
11,736
7,566
4,579
3,405
1,550
1,855
0
0
0
0
0
482
72
82
328
0
159,104
149,069
10,035
32,009
1,883
30,126
51,211
44,254
6,957

291,858
7
7
0
40,851
16,895
11,739
7,705
4,513
3,405
1,550
1,855
0
0
0
0
0
361
54
61
245
0
157,675
147,594
10,081
32,473
1,911
30,562
57,085
49,106
7,979

1,863,210
472,283
461,438
10,845
515,051
512,238
2,813
582,959
569,724
13,235
11
2
0
5
4
292,906
227,800
15,584
49,522
0

2,064,882
506,340
494,158
12,182
554,260
551,513
2,747
650,780
633,210
17,570
3
0
0
0
3
353,499
261,900
21,967
69,633
0

2,272,999
536,810
523,156
13,654
579,385
576,846
2,539
709,582
687,981
21,601
2
0
0
0
2
447,219
318,000
29,264
99,955
0

2,272,999
536,810
523,156
13,654
579,385
576,846
2,539
709,582
687,981
21,601
2
0
0
0
2
447,219
318,000
29,264
99,955
0

2,330,674
533,011
519,152
13,859
583,144
580,715
2,429
730,832
708,125
22,707
2
0
0
0
2
483,685
336,824
33,477
113,384
0

2,442,603
537,586
523,243
14,343
609,791
607,469
2,322
761,359
737,631
23,728
2
0
0
0
2
533,865
364,316
38,144
131,405
0

2,548,050
541,431
526,934
14,497
635,726
633,124
2,602
798,460
770,979
27,481
2
0
0
0
2
572,431
391,736
40,893
139,802
0

2,631,790
537,431
522,483
14,948
646,459
643,465
2,994
834,518
804,205
30,313
1
0
0
0
1
613,382
410,900
44,690
157,792
0

538,295
371,806
73,528
75,154
17,806

586,408
376,039
82,492
109,707
18,169

614,279
388,988
90,879
115,633
18,779

614,279
388,988
90,879
115,633
18,779

639,117
409,548
93,430
117,176
18,964

635,833
402,395
95,534
118,633
19,271

651,109
413,480
95,992
122,123
19,514

665,001
425,836
94,686
124,762
19,717

1. Multifamily debt refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by bank trust
departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from
FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting
changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by
the agency indicated.




1998

1997

6. Includes securitized home equity loans.
7. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
SOURCE. Based on data from various institutional and government sources. Separation of
nonfarm mortgage debt by type of property, if not reported directly, and interpolations and
extrapolations, when required for some quarters, are estimated in part by the Federal Reserve.
Line 69 from Inside Mortgage Securities and other sources.

A36
1.55

DomesticNonfinancialStatistics • June 1999
CONSUMER CREDIT1
Millions of dollars, amounts outstanding, end of period

1998
Holder and type of credit

1996

1997

1999

1998
Sept.

Oct.

Nov.

Dec.

Jan.'

Feb.

Seasonally adjusted
1 Total
2 Automobile
3 Revolving
4 Other2

1,181,913

1,233,099

1,299,207"'

1,283,573'

l,294,917 r

1,296,630r

1,299,207r

1,314,471

1,323,166

392,321
499,486
290,105

413,369
531,140
288,590

447,013r
560,515r
291,680r

435,592r
551,673r
296,308r

437,820'
557,644'
299,453'

442,430'
556,535'
297,665'

447,013'
560,515'
291,680'

454,096
566,690
293,684

459,265
568,979
294,922

Not seasonally adjusted
1,211,590

1,264,103

1,331,742r

l,286,589 r

l,297,576 r

1,304,499r

1,331,742""

1,323,250

1,316,336

By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business3
Pools of securitized assets4

526,769
152,391
144,148
44,711
77,745
265,826

512,563
160,022
152,362
47,172
78,927
313,057

508,932
168,491
155,406'
51,611
74,877r
372,425

497,870
159,141
154,339r
50,307
65,539r
359,393

502,076
165,573
154,991'
50,966
65,962'
358,008

498,838
166,622
155,221'
51,625
66,615'
365,578

508,932
168,491
155,406'
51,611
74,877'
372,425

507,264
167,305
155,726
52,047
70,950
369,958

497,701
169,664
155,141
52,482
67,915
373,433

By major type of credit
12 Automobile
Commercial banks
13
14
Finance companies
Pools of securitized assets4
IS

395,609
157,047
86,690
51,719

416,962
155,254
87,015
64,950

450,968r
158,072
103,094
72,955

439,598'
156,287
96,183
72,146

443,120'
156,788
97,637
71,788

446,566'
157,126
98,954
72,582

450,968'
158,072
103,094
72,955

452,181
160,273
102,822
73,232

454,136
159,922
104,987
73,232

16 Revolving
Commercial banks
17
Finance companies
18
19
Nonfinancial business3
20
Pools of securitized assets4

522,860
228,615
32,493
44,901
188,712

555,858
219,826
38,608
44,966
221,465

586,528'
210,346
32,309
39,166'
272,327

549,001'
197,615
28,375
33,743
259,348

556,006'
200,869
33,309
33,762
258,139

559,211'
196,923
33,056
33,756
265,311

586,528'
210,346
32,309
39,166'
272,327

575,675
204,774
32,414
36,389
269,918

568,991
197,571
32,195
34,295
272,551

21 Other
22
Commercial banks
Finance companies
23
24
Nonfinancial business3
25
Pools of securitized assets4

293,121
141,107
33,208
32,844
25,395

291,283
137,483
34,399
33,961
26,642

294,246r
140,514
33,088
35,71 r
27,143

297,990'
143,968
34,583
31,796'
27,899

298,450'
144,419
34,627
32,200'
28,081

298,722'
144,789
34,612
32,859'
27,685

294,246'
140,514
33,088
35,711'
27,143

295,394
142,217
32,069
34,561
26,808

293,209
140,208
32,482
33,620
27,650

5 Total
6
7
8
9
10
11

1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Comprises mobile home loans and all other loans that are not included in automobile or
revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be
secured or unsecured.

1.56

3. Includes retailers and gasoline companies.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Totals include estimates for certain holders for which only consumer credit totals are
available.

TERMS OF CONSUMER CREDIT1
Percent per year except as noted

1998
Item

1996

1997

1999

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

INTEREST RATES
Commercial banks2

9.05
13.54

9.02
13.90

8.72
13.74

8.71
13.45

n.a.

n.a.
n.a.

8.62
13.75

n.a.
n.a.

n.a.
n.a.

8.34
13.41

Credit card plan

15.63
15.50

15.77
15.57

15.71
15.59'

15.83
15.85

n.a.

n.a.
n.a.

15.69
15.54'

n.a.
n.a.

n.a.
n.a.

15.41
14.73

Auto finance companies

9.84
13.53

7.12
13.27

6.30
12.64

6.00
12.68

5.92
12.65

6.33
12.58

6.79
12.41

6.43
12.31

6.22
11.81

6.43
12.08

Maturity (months)

51.6
51.4

54.1
51.0

52.1
53.5

53.0
54.1

53.1
54.2

53.1
54.2

52.8
54.3

52.2
54.2

52.1
56.0

53.4
55.9

Loan-to-value ratio

91
100

92
99

92
99

93
101

93
101

92
100

91
100

91
100

92
99

92
99

16,987
12,182

18,077
12,281

19,083
12,691

19,068
12,407

19,028
12,731

19,199
12,914

19,590
13,112

19,734
13,202

19,628
13,497

19,304
13,604

OTHER TERMS3

Amount financed (dollars)

1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.




2. Data are available for only the second month of each quarter,
3. At auto finance companies,

Flow of Funds
1.57

A3 7

FUNDS RAISED IN U.S. CREDIT MARKETS 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1998

1997
Transaction category or sector

1993

1994
Q2

Q3

Q4

Q1

Q2

Q3

Q4

Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors . . .

587.1

577.1

703.4

720.3

736.9

612.0

826.5

858.3

904.7

925.4

855.5

1,118.3

By sector and instrument
2 Federal government
3 Treasury securities
4
Budget agency securities and mortgages

256.1
248.3
7.8

155.9
155.7
.2

144.4
142.9
1.5

145.0
146.6
-1.6

23.1
23.2
-.1

-43.5
-43.8
.2

30.3
31.2
-.9

40.8
39.0
1.7

-30.0
-27.6
-2.4

-70.9
-69.4
-1.4

-136.5
-136.1
-.4

26.9
14.7
12.2

5 Nonfederal

331.0

421.3

558.9

575.3

713.8

655.6

796.2

817.5

934.7

996.2

991.9

1,091.4

6
7
8
9
in
ii
1?
13
14
15
16

By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit

10.0
74.8
75.2
6.4
-18.9
122.9
156.1
-4.7
-29.6
1.0
60.7

21.4
-35.9
23.3
75.2
34.0
178.4
179.7
.5
-4.1
2.2
124.9

18.1
-48.2
73.3
101.4
67.2
208.1
176.0
9.7
20.9
1.6
138.9

-.9
2.6
72.5
63.0
36.4
313.0
256.4
17.1
36.9
2.6
88.8

13.7
71.4
90.7
106.3
66.2
312.9
243.0
15.1
51.6
3.2
52.5

20.3
59.6
86.1
114.1
20.8
295.2
211.7
18.9
60.1
4.5
59.5

14.5
88.9
122.9
29.0
78.1
412.5
334.0
14.7
60.3
3.5
50.3

12.8
103.2
74.4
138.6
142.3
308.4
208.6
27.0
69.9
2.9
37.8

51.1
116.7
157.2
-2.8
84.3
471.3
372.8
28.3
66.8
3.4
57.0

3.8
100.1
160.8
185.3
34.6
446.8
320.3
31.1
89.4
6.0
64.8

85.6
83.6
87.1
125.8
73.5
453.0
361.5
12.4
74.5
4.6
83.4

-43.0
87.0
123.8
144.0
117.0
596.0
453.3
14.3
123.7
4.7
66.6

17
18
19
20
?1
22

By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government

207.7
57.2
51.4
3.2
2.6
66.2

312.6
155.0
147.4
3.3
4.4
-46.2

345.4
265.0
231.5
30.6
2.9
-51.5

359.8
222.3
170.7
46.8
4.8
-6.8

333.6
324.1
257.9
59.9
6.2
56.1

328.0
285.1
214.1
64.7
6.4
42.5

368.4
355.2
283.8
66.7
4.7
72.6

302.1
423.1
341.7
72.1
9.2
92.3

437.5
402.9
321.1
74.5
7.3
94.3

457.2
460.1
357.3
95.7
7.2
78.9

452.7
466.6
374.6
85.9
6.1
72.6

592.7
423.3
318.7
98.8
5.8
75.4

23 Foreign net borrowing in United States
24
Commercial paper
Bonds
75
7.6 Bank loans n.e.c
27
Other loans and advances

69.8
-9.6
82.9
.7
-4.2

-14.0
-26.1
12.2
1.4
-1.5

71.1
13.5
49.7
8.5
-.5

76.9
11.3
55.8
9.1
.8

56.9
3.7
46.7
8.5
-2.0

61.7
10.4
38.7
11.5
1.2

92.5
-11.6
100.3
7.3
-3.5

42.3
.7
32.4
15.7
-6.5

67.8
55.3
14.3
5.2
-7.0

85.9
-25.5
107.5
8.4
-4.4

-28.0
6.2
-35.3
3.6
-2.4

-38.0
-4.7
-32.9
9.9
-10.3

28 Total domestic plus foreign

656.9

563.1

774.5

797.3

793.8

673.7

919.0

900.5

972.5

1,011.3

827.5

1,080.3

Financial sectors
29 Total net borrowing by financial sectors
30
31
32
33
34
35
36
37
38
39
40
41
47
43
44
45
46
47
48
49
50
51

By instrument
Federal government-related
Government-sponsored enterprise securities
Mortgage pool securities
Loans from U.S. government
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
By borrowing sector
Commercial banking
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations




294.4

468.4

456.2

552.1

652.8

667.9

601.9

993.2

936.4

994.9

1,061.5

1,471.3

165.3
80.6
84.7
.0

287.5
176.9
115.4
-4.8

204.1
105.9
98.2
.0

231.5
90.4
141.1
.0

212.8
98.4
114.4
.0

286.2
198.1
88.1
.0

161.0
46.4
114.6
.0

298.1
157.9
140.3
.0

227.3
142.5
84.8
.0

413.4
166.4
247.0
.0

561.6
294.0
267.5
.0

785.7
614.5
171.2
.0

129.1
-5.5
123.1
-14.4
22.4
3.6

180.9
40.5
121.8
-13.7
22.6
9.8

252.1
42.7
196.7
4.8
3.4
4.6

320.7
92.2
175.5
20.0
27.9
5.0

440.0
166.7
208.2
13.4
35.6
16.2

381.7
77.0
228.1
-2.0
63.0
15.5

440.9
168.8
202.3
25.9
37.5
6.5

695.0
244.2
337.8
26.1
61.7
25.2

709.1
237.4
340.5
78.6
32.7
19.8

581.5
134.8
376.9
-21.1
76.0
14.8

499.9
141.0
178.3
62.0
82.3
36.3

685.7
130.7
337.2
-16.3
173.7
60.3

13.4
11.3
.2
.2
80.6
84.7
83.6
-1.4
.0
3.4
12.0
6.3

20.1
12.8
.2
.3
172.1
115.4
72.9
48.7
-11.5
13.7
.5
23.1

22.5
2.6
-.1
-.1
105.9
98.2
141.1
50.2
.4
5.6
-5.0
34.9

13.0
25.5
.1
1.1
90.4
141.1
153.6
45.9
12.4
7.0
-2.0
64.1

46.1
19.7
.1
.2
98.4
114.4
204.4
48.7
-4.7
36.8
8.1
80.7

76.4
31.9
.2
.1
198.1
88.1
120.7
120.5
-12.2
30.6
34.9
-21.5

32.5
22.3
.2
.2
46.4
114.6
226.2
8.9
11.4
30.8
-6.9
115.3

61.0
41.7
.3
-.3
157.9
140.3
385.1
59.6
-17.4
58.9
7.0
99.2

83.5
10.6
.5
.0
142.5
84.8
282.1
80.1
49.2
66.2
-1.0
137.9

80.0
31.2
.2
-.6
166.4
247.0
368.1
101.8
-48.0
62.1
20.0
-33.3

61.7
63.7
1.0
1.6
294.0
267.5
293.5
-14.0
2.0
82.8
-2.6
10.1

66.5
106.8
.4
1.8
614.5
171.2
324.2
76.8
2.0
50.0
12.3
44.9

A38
1.57

DomesticNonfinancialStatistics • June 1999
FUNDS RAISED IN U S . CREDIT MARKETS 1 —Continued
1997
Transaction category or sector

1993

1994

1995

1996

1998

1997
Q2

Q3

Q4

Q1

Q2

Q3

Q4

All sectors
52 Total net borrowing, all sectors

951.4

1,031.6

1,230.7

1,349.4

1,446.6

1,341.5

1,521.0

1,893.7

1,908.9

2,006.2

1,889.0

2,551.6

53
54
55
56
57
58
59
60

-5.1
421.4
74.8
281.2
-7.2
-.8
126.5
60.7

35.7
448.1
-35.9
157.3
62.9
50.3
188.2
124.9

74.3
348.5
-48.2
319.6
114.7
70.2
212.7
138.9

102.6
376.5
2.6
303.8
92.1
65.1
318.0
88.8

184.1
235.9
71.4
345.7
128.2
99.8
329.1
52.5

107.7
242.6
59.6
352.9
123.6
85.0
310.7
59.5

171.7
191.3
88.9
425.5
62.2
112.1
419.0
50.3

257.7
338.9
103.2
444.6
180.5
197.5
333.6
37.8

343.8
197.3
116.7
512.0
81.0
110.0
491.1
57.0

113.1
342.5
100.1
645.3
172.7
106.1
461.6
64.8

232.7
425.1
83.6
230.1
191.4
153.4
489.4
83.4

83.0
812.5
87.0
428.1
137.5
280.5
656.3
66.6

Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit

Funds raised through mutual funds and corporate equities
61 Total net issues

429.7

125.2

144.3

234.2

186.4

173.9

239.4

157.7

213.9

267.8

-118.1

24.8

62 Corporate equities
63
Nonfinancial corporations
64
Foreign shares purchased by U.S. residents
65
Financial corporations
66 Mutual fund shares

137.7
21.3
63.4
53.0
292.0

24.6
-44.9
48.1
21.4
100.6

-3.1
-58.3
50.4
4.8
147.4

-3.4
-64.2
60.0
.8
237.6

-78.8
-114.4
41.3
-5.6
265.1

-76.2
-100.0
54.4
-30.6
250.1

-60.5
-124.0
64.3
-.8
299.9

-103.3
-143.3
-.3
40.3
261.0

-107.5
-139.2
13.6
18.2
321.4

-115.9
-129.1
4.0
9.2
383.7

-319.0
-308.4
-32.9
22.2
200.9

-171.4
-474.4
319.1
-16.1
196.2

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
F.2 through F.4. For ordering address, see inside front cover.




Flow of Funds
1.58

A3 7

SUMMARY OF FINANCIAL TRANSACTIONS 1
B i l l i o n s o f dollars e x c e p t as noted; quarterly data at s e a s o n a l l y adjusted annual rates
1998

1997
Transaction category or sector

1993

1994

1995

1996

1997
Q2

Q3

Q4

Ql

Q2

Q3

Q4

NET LENDING IN CREDIT MARKETS2
951.4

1,031.6

1,230.7

1,349.4

1,446.6

1,341.5

1,521.0

1,893.7

1,908.9

2,006.2

1,889.0

2,551.6

40.4
-.2
9.1
-1.1
32.6
-18.4
129.3
800.0
36.2
142.2
149.6
-9.8
.0
2.4
-23.3
21.7
9.5
100.4
27.7
50.2
22.7
20.4
159.5
20.0
87.8
84.7
81.0
-20.9
.0
.6
14.8
-35.1

237.7
274.4
17.7
.6
-55.0
-27.5
132.3
689.0
31.5
163.4
148.1
11.2
.9
3.3
6.7
28.1
7.1
72.0
24.9
46.1
22.3
30.0
-7.1
-3.7
117.8
115.4
65.8
48.3
-24.0
4.7
-44.2
-16.2

-95.6
-.1
-8.8
4.7
-91.4
-.2
273.9
1,052.5
12.7
265.9
186.5
75.4
-.3
4.2
-7.6
16.2
-8.3
100.0
21.5
56.0
27.5
86.5
52.5
10.5
86.7
98.2
119.3
49.9
-3.4
2.2
90.1
-23.8

-17.7
-18.4
20.0
4.4
-23.7
-7.7
417.3
957.6
12.3
187.5
119.6
63.3
3.9
.7
19.9
25.5
-7.7
69.6
22.5
52.3
45.9
88.8
48.9
4.7
84.2
141.1
123.4
18.4
8.2
3.8
-15.7
24.0

-106.7
-124.0
14.8
2.7
-.2
4.9
310.1
1,238.3
38.3
324.3
274.9
40.2
5.4
3.7
-4.7
16.8
7.6
94.3
25.2
65.5
36.6
87.5
80.9
-3.4
94.3
114.4
166.0
21.9
-9.1
8.8
14.9
58.4

-56.5
-72.2
-28.7
2.7
41.8
5.7
308.5
1,083.8
42.9
290.0
286.7
-3.6
5.1
1.8
23.8
25.2
10.7
171.3
28.0
61.6
34.6
26.1
90.0
-3.4
118.9
88.1
105.9
.9
-24.4
8.4
-17.4
2.8

-155.3
-148.7
31.7
2.8
-41.0
3.3
402.9
1,270.0
22.9
226.2
220.7
4.6
-5.0
5.8
-35.3
13.6
7.3
92.9
32.0
64.6
79.1
121.5
108.0
-3.4
55.6
114.6
163.7
68.3
82.9
7.2
18.0
30.4

36.4
8.2
-2.6
2.9
27.9
9.0
208.7
1,639.7
52.9
464.9
386.2
58.2
19.4
1.1
-2.0
7.7
8.8
34.1
34.7
79.5
9.5
144.2
61.8
-3.4
158.5
140.3
332.2
-21.3
-93.6
17.6
71.7
141.4

-218.5
-227.5
13.2
3.0
-7.3
15.5
238.6
1,873.3
27.4
292.9
260.5
11.6
15.3
5.5
10.1
16.5
2.4
95.7
23.4
74.5
81.7
172.0
143.6
-2.4
165.2
84.8
223.0
28.7
58.8
13.2
245.8
115.9

404.7
310.1
-45.6
3.2
137.1
12.8
314.2
1,274.5
7.7
136.1
130.5
18.1
-17.6
5.1
-1.8
22.7
3.1
66.5
-1.5
130.1
60.6
200.1
152.6
-2.4
140.4
247.0
337.0
27.1
-56.4
9.3
-183.1
-20.5

7.8
-137.1
23.3
3.3
118.3
13.9
58.6
1,808.7
48.3
242.6
286.7
-53.1
6.0
2.9
33.9
20.5
2.0
87.8
-7.7
95.5
50.9
247.5
93.5
-2.4
250.0
267.5
248.0
79.7
4.5
-2.4
77.0
-27.9

-173.8
-174.4
-11.0
3.4
8.2
10.7
385.1
2,329.6
.8
554.6
569.7
-24.1
-7.4
16.4
101.1
28.1
3.9
136.6
3.0
174.4
75.1
356.4
98.6
-2.0
401.0
171.2
292.9
119.4
6.0
-10.0
-230.5
49.1

34 Net flows through credit m a r k e t s

951.4

1,031.6

1,230.7

1,349.4

1,446.6

1,341.5

1,521.0

1,893.7

1,908.9

2,006.2

1,889.0

2,551.6

Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank transactions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Corporate equities
Mutual fund shares
Trade payables
Security credit
Life insurance reserves
Pension fund reserves
Taxes payable
Investment in bank personal trusts
Noncorporate proprietors' equity
Miscellaneous

.8
.0
.4
-18.5
50.5
117.3
-70.3
-23.5
20.2
71.3
137.7
292.0
52.2
61.4
37.1
267.4
11.4
.9
25.9
340.9

-5.8
.0
.7
52.9
89.8
-9.7
-39.9
19.6
43.3
78.2
24.6
100.6
94.0
-.1
35.5
258.9
2.6
17.8
50.3
248.3

8.8
2.2
.6
35.3
9.9
-12.7
96.6
65.6
142.3
110.5
-3.1
147.4
101.5
26.7
45.8
228.5
6.2
4.0
62.1
459.0

-6.3
-.5
.1
85.9
-51.6
15.8
97.2
114.0
145.8
41.4
-3.4
237.6
76.9
52.4
44.5
243.6
16.2
-8.6
43.3
448.8

.7
-.5
.0
107.4
-19.7
41.5
97.1
122.5
157.6
120.9
-78.8
265.1
99.2
111.0
54.3
306.9
14.6
75.0
25.1
568.9

.4
.0
.2
23.9
-56.3
50.6
34.0
174.7
98.9
202.9
-76.2
250.1
48.7
124.4
62.4
326.5
14.1
71.8
39.6
523.0

2.4
.0
1.3
116.1
-25.0
-38.4
47.0
188.4
226.2
115.5
-60.5
299.9
136.1
91.1
63.9
337.3
30.1
80.8
38.7
554.3

17.5
.0
-1.9
103.0
79.8
71.9
155.9
70.7
147.8
117.9
-103.3
261.0
151.9
116.8
37.4
300.3
-7.7
78.4
-26.8
404.1

1.0
.0
.3
-45.3
-107.1
65.6
154.9
186.2
248.0
259.5
-107.5
321.4
88.5
165.3
49.3
261.5
9.7
50.3
20.2
1,206.6

8.1
.0
.2
89.0
46.6
109.3
36.2
-16.5
186.4
-113.6
-115.9
383.7
4.9
128.3
38.3
284.9
-2.7
57.5
-8.7
224.8

11.4
.0
1.7
87.3
14.3
-61.7
115.2
81.5
400.7
228.6
-319.0
200.9
81.4
179.6
31.7
278.0
34.0
47.8
-43.1
637.4

8.6
.0
-2.3
36.8
-103.3
81.3
313.6
115.1
306.6
-153.4
-171.4
196.2
77.4
-71.0
49.0
352.6
-5.7
67.1
15.8
556.8

2,326.3

2,093.3

2,767.8

2,942.6

3,515.4

3,255.0

3,726.3

3,868.4

4,737.4

3,347.3

3,896.7

4,221.6

-.2
-5.7
4.2
46.4
15.8
-169.5

-.2
43.0
-2.7
69.4
16.6
-155.9

-.5
25.1
-3.1
17.5
21.1
-198.5

-.9
59.4
-3.3
.6
20.4
-61.0

-.6
107.4
-19.9
65.3
17.2
-228.4

-.5
10.7
-26.7
168.9
29.3
-396.1

.7
93.8
-50.0
23.9
15.2
-42.4

-2.4
148.3
-33.0
190.8
5.0
-550.3

-.2
-94.6
30.7
115.2
6.8
95.0

-.3
148.3
11.4
-175.3
5.0
-75.8

1.1
69.2
19.4
90.5
25.8
-105.0

-3.0
31.3
-48.4
.7
-.8
-79.1

-1.5
-1.3
-4.0

-4.8
-2.8
1.5

-6.0
-3.8
-11.7

.5
-4.0
-26.7

-2.7
-3.9
21.5

-8.3
-4.3
-58.7

10.0
-3.0
72.6

-7.9
-5.0
81.9

7.5
-4.0
10.4

-41.7
-3.0
-110.7

24.1
-3.2
-58.0

20.4
-2.1
-30.8

2,442.0

2,129.3

2,927.7

2,957.6

3,559.5

3,540.7

3,605.4

4,040.9

4,570.6

3,589.6

3,832.9

4,333.5

1 Total net lending in credit m a r k e t s
7 Domestic nonfederal nonfinancial sectors
Household
4
Nonfinancial corporate business
5
Nonfarm noncorporate business
6
State and local governments
7 Federal government
8 Rest of the world
9 Financial sectors
10
Monetary authority
11
Commercial banking
U.S.-chartered banks
17
N
Foreign banking offices in United States
14
Bank holding companies
IS
Banks in U.S.-affiliated areas
16
Savings institutions
17
Credit unions
18
Bank personal trusts and estates
19
Life insurance companies
70
Other insurance companies
71
Private pension funds
77
State and local government retirement funds
73
Money market mutual funds
74
Mutual funds
75
Closed-end funds
Government-sponsored enterprises
26
27
Federally related mortgage pools
78
Asset-backed securities issuers (ABSs)
79
Finance companies
30
Mortgage companies
31
Real estate investment trusts (REITs)
37
Brokers and dealers
33
Funding corporations
RELATION OF LIABILITIES
TO FINANCIAL ASSETS

35
36
37
38
39
40
41
47
43
44
45
46
47
48
49
50
51
57
53
54

55 Total financial sources
56
57
58
59
60
61

Liabilities not identified as assets (—)
Treasury currency
Foreign deposits
Net interbank liabilities
Security repurchase agreements
Taxes payable
Miscellaneous

Floats not included in assets (—)
62 Federal government checkable deposits
63 Other checkable deposits
64 Trade credit
65 Total identified to sectors as assets

1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
F.l and F.5. For ordering address, see inside front cover.




2. Excludes corporate equities and mutual fund shares.

A40 Domestic Financial Statistics • June 1999
1.59

SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
B i l l i o n s of dollars, e n d of period

1997
Transaction category or sector

1995

19 98

1997
Q3

Q2

Q4

QI

Q2

Q3

Q4

Nonfinancial sectors

1 Total c r e d i t m a r k e t d e b t o w e d b y
domestic nonfinancial sectors

13,018.6

13,721.9

14,442.3

15,177.6

14,721.3

14,924.5

15,177.6

15,405.6

15,598.7

15,809.8

16,130.1

By sector and instrument
2 Federal government
Treasury securities
3
4
Budget agency securities and mortgages

3,492.3
3,465.6
26.7

3,636.7
3,608.5
28.2

3,781.8
3,755.1
26.6

3,804.9
3,778.3
26.5

3,760.6
3,734.3
26.3

3,771.2
3,745.1
26.1

3,804.9
3,778.3
26.5

3,830.8
3,804.8
25.9

3,749.0
3,723.4
25.6

3,720.2
3,694.7
25.5

3,752.2
3,723.7
28.5

5 Nonfederal

9,526.3

10,085.2

10,660.5

11,372.7

10,960.7

11,153.3

11,372.7

11,574.9

11,849.8

12,089.6

12,377.8

6
7
8
9
10
11
12
13
14
15
16

By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
B a n k loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit

139.2
1,341.7
1,253.0
759.9
669.6
4,378.9
3,357.0
269.5
669.5
83.0
983.9

157.4
1,293.5
1,326.3
861.3
736.9
4,587.0
3,533.0
279.2
690.3
84.6
1,122.8

156.4
1,296.0
1,398.8
924.3
773.2
4,900.1
3,755.7
300.0
757.2
87.1
1,211.6

168.6
1,367.5
1,489.5
1,030.7
839.5
5,212.9
3,998.8
315.1
808.8
90.3
1,264.1

179.3
1,326.8
1,440.2
995.9
788.5
5,024.9
3,855.3
304.6
776.3
88.7
1,205.0

176.6
1,340.2
1,470.9
995.2
802.9
5,140.7
3,951.5
308.3
791.3
89.6
1,226.7

168.6
1,367.5
1,489.5
1,030.7
839.5
5,212.9
3,998.8
315.1
808.8
90.3
1,264.1

193.1
1,397.1
1,528.8
1,032.0
866.1
5,321.8
4,083.0
322.1
825.5
91.2
1,236.0

202.5
1,429.3
1,569.0
1,084.4
873.5
5,434.4
4,164.0
329.9
847.9
92.6
1,256.8

216.9
1,439.9
1,590.8
1,107.1
886.1
5,561.5
4,268.1
333.0
866.5
93.8
1,287.4

193.0
1,464.3
1,621.8
1,143.7
916.8
5,704.7
4,375.7
336.6
897.4
95.0
1,333.6

17
18
19
20
21
22

By borrowing
sector
Household
Nonfinancial business
Corporate
N o n f a r m noncorporate
Farm
State and local government

4,454.0
3,950.6
2,686.6
1,121.8
142.2
1,121.7

4,804.3
4,210.7
2,913.2
1,152.4
145.1
1,070.2

5,135.4
4,461.7
3,112.6
1,199.2
149.9
1,063.4

5,471.7
4,781.6
3,366.4
1,259.1
156.1
1,119.5

5,261.2
4,613.5
3,235.6
1,224.4
153.5
1,086.1

5,373.0
4,684.8
3,289.1
1,240.4
155.2
1,095.5

5,471.7
4,781.6
3,366.4
1,259.1
156.1
1,119.5

5,529.3
4,901.2
3,468.3
1,277.8
155.1
1,144.3

5,651.4
5,027.6
3,565.3
1,301.6
160.6
1,170.8

5,786.2
5,124.7
3,639.7
1,322.5
162.5
1,178.8

5,958.3
5,219.8
3,709.3
1,347.8
162.7
1,199.8

23 F o r e i g n c r e d i t m a r k e t d e b t h e l d in
United States

370.8

441.9

518.8

569.6

539.2

557.7

569.6

584.1

606.6

600.2

591.6

24
25
26
27

42.7
242.3
26.1
59.8

56.2
291.9
34.6
59.3

67.5
347.7
43.7
60.0

65.1
394.4
52.1
58.0

71.3
361.2
46.4
60.3

64.3
386.3
48.2
58.9

65.1
394.4
52.1
58.0

76.7
398.0
53.4
55.9

71.4
424.9
55.5
54.8

74.0
416.0
56.4
53.8

72.9
407.8
58.9
52.0

13,389.4

14,163.8

14,961.1

15,747.2

15,260.5

15,482.2

15,747.2

15,989.7

16,205.3

16,410.0

16,721.7

Commercial paper
Bonds
B a n k loans n.e.c
Other loans and advances

28 Total credit m a r k e t debt owed by nonfinancial
sectors, domestic a n d foreign

Financial sectors

29 Total credit m a r k e t debt owed by
financial sectors

3,822.2

4,281.0

4,833.2

5,452.9

5,086.3

5,208.3

5,452.9

5,682.0

5,935.5

6,205.7

6,568.9

30
31
32
33
34
3B
36
37
38
39

By instrument
Federal government-related
Government-sponsored enterprise securities
Mortgage pool securities
Loans from U.S. government
Private
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages

2,172.7
700.6
1,472.1
.0
1,649.5
441.6
1,008.8
48.9
131.6
18.7

2,376.8
806.5
1,570.3
.0
1,904.2
486.9
1,205.4
53.7
135.0
23.3

2,608.3
896.9
1,711.4
.0
2,224.9
579.1
1,380.9
73.7
162.9
28.3

2,821.0
995.3
1,825.8
.0
2,631.9
745.7
1,556.1
87.1
198.5
44.5

2,706.2
944.2
1,762.1
.0
2,380.1
642.5
1,453.9
73.5
173.7
36.6

2,746.5
955.8
1,790.7
.0
2,461.8
684.7
1,476.2
79.7
183.0
38.2

2,821.0
995.3
1,825.8
.0
2,631.9
745.7
1,556.1
87.1
198.5
44.5

2,877.9
1,030.9
1,847.0
.0
2,804.1
804.9
1,637.0
106.1
206.6
49.4

2,981.2
1,072.5
1,908.7
.0
2,954.3
838.9
1,735.7
101.0
225.6
53.2

3,121.6
1,146.0
1,975.6
.0
3,084.2
874.2
1,785.4
116.1
246.2
62.2

3,318.0
1,299.6
2,018.4
.0
3,250.9
906.7
1,864.4
112.9
289.6
77.3

40
41
42
43
44
45
46
47
48
49
50
51
52

By borrowing sector
Commercial banks
Bank holding companies
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Brokers and dealers
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Funding corporations

94.5
133.6
112.4
.5
.6
700.6
1,472.1
579.0
34.3
433.7
18.7
31.1
211.0

102.6
148.0
115.0
.4
.5
806.5
1,570.3
720.1
29.3
483.9
19.1
36.7
248.6

113.6
150.0
140.5
.4
1.6
896.9
1,711.4
873.8
27.3
529.8
31.5
43.7
312.7

140.6
168.6
160.3
.6
1.8
995.3
1,825.8
1,089.3
35.3
554.5
26.8
80.4
373.7

125.7
160.5
144.3
.4
1.8
944.2
1,762.1
917.9
35.3
557.8
28.3
58.0
350.0

130.0
164.0
149.8
.5
1.9
955.8
1,790.7
989.0
33.6
532.7
31.2
65.7
363.4

140.6
168.6
160.3
.6
1.8
995.3
1,825.8
1,089.3
35.3
554.5
26.8
80.4
373.7

148.7
181.2
162.9
.7
1.8
1,030.9
1,847.0
1,154.1
35.1
571.9
39.1
97.0
411.6

159.6
190.5
170.7
.8
1.6
1,072.5
1,908.7
1,243.9
40.1
596.9
27.1
112.5
410.5

169.6
196.1
186.6
1.0
2.0
1,146.0
1,975.6
1,321.2
39.4
589.4
27.6
133.2
417.9

188.7
193.5
213.3
1.1
2.5
1,299.6
2,018.4
1,406.2
42.5
615.6
28.1
145.7
413.6

All sectors

53 Total credit m a r k e t debt, domestic a n d foreign . . .
54
55
56
5/
58
59
60
61

Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit

17,211.6

18,444.9

19,794J

21,200.2

20,346.8

20,690.5

21,200.2

21,671.7

22,140.8

22,615.8

23,290.6

623.5
5,665.0
1,341.7
2,504.0
834.9
860.9
4,397.6
983.9

700.4
6,013.6
1,293.5
2,823.6
949.6
931.1
4,610.4
1,122.8

803.0
6,390.0
1,296.0
3,127.5
1,041.7
996.2
4,928.4
1,211.6

979.4
6,625.9
1,367.5
3,440.1
1,169.8
1,095.9
5,257.4
1,264.1

893.1
6,466.8
1,326.8
3,255.3
1,115.8
1,022.4
5,061.5
1,205.0

925.7
6,517.7
1,340.2
3,333.4
1,123.1
1,044.9
5,178.9
1,226.7

979.4
6,625.9
1,367.5
3,440.1
1,169.8
1,095.9
5,257.4
1,264.1

1,074.8
6,708.6
1,397.1
3,563.9
1,191.5
1,128.7
5,371.2
1,236.0

1,112.7
6,730.2
1,429.3
3,729.6
1,240.9
1,153.9
5,487.5
1,256.8

1,165.1
6,841.8
1,439.9
3,792.2
1,279.7
1,186.1
5,623.7
1,287.4

1,172.6
7,070.2
1,464.3
3,893.9
1,315.5
1,258.4
5,782.0
1,333.6

1. Data in this table also appear in the B o a r d ' s Z. 1 (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.




Flow of Funds A3 7
1.60

SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars e x c e p t as noted, e n d o f period

1997
Transaction category or sector

1994

1995

1996

1998

1997
Q2

Q3

Q4

Q1

Q2

Q3

Q4

CREDIT MARKET DEBT OUTSTANDING2
1 Total c r e d i t m a r k e t assets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33

Domestic nonfederal nonfinancial sectors
Household
Nonfinancial corporate business
N o n f a r m noncorporate business
State and local governments
Federal government
Rest of the world
Financial sectors
Monetary authority
Commercial banking
U.S.-chartered banks
Foreign banking offices in United States
Bank holding companies
Banks in U.S.-affiliated areas
Savings institutions
Credit unions
Bank personal trusts and estates
Life insurance companies
Other insurance companies
Private pension f u n d s
State and local government retirement funds
M o n e y market mutual f u n d s
Mutual f u n d s
Closed-end f u n d s
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations

17,211.6

18,444.9

19,794.3

21,200.2

20,346.8

20,690.5

21,200.2

21,671.7

22,140.8

22,615.8

23,290.6

3,035.9
1,979.2
289.2
37.6
729.9
203.4
1,216.0
12,756.3
368.2
3,254.3
2,869.6
337.1
18.4
29.2
920.8
246.8
248.0
1,487.5
446.4
660.9
455.8
459.0
718.8
86.0
663.3
1,472.1
541.7
476.2
36.5
13.3
93.3
107.5

2,899.1
1,937.8
280.4
42.3
638.6
203.2
1,530.3
13,812.3
380.8
3,520.1
3,056.1
412.6
18.0
33.4
913.3
263.0
239.7
1,587.5
468.7
716.9
483.3
545.5
771.3
96.4
750.0
1,570.3
661.0
526.2
33.0
15.5
183.4
86.3

2,921.5
1,968.9
291.0
46.7
614.8
195.5
1,933.8
14,743.5
393.1
3,707.7
3,175.8
475.8
22.0
34.1
933.2
288.5
232.0
1,657.0
491.2
769.2
529.2
634.3
820.2
101.1
807.9
1,711.4
784.4
544.5
41.2
19.3
167.7
110.3

2,764.8
1,794.9
305.8
49.5
614.6
200.4
2,259.0
15,975.9
431.4
4,031.9
3,450.7
516.1
27.4
37.8
928.5
305.3
239.5
1,751.3
515.3
834.7
565.8
721.9
901.1
97.7
902.2
1,825.8
950.4
566.4
32.1
28.1
182.6
164.0

2,801.5
1,853.2
281.4
48.0
618.9
197.3
2,095.0
15,252.9
412.4
3,856.8
3,295.2
501.8
23.8
36.1
937.8
299.9
235.5
1,723.7
498.6
798.7
542.7
656.5
861.3
99.4
848.6
1,762.1
818.9
553.1
34.8
21.9
160.2
130.0

2,744.2
1,798.4
290.4
48.7
606.6
198.2
2,196.4
15,551.8
412.7
3,912.9
3,351.9
501.0
22.5
37.5
929.0
303.9
237.3
1,746.7
506.6
814.8
562.0
678.7
890.4
98.5
862.5
1,790.7
863.3
564.4
55.5
23.7
164.7
133.4

2,764.8
1,794.9
305.8
49.5
614.6
200.4
2,259.0
15,975.9
431.4
4,031.9
3,450.7
516.1
27.4
37.8
928.5
305.3
239.5
1,751.3
515.3
834.7
565.8
721.9
901.1
97.7
902.2
1,825.8
950.4
566.4
32.1
28.1
182.6
164.0

2,706.9
1,756.5
289.6
50.2
610.6
204.3
2,324.0
16,436.5
433.8
4,093.3
3,505.1
517.9
31.2
39.2
931.0
306.7
240.1
1,779.1
521.1
853.4
582.5
775.0
939.3
97.1
942.9
1,847.0
1,000.4
572.0
46.8
31.5
244.0
199.5

2,766.5
1,787.4
280.1
51.0
648.0
207.5
2,401.2
16,765.6
440.3
4,136.4
3,543.6
525.6
26.8
40.4
930.6
315.1
240.9
1,796.0
520.8
885.9
600.2
815.9
977.6
96.5
978.5
1,908.7
1,082.4
579.0
32.7
33.8
198.3
196.2

2,785.4
1,770.3
287.7
51.8
675.5
210.9
2,416.4
17,203.0
446.5
4,195.7
3,616.2
510.1
28.3
41.1
939.0
320.8
241.4
1,817.6
518.9
909.8
613.1
869.9
1,003.4
95.9
1,041.0
1,975.6
1,148.3
592.7
33.8
33.2
217.5
189.0

2,771.3
1,737.7
302.3
52.7
678.7
213.6
2,508.1
17,797.5
452.5
4,337.0
3,761.1
504.2
26.5
45.2
964.3
327.2
242.4
1,847.9
519.6
953.4
632.9
965.9
1,023.2
95.4
1,141.3
2,018.4
1,225.6
630.2
35.3
30.7
159.9
194.6

17,211.6

18,444.9

19,794.3

21,200.2

20,346.8

20,690.5

21,200.2

21,671.7

22,140.8

22,615.8

23,290.6

53.2
8.0
17.6
373.9
280.1
1,242.0
2,183.2
411.2
602.9
549.5
1,477.3
279.0
520.3
5,057.5
1,140.6
101.4
699.4
5,326.6

63.7
10.2
18.2
418.8
290.7
1,229.3
2,279.7
476.9
745.3
660.0
1,852.8
305.7
566.2
5,821.1
1,242.2
107.6
803.0
5,693.7

53.7
9.7
18.3
516.1
240.8
1,245.1
2,377.0
590.9
891.1
701.5
2,342.4
358.1
610.6
6,567.8
1,319.0
123.8
871.7
6,012.0

48.9
9.2
18.3
619.4
219.4
1,286.6
2,474.1
713.4
1,048.7
822.4
2,989.4
469.1
665.0
7,680.9
1,418.2
138.3
1,082.8
6,461.5

46.7
9.2
18.4
568.8
197.5
1,265.3
2,432.3
646.7
952.4
768.0
2,717.5
414.3
639.6
7,169.4
1,319.8
133.9
982.9
6,258.4

46.1
9.2
18.7
597.8
189.0
1,234.2
2,438.8
696.1
1,005.1
797.7
2,973.6
431.8
655.6
7,556.3
1,353.5
143.1
1,058.9
6,449.8

48.9
9.2
18.3
619.4
219.4
1,286.6
2,474.1
713.4
1,048.7
822.4
2,989.4
469.1
665.0
7,680.9
1,418.2
138.3
1,082.8
6,461.5

48.2
9.2
18.4
608.1
182.4
1,259.4
2,525.2
760.9
1,130.7
891.0
3,340.2
505.3
677.3
8,246.8
1,407.7
149.5
1,179.3
6,746.4

50.1
9.2
18.4
630.4
197.8
1,321.0
2,530.8
754.0
1,153.7
861.5
3,439.0
540.6
686.9
8,349.4
1,414.6
141.4
1,207.2
6,784.3

54.5
9.2
18.8
652.2
196.3
1,282.7
2,554.4
776.5
1,249.7
919.8
3,151.9
579.0
694.8
7,810.4
1,434.8
151.7
1,112.4
7,042.9

60.1
9.2
18.3
661.4
184.0
1,335.2
2,629.1
805.0
1,334.2
877.7
3,626.1
569.6
707.0
8,770.1
1,481.3
147.2
1,291.0
6,848.0

37,535.5

41,029.9

44,643.8

49,365.7

46,888.0

48,346.0

49,365.7

51,357.4

52,230.9

52,307.5

54,644.9

21.1
6,237.9
3,370.5

22.1
8,331.3
3,578.3

21.4
10,062.4
3,776.1

21.1
12,776.0
4,097.4

21.1
11,627.0
3,964.4

21.0
12,649.4
4,030.7

21.1
12,776.0
4,097.4

21.2
14,397.6
4,108.8

21.0
14,556.1
4,136.2

21.2
12,758.4
4,153.7

21.6
15,437.7
4,164.4

-5.4
325.4
-6.5
67.8
48.8
-1,046.5

-5.8
360.2
-9.0
85.3
62.4
-1,369.3

-6.7
431.2
-10.6
86.0
76.9
-1,723.8

-7.3
534.5
-32.2
151.2
91.4
-2,110.0

-6.9
478.1
-8.1
96.6
77.6
-1,687.0

-6.7
501.5
-22.1
113.1
87.9
-1,656.3

-7.3
534.5
-32.2
151.2
91.4
-2,110.0

-7.4
510.8
-21.2
183.5
87.4
-2,018.7

-7.4
547.9
-17.1
134.4
92.6
-2,007.8

-7.2
565.2
-15.4
167.4
98.8
-2,012.6

-7.9
573.0
-27.0
159.0
97.7
-2,304.1

3.4
38.0
-245.9

3.1
34.2
-257.6

-1.6
30.1
-284.2

-8.1
26.2
-273.8

-6.8
27.9
-366.6

-7.8
19.5
-366.2

-8.1
26.2
-273.8

-10.4
21.4
-323.8

-16.1
24.2
-363.2

-12.0
15.7
-383.7

-3.9
23.1
-319.5

47,985.7

54,058.1

59,906.5

67,888.3

63,895.6

66,384.2

67,888.3

71,463.4

72,556.7

70,824.6

76,078.2

RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Total c r e d i t m a r k e t d e b t

35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52

Other
liabilities
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank liabilities
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market f u n d shares
Security repurchase agreements
Mutual fund shares
Security credit
Life insurance reserves
Pension f u n d reserves
Trade payables
Taxes payable
Investment in bank personal trusts
Miscellaneous

53 Total liabilities
Financial assets not included in liabilities
(+)
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business

57
58
59
60
61
62

Liabilities not identified as assets
Treasury currency
Foreign deposits
Net interbank transactions
Security repurchase agreements
Taxes payable
Miscellaneous

(—)

Floats not included in assets (—)
63 Federal government checkable deposits
64 Other checkable deposits
65 Trade credit
66 Total identified to s e c t o r s a s a s s e t s

1. Data in this table also appear in the B o a r d ' s Z . l (780) quarterly statistical release, tables
L . l and L.5. For ordering address, see inside front cover.




2. Excludes corporate equities and mutual f u n d

A42
2.10

Domestic Nonfinancial Statistics • June 1999
NONFINANCIAL BUSINESS ACTIVITY

Selected Measures

Monthly data seasonally adjusted, and indexes 1 9 9 2 = 1 0 0 , except as noted
1998
Measure

1996

1997

1999

1998
July

Aug.

Sept.

Oct.

Nov.

Dec.r

Jan.r

Feb.r

Mar.

1 Industrial production 1

119.5

126.8

131.3 r

130.5

132.4

131.9

132.4

132.2

132.3

132.3

132.6

132.8

Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials

114.4
115.5
111.3
122.7
110.9
127.8

119.6
121.1
114.1
133.9
115.2
138.2

123.5
125.4
115.2
144.2r
118.0
144.0

123.3
124.7
114.0
143.9
119.1
141.9

124.9
126.8
116.1
146.0
119.1
144.4

124.1
126.0
114.8
146.2
118.3
144.4

124.9
126.7
115.2
147.5
119.0
144.5

124.5
126.1
114.8
146.5
119.3
144.6

124.4
125.9
114.9
145.6
119.8
145.2

124.5
125.7
115.1
144.8
120.5
144.9

124.6
125.8
115.2
144.8
120.8
145.6

124.6
125.9
115.2
145.1
120.5
146.1

121.4

129.7

135.1

133.6

135.7

135.2

136.1

136.4

136.7

136.5

137.0

137.0

81.4

82.0

80.8

79.8

80.7

80.1

80.3

80.1

80.0

79.6

79.5

79.3

10 Construction contracts3

130.9

142.7r

153.7r

156.0

155.0

ISS.O1

152.0r

158.01

161.0

159.0

148.0

145.0

11 Nonagricultural employment, total4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
Disposable personal income 5
19
20 Retail sales5

117.3
2.4
97.4
98.6
123.1
165.2
159.8
135.7
164.0
159.6

120.3
2.4
98.2
99.6
126.5
174.5
171.2
144.7
171.7
166.9

123.4
2.3
98.5
99.6
130.1
183.3r
182.6r
151.1
178.6
175.2

123.5
101.9
97.9
98.4
130.4
183.4
182.8
149.6
178.7
174.8

123.8
102.4
98.4
99.1
130.6
184.2
184.1
151.3
179.4
174.9

123.9
102.3
98.4
99.3
130.9
184.8
184.6
152.1
179.9
175.6

124.1
102.2
98.1
99.0
131.1
185.6r
185.7'
151.8
180.7r
177.7

124.4
102.1
97.8
98.6
131.5
187.2r
186.7r
151.6r
182.4r
178.9

124.7
102.4
97.7
98.5
131.8
187.1
187.6
151.7
182.1
180.9

124.9
102.3
97.6
98.4
132.1
188.3
189.0
152.1
183.5
183.3

125.2
102.4
97.3
98.1
132.5
189.3
190.2
152.1
184.5
186.4

125.2
102.1
97.1
97.9
132.6
n.a.
n.a.
n.a.
n.a.
186.9

Prices6
21 Consumer (1982-84= 100)
22 Producer finished goods (1982= 100)

156.9
131.3

160.5
131.8

163.0
130.7

163.2
131.0

163.4
130.7

163.6
130.6

164.0
131.4

164.0
130.9r

163.9
131.0

164.3
131.5

164.5
130.9

165.0
131.2

2
3
4
5
6
7

Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing (percent) 2 ..

1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1998. The recent annual revision is described in an article in the
January 1999 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the Federal
Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources.

2.11

3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge
Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers
employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price
indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics,
Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series
mentioned in notes 3 and 6, can also be found in the Survey of Current Business.

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted

1998
Category

1996

1997

1999

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.'

Feb.1

Mar.

HOUSEHOLD SURVEY DATA1
1 Civilian labor force2
Employment
2
Nonagricultural industries3
3
Agriculture
Unemployment
4
Number
5
Rate (percent of civilian labor force)

133,943

136,297

137,673

137,481

138,081

138,116

138,193

138,547

139,347

139,271

138,816

123,264
3,443

126,159
3,399

128,085
3,378

127,772
3,492

128,348
3,470

128,300
3,558

128,765
3,348

129,304
3,222

130,097
3,299

129,817
3,328

129,752
3,281

7,236
5.4

6,739
4.9

6,210
4.5

6,217
4.5

6,263
4.5

6,258
4.5

6,080
4.4

6,021
4.3

5,950
4.3

6,127
4.4

5,783
4.2

119,608

122,690

125,833

126,191

126,363

126,527

126,804

127,118

127,335

127,632

127,678

18,495
580
5,418
6,253
28,079
6,911
34,454
19,419

18,657
592
5,686
6,395
28,659
7,091
36,040
19,570

18,716
575
5,965
6,551
29,299
7,341
37,525
19,862

18,693
571
5,989
6,570
29,383
7,372
37,691
19,922

18,692
568
5,981
6,579
29,454
7,393
37,768
19,928

18,633
564
6,012
6,595
29,453
7,417
37,905
19,948

18,573
560
6,051
6,604
29,549
7,441
38,040
19,986

18,559
557
6,153
6,627
29,594
7,458
38,148
20,022

18,534
547
6,170
6,644
29,662
7,488
38,245
20,045

18,483
539
6,249
6,657
29,746
7,491
38,369
20,098

18,448
532
6,202
6,665
29,744
7,505
38,464
20,118

ESTABLISHMENT SURVEY DATA
6 Nonagricultural payroll employment 4
7
8
9
10
11
12
13
14

Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government

1. Beginning January 1994, reflects redesign of current population survey and population
controls from the 1990 census.
2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly
figures are based on sample data collected during the calendar week that contains the twelfth
day; annual data are averages of monthly figures. By definition, seasonality does not exist in
population figures.
3. Includes self-employed, unpaid family, and domestic service workers.




4. Includes all full- and part-time employees who worked during, or received pay for, the
pay period that includes the twelfth day of the month; excludes proprietors, self-employed
persons, household and unpaid family workers, and members of the armed forces. Data are
adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this
time.
SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings.

Selected Measures
2.12

A43

OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1999

1998

1999

1999

Series
Q2

Q3

Q4r

Ql

Q2

Q3

Q4

Ql

Capacity (percent of 1992 output)

Output (1992=100)

Q2

Q3

Q4r

Ql

Capacity utilization rate (percent)2

1 Total industry

131.3

131.6

132.3

132.5

159.6

161.5

163.5 r

165.1

82.3

81.5

80.9

80.3

2 Manufacturing

134.7

134.8

136.4

136.8

165.8

168.1

170.3

172.2

81.2

80.2

80.1

79.5

Primary processing3
Advanced processing4

121.1
141.4

120.2
142.1

120.6
144.4

121.7
144.4

144.0
176.4

145.1
179.2

146.1
182.0

146.9
184.5

84.1
80.2

82.9
79.3

82.5
79.3

82.8
78.3

5
6
7
8
9
10
11
12
13

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment . . .

156.1
116.4
125.3
124.0
127.0
203.0
282.8
135.3

157.9
117.7
122.4
118.7
126.8
207.9
292.7
137.2

161.2
119.2
119.3
112.9
126.9
211.7
304.8
148.5

161.8
121.4
118.9
114.1
124.6
213.6
312.2
146.7

193.9
143.0
142.0
142.8
140.8
234.7
366.6
183.9

197.5
143.9
143.2
144.6
141.3
242.9
381.6
184.9

201.2r
144.9
144.4
146.5
141.7
251.6
396.6
186.0

204.4
145.8
145.4
147.9
142.1
259.6
411.0
186.7

80.5
81.4
88.3
86.9
90.1
86.5
77.1
73.6

79.9
81.8
85.5
82.1
89.7
85.6
76.7
74.2

80.1
82.3
82.6
77.0
89.6
84.1
76.9
79.8

79.2
83.3
81.8
77.2
87.6
82.3
76.0
78.6

106.1

106.6

105.8

102.7

127.5

128.0

128.5

128.8

83.2

83.3

82.4

79.8

14
15
16
17
18
19

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

112.7
113.2
115.0
116.9
127.5
112.0

111.3
112.1
115.0
114.4
128.4
112.7

111.4
110.2
114.3
114.0
131.9
111.9

111.7
109.8
116.9
113.7
128.0
115.0

136.6
134.9
131.6
148.0
140.7
116.5

137.5
135.1
132.5
148.9
141.9
116.8

138.4
135.2
133.4
149.7
143.2
117.1

139.1
135.2
134.2
150.3
144.4
117.4

82.5
83.9
87.4
79.0
90.6
96.1

80.9
83.0
86.8
76.8
90.5
96.5

80.5
81.5
85.7
76.1
92.1
95.6

80.3
81.2
87.1
75.6
88.7
98.0

105.3
115.6
118.3

103.6
119.6
121.2

100.7
112.9
116.7

97.5
114.2
116.9

119.9
126.2
123.8

120.1
126.5
124.0

120.6
126.7
124.3

120.9
126.9
124.5

87.8
91.6
95.6

86.2
94.6
97.7

83.5
89.2
93.9

80.7
90.0
93.9

1973

1975

Previous cycle5

High

Low

High

3
4

20 Mining
71 Utilities
Electric
22

Low

Latest cycle6
High

Low

Mar.

1999

1998

1998
Oct.

Nov.

Dec/

Jan/

Feb/

Mar.p

Capacity utilization rate (percent)2

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

85.4

78.1

82.6

81.3

80.8

80.7

80.3

80.3

80.1

69.0

85.7

76.6

81.6

80.3

80.1

80.0

79.6

79.5

79.3

88.9
84.2

77.7
76.1

84.4
80.6

82.4
79.6

82.4
79.4

82.9
79.0

83.1
78.3

82.8
78.4

82.6
78.2

63.9
60.8
45.1
37.0
60.1

84.6
93.6
92.7
95.2
89.3

73.1
75.5
73.7
71.8
74.2

81.1
81.0
90.0
90.2
89.9

80.6
81.6
83.7
78.4
90.4

80.0
81.6
82.2
74.9
91.3

79.8
83.6
81.9
77.9
87.0

79.4
83.7
82.8
78.9
87.7

79.2
83.6
81.2
76.2
87.6

78.9
82.5
81.3
76.4
87.6

64.0
71.6
45.5

85.4
84.0
89.1

72.3
75.0
55.9

86.6
78.1
76.4

84.9
77.2
80.9

83.9
76.8
80.0

83.6
76.5
78.7

82.6
76.2
77.9

82.6
75.9
79.1

81.7
75.7
78.7

82.2

83.3

82.3

81.5

80.0

79.8

79.6

82.6
83.5
87.9
79.1
89.5
97.2

80.3
83.2
86.7
75.7
89.1
94.4

80.7
80.5
84.2
76.6
94.1
96.3

80.6
80.9
86.2
76.1
93.1
96.0

80.2
81.1
86.7
75.2
88.2
99.8

80.4
82.0
87.3
75.8
88.8
97.4

80.3
80.6
87.3
76.0
88.9
96.7

84.7
92.0
96.9

83.8
87.3
92.2

82.0
88.2
92.6

80.6
89.9
93.5

81.0
89.2
93.4

80.4
90.9
95.0

72.6

87.3

88.5

70.5

86.9

91.2
87.2

68.2
71.8

88.1
86.7

66.2
70.4

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment

89.2
88.7
100.2
105.8
90.8

68.9
61.2
65.9
66.6
59.8

87.7
87.9
94.2
95.8
91.1

96.0
89.2
93.4

74.3
64.7
51.3

93.2
89.4
95.0

78.4

67.6

81.9

66.6

87.3

79.2

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

87.8
91.4
97.1
87.6
102.0
96.7

71.7
60.0
69.2
69.7
50.6
81.1

87.5
91.2
96.1
84.6
90.9
90.0

76.4
72.3
80.6
69.9
63.4
66.8

87.3
90.4
93.5
86.2
97.0
88.5

80.7
77.7
85.0
79.3
74.8
85.1

94.3
96.2
99.0

88.2
82.9
82.7

96.0
89.1
88.2

80.3
75.9
78.9

88.0
92.6
95.0

87.0
83.4
87.1

88.4
90.5
93.6

2 Manufacturing
3
4

71.1

89.2

1 Total industry

3

Primary processing
Advanced processing4

7.0 Mining
71 Utilities
22 Electric

1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1998. The recent annual revision is described in an article in the
January 1999 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted
index of industrial production to the corresponding index of capacity.




3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;
primary metals; and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing
and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather
and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.

A44
2.13

Domestic Nonfinancial Statistics • June 1999
INDUSTRIAL PRODUCTION

Indexes and Gross Value1

Monthly data seasonally adjusted
1992
Group

portion

1998

1999

1998
avg.
Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.'

Jan.'

Feb.'

Mar.p

Index (1992 = 100)
MAJOR MARKETS
1 Total index

100.0

131.3

130.7

131.3

131.9

130.6

130.5

132.4

131.9

132.4

132.2

132.3

132.3

132.6

132.8

2 Products
3
Final products
4
Consumer goods, total
5
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods . . . .
11
Other
12
Appliances, televisions, and air
conditioners
Carpeting and furniture
13
14
Miscellaneous home goods
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
18
Chemical products
19
Paper products
20
Energy
21
Fuels
22
Residential utilities

60.5
46.3
29.1
6.1
2.6
1.7
.9
.7
.9
3.5

123.5
125.4
115.2
135.7
132.9
137.8
109.2
166.2
125.0
137.8

123.2
125.3
115.8
135.9
132.7
138.9
106.5
169.8
122.7
138.5

124.0
126.2
116.4
136.9
134.6
141.3
107.4
173.8
123.7
138.8

124.5
126.6
116.8
138.3
136.8
143.5
108.4
177.1
126.0
139.4

123.6
125.5
115.1
130.7
121.7
118.2
93.8
142.2
125.4
137.8

123.3
124.7
114.0
124.6
107.3
92.8
75.8
110.0
125.6
138.7

124.9
126.8
116.1
140.1
141.7
151.4
124.4
178.9
127.6
138.5

124.1
126.0
114.8
137.4
136.4
143.4
128.3
161.1
125.9
138.0

124.9
126.7
115.2
140.5
141.1
150.6
119.9
181.0
127.4
139.7

124.5
126.1
114.8
138.9
139.6
149.1
113.7
183.2
125.9
137.9

124.4
125.9
114.9
139.8
139.8
147.7
115.5
179.1
128.2
139.5

124.5
125.7
115.1
141.4
141.7
149.4
111.7
185.2
130.4
140.9

124.6
125.8
115.2
142.5
141.1
149.4
107.0
188.9
129.2
143.3

124.6
125.9
115.2
141.8
139.6
147.1
109.7
182.7
128.6
143.2

1.0
.8
1.6
23.0
10.3
2.4
4.5
2.9
2.9
.8
2.1

206.2
117.1
114.7
110.1
109.0
97.8
120.5
105.8
112.2
110.5
112.3

203.8
114.3
118.3
110.8
109.1
100.4
121.3
106.3
113.2
111.2
113.7

203.4
115.9
118.2
111.4
110.2
99.9
123.2
106.2
111.5
111.6
111.0

202.7
119.1
117.9
111.5
110.8
98.8
122.5
105.7
112.5
110.9
112.9

199.9
117.0
117.1
111.2
108.5
98.8
122.8
105.3
118.2
111.4
121.2

207.8
117.3
115.9
111.2
108.5
98.4
122.2
106.3
118.4
112.9
120.7

209.4
116.7
115.3
110.3
107.5
97.7
119.0
106.6
120.1
112.1
123.7

209.9
116.3
114.5
109.3
106.9
97.1
118.0
105.9
116.8
108.3
120.7

215.2
120.3
113.6
109.1
108.0
95.4
117.2
105.2
115.0
108.4
117.8

222.5
117.5
109.5
109.0
109.6
94.5
119.3
104.1
106.5
109.1
104.5

226.0
116.8
111.4
108.9
109.6
94.6
118.7
103.6
107.1
109.6
105.2

229.5
120.3
110.9
108.8
110.0
93.6
116.3
102.0
110.9
112.2
109.7

233.9
122.6
112.6
108.6
109.9
93.9
117.4
101.2
109.3
109.4
108.8

231.2
121.5
114.0
108.8
109.5
92.8
118.2
101.1
111.6
108.8
112.5

23
24
25
26
27
28
29
30
31
32
33

Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes

17.2
13.2
5.4
1.1
4.0
2.5
1.2
1.3
3.3
.6
.2

144.2
163.5
209.9
646.0
140.0
133.7
124.6
138.9
75.7
134.7
149.2

142.4
160.1
202.3
584.9
139.4
130.3
121.6
139.8
75.9
155.7
148.0

143.6
162.2
206.0
601.5
139.4
133.6
123.4
140.8
75.9
147.6
148.0

144.2
163.1
209.2
620.6
138.1
135.5
125.1
139.6
76.0
147.1
149.0

144.1
163.6
210.3
638.6
142.9
128.2
108.6
141.7
75.8
136.7
146.1

143.9
163.5
211.8
654.6
144.2
121.9
91.7
146.6
76.1
131.9
151.1

146.0
166.6
213.1
671.6
142.3
141.6
136.9
132.6
76.5
127.7
145.7

146.2
167.4
217.3
693.6
139.5
140.1
135.6
140.9
75.5
123.4
147.8

147.5
169.0
219.0
716.7
141.6
141.6
136.1
141.1
76.4
119.4
150.9

146.5
168.1
219.7
745.2
139.9
140.5
136.4
138.5
75.7
115.2
154.6

145.6
167.9
220.8
759.9
141.3
139.6
136.0
131.7
74.6
103.2
156.6

144.8
167.1
221.5
776.8
139.8
137.4
134.8
131.8
74.5
99.2
159.1

144.8
167.2
222.0
789.6
138.4
135.5
133.1
140.0
74.8
97.4
154.1

145.1
166.9
223.3
800.5
137.9
135.3
131.6
136.6
75.4
104.2
153.9

34
35
36

Intermediate products, total
Construction supplies
Business supplies

14.2
5.3
8.9

118.0
127.2
112.6

116.9
124.7
112.2

117.3
125.4
112.5

118.2
126.6
113.3

118.0
126.1
113.2

119.1
128.5
113.6

119.1
128.0
113.8

118.3
126.9
113.3

119.0
128.4
113.5

119.3
129.6
113.2

119.8
131.0
113.3

120.5
132.5
113.4

120.8
131.8
114.2

120.5
131.0
114.2

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
Paper materials
46
Chemical materials
47
Other
48
Energy materials
Primary energy
49
50
Converted fuel materials

39.5
20.8
4.0
7.6
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3

144.0
176.4
144.0
277.4
129.0
121.2
113.5
108.7
116.0
114.5
111.5
103.5
101.2
108.1

142.7
173.7
143.7
265.8
129.7
123.7
114.2
110.6
116.3
115.6
111.0
103.7
101.0
109.0

143.1
174.5
144.4
266.9
130.3
123.5
114.4
110.5
116.3
116.2
110.9
103.8
101.3
108.6

143.6
175.4
147.9
268.6
129.6
123.0
114.1
111.0
115.5
115.6
111.2
104.3
101.0
110.8

141.8
171.7
131.9
271.0
128.3
120.1
113.9
110.2
117.3
114.8
110.6
104.8
101.8
110.7

141.9
171.8
129.7
274.1
128.1
120.2
114.1
110.1
117.3
114.6
111.7
104.8
102.9
108.6

144.4
177.4
149.6
278.0
128.3
121.9
113.1
107.7
116.4
113.6
111.6
104.4
101.2
110.7

144.4
177.7
147.7
282.7
127.7
118.2
112.0
107.6
115.0
111.8
111.5
105.2
102.3
110.9

144.5
178.8
146.2
287.0
128.4
118.3
111.7
108.8
115.8
111.1
110.4
103.7
102.6
106.1

144.6
179.9
145.6
289.9
129.3
117.3
112.2
103.0
112.7
113.7
113.2
101.5
99.8
104.9

145.2
180.4
144.8
292.6
129.3
116.3
112.5
102.5
114.7
113.0
114.4
102.6
100.3
107.2

144.9
180.3
141.9
294.7
129.5
117.8
112.4
99.2
116.5
113.0
113.6
101.5
98.3
107.7

145.6
181.1
146.0
295.9
128.7
116.6
113.2
99.6
116.9
113.6
115.6
102.2
99.8
106.8

146.1
182.2
146.5
298.7
129.3
116.8
113.1
98.8
117.4
113.6
115.2
101.7
98.1
108.8

97.1
95.1

131.3
130.8

130.7
130.3

131.3
130.9

131.8
131.3

131.2
131.2

131.6
131.7

132.1
131.3

131.7
131.0

132.1
131.5

131.9
131.4

132.1
131.7

132.0
131.6

132.4
131.9

132.6
132.1

98.2
27.4
26.2

127.1
113.9
115.5

126.7
114.5
116.1

127.3
115.1
117.0

127.7
115.3
117.3

126.4
114.8
114.7

126.2
114.9
113.5

128.0
114.3
115.7

127.4
113.2
114.6

127.8
113.4
115.3

127.4
113.0
115.8

127.5
113.2
115.8

127.4
113.3
115.6

127.7
113.4
115.9

127.8
113.5
115.6

12.0

167.9

164.6

166.7

167.4

170.0

171.8

169.9

171.0

172.7

171.6

171.5

170.7

171.0

170.9

12.1
29.8

142.4
156.7

140.8
154.9

142.3
155.5

142.6
156.0

142.7
153.4

142.2
153.6

144.8
156.9

145.1
156.7

146.2
157.3

144.6
158.2

144.1
158.6

143.0
158.5

142.8
159.3

142.3
160.0

SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks .
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy




Selected Measures
2.13

INDUSTRIAL PRODUCTION

Group

Indexes and Gross Value 1 —Continued
1992
proportion

SIC
code

A45

1999

1998
1998
avg.
Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec. r

Jan. r

Feb. r

Mar?

Index (1992 = 100)

MAJOR INDUSTRIES
100.0

131.3

130.7

131.3

131.9

130.6

130.5

132.4

131.9

132.4

132.2

132.3

132.3

132.6

132.8

85.4
26.5
58.8 r

135.1
120.7
142.1

134.1
121.0
140.6

134.9
121.5
141.6

135.4
121.4
142.3

133.7
120.2
140.4

133.6
120.7
139.9

135.7
120.6
143.3

135.2
119.3
143.2

136.1
120.1
144.2

136.4
120.3
144.6

136.7
121.3
144.4

136.5
121.9
143.9

137.0
121.6
144.7

137.0
121.5
144.8

" ' 24
25

45.0
2.0
1.4

157.5
117.0
121.4

155.2
115.3
121.5

156.2
116.1
121.0

157.2
116.4
120.6

154.8
116.7
122.0

154.4
117.5
120.8

159.8
118.5
120.1

159.6
117.0
121.6

161.2
118.0
124.5

161.0
118.3
123.6

161.5
121.4
122.9

161.5
121.9
122.5

161.9
121.9
124.1

162.0
120.6
125.4

32
33
331,2
331PT
333-6,9
34

2.1
3.1
1.7
.1
1.4
5.0

126.2
123.8
121.1
115.7
127.0
127.3

124.5
127.1
127.7
120.0
126.4
127.2

124.0
127.5
126.7
122.4
128.4
127.8

124.5
126.5
125.5
121.9
127.6
128.7

123.5
122.1
119.8
116.0
124.9
128.0

125.4
122.6
120.2
118.3
125.4
127.8

127.0
124.4
122.5
120.3
126.7
126.3

126.6
120.1
113.4
112.6
128.1
126.2

128.3
120.6
114.4
109.7
128.0
126.9

130.5
118.7
109.7
100.2
129.3
127.7

131.6
118.6
114.6
102.0
123.4
128.7

133.6
120.1
116.4
106.6
124.6
127.9

132.1
118.1
112.7
106.6
124.5
127.2

131.0
118.4
113.2
107.2
124.6
127.5

59 Total index
60 Manufacturing
Primary processing
61
Advanced processing
62

79
80

Durable goods
Lumber and products
Furniture and fixtures
Stone, clay, and glass
products
Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products . .
Industrial machinery and
equipment
Computer and office
equipment
Electrical machinery
Transportation equipment.. .
Motor vehicles and parts .
Autos and light trucks .
Aerospace and
miscellaneous
transportation
equipment
Instruments
Miscellaneous

81
82
83
84
85
86
87
88
89
90
91

Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing . . . .
Chemicals and products . . . .
Petroleum products
Rubber and plastic products .
Leather and products

63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78

92 Mining
93
Metal
94
Coal
95
Oil and gas extraction
Stone and earth minerals
96
97 Utilities
Electric
98
Gas
99

35

8.0

203.7

198.4

200.6

202.5

205.8

209.0

207.0

207.7

211.2

211.1

212.7

212.3

214.4

214.0

357
36
37
371
371PT

1.8
7.3
9.5
4.9
2.6

649.1
291.9
123.0
141.1
128.5

589.6
278.2
122.3
140.0
128.8

605.4
280.8
123.3
140.8
130.9

623.9
282.0
125.2
144.1
132.7

641.4
285.5
114.2
121.1
110.1

657.0
289.4
108.2
107.6
86.9

673.6
290.8
130.3
154.2
142.0

695.5
297.7
127.6
149.9
136.5

718.5
302.4
128.4
150.2
140.4

746.9
304.8
127.1
148.8
138.1

761.6
307.3
125.6
146.6
137.3

778.7
309.8
124.0
145.3
137.9

791.7
312.1
125.0
147.7
137.0

802.8
314.6
124.5
147.0
135.8

372-6,9
38
39

4.6
5.4
1.3

104.9
113.0
117.7

104.5
112.8
120.0

105.7
113.0
120.1

106.3
113.8
119.1

106.3
112.4
118.5

107.1
112.6
118.5

106.9
113.0
117.7

105.8
114.2
117.0

106.9
114.6
115.9

105.7
114.1
114.1

104.8
113.9
115.4

103.0
114.4
114.8

102.7
113.7
116.0

102.5
114.4
117.0

"20
21
22
23
26
27
28
29
30
31

40.4
9.4
1.6
1.8
2.2
3.6
6.7
9.9
1.4
3.5
.3

111.9
109.6
106.0
112.2
99.2
115.0
105.1
115.5
112.0
132.6
75.3

112.4
109.7
105.3
112.6
101.6
115.0
105.4
116.6
113.0
131.4
77.9

113.0
110.3
109.8
113.3
101.0
115.2
105.5
117.7
112.8
133.2
76.3

113.0
110.7
111.5
114.5
100.4
115.0
105.6
116.9
111.5
133.1
75.8

112.0
109.2
104.7
112.0
100.5
114.9
105.5
116.2
111.6
132.4
74.5

112.1
109.0
106.0
113.2
100.1
115.9
105.4
115.7
113.4
132.7
75.3

111.3
107.9
107.0
111.8
99.2
115.3
104.9
114.3
114.1
132.2
74.0

110.6
107.7
104.2
111.2
98.3
113.9
104.6
113.3
110.7
132.6
73.5

110.9
109.1
101.9
112.4
97.3
115.4
104.2
113.1
110.4
133.4
72.8

111.6
111.3
99.8
108.8
95.5
112.3
105.4
114.7
112.8
135.0
74.3

111.7
111.1
100.0
109.4
95.3
115.3
105.1
114.0
112.5
136.0
73.0

111.4
111.9
96.9
109.6
94.2
116.2
103.6
112.8
117.1
135.4
71.1

111.9
112.2
97.1
110.9
93.9
117.1
103.9
113.9
114.3
136.3
71.1

111.8
111.5
97.8
109.0
93.0
117.4
103.7
114.3
113.7
137.6
70.1

10
12
13
14

6.9
.5
1.0
4.8
.6

104.0
110.0
109.7
99.6
124.7

105.8
109.3
103.4
104.0
120.0

105.7
106.9
107.2
102.9
123.3

105.4
108.5
106.0
102.4
124.4

104.7
108.0
110.4
100.4
125.6

104.6
105.7
112.8
100.0
125.4

103.7
109.0
109.7
99.2
124.3

102.4
106.4
115.8
96.8
120.3

102.0
113.6
110.8
96.8
118.8

101.1
U0.7
108.6
94.2
132.1

99.0
108.3
114.5
91.0
125.6

97.4
110.1
102.0
90.9
128.1

98.0
U0.9
108.6
90.9
123.9

97.3
U0.9
101.1
91.6
123.8

491.493PT
492.493PT

1.1
6.2
1.6

113.9
117.2
101.9

114.0
115.7
106.3

112.8
115.2
102.0

115.2
118.9
98.3

118.7
121.0
108.4

118.3
119.8
111.7

120.2
121.2
115.7

120.3
122.6
109.7

116.5
120.3
98.7

110.6
114.6
92.0

111.8
115.2
96.0

114.0
116.3
103.6

113.2
116.3
99.1

115.4
118.3
102.4

80.5

134.7

133.8

134.6

134.9

134.5

135.1

134.6

134.4

135.3

135.7

136.2

136.1

136.4

136.5

83.6

130.2

129.5

130.2

130.6

128.8

128.6

130.6

130.0

130.8

130.9

131.1

130.9

131.2

131.2

5.9

515.6

473.4

482.7

490.7

502.9

511.8

522.5

538.3

552.1

562.8

571.2

578.1

586.1

594.3

81.1

120.1

120.2

120.9

121.1

119.2

118.9

120.6

119.9

120.4

120.4

120.5

120.2

120.4

120.3

79.5

118.5

118.7

119.3

119.5

117.5

117.2

119.0

118.1

118.7

118.8

118.9

118.6

118.8

118.6

2,519.6

SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding
computer and office
equipment
102 Computers, communications
equipment, and
semiconductors
103 Manufacturing excluding
computers and
semiconductors
104 Manufacturing excluding
computers, communications
equipment, and
semiconductors

Gross value (billions of 1992 dollars, annual rates)

Major Markets
105 Products, total

2,001.9 2,489.8 r 2,474.5
r

106 Final

1,552.1

l,958.0

Consumer goods
107
108
Equipment
109 Intermediate

1,049.6
502.5
449.9

l,212.3 r
746.9 r
533.6 r

2,489.8

2,498.5

2,470.3

2,454.6

2,525.1

2,501.0

2,519.7

2,511.6

2,513.9

2,525.8

2,522.6

1,948.1

1,961.6

1,966.1

1,938.2

1,915.6

1,985.9

1,966.4

1,982.3

1,973.4

1,972.7

1,979.9

1,975.4

1,974.4

1,218.7
732.5
527.6

1,224.8
739.9
529.7

1,225.2
744.2
533.6

1,201.8
740.1
532.6

1,185.0
734.3
538.4

1,227.4
762.5
540.3

1,208.2
762.7
535.7

1,217.1
769.8
538.7

1,212.6
765.2
539.1

1,215.0
762.0
541.9

1,225.5
758.2
546.3

1,221.5
757.8
547.4

1,220.2
758.1
545.6

1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1998. The recent annual revision is described in an article in the
January 1999 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:




Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Standard industrial classification.

A46
2.14

Domestic Nonfinancial Statistics • June 1999
HOUSING AND CONSTRUCTION
M o n t h l y figures at s e a s o n a l l y adjusted annual rates e x c e p t as n o t e d

1998
1996

1997

1999

1998
May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan. r

Feb.

1,729
1,306
423
1,750
1,383
367
999
688
311
L,440R
1,150R
290R
382

1,778
1,275
503
1,820
1,393
427
1,011
697
314
1,645
1,287
358
390

1,741
1,303
438
1,790
1,402
388
1,033
713
320
1,546
1,265
281
381

Private residential real estate activity (thousands of units except as noted)
NEW UNITS
1
2
3
4
5
6
7
8
9
10
11
12
13

Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period1
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped

Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1
Price of units sold
of dollars)2
16 Median
17 Average

1,426
1,070
356
1,477
1,161
316
819
584
235
1,406
1,123
283
361

1,441
1,062
379
1,474
1,134
340
834
570
264
1,406
1,120
285
354

757
326

804
287

140.0
166.4

1,604
1,184
421
1,617
1,271
346
935
638
297
L,473R
L,158R
315R
372

1,543
1,152
391
1,541
1,221
320
916
626
290
1,457
1,114
343
374

1,517
1,128
389
1,626
1,274
352
930
639
291
1,480
1,169
311
362

1,581
1,173
408
1,719
1,306
413
938
642
296
1,549
1,230
319
380

1,618
1,180
438
1,615
1,264
351
939
644
295
1,517
1,183
334
368

1,544
1,164
380
1,576
1,251
325
946
648
298
1,459
1,184
275
369

1,690
1,198
492
1,698
1,298
400
968
659
309
1,455
1,164
291
352

1,656
1,238
418
1,654
1,375
279
971
667
304
1,600
1,254
346
389

886
300

893
287

909
286

883
283

836
285

861
289

903
293

985
292

964
295

899
297

881
301

146.0
176.2

152.2
181.9

153.2
183.5

148.0
175.9

149.9
179.8

154.9
186.5

155.0
182.7

154.5
182.8

151.0
178.6

152.0
183.1

150.8
184.1

158.0
187.2

4,087

4,215

4,785

4,770

4,780

4,860

4,740

4,710

4,800

4,900

5,030

5,040

5,020

118.2
145.5

124.1
154.2

130.6
162.9

130.5
162.3

134.0
169.2

133.8
168.4

132.9
165.9

131.2
162.9

130.7
161.8

131.7
163.9

130.5
163.0

131.3
161.8

129.5
162.6

(thousands

EXISTING UNITS (one-family)
18 Number sold
Price of units sold
of dollars)2
19 Median
20 Average

(thousands

Value of new construction (millions of dollars) 3
CONSTRUCTION
618,051

654,528 r

635,396

650,341

658,673

663,300

670,133

668,287 r

R

670,996 r

679,428 r

691,022

706,511

22 Private
23
Residential
24
Nonresidential
25
Industrial buildings
26
Commercial buildings
2/
Other buildings
28
Public utilities and other

444,743
255,570
189,173
32,563
75,722
30,637
50,252

470,969
265,536
205,433
31,417
83,727
37,382
52,906

508,539
295,586R
212,953R
30,340R
88,131R
38,lllr
56,37 LR

496,495
288,003
208,492
29,642
86,321
37,678
54,851

503,592
291,907
211,685
30,067
88,480
37,334
55,804

511,514
299,300
212,214
28,616
88,310
37,406
57,882

516,601
300,612
215,989
32,302
86,243
38,305
59,139

521,050
304,993
216,057
30,300
87,553
38,309
59,895

523,642 R
306,264R
217,378 R
29,246
90,986R
37,538R
59,608R

525,453 R
307,259R
218,194 R
30,011R
93,644R
37,793R
56,746R

531,004 R
311,529R
219,475R
28,971R
96,033R
39,149R
55,322R

536,493
317,372
219,121
28,721
93,886
37,900
58,614

544,849
319,930
224,919
30,985
97,819
38,586
57,529

29 Public
30
Military
Highway
31
32
Conservation and development
33
Other

137,070
2,639
41,326
5,926
87,179

147,082
2,625
45,246
5,628
93,583

145,989R
2,725 r
44,742 r
5,529 r
92,993 r

138,901
2,471
42,030
5,146
89,254

146,749
2,659
44,541
5,989
93,560

147,159
3,325
43,809
5,475
94,550

146,699
3,187
44,291
5,442
93,779

149,083
2,325
45,719
5,904
95,135

144,644R
2,568 r
45,166 r
5,146 r
91,764 r

145,544R
2,502 r
43,721 r
5,643 r
93,678 r

148,425R
2,608 r
44,269 r
5,539 r
96,009 r

154,530
2,058
52,096
5,584
94,792

161,662
2,781
57,505
6,011
95,365

21 Total p u t in place

581,813

1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable with data for
previous periods because of changes by the Bureau of the Census in its estimating techniques.
For a description of these changes, see Construction Reports (C-30-76-5), issued by the
Census Bureau in July 1976.




SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are
private, domestic shipments as reported by the Manufactured Housing Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are
published by the National Association of Realtors. All back and current figures are available
from the originating agency. Permit authorizations are those reported to the Census Bureau
from 19,000 jurisdictions beginning in 1994.

Selected Measures
2.15

A47

CONSUMER AND PRODUCER PRICES
Percentage changes based o n seasonally adjusted data except as noted
Change from 3 months earlier
(annual rate)

Change from 12
months earlier
Item

1998

1999

1998
1998
Mar.

Change from 1 month earlier
Index
level,
Mar.
1999 1

1999

1999
Mar.
June

Sept.

Dec.

Mar.

Nov.

Dec.

Jan.

Feb.

Mar.

CONSUMER PRICES2
(1982-84=100)
1.4

1.7

2.2

1.5

2.0

1.5

.2

.1

.1

.1

.2

165.0

2.0
-8.6
2.1
.1
3.0

2.3
-3.1
2.1
.6
2.8

2.3
-3.4
2.6
1.7
2.8

2.5
-9.0
2.3
1.1
3.0

2.8
-5.1
2.5
2.5
2.5

1.7
5.8
.9
-3.0
2.7

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

.1
-1.1
.3
.6
.2

.5
-.2
.1
.0
.2

.1
.0
.1
-.4
.2

-.2
1.6
.1
-.3
.3

163.3
98.4
176.2
143.9
194.7

-1.5
-1.3
-10.6
1.2
-.6

.8
.9
-3.8
2.9
-.1

-.3
-.6
-3.1
1.4
-1.2

.6
1.8
-9.2
3.0
.9

1.5
-.3
-10.4
8.0
.3

1.5
2.7
8.6
-.3
-.3

-,2r
— .4r
-1.3r
,0r
,l r

.3r
-,lr
—2.2r
1.7r
-.r

.5
1.6
1.8
-.1
-.1

-.4
-1.4
-1.0
-.1
.1

.2
.4
1.2
.1
.0

131.2
134.6
71.4
151.4
137.8

Intermediate materials
12 Excluding foods and feeds
13 Excluding energy

-1.5
-.1

-1.9
-1.6

-1.6
-1.2

-2.2
-1.8

-3.8
-2.4

.0
-1.2

-.3
-.2

-.5
-,lr

.1
-.2

-.4
-.2

.3
.1

121.3
132.0

Crude materials
14 Foods
15 Energy
16 Other

-6.8
-9.7
-6.5

-7.0
-11.9
-12.9

-3.3
-14.6
-5.8

-19.6
-25.3
-19.9

-6.2
-1.3
-24.6

3.3
-4.4
1.6

-.6
2.0r
—2.2r

-4.1
—7.3r
-1.8r

5.1
.6
.2

-2.8
-7.4
1.1

-1.3
6.1
-.8

98.9
61.3
130.0

1 All items
7 Food
3 Energy items
4 All items less food and energy
5
Commodities
6
Services
PRODUCER PRICES
(1982=100)
7 Finished goods
8
Consumer foods
9
Consumer energy
10
Other consumer goods
Capital equipment
11

1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.




SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.

A48
2.16

Domestic Nonfinancial Statistics • June 1999
GROSS DOMESTIC PRODUCT AND INCOME
B i l l i o n s o f c u r r e n t d o l l a r s e x c e p t a s n o t e d ; q u a r t e r l y data at s e a s o n a l l y a d j u s t e d a n n u a l r a t e s

1997
Account

1996

1997

1998

1998R
Q4

QL

Q2

Q3

Q4 R

GROSS DOMESTIC PRODUCT
1 Total

7,661.6

8,110.9

8,511.0

8,254.5

8,384.2

8,440.6

8,537.9

8,681.2

By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services

5,215.7
643.3
1,539.2
3,033.2

5,493.7
673.0
1,600.6
3,220.1

5,807.9
724.7
1,662.4
3,420.8

5,593.2
682.2
1,613.2
3,297.8

5,676.5
705.1
1,633.1
3,338.2

5,773.7
720.1
1,655.2
3,398.4

5,846.7
718.9
1,670.0
3,457.7

5,934.8
754.5
1,691.3
3,488.9

6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
Structures
9
10
Producers' durable equipment
11
Residential structures

1,131.9
1,099.8
787.9
216.9
571.0
311.8

1,256.0
1,188.6
860.7
240.2
620.5
327.9

1,367.1
1,307.8
938.2
246.9
691.3
369.6

1,292.0
1,220.1
882.8
246.4
636.4
337.4

1,366.6
1,271.1
921.3
245.0
676.3
349.8

1,345.0
1,305.8
941.9
245.4
696.6
363.8

1,364.4
1,307.5
931.6
246.2
685.4
375.8

1,392.4
1,346.7
957.9
250.9
706.9
388.9

32.1
24.5

67.4
63.1

59.3
52.7

71.9
66.9

95.5
90.5

39.2
31.5

57.0
49.3

45.7
39.3

-91.2
873.8
965.0

-93.4
965.4
1,058.8

-151.2
959.0
1,110.2

-98.8
988.6
1,087.4

-123.7
973.3
1,097.1

-159.3
949.6
1,108.9

-165.5
936.2
1,101.7

-156.2
976.8
1,133.0

17 G o v e r n m e n t consumption expenditures and gross investment
18
Federal
19
State and local

1,405.2
518.4
886.8

1,454.6
520.2
934.4

1,487.1
520.6
966.5

1,468.1
520.1
947.9

1,464.9
511.6
953.3

1,481.2
520.7
960.4

1,492.3
519.4
972.9

1,510.2
530.7
979.5

By major type of
20 Final sales, total
21
Goods
22
Durable
23
Nondurable
24
Services
25
Structures

7,629.5
2,780.3
1,228.8
1,551.6
4,179.5
669.7

8,043.5
2,911.2
1,310.1
1,601.0
4,414.1
718.3

8,451.6
3,044.7
1,391.0
1,653.7
4,641.0
765.9

8,182.6
2,948.7
1,334.3
1,614.4
4,501.2
732.7

8,288.7
3,005.8
1,376.9
1,628.8
4,538.4
744.6

8,401.3
3,025.3
1,380.8
1,644.4
4,619.5
756.6

8,480.9
3,029.0
1,373.0
1,655.9
4,678.5
773.5

8,635.5
3,118.8
1,433.1
1,685.7
4,727.7
789.0

32.1
20.8
11.4

67.4
33.6
33.8

59.3
25.2
34.1

71.9
34.0
37.9

95.5
49.9
45.6

39.2
4.5
34.7

57.0
19.5
37.5

45.7
27.0
18.7

6,994.8

7,269.8

7,551.9

7,364.6

7,464.7

7,498.6

7,566.5

7,677.7

6,256.0

6,646.5

6,994.7

6,767.9

6,875.0

6,945.5

7,032.3

7,126.0

4,409.0
3,640.4
640.9
2,999.5
768.6
381.7
387.0

4,687.2
3,893.6
664.2
3,229.4
793.7
400.7
392.9

4,981.0
4,153.9
689.3
3,464.6
827.1
420.1
406.9

4,798.0
3,993.6
671.4
3,322.2
804.4
407.4
397.0

4,882.8
4,065.9
679.5
3,386.4
816.8
414.1
402.8

4,945.2
4,121.6
685.8
3,435.8
823.5
417.9
405.7

5,011.6
4,181.1
692.7
3,488.4
830.5
422.1
408.4

5,084.3
4,246.8
699.2
3,547.6
837.5
426.5
411.0

527.7
488.8
38.9

551.2
515.8
35.5

577.2
548.5
28.7

558.0
526.6
31.4

564.2
536.8
27.4

571.7
544.0
27.7

576.1
550.9
25.2

596.9
562.2
34.7

2
3
4
5

12
13

C h a n g e in business inventories
Nonfarm

14 Net exports of goods and services
15
Exports
16
Imports

product

26 Change in business inventories
27
Durable goods
Nondurable goods
28
MEMO
29 Total G D P in c h a i n e d 1992 d o l l a r s
NATIONAL INCOME
30 Total
31
32
33
34
35
36
37

Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income

38 Proprietors' i n c o m e '
Business and professional'
39
40
Farm 1
41 Rental income of persons 2

150.2

158.2

162.6

158.8

158.3

161.0

163.6

167.5

4 2 Corporate profits'
43
Profits before tax 3
44
Inventory valuation adjustment
45
Capital consumption adjustment

750.4
680.2
-1.2
71.4

817.9
734.4
6.9
76.6

824.6
717.8
14.5
92.3

820.8
736.4
4.3
80.1

829.2
719.1
25.3
84.9

820.6
723.5
7.8
89.4

827.0
720.5
11.7
94.8

821.7
708.1
13.4
100.2

46 Net interest

418.6

432.0

449.3

432.4

440.5

447.1

454.0

455.6

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of C o m m e r c e , Survey of Current
Business.

Selected Measures
2.17

A49

PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1998

1997
Account

1996

1997

1998
Q4

QI

Q2

Q3

Q4 r

PERSONAL INCOME AND SAVING
1 Total personal income

6,425.2

6,784.0

7,126.1 r

6,904.9

7,003.9

7,081.9

7,160.8

7,257.9

2 Wage and salary disbursements
Commodity-producing industries
3
4
Manufacturing
Distributive industries
6
Service industries
Government and government enterprises
7

3,631.1
909.0
674.6
823.3
1,257.9
640.9

3,889.8
975.0
719.5
879.8
1,370.8
664.2

4,149.9r
1,026.9
751.5
939.6r
1,494.0
689.3

3,989.9
1,003.7
741.3
904.5
1,410.2
671.4

4,061.9
1,019.0
750.4
918.9
1,444.5
679.5

4,117.6
1,023.2
750.8
932.2
1,476.4
685.8

4,177.1
1,028.0
750.9
945.8
1,510.6
692.7

4,242.8
1,037.4
754.1
961.5
1,544.6
699.2

387.0
527.7
488.8
38.9
150.2
248.2
719.4
1,068.0
538.0

392.9
551.2
515.8
35.5
158.2
260.3
747.3
1,110.4
565.9

406.9
511.2'
548.5
28.7r
162.6r
263.1
764.8
l,149.0 r
586.5

397.0
558.0
526.6
31.4
158.8
261.3
753.0
1,120.5
572.2

402.8
564.2
536.8
27.4
158.3
261.6
757.0
1,139.0
581.6

405.7
571.7
544.0
27.7
161.0
262.1
763.0
1,145.8
585.0

408.4
576.1
550.9
25.2
163.6
263.0
769.2
1,152.9
589.0

411.0
596.9
562.2
34.7
167.5
265.7
769.9
1,158.3
590.6

8 Other labor income
9 Proprietors' income1
Business and professional1
10
Farm1
11
12 Rental income of persons2
13 Dividends
14 Personal interest income
IS Transfer payments
Old-age survivors, disability, and health insurance benefits
16

306.3

326.2

347.4

333.6

340.9

345.1

349.5

354.1

6,425.2

6,784.0

7,126.1r

6,904.9

7,003.9

7,081.9

7,160.8

7,257.9

890.5

989.0

l,098.3 r

1,025.5

1,066.8

1,092.9

1,108.4

1,124.9

5,534.7

5,795.1

6,027.9r

5,879.4

5,937.1

5,988.9

6,052.4

6,133.1

LESS: Personal outlays

5,376.2

5,674.1

6,000.2r

5,781.2

5,864.0

5,963.3

6,039.8

6,133.6

22 EQUALS: Personal saving

158.5

121.0

21.1'

98.2

73.0

25.6

12.6

-.6

26,335.7
17,893.0
18,989.0

27,136.2
18,340.9
19,349.0

27,938.9r
19,065.0r
19,790.0r

27,398.2
18,530.5
19,478.0

27,718.8
18,771.1
19,632.0

27,783.0
19,007.8
19,719.0

27,972.1
19,156.3
19,829.0

28,299.8
19,336.4
19,980.0

2.9

2.1

.5

1.7

1.2

.4

.2

.0

27 Gross saving

1,274.5

1,406.3

1,468.0

1,428.0

1,482.5

1,448.5

1,474.5

1,466.6

28 Gross private saving

1,114.5

1,141.6

1,090.4

1,131.6

1,130.1

1,079.0

1,078.7

1,073.7

29 Personal saving
30 Undistributed corporate profits1
31 Corporate inventory valuation adjustment

158.5
262.4
-1.2

121.0
296.7
6.9

21.1'
305.4
14.5

98.2
295.0
4.3

73.0
312.0
25.3

25.6
300.9
7.8

12.6
304.8
11.7

-.6
303.9
13.4

Capital consumption allowances
3? Coiporate
33 Noncorporate

452.0
232.3

477.3
242.8

500.6
252.7

487.7
247.0

492.5
248.6

497.8
250.7

503.1
254.2

508.9
257.5

34 Gross government saving
35
Federal
Consumption of fixed capital
36
Current surplus or deficit (—), national accounts
37
State and local
38
Consumption of fixed capital
39
Current surplus or deficit ( - ) , national accounts
40

160.0
-39.6
70.6
-110.3
199.7
77.1
122.6

264.7
49.5
70.6
-21.1
215.2
81.1
134.1

377.6
142.5
69.7
72.8
235.2
85.0r
150.2

296.4
72.3
70.2
2.2
224.1
82.7
141.4

352.4
128.7
69.9
58.8
223.7
83.5
140.2

369.4
143.9
69.5
74.4
225.6
84.3
141.3

395.7
161.6
69.6
92.0
234.2
85.4
148.7

392.9
135.8
70.0
65.8
257.1
86.6
170.5

41 Gross investment

1,242.3

1,350.5

1,391.5

1,360.7

1,428.4

1,362.7

1,372.5

1,402.4

42 Gross private domestic investment
43 Gross government investment
44 Net foreign investment

1,131.9
229.7
-119.2

1,256.0
235.4
-140.9

l,367.1 r
231.&
-212.6

1,292.0
236.5
-167.8

1,366.6
237.4
-175.6

1,345.0
232.5
-214.8

1,364.4
239.7
-231.6

1,392.4
238.3
-228.3

-32.2

-55.8

-76.5

-67.3

-54.1

-85.7

-102.0

-64.2

17

LESS: Personal contributions for social insurance

18 EQUALS: Personal income
19

LESS: Personal tax and nontax payments

20 EQUALS: Disposable personal income
21

MEMO
Per capita (chained 1992 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING

45 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




SOURCE. U.S. Department of Commerce, Survey of Current Business.

A50
3.10

International Statistics • June 1999
U.S. INTERNATIONAL TRANSACTIONS

Summary

Millions of dollars; quarterly data seasonally adjusted except as noted 1
1997
Item credits or debits

1 Balance on current account
2
Merchandise trade balance 2
3
Merchandise exports
4
Merchandise imports
5
Military transactions, net
6
Other service transactions, net
7
Investment income, net
8
U.S. government grants
y
U.S. government pensions and other transfers
10
Private remittances and other transfers
i i Change in U.S. government assets other than official
reserve assets, net (increase, —)

1996

-134,915
-191,337
611,983
-803,320
4,684
78,079
14,236
-15,023
-4,442
-21,112

1997

1998

1998

-155,215
-197,954
679,325
-877,279
6,781
80,967
-5,318
-12,090
-4,193
-23,408

-233,448
-247,985
671,055
-919,040
4,072
74,799
-22,479
-12,492
-4,304
-25,059

Q4

Ql

Q2

Q3

Q4P

-45,043
-49,839
174,284
-224,123
1,103
20,277
-4,247
-5,213
-1,069
-6,055

-47,018
-56,033
171,190
-227,223
1,527
19,134
-2,218
-2,266
-1,073
-6,089

-56,971
-64,778
164,543
-229,321
1,043
19,500
-3,346
-2,063
-1,073
-6,254

-65,694
-64,899
163,414
-228,313
829
17,573
-9,165
-2,663
-1,080
-6,289

-63,765
-62,275
171,908
-234,183
673
18,592
-7,754
-5,500
-1,078
-6,423

-708

174

-836

29

-388

-433

174

-189

12 Change in U.S. official reserve assets (increase, —)
13
Gold
14
Special drawing rights (SDRs)
lb
Reserve position in International Monetary Fund
16
Foreign currencies

6,668
0
370
-1,280
7,578

-1,010
0
-350
-3,575
2,915

-6,784
0
-149
-5,118
-1,517

-4,524
0
-150
-4,221
-153

-444
0
-182
-85
-177

-1,945
0
72
-1,031
-986

-2,026
0
188
-2,078
-136

-2,369
0
-227
-1,924
-218

17 Change in U.S. private assets abroad (increase, —)
18
Bank-reported claims 3
19
Nonbank-reported claims
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net

-374,761
-91,555
-86,333
-115,801
-81,072

-477,666
-147,439
-120,403
-87,981
-121,843

-297,765
-31,040
-45,440
-89,352
-131,933

-118,946
-27,539
-47,907
-8,030
-35,470

-45,193
3,074
-6,596
-6,973
-34,698

-107,786
-24,615
-14,327
-27,878
-40,966

-58,543
-31,996
-20,320
17,056
-23,283

-86,240
22,497
-71,557
-32,983

22 Change in foreign official assets in United States (increase, +)
23
U.S. Treasury securities
24
Other U.S. government obligations
2b
Other U.S. government liabilities4
26
Other U.S. liabilities reported by U.S. banks3
27
Other foreign official assets5

127,344
115,671
5,008
-362
5,704
1,323

15,817
-7,270
4,334
-2,521
21,928
-654

-22,112
-9,946
6,332
-2,506
-12,515
-3,477

-26,979
-24,578
86
-244
-3,250
1,007

11,324
11,336
2,610
-1,059
-607
-956

-10,274
-20,318
254
-422
9,380
832

-46,347
-32,811
1,906
-264
-12,684
-2,494

23,185
31,847
1,562
-761
-8,604
-859

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
U.S. currency flows
33
Foreign purchases of other U.S. securities, net
34
Foreign direct investments in United States, net

436,013
16,478
39,404
154,996
17,362
130,151
77,622

717,624
148,059
107,779
146,710
24,782
196,845
93,449

564,594
42,568
43,803
48,060
16,622
217,312
196,229

247,470
89,643
47,390
35,301
9,900
36,783
28,453

84,313
-50,497
32,707
-1,701
746
77,019
26,039

175,241
37,670
18,040
26,916
2,349
71,017
19,249

145,089
76,993
11,875
-1,438
7,277
20,041
30,341

159,951
-21,598

35 Allocation of special drawing rights
36 Discrepancy
37
Due to seasonal adjustment
38
Before seasonal adjustment

0
-59,641

0
-99,724

0
-3,649

-59,641

-99,724

-3,649

0
-52,007
3,528
-55,535

0
-2,594
6,769
-9,363

0
2,168
2,024
144

0
27,347
-10,195
37,542

0
-30,573
1,399
-31,972

MEMO
Changes in official assets
39 U.S. official reserve assets (increase, —)
40 Foreign official assets in United States, excluding line 25
(increase, +)
41 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)

6,668

-1,010

-6,784

-4,524

-444

-1,945

-2,026

-2,369

127,706

18,338

-19,606

-26,735

12,383

-9,852

-46,083

23,946

14,911

10,822

-1,282

-968

-494

-9,647

3,598

t. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38^-0.
2. Data are on an international accounts basis. The data differ from the Census basis data,
shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from
merchandise trade data and are included in line 5.
3. Reporting banks include all types of depository institutions as well as some brokers and
dealers.




24,283
6,250
49,235
120,600

4. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.

Summary Statistics
3.11

A51

U.S. FOREIGN TRADE'
Millions of dollars; monthly data seasonally adjusted
1998
Item

1996

1997

1999

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.1

Feb.p

1 Goods and services, balance
Merchandise
2
Services
3

-108,574
-191,337
82,763

-110,207
-197,955
87,748

-169,288
-248,159
78,871

-16,733
-22,847
6,114

-14,595
-20,914
6,319

-13,963
-20,280
6,317

-15,165
-21,669
6,504

-14,055
-20,499
6,444

-16,808
-23,259
6,451

-19,438
-26,150
6,712

4 Goods and services, exports
Merchandise
5
Services
6

850,775
611,983
238,792

937,593
679,325
258,268

931,026
670,641
260,385

74,986
53,769
21,217

77,443
55,912
21,531

80,415
58,246
22,169

78,942
57,110
21,832

77,873
56,133
21,740

77,082
55,168
21,914

76,597
54,339
22,258

7 Goods and services, imports
Merchandise
8
Services
9

-959,349
-803,320
-156,029

-1,047,799
-877,279
-170,520

-1,100,314
-918,800
-181,514

-91,719
-76,616
-15,103

-92,038
-76,826
-15,212

-94,378
-78,526
-15,852

-94,107
-78,779
-15,328

-91,928
-76,632
-15,296

-93,890
-78,427
-15,463

-96,035
-80,489
-15,546

1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.

3.12

SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.

U.S. RESERVE ASSETS
Millions of dollars, end of period
1998
Asset

1 Total
2 Gold stock, including Exchange
Stabilization Fund'
3 Special drawing rights2 '
4 Reserve position in International Monetary
Fund2
5 Foreign currencies4

1995

1996

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.p

85,832

75,090

69,954

73,544

75,66

79,183

77,683

81,755

80,675

75,322

74,359

11,050
11,037

11,049
10,312

11,050
10,027

11,046
9,891

11,044
10,106

11,041
10,379

11,041
10,393

11,041
10,603

11,046
10,465

11,048
9,474

11,049
9,682

14,649
49,096

15,435
38,294

18,071
30,809

21,161
31,446

21,644
32,882

22,278
35,485

22,049
34,200

24,111
36,001

24,129
35,035

24,283
30,517

23,231
30,397

1. Gold held "under earmark" at Federal Reserve Banks for foreign and international
accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold
stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted by the
International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of
exchange rates for the currencies of member countries. From July 1974 through December
1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S.

3.13

1999

1997

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'
Millions of dollars, end of period
1998
Asset

1995

1996

Aug.
1 Deposits
Held in custody
2 US. Treasury securities2
3 Earmarked gold"

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.p

386

167

457

161

347

154

211

167

233

200

166

522,170
11,702

638,049
11,197

620,885
10,763

588,337
10,510

578,403
10,457

588,768
10,403

608,060
10,355

607,574
10,343

612,670
10,343

615,139
10,347

610,649
10,347

1. Excludes deposits and U.S. Treasury securities held for international and regional
organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury
securities, in each case measured at face (not market) value.




1999

1997

3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not
included in the gold stock of the United States.

A52
3.15

International Statistics • June 1999
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1998r
Item

1 Total1
2
3
4
5
6
7
8
9
10
11
12

By type
Liabilities reported by banks in the United States*
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities5
By area
Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries

1996r

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.r

Feb.p

756,533

776,505

758,773

733,030

745,152

751,482

757,934

762,236

761,013

113,098
198,921

135,384
148,301

144,120
130,398

131,551
128,146

134,822
128,598

125,132
133,702

123.915
134,141

121,834
136,840

125,275
135,471

384,045
5,968
54,501

428,004
5,994
58,822

416,313
6,311
61,631

406,009
6,350
60,974

415,010
5,997
60,725

426,853
6,035
59,760

432,127
6,074
61,677

434,601
6,113
62,848

430,902
6,151
63,214

246,983
38,723
79,949
403,265
7,242
6,457

252,289
36,177
96,942
400,144
9,981
7,058

255,668
33,815
97,806
381,683
11.364
4.523

247,302
33,598
79,164
383,412
11,584
4,056

259,698
34,644
77,469
385,565
10,976
2,886

261,028
36,885
76,759
389,359
10,084
3,453

256,026
36,715
79,417
398,717
10,059
3,086

258,298
37,471
73,986
405,425
10.144
2.998

256,164
38,462
75,986
404,111
9,838
2,538

1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper,
negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of
zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning
March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue;

3.16

1999

1997r

LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies

Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April
1993, 30-year maturity issue.
5. Debt securities of U.S. government corporations and federally sponsored agencies, and
U.S. corporate stocks and bonds.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the United
States, and on the 1994 benchmark survey of foreign portfolio investment in the United
States.

Reported by Banks in the United States'

Millions of dollars, end of period
1998
Item

1 Banks' liabilities
2 Banks' claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers"

1995

109,713
74,016
22,696
51,320
6,145

1. Data on claims exclude foreign currencies held by U.S. monetary authorities.




1996

103,383
66,018
22,467
43,551
10,978

1997

117,524
83,038
28,661
54.377
8,191

Mar.

June

Sept.

Dec.

100,708
82,209
28,127
54,082
7,926

87,889
68,286
27,387
40,899
7,354

92,934
67,901
27,293
40,608
8,453

101,125
74,013
41,846
32,167
29,975

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.

Nonbank-Reported
3.17

LIABILITIES TO FOREIGNERS
Payable in U.S. dollars

Data

A53

Reported by Banks in the United States'

Millions of dollars, end of period
1999

1998
Item

1996

1998r

1997

Aug.

Sept.

Oct.

Nov.

Dec.1"

Jan.r

Feb.p

BY HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
?, Banks' own liabilities
3
Demand deposits
4
Time deposits2
Other3
5
Own foreign offices4
6
7 Banks' custodial liabilities5
8
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
9
instruments7
Other
10
11 Nonmonetary international and regional organizations8 . .
17. Banks' own liabilities
Demand deposits
13
14
Time deposits*
Other3
15
16
17
18
19

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other

70 Official institutions9
71
Banks' own liabilities
Demand deposits
7.2
23
Time deposits2
24
Other3
75
26
27
28

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other

79 Banks 10
30
Banks' own liabilities . .
31
Unaffiliated foreign banks
Demand deposits
32
33
Time deposits2
Other3
34
Own foreign offices4
35
36
37
38
39

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other

40 Other foreigners
Banks' own liabilities
41
Demand deposits
47
43
Time deposits2
Other3
44

1,162,148

1,283,787

1,346,654

1,341,295

1,350,292

1,371,998

1,346,154

1,346,654

1,332,241

1,339,175

758,998
27,034
186,910
143,510
401,544

883,740
32,104
198,546
168,011
485,079

884,356
29,341
151,589
140,753
562,673

928,182
33,038
183,556
190,542
521,046

917,008
33,547
174,173
165,205
544,083

911,258
32,071
158,664
153,269
567,254

880,616
32,104
149,746
143,341
555,425

884,356
29,341
151,589
140,753
562,673

872,123
33,039
147,456
145,309
546,319

879,415
31,681
153,247
161,556
532,931

403,150
236,874

400,047
193,239

462,298
183,490

413,113
162,235

433,284
160,598

460,740
168,764

465,538
182,917

462,298
183,490

460,118
185,231

459,760
184,851

72,011
94,265

93,641
113,167

141,103
137,705

123,378
127,500

142,169
130,517

151,239
140,737

142,399
140,222

141,103
137,705

137,428
137,459

134,109
140,800

13,972
13,355
29
5,784
7,542

11,690
11,486
16
5,466
6,004

11,833
10,850
172
5,793
4,885

15,188
13,684
59
6,252
7,373

15,215
13,862
408
5,763
7,691

12,810
11,644
97
5,418
6,129

13,207
12,267
234
5,802
6,231

11,833
10,850
172
5,793
4,885

13,839
12,829
62
6,161
6,606

19,187
18,430
187
7,315
10,928

617
352

204
69

983
636

1,504
490

1,353
435

1,166
509

940
570

983
636

1,010
623

757
549

265
0

133
2

347
0

1,012
2

818
100

657
0

370
0

347
0

387
0

207
1

312,019
79,406
1,511
33,336
44,559

283,685
102,028
2,314
41,396
58,318

258,056
79,149
2,787
28,947
47,415

274,518
101,608
3,456
35,578
62,574

259,697
85,310
3,607
28,076
53,627

263,420
84,826
3,325
26,148
55,353

. 258,834
79,450
2,744
25,659
51,047

258,056
79,149
2,787
28,947
47,415

258,674
76.044
3,666
24,176
48,202

260,746
77,262
2,850
25,988
48,424

232,613
198,921

181,657
148,301

178,907
134,141

172,910
130,398

174,387
128.146

178,594
128,598

179,384
133,702

178,907
134,141

182.630
136,840

183,484
135,471

33,266
426

33,151
205

44,092
674

41,759
753

45,684
557

49,691
305

45,213
469

44,092
674

45,202
588

47,213
800

694,835
562,898
161,354
13,692
89,765
57,897
401,544

816,007
642,207
157,128
17,527
83,433
56,168
485,079

885,269
676,035
113,362
14,072
46,273
53,017
562,673

852,890
673,127
152,081
16,063
74,201
61,817
521,046

876,463
687,824
143,741
15,799
71,259
56,683
544,083

898,909
690,862
123,608
15,802
56,193
51,613
567,254

885,767
673,486
118,061
15,119
51,352
51,590
555,425

885,269
676,035
113,362
14,072
46,273
53,017
562,673

866,002
657,930
111,611
15,327
46,745
49,539
546,319

854,319
647,945
115,014
15,335
46,728
52,951
532,931

131,937
23,106

173,800
31,915

209,234
35,544

179,763
20,696

188,639
21,563

208,047
27,556

212,281
35,213

209,234
35,544

208,072
35,325

206,374
34,472

17,027
91,804

35,393
106,492

45,102
128,588

40,180
118,887

44,807
122,269

48,240
132,251

45,132
131,936

45,102
128,588

44,087
128,660

40,108
131,794

141,322
103,339
11,802
58,025
33,512

172,405
128,019
12,247
68,251
47,521

191,496
118,322
12,310
70,576
35,436

198,699
139,763
13,460
67,525
58,778

198,917
130,012
13,733
69,075
47,204

196,859
123,926
12,847
70,905
40,174

188,346
115,413
14,007
66,933
34,473

191,496
118,322
12,310
70,576
35,436

193,726
125,320
13,984
70,374
40,962

204,923
135,778
13,309
73,216
49,253

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other

37,983
14,495

44,386
12,954

73,174
13,169

58,936
10,651

68,905
10,454

72,933
12,101

72,933
13,432

73,174
13,169

68,406
12,443

69,145
14,359

21,453
2,035

24,964
6,468

51,562
8,443

40,427
7,858

50,860
7,591

52,651
8,181

51,684
7,817

51,562
8,443

47,752
8,211

46,581
8,205

MEMO
49 Negotiable time certificates of deposit in custody for
foreigners

14,573

16,083

27,026

25,867

27,391

29,933

28,793

27,026

25,858

23,341

45
46
47
48

1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
2. Excludes negotiable time certificates of deposit, which are included in "Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and to foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term securities, held
by or through reporting banks for foreign customers.




6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time certificates of
deposit.
8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for International
Settlements.
10. Excludes central banks, which are included in "Official institutions."

A54
3.17

International Statistics • June 1999
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
1998
Item

1996

1997

1999

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan. r

Feb. p

AREA
50 Total, all foreigners
51 Foreign countries
52 Europe
53
Austria
54
Belgium and Luxembourg
55
Denmark
56
Finland
57
France
58
Germany
59
Greece
60
Italy
61
Netherlands
62
Norway
63
Portugal
64
Russia
65
Spain
66
Sweden
Switzerland
67
68
Turkey
69
United Kingdom
70
Yugoslavia1'
71
Other Europe and other former U.S.S.R. 1 "
72 Canada
73 Latin America and Caribbean
74
Argentina
/5
Bahamas
76
Bermuda
77
Brazil
78
British West Indies
79
Chile
80
Colombia
81
Cuba
82
Ecuador
83
Guatemala
84
Jamaica
85
Mexico
86
Netherlands Antilles
87
Panama
88
Peru
89
Uruguay
90
Venezuela
91
Other
92 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
97
98
Israel
99
Japan
100
Korea (South)
101
Philippines
102
Thailand
103
Middle Eastern oil-exporting countries"
104
Other
93
94
95
96

1,283,787

l,346,654 r

1,341,295

1350,292

1371,998

1,346,154

1346,654 r

1,332,241

1,339,175

1,148,176

1,272,097

1,334,82l

r

1,326,107

1,335,077

1,359,188

1,332,947

l,334,821 r

1,318,402

1,319,988

376,590
5,128
24,084
2,565
1,958
35,078
24,660
1,835
10,946
11,110
1,288
3,562
7,623
17,707
1,623
44,538
6,738
153,420
206
22,521

420,432
2,717
41,007
1,514
2,246
46,607
23,737
1,552
11,378
7,385
317
2,262
7,968
18,989
1,628
39,023
4,054
181,904
239
25,905

427,367 r
3,178 r
42,818 r
l,437 r
1,862
44,616 r
21,357
2,066
7,103
10,793 r
710
3,235
2,439 r
15,775
3,027
50,654
4,286
181,554 r
258
30,199 r

457,537
2,671
35,086
2,128
1,350
48,328
28,751
2,941
10,625
9,239
1,469
2,424
2,718
14,283
1,769
39,362
4,317
219,197
242
30,637

450,587
3,137
33,934
1,578
1,181
50,405
25,811
2,544
9,183
8,066
688
2,292
3,085
20,485
3,285
48,393
4,264
204,915
253
27,088

451,350
2,799
39,911
1,813
1,193
47,348
22,024
2,901
7,124
7,251
1,149
2,377
3,735
26,569
3,257
47,332
4,105
202,536
362
27,564

449,567
2,824
42,014
1,675
1,706
48,169
22,606
2,444
6,378
9,298
797
2,400
2,698
27,017
3,857
50,167
3,842
195,099
271
26,305

427,367 r
3,178 r
42,818 r
l,437 r
1,862
44,616 r
21,357
2,066
7,103
10,793 r
710
3,235
2,439 r
15,775
3,027
50,654
4,286
181,554 r
258
30,199 r

429,636
2,902
38,897
1,200
1,989
44,444
20,315
2,195
6,155
10,580
1,065
2,543
2,231
12,843
3,132
59,871
5,105
177,240
275
36,654

436,331
3,070
41,594
1,826
1,643
47,620
23,111
2,509
6,684
14,792
1,102
2,225
2,438
13,457
2,918
60,345
5,045
173,543
287
32,122

1,162,148

38,920

28,341

30,212

27,844

28,701

31,278

29,249

30,212

29,725

28,019

467,529
13,877
88,895
5,527
27,701
251,465
2,915
3,256
21
1,767
1,282
628
31,240
6.099
4,099
834
1,890
17,363
8,670

536,393
20,199
112,217
6,911
31,037
276,418
4,072
3,652
66
2.078
1,494
450
33.972
5,085
4,241
893
2,382
21,601
9,625

554,561 r
19,013
118,085
6,839
15,800
302,299 r
5,010
4,616
62
1,573
1,332r
539
37,148
5,010
3,864
840
2,486
19,894
10,151

556,699
21,655
113,543
7,332
27,824
291,098
4,726
4,102
62
1,608
1,237
550
38,087
8,340
3,675
900
2,091
20,125
9,744

561,502
18,384
124,249
7,920
18,453
298,697
5,725
4,475
62
1,540
1,241
541
35,681
8,588
3,826
843
2,276
19,180
9,821

575,837
17,706
128,893
7,247
17,308
310,058
5,598
4,888
57
1,679
1,232
578
38,058
6,255
3,793
799
2,223
19,662
9,803

545,251
18,892
115,598
7,241
13,370
298,260
4,778
4.124
63
1,510
1,204
524
36,720
6,009
3,774
814
2,199
19,631
10,540

554,56 l r
19,013
118,085
6,839
15,800
302,299 r
5,010
4,616
62
1,573
l,332 r
539
37,148
5,010
3,864
840
2,486
19,894
10,151

540,480
17,175
121,606
8,969
12,268
287,124
5,188
4,535
64
1,525
1,224
565
35,965
5,681
4,499
864
2,380
20,250
10,598

537,394
18,228
118,727
8,370
12,913
284,639
5,189
4,462
56
1,513
1,337
542
35,891
8,406
4,401
828
2,274
19,354
10,264

249,083

269,379

307,140 r

266,480

275,745

284,441

293,584

307,140 r

301,454

302,514

30,438
15,995
18,789
3,930
2,298
6,051
117,316
5,949
3,378
10,912
16,285
17,742

18.252
11,840
17,722
4.567
3.554
6,281
143,401
13,060
3,250
6,501
14,959
25,992

13,041
12,708
20,898 r
5,250 r
8,282 r
7,749
168,236 r
12,454
3,324 r
7,359 r
15,609 r
32,230 r

18,506
11,290
18,349
6,437
5,651
5,296
131,376
12,493
2,777
7,869
14,532
31,904

18,523
12,080
16,627
5,144
5,470
5,984
142,767
12,971
2,712
6,664
16,627
30,176

15,814
12,802
16,508
5,337
5,671
4,781
156,340
12,505
2,539
7,134
14,718
30,292

13,784
12,361
16,739
5,089
6,247
8,106
164,311
12,396
2,849
6,788
16,370
28,544

13,041
12,708
20,898 r
5,250 r
8,282 r
7,749
168.2361"
12,454
3,324 r
7,359 r
15,609 r
32,230 r

14,854
10,980
22,844
5,279
7,909
7,287
161,207
12,446
2,318
7,300
14,655
34,375

15,345
12,211
25,509
5,241
6,172
7,598
161,073
9,990
2,482
6,590
16,152
34,151

8,116
2,012
112
458

10,347
1,663
138
2,158

10,562
1,459
76
2,428
35
3,684
2,880

11,098
1,616
88
2,658
6
3,727
3,003

9,749
1,288
78
2,358
7
3,291
2,727

8,889
1,498
75
1,659
3,017
2,628

8,905 r
1,339
97
1,522
5
3,088
2,854 r

9,110
1,856
98
1,308
6
2,989
2,853

8,658
1,902
73
1,343
13
2,737
2,590

105 Africa
106
Egypt
107
Morocco
108
South Africa
109
Zaire
110
Oil-exporting countries 14
111
Other

10

10

2,626
2,898

3,060
3.318

8,905 r
1,339
97
1,522
5
3,088
2,854 r

112 Other
113
Australia
114
Other

7,938
6,479
1,459

7,205
6,304
901

6,636 r
5,495 r
1,141

6,985
5,931
1,054

7,444
6,427
1,017

6,533
5,372
1,161

6,407
5,180
1,227

6,636 r
5,495 r
1,141

7,997
6,854
1,143

7,072
5,550
1,522

13,972
12,099
1,339
534

11,690
10,517
424
749

1 l,833 r
10,221 r
594 r
1,018

15,188
12,825
721
1,642

15,215
12,782
803
1,630

12,810
10,519
1,008
1,283

13,207
11,298
598
1,311

1 l,833 r
10,221 r
594 r
1,018

13,839
11,787
917
1,135

19,187
16,560
1,411
1,216

115 Nonmonetary international and regional organizations . .
lib
International 15
117
Latin American regional 16
118
Other regional 17

11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992. has
included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
14. Comprises Algeria, Gabon, Libya, and Nigeria.




12

15. Principally the International Bank for Reconstruction and Development. Excludes
"holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian, African, Middle Eastern, and European regional organizations, except the Bank
for International Settlements, which is included in "Other Europe."

Nonbank-Reported
3.18

Data

A55

BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States'
Payable in U.S. Dollars
Millions of dollars, end of period
1999

1998
Area or country

1996

1997

1998
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.r

Feb.p

1 Total, all foreigners

599,925

708,225

734,794r

764,878

768,427

749,543

756,110

734,794 r

716,521

710,070

2 Foreign countries

597,321

705,762

731,176r

760,488

763,105

744,153

751,872

731,176 r

712,936

706,055

165,769
1,662
6,727
492
971
15,246
8,472
568
6,457
7,117
808
418
1,669
3,211
1,739
19,798
1,109
85,234
115
3,956

199,880
1,354
6,641
980
1,233
16,239
12,676
402
6,230
6,141
555
777
1,248
2,942
1,854
28,846
1,558
103,143
52
7,009

233,480r
1,043
7,187
2,383r
1,070
15,251
15,922
575
7,283
5,734
827
669r
789
5,735
4,223
46,880r
1,982
106,358r
53
9,516r

227,688
1,856
6,779
1,374
1,161
17,314
12,029
530
8,617
4,321
1,110
725
1,209
5,225
4,456
49,258
1,990
99,174
53
10,507

234,967
1,849
8,200
1,059
1,073
17,077
15,375
373
6,510
4,803
640
975
920
7,980
4,319
55,798
1,900
97,436
53
8,627

224,661
2,358
9,245
1,768
1,149
16,307
15,121
415
7,153
5,230
662
885
883
6,051
4,508
43,337
1,848
98,746
53
8,942

228,924
2,311
7,409
2,524
1,050
18,881
17,997
510
6,544
5,686
385
679
760
5,234
5,087
45,858
1,915
97,072
53
8,969

233,480r
1,043
7,187
2,383r
1,070
15,251
15,922
575
7,283
5,734
827
669r
789
5,735
4,223
46,880r
1,982
106,358r
53
9,516r

225,892
2,634
5,599
1,816
963
18,575
15,115
533
6,168
5,828
645
584
742
4,560
4,338
46,122
1,796
98,959
53
10,862

229,661
1,809
6,933
1,616
1,233
18,418
16,362
624
5,714
5,866
561
888
724
4,260
4,589
50,797
1,857
97,424
57
9,929

3 Europe
4
Austria
Belgium and Luxembourg
5
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
15
Russia
16
Spain
17
Sweden
18
Switzerland
19
Turkey
20
United Kingdom
21
Yugoslavia2
22
Other Europe and other former U.S.S.R.3

26,436

27,189

47,212

41,402

41,165

37,316

44,830

47,212

42,925

40,743

24 Latin America and Caribbean
25
Argentina
26
Bahamas
27
Bermuda
28
Brazil
29
British West Indies
30
Chile
31
Colombia
3?
Cuba
33
Ecuador
34
Guatemala
35
Jamaica
36
Mexico
37
Netherlands Antilles
38
Panama
39
Peru
40
Uruguay
41
Venezuela
42
Other

274,153
7,400
71,871
4,129
17,259
105,510
5,136
6,247
0
1,031
620
345
18,425
25,209
2,786
2,720
589
1,702
3,174

343,730
8,924
89,379
8,782
21,696
145,471
7,913
6,945
0
1,311
886
424
19,428
17,838
4,364
3,491
629
2,129
4,120

342,08 l r
9,553
96,455
4,969
16,193
153,269
8,261
6,523
0
1,400
1,127
239
21,143
6,779
3,584r
3,260
1,126
3,089
5,111

379,383
8,724
77,875
9,629
23,530
192,334
8,307
6,905
0
1,518
950
318
20,078
12,939
4,157
4,061
1,055
2,649
4,354

373,237
8,777
86,867
10,610
19,073
182,757
8,345
6,813
0
1,458
1,166
305
20,677
10,294
4,226
3,829
955
2,638
4,447

368,394
9,087
88,923
6,585
17,644
183,122
8,549
6,764
0
1,444
947
330
22,039
7,323
4,011
3,706
958
2,689
4,273

368,212
9,225
91,171
5,702
17,801
179,223
8,824
6.639
0
1,351
1,483
299
22,483
7,696
3,864
3,618
1,040
2,788
5,005

342,081'
9,553
96,455
4,969
16,193
153,269
8,261
6,523
0
1,400
1,127
239
21,143
6,779
3,584r
3,260
1,126
3,089
5,111

344,020
9,713
93,000
5,547
15,616
157,683
8,232
6,433
0
1,403
1,107
333
21,128
7,403
3,549
3,364
997
3,312
5,200

340,291
10,184
91,102
6,028
15,357
154,982
8,085
6,462
0
1,341
1,269
588
21,534
6,571
3,384
3,353
934
3,684
5,433

43 Asia
China
44
Mainland
45
Taiwan
46
Hong Kong
47
India
48
Indonesia
49
Israel
50
Japan
51
Korea (South)
57
Philippines
53
Thailand
54
Middle Eastern oil-exporting countries4
55
Other

122,478

125,092

98,650r

102,382

104,614

104,781

100,768

98,650r

90,840

86,388

1,401
1,894
12,802
1,946
1,762
633
59,967
18,901
1,697
2,679
10,424
8,372

1,579
922
13,991
2,200
2,651
768
59,549
18,162
1,689
2,259
10,790
10,532

1,311
1,041
9,082r
1,440r
1,954r
1,166
46,712
8,238r
l,465 r
l,806 r
16,145
8,290r

2,703
651
13,821
1,878
2,031
898
44,822
11,508
1,259
1,883
12,136
8,792

1,380
1,031
10,548
1,823
2,108
941
52,213
9,823
1,280
2,129
12,681
8,657

2,275
1,079
8,244
1,582
2,044
1,504
52,904
9,733
1,128
1.952
13,531
8,805

2,488
957
8,238
1,533
2,069
916
48,406
8,947
1,619
1,895
15,077
8,623

1,311
1,041
9,082r
1,440r
l,954 r
1,166
46,712
8,238r
1,465r
l,806 r
16,145
8,290r

2,691
728
8,332
1,483
1,948
833
41,817
8,679
1,310
1,759
14,328
6,932

2,400
778
6,736
1,529
2,110
774
39,064
8,461
1,589
1,708
12,861
8,378

56 Africa
57
Egypt
58
Morocco
59
South Africa
60
Zaire
61
Oil-exporting countries5
62
Other

2,776
247
524
584
0
420
1,001

3,530
247
511
805
0
1,212
755

3,122
257
372
643
0
936
914

3,262
279
426
653
0
1,046
858

3,012
272
390
694
0
787
869

2,785
322
405
665
0
533
860

2,611
259
390
704
0
454
804

3,122
257
372
643
0
936
914

2,899
302
378
802
0
516
901

3,027
264
361
876
0
625
901

63 Other
64
Australia
65
Other

5,709
4,577
1,132

6,341
5,300
1,041

6,63 r
6,167
464r

6,371
5,999
372

6,110
5,783
327

6,216
5,809
407

6,527
6,008
519

6,63 l r
6,167
464r

6,360
5,866
494

5,945
5,275
670

66 Nonmonetary international and regional organizations6 , . .

2,604

2,463

3,618

4,390

5,322

5,390

4,238

3,618

3,585

4,015

23 Canada

1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements. Since December 1992, has included all
parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.




4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in "Other Europe."

A56
3.19

International Statistics • June 1999
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars

Reported by Banks in the United States'

M i l l i o n s o f dollars, end o f period

1999

1998
Type of claim

1996

1998R

1997

Aug.

Sept.

Nov.

749,543
28,164
476,973
109,140
26,713
82,427
135,266

756,110
25,993
487,641
117,919
33,774
84,145
124,557

743,919

852,852

875,332

599,925
22,216
341,574
113,682
33,826
79,856
122,453

708,225
20,581
431,685
109,230
30,995
78,235
146,729

734,794
23,540
484,356
105,732
26,808
78,924
121,166

143.994
77,657

144,627
73,110

140,538
78,167

158,051
89,602

140,538
78,167

51,207

53,967

48,848

53,512

48,848

15,130

17,550

13,523

14,937

13,523

MEMO
13 Customer liability on acceptances

10,388

9,624

4,519

6,068

4,519

14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States 5

39,661

33,816

39,978

9 Claims of banks' domestic customers 3
Deposits
10
11
Negotiable and readily transferable
instruments 4
12
Outstanding collections and other
claims

926,478

28,436

25,082

34,265

32,888

734,794
23,540
484,356
105,732
26,808
78,924
121,166

716,521
28,848
459,017
106,230
30,231
75,999
122,426

710,070
29,688
461,685
102,235
29,291
72,944
116,462

38,941

39,978

n.a.

principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.

1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are
for quarter ending with month indicated.
Reporting banks include all types of depository institution as well as some brokers and
dealers.
2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists

3.20

768,427
26,377
486,452
108,972
30,426
78,546
146,626

Feb. p

875,332

1 Total
2 Banks' claims
Foreign public borrowers
3
4
Own foreign offices*
Unaffiliated foreign banks
6
Deposits
7
Other
All other foreigners
8

764,878
29,758
466.019
106,034
24,593
81.441
163,067

Jan. r

Dec. r

Oct.

BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars

Reported by Banks in the United States'

M i l l i o n s o f dollars, e n d o f period

1998
Maturity, by borrower and area"

1 Total

2
3
4
5
6
7

8
9
10
11
12
13

By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean

Africa
All other 3
Maturity of more than one year
14
Europe
15
Canada
16
Latin America and Caribbean
17
18
Africa
19
All other 3

1996

1995

Mar.

June

Sept.

Dec. p

224,932

258,106

276,550

285,590

292,788

281,136

250,366

178,857
14,995
163,862
46,075
7,522
38,553

211,859
15,411
196,448
46,247
6,790
39,457

205,781
12,081
193,700
70,769
8,499
62,270

214,779
16,874
197,905
70,811
11.285
59,526

211,347
16,997
194,350
81.441
10,688
70,753

208,374
14,613
193,761
72,762
10,926
61,836

186,422
13,675
172,747
63,944
9,838
54,106

55,622
6,751
72,504
40,296
1,295
2,389

55,690
8,339
103,254
38,078
1,316
5,182

58,294
9,917
97.207
33,964
2,211
4,188

69,150
9,297
101,070
28,751
2,227
4,284

73,787
8,766
99,611
23,570
1,116
4,497

68,996
8,953
99,646
22,330
1,762
6,687

68,708
11,125
81,454
18,035
1,835
5,265

4,995
2,751
27,681
7,941
1,421
1,286

6,965
2,645
24,943
9,392
1,361
941

13,240
2,525
42,049
10,235
1,236
1,484

15,118
2,765
39,363
10,806
1,254
1,505

15,606
2,571
47,969
12,630
1,259
1,406

15,395
2,982
39,138
12,173
1,170
1,904

15,055
3,140
33,340
10,039
1,233
1,137

1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.




1997

2. Maturity is time remaining until maturity.
3. Includes nonmonetary international and regional organizations.

Nonbank-Reported
3.21

CLAIMS ON FOREIGN COUNTRIES

Data

A57

Held by U.S. and Foreign Offices of U.S. Banks'

Billions of dollars, end of period
1996
Area or country

1 Total

1994

499.5

1998

1997

1995

551.9

Dec.

Mar.

June

Sept.

Dec.

Mar.

June

Sept.

Dec.p

645.3

647.6

678.8

711.0

726.0

739.1

746.6

723.0

688.2

258.5
10.9
19.9
28.9
17.9
8.1
2.1
7.4
125.1
15.5
22.7

247.0
13.1
18.0
30.7
11.3
7.7
2.2
8.2
114.9
16.7
24.1

191.2
7.2
19.1
24.7
11.8
3.6
2.7
5.1
85.8
10.0
21.1

206.0
13.6
19.4
27.3
11.5
3.7
2.7
6.7
82.4
10.3
28.5

228.3
11.7
16.6
29.8
16.0
4.0
2.6
5.3
104.7
14.0
23.7

231.4
14.1
19.7
32.1
14.4
4.5
3.4
6.0
99.2
16.3
21.7

250.0
9.4
17.9
34.1
20.2
6.4
3.6
5.4
110.6
15.7
26.8

247.8
11.4
20.2
34.7
19.3
7.2
4.1
4.8
108.3
15.1
22.6

242.8
11.0
15.4
28.6
15.5
6.2
3.3
7.2
113.4
13.7
28.6

249.0
11.2
15.5
25.5
19.7
7.3
4.8
5.6
120.1
13.5
25.8

275.0
13.1
20.5
28.7
19.5
8.3
3.1
6.9
134.8
16.5
23.7

13 Other industrialized countries
14
Austria
15
Denmark
16
Finland
17
Greece
18
Norway
19
Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia

45.7
1.1
1.3
.9
4.5
2.0
1.2
13.6
1.6
3.2
1.0
15.4

50.2
.9
2.6
.8
5.7
3.2
1.3
11.6
1.9
4.7
1.2
16.4

65.7
1.1
1.5
.8
6.7
8.0
.9
13.2
2.7
4.7
2.0
24.0

66.4
1.9
1.7
.7
6.3
5.3
1.0
14.4
2.8
6.3
1.9
24.4

71.7
1.5
2.8
1.4
6.1
4.7
1.1
15.4
3.4
5.5
1.9
27.8

73.8
1.7
3.7
1.9
6.2
4.6
1.4
13.9
4.4
6.1
1.9
28.0

64.5
1.5
2.4
1.3
5.1
3.6
.9
11.7
4.5
8.2
2.2
23.1

74.3
1.7
2.0
1.5
6.1
4.0
.7
16.5
4.9
9.9
3.7
23.2

72.0
1.9
2.1
1.4
5.8
3.4
1.3
15.1
6.5
9.6
5.0
20.0

71.4
2.1
2.8
1.6
5.7
3.3
1.0
17.5
5.2
10.3
3.7
18.2

67.7
1.4
2.1
1.4
5.9
3.2
1.3
13.5
4.8
10.4
3.5
20.3

25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries

24.1
.5
3.7
3.8
15.3
.9

22.1
.7
2.7
4.8
13.3
.6

19.7
1.1
2.4
5.2
10.7
.4

21.8
1.1
1.9
4.9
13.2
.7

22.3
.9
2.1
5.6
12.5
1.2

22.9
1.2
2.2
6.5
11.8
1.1

26.0
1.3
2.5
6.7
14.4
1.2

25.7
1.3
3.3
5.5
14.3
1.4

25.3
1.2
3.2
5.1
15.5
.3

25.8
1.2
3.1
4.7
16.1
.8

26.9
1.2
3.2
4.7
16.9
1.0

31 Non-OPEC developing countries

2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
5
Germany
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12
Japan

96.0

112.6

130.3

128.1

140.6

137.0

138.7

147.4

144.4

138.2

141.5

32
33
34
35
36
37
38

Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other

11.2
8.4
6.1
2.6
18.4
.5
2.7

12.9
13.7
6.8
2.9
17.3
.8
2.8

14.3
20.7
7.0
4.1
16.2
1.6
3.3

14.3
22.0
6.8
3.7
17.2
1.6
3.4

16.4
27.3
7.6
3.3
16.6
1.4
3.4

17.1
26.1
8.0
3.4
16.4
1.8
3.6

18.4
28.6
8.7
3.4
17.4
2.0
4.1

19.3
32.4
9.0
3.3
17.7
2.1
4.0

20.2
29.9
9.1
3.6
17.9
2.2
4.4

22.3
23.4
8.5
3.4
18.4
2.2
4.6

22.3
24.8
8.3
3.2
18.4
2.2
5.4

39
40
41
42
43
44
45
46
47

Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia

1.1
9.2
4.2
.4
16.2
3.1
3.3
2.1
4.7

1.8
9.4
4.4
.5
19.1
4.4
4.1
4.9
4.5

2.5
10.3
4.3
.5
21.5
6.0
5.8
5.7
4.1

2.7
10.5
4.9
.6
14.6
6.5
6.0
6.8
4.3

3.6
10.6
5.3
.8
16.3
6.4
7.0
7.3
4.7

4.3
9.7
4.9
1.0
16.2
5.6
5.7
6.2
4.5

3.2
9.0
4.9
.7
15.6
5.1
5.7
5.4
4.3

4.2
11.7
5.0
.7
16.2
4.5
5.0
5.5
4.2

3.9
11.3
4.9
.9
14.5
4.7
5.4
4.9
3.7

2.8
12.1
5.3
.9
12.9
5.0
4.7
5.3
3.1

3.0
12.8
5.3
1.1
13.6
5.6
5.1
4.6
2.9

48
49
50
51

Africa
Egypt
Morocco
Zaire
Other Africa 3

.3
.6
.0
.8

.4
.7
.0
.9

.7
.7
.1
.9

.9
.6
.0
.9

1.1
.7
.0
.9

.9
.7
.0
.9

.9
.6
.0
.8

1.0
.6
.0
1.1

1.5
.6
.0
.8

1.7
.5
.0
1.1

1.3
.5
.0
1.0

2.7
.8
1.9

4.2
1.0
3.2

6.9
3.7
3.2

8.9
3.5
5.4

7.1
4.2
2.9

9.8
5.1
4.7

9.1
5.1
4.0

12.0
7.5
4.6

10.9
6.8
4.1

6.0
2.8
3.2

5.2
2.2
3.1

72.9
10.2
8.4
21.4
1.6
1.3

99.2

6.3
32.4
10.3
1.4

134.7
20.3
4.5
37.2
26.1
2.0

131.3
20.9
6.7
32.8
19.9
2.0

129.6
16.1
7.9
35.1
15.8
2.6

138.9
19.8
9.8
45.7
21.7
2.1

145.7
29.9
9.8
43.4
14.6
3.1

129.3
29.2
9.0
24.9
14.0
3.2

123.5
22.7
9.3
33.9
10.5
3.3

118.6
28.9
10.4
27.4
6.0
4.0

90.4
32.6
4.5
12.3
2.6
3.8

20.0
10.1
.1
66.9

25.0
13.1
.1
57.6

27.9
16.7
.1
59.6

30.8
17.9
.1
59.6

35.2
16.7
.3
57.6

27.2
12.7
.1
80.8

32.2
12.7
.1
99.1

33.8
15.0
.1
101.3

30.0
13.5
.2
95.6

30.6
11.1
.2
104.5

23.2
11.1
.2
109.4

52 Eastern Europe
53
Russia4
54
Other
55 Offshore banking centers
56
Bahamas
57
Bermuda
58
Cayman Islands and other British West Indies
59
Netherlands Antilles
60
Panama5
61
Lebanon
62
Hong Kong, China
63
Singapore
64
Other
65 Miscellaneous and unallocated7

11.0

1. The banking offices covered by these data include U.S. offices and foreign branches of
U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered
include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include
large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository
institutions as well as some types of brokers and dealers. To eliminate duplication, the data
are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign
branch of the same banking institution.
These data are on a gross claims basis and do not necessarily reflect the ultimate country
risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks
are available in the quarterly Country Exposure Lending Survey published by the Federal
Financial Institutions Examination Council.




2. Organization of Petroleum Exporting Countries, shown individually; other members of
OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United
Arab Emirates); and Bahrain and Oman (not formally members of OPEC).
3. Excludes Liberia. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. Includes Canal Zone.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.

A58

International Statistics • June 1999

3.22

LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period

1997
Type of liability, and area or country

1995

1996

1998

1997
Sept.

Dec.

Mar.

June

Sept.

Dec/

1 Total

46,448

61,782

60,037

55,891

60,037

58,040

51,433

49,278

46,553

2 Payable in dollars
3 Payable in foreign currencies

33,903
12,545

39,542
22,240

41,956
18,081

39,746
16,145

41,956
18,081

42,258
15,782

40,026
11,407

38,409
10,869

36,651
9,902

By type
4 Financial liabilities
Payable in dollars
6
Payable in foreign currencies

24,241
12,903
11,338

33,049
11,913
21,136

29,532
13,043
16,489

26,461
11,487
14,974

29,532
13,043
16,489

28,050
13,568
14,482

22,322
11,988
10,334

19,331
9,812
9,519

19,255
10,371
8,884

7 Commercial liabilities
8
Trade payables
y
Advance receipts and other liabilities

22,207
11.013
11,194

28,733
12,720
16,013

30,505
10,904
19,601

29,430
10,885
18,545

30,505
10,904
19,601

29,990
10,107
19,883

29,111
9,537
19,574

29,947
10,276
19,671

27,298
10,961
16,337

10
n

Payable in dollars
Payable in foreign currencies

21,000
1,207

27,629
1.104

28,913
1,592

28,259
1,171

28,913
1,592

28,690
1,300

28,038
1,073

28,597
1,350

26,280
1,018

12
13
14
15
16
17
18

By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

15,622
369
999
1.974
466
895
10,138

23,179
632
1,091
1,834
556
699
17,161

19,657
186
1,684
2,018
494
776
12,737

18,019
89
1,334
1,730
507
645
12,165

19,657
186
1,684
2,018
494
776
12,737

20,307
127
1,795
2,578
472
345
13,145

15,468
75
1,699
2,441
484
189
8,765

12,905
150
1,457
2,167
417
179
6,610

12,589
79
1,097
2,063
1,406
155
5,980

iy

Canada

20
21
22
23
24
25
26

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

27
28
2y
30
31
32
33
34
35
36
37
38
39

Japan
Middle Eastern oil-exporting countries'
Africa
Oil-exporting countries2
All other3
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

632

1,401

2,392

651

2,392

1,045

539

389

693

1,783
59
147
57
866
12
2

1,668
236
50
78
1,030
17
1

1,386
141
229
143
604
26
1

1,067
10
64
52
669
76
1

1,386
141
229
143
604
26
1

965
17
86
91
517
21
1

1,320
6
49
76
845
51
1

1,351
1
73
154
834
23
1

1,495
7
101
152
957
59
2

5,988
5,436
27

6.423
5,869
25

5,394
5,085
32

6,239
5,725
23

5,394
5,085
32

5,024
4,767
23

4,315
3,869
0

4,005
3,754
0

3,785
3,612
0

150
122

38
0

60
0

33
0

60
0

33
0

29
0

31
0

28
0

66

340

643

452

643

676

651

650

665

7,700
331
481
767
500
413
3,568

9,767
479
680
1,002
766
624
4.303

10,228
666
764
1,274
439
375
4,086

9,343
703
782
945
452
400
3,829

10,228
666
764
1,274
439
375
4,086

9,951
565
840
1,068
443
407
4,041

9,987
557
612
1,219
485
349
3,743

11,010
623
740
1,408
440
507
4,286

10,032
278
920
1,394
429
499
3,697

40

Canada

1,040

1.090

1,175

1.150

1,175

1,347

1,206

1,504

1,390

41
42
43
44
45
46
47

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

1,740
1
205
98
56
416
221

2,574
63
297
196
14
665
328

2,176
16
203
220
12
565
261

2,224
38
180
233
23
562
322

2,176
16
203
220
12
565
261

2,051
27
174
249
5
520
219

2,285
14
209
246
27
557
196

1,840
48
168
256
5
511
230

1,619
14
198
152
10
347
202

48
4y
50

Asia
Japan
Middle Eastern oil-exporting countries'

10,421
3,315
1,912

13,422
4,614
2.168

14,966
4,500
3,111

14,628
4,553
2.984

14,966
4,500
3,111

14,672
4,372
3,138

13,611
3,995
3,194

13,538
3,779
3,582

12,322
3,808
2,851

51
52

Africa
Oil-exporting countries"

619
254

1,040
532

874
408

929
504

874
408

833
376

921
354

810
372

794
393

53

Other3

687

840

1,086

1,156

1,086

1,136

1,101

1,245

1,141

1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).




2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.

Nonbank-Reported Data
3.23

CLAIMS ON UNAFFILIATED FOREIGNERS
the United States

A59

Reported by Nonbanking Business Enterprises in

Millions of dollars, end of period
1998

1997
Type of claim, and area or country

1995

1996

1997
Sept.

Dec.

Mar.

June

Sept.

Dec.p

1 Total

52,509

65,897

68,128

70,506

68,128

71,004

63,202

67,976

77,543

7 Payable in dollars
3 Payable in foreign currencies

48,711
3,798

59,156
6,741

62,173
5,955

64,144
6,362

62,173
5,955

65,359
5,645

57,601
5,601

62,034
5,942

72,263
5,280

By type
4 Financial claims
Deposits
6
Payable in dollars
Payable in foreign currencies
7
8
Other financial claims
Payable in dollars
<3
Payable in foreign currencies
10

27,398
15,133
14,654
479
12,265
10,976
1,289

37,523
21,624
20,852
772
15,899
12,374
3,525

36,959
22,909
21,060
1,849
14,050
11,806
2,244

41,805
23,951
22,392
1,559
17,854
14,795
3,059

36,959
22,909
21,060
1,849
14,050
11,806
2,244

40,301
20,863
19,155
1,708
19,438
16,981
2,457

32,355
14,762
13,084
1,678
17,593
14,918
2,675

37,262
15,406
13,374
2,032
21,856
19,867
1,989

46,324
30,192
28,549
1,643
16,132
14,124
2,008

11 Commercial claims
17
Trade receivables
Advance payments and other claims
13

25,111
22,998
2,113

28,374
25,751
2,623

31,169
27,536
3,633

28,701
25,110
3,591

31,169
27,536
3,633

30,703
26,888
3,815

30,847
26,764
4,083

30,714
26,330
4,384

31,219
27,211
4,008

14
15

Payable in dollars
Payable in foreign currencies

23,081
2,030

25,930
2,444

29,307
1,862

26,957
1,744

29,307
1,862

29,223
1,480

29,599
1,248

28,793
1,921

29,590
1,629

16
17
18
19
70
71
22

By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

7,609
193
803
436
517
498
4,303

11,085
185
694
276
493
474
7,922

14,999
406
1,015
427
677
434
10,337

15,608
360
1,112
352
764
448
11,000

14,999
406
1,015
427
677
434
10,337

14,187
378
902
393
911
401
9,289

14,105
518
810
290
975
403
9,639

14,473
496
1,140
359
867
409
9,849

12,362
661
863
379
875
414
7,765

23

Canada

74
75
76
77
78
79
30

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

31
32
33

Japan
Middle Eastern oil-exporting countries'

2,851

3,442

3,313

4,279

3,313

4,688

3,020

4,090

2,502

14,500
1,965
81
830
10,393
554
32

20,032
1,553
140
1,468
15,536
457
31

15,543
2,308
108
1,313
10,462
537
36

19,176
2,442
190
1,501
12,957
508
15

15,543
2,308
108
1,313
10,462
537
36

18,207
1,316
66
1,408
13,551
967
47

11,967
1,306
48
1,394
7,349
1,089
57

15,758
2,105
63
710
10,960
1,122
50

27,714
403
39
835
24,388
1,245
55

1,579
871
3

2,221
1,035
22

2,133
823
11

2,015
999
15

2,133
823
11

2,174
791
9

2,376
886
12

2,121
928
13

3,026
1,194
9

34
35

Africa
Oil-exporting countries2

276
5

174
14

319
15

174
16

319
15

325
16

155
15

157
16

160
16

36

All other3

583

569

652

553

652

720

732

663

560

9,824
231
1,830
1,070
452
520
2,656

10,443
226
1,644
1,337
562
642
2,946

12,120
328
1,796
1,614
597
554
3,660

10,486
331
1,642
1,395
573
381
2,904

12,120
328
1,796
1,614
597
554
3,660

12,854
232
1,939
1,670
534
476
4,828

12,882
216
1,955
1,757
492
418
4,664

13,029
219
2,098
1,502
463
546
4,681

13,249
238
2,172
1,822
467
484
4,769

37
38
39
40
41
47
43
44
45
46
47
48
49
50
51
57
53
54

Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada

1,951

2,165

2,660

2,649

2,660

2,882

2,779

2,291

2,595

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

4,364
30
272
898
79
993
285

5,276
35
275
1,303
190
1,128
357

5,750
27
244
1,162
109
1,392
576

5,028
22
128
1,101
98
1,219
418

5,750
27
244
1,162
109
1,392
576

5,481
13
238
1,128
88
1,302
441

6,082
12
359
1,183
110
1,462
585

5,773
39
173
1,062
91
1,356
566

6,328
24
536
992
137
1,574
401

7,312
1,870
974

8,376
2,003
971

8,713
1,976
1,107

8,576
2,048
987

8,713
1,976
1,107

7,638
1,713
987

7,367
1,757
1,127

7,190
1,789
967

7,194
1,681
1,131

654
87

746
166

680
119

764
207

680
119

613
122

657
116

740
128

712
165

1,006

1,368

1,246

1,198

1,246

1,235

1,080

1,691

1,141

Japan
Middle Eastern oil-exporting countries

55
56

Africa
Oil-exporting countries2

57

Other3

1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).




2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.

A60
3.24

International Statistics • June 1999
FOREIGN TRANSACTIONS IN SECURITIES
M i l l i o n s o f dollars

1999
Transaction, and area or country

1997

1998

1999

1998
Jan.—
Feb.

Aug.

Sept.

Oct.

Nov.

Dec.

Jan. r

Feb. p

126,571
119,042

138,942
134,306

155,819
152,303

159,532
154,968
4,564

U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales

1,097,958
1,028,361

1,596,255
1,542,099

3 Net purchases, or sales ( —)

69,597

54,156

4 Foreign countries

69,754

54,536

62,688
6,641
9,059
3,831
7,848
22,478
-1,406
5,203
383
2,072
4,787
472
342

72,349
6,099
10,609
8,326
6,269
24,336
-4,766
781
-1,082
-12,554
-1,407
624
-816

-157

19 Foreign purchases
20 Foreign sales

141.566
139.722

137,418
147,891

8,080

1,844

-10,473

2,757

7,529

4,636

3,516

8,066

1,843

-10,430

2,754

7,546

4,634

3,502

4,564

12,413
362
1,907
1,042
572
6,688
976
-2,558
-88
-2,936
-960
33
226

5,459
988
1,326
163
-277
1.740
-276
610
-157
-4,112
214
159
160

2,182
85
1,281
876
-307
700
-195
-11,766
148
-678
519
-98
-23

-249
360
68
1,009
-1,974
632
-507
2,058
-177
1,823
597
-217
23

4,406
50
372
1,816
-420
1,902
-201
3,691
-334
-8
822
41
-49

2,441
-614
-189
332
-314
3,154
-976
3.088
-219
155
141
16
129

6,048
537
1,035
86
-10
3,893
728
-1,279
152
-2,306
-616
22
137

6,365
-175
872
956
582
2,795
248
-1,279
-240
-630
-344
11
89

-380

14

1

-43

3

-17

2

14

0

610,116
475,958

905,272
727,866

141,009
109,705

67.529
58,678

100,186
92,663

108,678
105,437

81,943
60,480

58,884
41,141

66,585
53,759

74,424
55,946

21 Net purchases, or sales (—)

134,158

177,406

31,304

8,851

7,523

3,241

21,463

17,743

12,826

18,478

22 Foreign countries

133,595

177,749

31,262

8,813

7,473

3,230

22,433

17,665

12,825

18,437

71,631
3,300
2,742
3,576
187
54,134
6,264
34.733
2,155
16,996
9,357
1,005
811

127,932
3,390
4,381
3,490
4,856
97,683
6,077
24,731
4,994
12,679
8,381
190
1,146

16,755
269
1,666
389
938
11,002
575
8,439
1.750
3,471
726
306
-34

5,813
233
139
32
100
3,924
439
1,592
-188
1.709
-10
-17
-535

12,323
184
268
275
1,003
9,760
443
-2,927
-58
-1,847
-713
-61
-400

12,062
701
-135
704
-50
10,182
292
-11,135
2
1,185
1,624
55
769

16,717
235
435
64
251
13,777
558
2,295
835
1,904
1,194
24
100

9,099
-170
217
996
-36
6,863
184
2,688
2,472
3,152
2,238
16
54

2,857
145
398
60
403
703
100
6,382
1,436
2,032
561
40
-22

13,898
124
1,268
329
535
10,299
475
2,057
314
1,439
165
266
-12

563

-343

42

38

50

11

-970

78

1

41

8,046
90,407
82,361
15,980
102,202
86,222

-2,729
70,402
73,131
-918
55,573
56,491

841
69,578
68,737
-4,684 R
56,845
61,529R

3,305
77,922
74,617
-2,304
56,072
58,376

3,661
73,941
70,280
30
66,142
66,112

5
6
/
8
9
10
11
12
13
14
15
16
1/

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries

18 Nonmonetary international a n d
regional organizations

315,351
307,271

145,588
142,831

BONDS2

23
24
25
26
2/
28
29
30
31
32
33
34
35

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries

36 Nonmonetary international a n d
regional organizations

Foreign securities
37 Stocks, net purchases, or sales ( —)
38
Foreign purchases
39
Foreign sales
40 Bonds, net purchases, or sales ( - )
41
Foreign purchases
42
Foreign sales

-40,942
756,015
796,957
-48,171
1,451,704
1,499,875

8,503
940,678
932,175
— 18,957R
1,335,314
1,354,27 l r

6,966
151,863
144,897
-2,274
122,214
124,488

5,557
74,376
68,819
1,049
139,393
138,344

6,107
89,496
83,389
3,384
152,881
149,497

-89,113

— 10,454 r

4,692

6,606

9,491

24,026

-3,647

—3,843 r

1,001

3,691

44 Foreign countries

-88,921

— 10,125 r

4,295

6,623

9,492

24,119

-3,641

—3,683 r

880

3,415

45
46
4/
48
49
50
51

-29,874
-3,085
-25,258
-25,123
-10,001
-3,293
-2,288

11,139
-1,163
- 12,860R
-3,326
-1,663
-1,411
-2,504

7,354
-861
3,187
-4,902
-3,249
-3
-480

1,202
2,667
-1,196
4,227
1,741
-122
-155

6.007
-1,118
1,214
3,550
2,239
-163
2

10,792
946
4,585
6,699
6,134
4
1,093

2,326
562
-4,074
-2,064
-2,390
-56
-335

3,072
-4,828
- 19R
-1,489
-1,882
5
-424

403
-310
2,355
-1,558
141
22
-32

6,951
-551
832
-3,344
-3,390
-25
-448

397

-17

-1

-93

-6

121

276

43 Net purchases, or sales (—), of stocks and bonds

Europe
Canada
Latin America and Caribbean
Japan
Africa
Other countries

52 Nonmonetary international and
regional organizations

....

-192

-329

1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, and United Arab Emirates (Trucial States).




-160

2. Includes state and local government securities and securities of U.S. government
agencies and corporations. Also includes issues of new debt securities sold abroad by U.S.
corporations organized to finance direct investments abroad.

Securities Holdings and Transactions
3.25

MARKETABLE U.S. TREASURY BONDS AND NOTES

A61

Foreign Transactions'

Millions of dollars; net purchases, or sales (—) during period

1997

1999

1998

1999
Area or country

1998
Jan.—
Feb.

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.r

Feb.p

1 Total estimated

184,171

46,677

-18,788

-15,795

-5,270

-2,193

25,456

10,549

-4,165

-14,623

2 Foreign countries

183,688

44,208

-18,289

-15,795

-5,261

-2,855

25,556

9,426

-4,107

-14,182

3
4

Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada

144,921
3,427
22,471
1,746
-465
6,028
98,253
13,461
-811

21,586
3,805
148
-5,533
1,486
5,240
12,120
4,320
572

-5.835
-25
-51
1.763
-65
-2,124
-5.003
-330
-602

-2,823
667
-1,799
-3,081
-152
-680
8,000
-5,778
-2,088

-2,771
113
894
-579
-330
363
2,217
-5,449
-663

-9,869
-606
1,171
1,543
193
2,811
-13,168
-1,813
-1,188

5,475
510
307
-1,156
586
531
3,207
1,490
3,694

8,077
2,148
-556
898
581
175
3,074
1,757
614

1,519
-229
-268
2,347
163
-2,171
718
959
-1,729

-7,354
204
217
-584
-228
47
-5,721
-1,289
1,127

Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles

-2,554
655
-549
-2.660
39,567
20,360
1,524
1,041

-3,735
59
9,450
-13,244
27,383
13,048
751
-2,349

-11,658
446
-4,003
-8,101
94
-3,258
11
-299

-5,940
-1,308
3,914
-8,546
-3,856
299
62
-1,150

-1,233
6
2,982
-4,221
-207
128
81
-468

-491
-35
-1,288
832
7,756
1,233
87
850

1,961
327
-5.411
7,045
13,632
7,311
145
649

-3,817
108
-165
-3,760
4,347
3,750
16
189

-5,621
-17
-1,979
-3,625
2,310
-2,134
17
-603

-6,037
463
-2,024
-4,476
-2,216
-1,124
-6
304

483
621
170

2,469
1,502
199

-499
-448
4

0
-10
8

-9
-288
-5

662
645
0

-100
-19
-6

1,123
1,084
2

-58
-77
3

-441
-371

183,688
43,959
139,729

44,208
4,123
40,085

-18,289
-1,225
-17,064

-15,795
-16,920
1,125

-5,261
-10,304
5,043

-2,855
9,001
-11,856

25,556
11,843
13,713

9,426
5,274
4,152

-4,107
2,474
-6,581

-14,182
-3,699
-10,483

7,636
-12

-16,554
2

3,462

-4,160
1

-5,837
0

-276
0

233
0

-2,442
0

4,080
0

-618
0

6
7
8
9
in
ii
i?
13
14
IS
16
17
18
19

Japan
Africa
Other

20 Nonmonetary international and regional organizations
21
International
22
Latin American regional
MEMO
73 Foreign countries
74
Official institutions
25
Other foreign
Oil-exporting countries
76 Middle East

2

27

1. Official and private transactions in marketable U.S. Treasury securities having an
original maturity of more than one year. Data are based on monthly transactions reports.
Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.




0

1

2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.

A62
3.28

International Statistics • June 1999
F O R E I G N E X C H A N G E R A T E S A N D I N D E X E S O F T H E F O R E I G N E X C H A N G E V A L U E O F T H E U.S. D O L L A R 1
Currency units per dollar except as noted
1999

1998
Item

1996

1998

1997

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Exchange Rates
COUNTRY/CURRENCY UNIT

1
2
3
4
5
6
7
8
9
10
11
12

Australia/dollar
Austria/schilling
Belgium/franc
Brazil/real
Canada/dollar
China, P.R./yuan
Denmark/krone
European Monetary Union/euro3 . .
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma

13
14
15
16
17
18
19
20
21
22
23

Hong Kong/dollar
India/rupee
Ireland/pound*
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar'
Norway/krone
Portugal/escudo

24
25
26
27
28
29
30
31
32
33
34

Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound2
Venezuela/bolivar

78.28
10.589
30.97
1.0051
1.3638
8.3389
5.8003
n.a.
4.5948
5.1158
1.5049
240.82

74.37
12.206
35.81
1.0779
1.3849
8.3193
6.6092
n.a.
5.1956
5.8393
1.7348
273.28

62.91
12.379
36.31
1.1605
1.4836
8.3008
6.7030
n.a.
5.3473
5.8995
1.7597
295.70

63.49
11.840
34.71
1.1932
1.5404
8.2778
6.3960
n.a.
5.1163
5.6422
1.6827
282.64

61.82
11.746
34.44
1.2052
1.5433
8.2780
6.3531
n.a.
5.0769
5.5981
1.6698
280.43

63.20
n.a.
n.a.
1.5120
1.5194
8.2789
6.4194
1.1591
n.a.
n.a.
n.a.
278.91

63.99
n.a.
n.a.
1.9261
1.4977
8.2755
6.6379
1.1203
n.a.
n.a.
n.a.
287.41

63.08
n.a.
n.a.
1.9057
1.5176
8.2792
6.8287
1.0886
n.a.
n.a.
n.a.
296.36

64.20
n.a.
n.a.
1.7025
1.4881
8.2792
6.9475
1.0701
n.a.
n.a.
n.a.
304.26

7.7345
35.51
159.95
1,542.76
108.78
2.5154
7.600
1.6863
68.77
6.4594
154.28

7.7431
36.36
151.63
1,703.81
121.06
2.8173
7.918
1.9525
66.25
7.0857
175.44

7.7467
41.36
142.48
1,736.85
130.99
3.9254
9.152
1.9837
53.61
7.5521
180.25

7.7432
42.43
147.77
1,664.91
120.29
3.8000
9.969
1.8969
53.40
7.4562
172.52

7.7471
42.59
148.76
1,653.23
117.07
3.8014
9.907
1.8816
52.23
7.6050
171.19

7.7486
42.55
n.a.
n.a.
113.29
3.8000
10.128
n.a.
53.88
7.4532
n.a.

7.7490
42.53
n.a.
n.a.
116.67
3.8000
10.006
n.a.
54.35
7.7240
n.a.

7.7493
42.52
n.a.
n.a.
119.47
3.8000
9.732
n.a.
53.45
7.8151
n.a.

7.7495
42.80
n.a.
n.a.
119.77
3.8000
9.430
n.a.
54.27
7.7750
n.a.

1.4100
4.3011
805.00
126.68
55.289
6.7082
1.2361
27.468
25.359
156.07
417.19

1.4857
4.6072
947.65r
146.53
59.026
7.6446
1.4514
28.775
31.072
163.76
488.39

1.6722
5.5417
1,400.40
149.41
65.006
7.9522
1.4506
33.547
41.262
165.73
548.39

1.6378
5.6511
1,294.01
143.05
67.578
8.0140
1.3852
32.603
36.527
166.11
569.66

1.6515
5.9030
1,213.22
142.08
68.117
8.0716
1.3604
32.337
36.276
167.08
565.89

1.6791
5.9931
1,175.11
n.a.
68.630
7.8188
1.3856
32.300
36.622
164.98
569.80

1.7004
6.1146
1,188.84
n.a.
69.070
7.9532
1.4272
32.564
37.137
162.76
577.32

1.7292
6.2136
1,229.72
n.a.
69.570
8.2144
1.4660
33.165
37.557
162.13
580.06

1.7134
6.1186
1,209.96
n.a.
69.588
8.3293
1.4971
32.965
37.631
160.89
587.79

.

Indexes3
NOMINAL

35
36
37
38

G-10 (March 1973= 100)4
Broad (January 1997= 100)5
Major currencies (March 1973= 100)6 . .
Other important trading partners (January
1997= 100)7

87.34
97.43
85.23

96.38
104.47
91.85

98.85
116.25
96.52

95.46
115.34
94.23

94.61
114.56
93.40

n.a.
114.68
92.37

n.a.
116.37
93.76

n.a.
117.80
95.69

n.a.
117.15
95.76

98.25

104.67

125.70

127.31

126.80

128.98

130.83

131.03

129.24

85.99r
85.88r

90.59r
93.24r

98.46r
98.361"

96.7 r
96.24r

95.93r
95.47r

96.041"
94.88r

97.10r
96.35r

98.34r
98.17r

97.77
98.30

r

r

r

r

r

r

r

104.18

REAL

39 Broad (March 1973=100)'
40 Major currencies (March 1973= 100)6 . .
41 Other important trading partners (March
1973= 100)7

92.52

93.61

105.83

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. As of January 1999, the euro is reported in place of the individual euro area currencies.
These currency rates can be derived from the euro rate by using the fixed conversion rates (in
currencies per euro) as shown below:
Euro equals
13.7603
40.3399
5.94573
6.55957
1.95583
.787564

Austrian schillings
Belgian francs
Finnish markkas
French francs
German marks
Irish pounds

1936.27
40.3399
2.20371
200.482
166.386

Italian lire
Luxembourg francs
Netherlands guilders
Portuguese escudos
Spanish pesetas

4. For more information on the indexes of the foreign exchange value of the dollar, see
Federal Reserve Bulletin, vol. 84 (October 1998), pp. 811-18.




!04.47

103.61

104.75

105.30

105.79

5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies
of the other G-10 countries. The weight for each of the ten countries is the 1972-76 average
world trade of that country divided by the average world trade of all ten countries combined.
Series revised as of August 1978 (see Federal Resen'e Bulletin, vol. 64 (August 1978),
p. 700).
6. Weighted average of the foreign exchange value of the U.S. dollar against the currencies
of a broad group of U.S. trading partners. The weight for each currency is computed as an
average of U.S. bilateral import shares from and export shares to the issuing country and of a
measure of the importance to U.S. exporters of that country's trade in third country markets.
7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of
broad index currencies that circulate widely outside the country of issue. The weight for each
currency is its broad index weight scaled so that the weights of the subset of currencies in the
index sum to one.
8. Weighted average of the foreign exchange value of the U.S. dollar against a subset of
broad index currencies that do not circulate widely outside the country of issue. The weight
for each currency is its broad index weight scaled so that the weights of the subset of
currencies in the index sum to one.

63

Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases

Issue
December 1998

Page
A72

Issue

Page

August
November
February
May

1998
1998
1999
1999

A64
A64
A64
A64

August
November
February
May

1998
1998
1999
1999

A67
A66
A66
A66

August
November
February
May

1998
1998
1999
1999

A72
A72
A72
A72

July 1998
October 1998
January 1999

A64
A64
A64

September 1996
September 1997
September 1998

A68
A68
A68

September 1997
September 1998

A76
A72

September 1998

A76

September 1998

A79

SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Assets and liabilities

of commercial

banks

March 31, 1998
June 30, 1998
September 30, 1998
December 31, 1998
Terms of lending at commercial
May 1998
August 1998
November 1998
February 1999

banks

Assets and liabilities of U.S. branches and agencies
March 31, 1998
June 30, 1998
September 30, 1998
December 31, 1998

of foreign

banks

Pro forma balance sheet and income statements for priced service
March 31, 1998
June 30, 1998
September 30, 1998

operations

Residential
1995
1996
1997

lending reported

Act

Disposition
1996
1997

of applications

Small loans to businesses
1997
Community
1997

development




under the Home Mortgage

for private

mortgage

Disclosure

insurance

and farms

lending reported under the Community

Reinvestment

Act

157

Federal Reserve Bulletin • June 1999

Index to Statistical Tables
References are to pages A3-A62 although the prefix 'A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Assets and liabilities (See also Foreigners)
Commercial banks, 15-21
Domestic finance companies, 32, 33
Federal Reserve Banks, 10
Foreign-related institutions, 20
Automobiles
Consumer credit, 36
Production, 44, 45
BANKERS acceptances, 5, 10, 22, 23
Bankers balances, 15-21. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 31
Rates, 23
Business activity, nonfinancial, 42
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 43
Capital accounts
Commercial banks, 15-21
Federal Reserve Banks, 10
Certificates of deposit, 23
Commercial and industrial loans
Commercial banks, 15-21
Weekly reporting banks, 17, 18
Commercial banks
Assets and liabilities, 15-21
Commercial and industrial loans, 15-21
Consumer loans held, by type and terms, 36
Real estate mortgages held, by holder and property, 35
Time and savings deposits, 4
Commercial paper, 22, 23, 32
Condition statements (See Assets and liabilities)
Construction, 42, 46
Consumer credit, 36
Consumer prices, 42
Consumption expenditures, 48, 49
Corporations
Profits and their distribution, 32
Security issues, 31, 61
Cost of living (See Consumer prices)
Credit unions, 36
Currency in circulation, 5, 13
Customer credit, stock market, 24
DEBT (See specific types of debt or securities)
Demand deposits, 15-21
Depository institutions
Reserve requirements, 8
Reserves and related items, 4, 5, 6, 12
Deposits (See also specific types)
Commercial banks, 4, 15-21
Federal Reserve Banks, 5, 10
Interest rates, 14
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 32
EMPLOYMENT, 42
Euro, 62
FARM mortgage loans, 35
Federal agency obligations, 5, 9, 10, 11, 28, 29
Federal credit agencies, 30




Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 27
Receipts and outlays, 25, 26
Treasury financing of surplus, or deficit, 25
Treasury operating balance, 25
Federal Financing Bank, 30
Federal funds, 23, 25
Federal Home Loan Banks, 30
Federal Home Loan Mortgage Corporation, 30, 34, 35
Federal Housing Administration, 30, 34, 35
Federal Land Banks, 35
Federal National Mortgage Association, 30, 34, 35
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 5, 10, 11, 27
Federal Reserve credit, 5, 6, 10, 12
Federal Reserve notes, 10
Federally sponsored credit agencies, 30
Finance companies
Assets and liabilities, 32
Business credit, 33
Loans, 36
Paper, 22, 23
Float, 5
Flow of funds, 37-41
Foreign currency operations, 10
Foreign deposits in U.S. banks, 5
Foreign exchange rates, 62
Foreign-related institutions, 20
Foreign trade, 51
Foreigners
Claims on, 52, 55, 56, 57, 59
Liabilities to, 51, 52, 53, 58, 60, 61
GOLD
Certificate account, 10
Stock, 5, 51
Government National Mortgage Association, 30, 34, 35
Gross domestic product, 48, 49
HOUSING, new and existing units, 46
INCOME, personal and national, 42, 48, 49
Industrial production, 42, 44
Insurance companies, 27, 35
Interest rates
Bonds, 23
Consumer credit, 36
Federal Reserve Banks, 7
Money and capital markets, 23
Mortgages, 34
Prime rate, 22
International capital transactions of United States, 50-61
International organizations, 52, 53, 55, 58, 59
Inventories, 48
Investment companies, issues and assets, 32
Investments (See also specific types)
Commercial banks, 4, 15-21
Federal Reserve Banks, 10, 11
Financial institutions, 35
LABOR force, 42
Life insurance companies (See Insurance companies)

65

Loans (See also specific types)
Commercial banks, 15-21
Federal Reserve Banks, 5, 6, 7, 10, 11
Financial institutions, 35
Insured or guaranteed by United States, 34, 35
MANUFACTURING
Capacity utilization, 43
Production, 43, 45
Margin requirements, 24
Member banks, reserve requirements, 8
Mining production, 45
Mobile homes shipped, 46
Monetary and credit aggregates, 4, 12
Money and capital market rates, 23
Money stock measures and components, 4, 13
Mortgages (See Real estate loans)
Mutual funds, 13, 32
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 26
National income, 48
OPEN market transactions, 9
PERSONAL income, 49
Prices
Consumer and producer, 42, 47
Stock market, 24
Prime rate, 22
Producer prices, 42, 47
Production, 42, 44
Profits, corporate, 32
REAL estate loans
Banks, 15-21, 35
Terms, yields, and activity, 34
Type of holder and property mortgaged, 35
Reserve requirements, 8
Reserves
Commercial banks, 15-21
Depository institutions, 4, 5, 6, 12
Federal Reserve Banks, 10
U.S. reserve assets, 51
Residential mortgage loans, 34, 35
Retail credit and retail sales, 36, 42
SAVING
Flow of funds, 37^11
National income accounts, 48




Savings institutions, 35, 36, 37-41
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 30
Foreign transactions, 60
New issues, 31
Prices, 24
Special drawing rights, 5, 10, 50, 51
State and local governments
Holdings of U.S. government securities, 27
New security issues, 31
Rates on securities, 23
Stock market, selected statistics, 24
Stocks (See also Securities)
New issues, 31
Prices, 24
Student Loan Marketing Association, 30
TAX receipts, federal, 26
Thrift institutions, 4. {See also Credit unions and Savings
institutions)
Time and savings deposits, 4, 13, 15-21
Trade, foreign, 51
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 10, 25
Treasury operating balance, 25
UNEMPLOYMENT, 42
U.S. government balances
Commercial bank holdings, 15-21
Treasury deposits at Reserve Banks, 5, 10, 25
U.S. government securities
Bank holdings, 15-21, 27
Dealer transactions, positions, and financing, 29
Federal Reserve Bank holdings, 5, 10, 11, 27
Foreign and international holdings and
transactions, 10, 27, 61
Open market transactions, 9
Outstanding, by type and holder, 27, 28
Rates, 23
U.S. international transactions, 50-62
Utilities, production, 45
VETERANS Administration, 34, 35
WEEKLY reporting banks, 17, 18
Wholesale (producer) prices, 42, 47
YIELDS (See Interest rates)

159

Federal Reserve Bulletin • June 1999

Federal Reserve Board of Governors
and Official Staff
A L A N GREENSPAN,
ALICE M . RIVLIN,

OFFICE

OF BOARD

Chairman
Vice Chair

EDWARD W . KELLEY, JR.
LAURENCE H . M E Y E R

DIVISION

MEMBERS

LYNN S. FOX, Assistant to the Board
DONALD J. WINN, Assistant to the Board
WINTHROP P. HAMBLEY, Deputy Congressional
Liaison
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board

LEGAL

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
KATHERINE H. WHEATLEY, Assistant General Counsel

OFFICE

OF THE

JENNIFER J. J O H N S O N ,

SECRETARY
Secretary

ROBERT DEV. FRIERSON, Associate
Secretary
BARBARA R. LOWREY, Associate Secretary and

Ombudsman

DIVISION OF BANKING
SUPERVISION

AND

REGULATION

RICHARD SPILLENKOTHEN,

Director

STEPHEN C. SCHEMERING, Deputy Director
HERBERT A. BIERN, Associate
Director
ROGER T. COLE, Associate
Director
WILLIAM A. RYBACK, Associate
Director
GERALD A. EDWARDS, JR., Deputy Associate
Director
STEPHEN M. HOFFMAN, JR., Deputy Associate
Director
JAMES V. HOUPT, Deputy Associate
Director
JACK P. JENNINGS, Deputy Associate
Director
MICHAEL G. MARTINSON, Deputy Associate
Director
Director
SIDNEY M. SUSSAN, Deputy Associate
MOLLY S. WASSOM, Deputy Associate
Director
HOWARD A. AMER, Assistant
Director
NORAH M. BARGER, Assistant
Director
BETSY CROSS, Assistant
Director
RICHARD A. SMALL, Assistant
Director
WILLIAM C. SCHNEIDER, JR., Project Director,
National Information Center




OF INTERNATIONAL

KAREN H . JOHNSON,

FINANCE

Director

LEWIS S. ALEXANDER, Deputy
Director
PETER HOOPER III, Deputy
Director
DALE W. HENDERSON, Associate
Director
DONALD B. ADAMS, Senior Adviser
DAVID H. HOWARD, Senior Adviser
THOMAS A. CONNORS, Assistant
Director
RALPH W. TRYON, Assistant
Director
DIVISION

OF RESEARCH

M I C H A E L J. PRELL,

AND

STATISTICS

Director

EDWARD C. ETTIN, Deputy
Director
DAVID J. STOCKTON, Deputy
Director
WILLIAM R. JONES, Associate
Director
MYRON L. KWAST, Associate
Director
PATRICK M. PARKINSON, Associate
Director
THOMAS D. SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate
Director
MARTHA S. SCANLON, Deputy Associate
Director
STEPHEN D. OLINER, Assistant
Director
STEPHEN A. RHOADES, Assistant
Director
JANICE SHACK-MARQUEZ, Assistant
Director
CHARLES S. STRUCKMEYER, Assistant
Director
A L I C E PATRICIA W H I T E , Assistant

Director

JOYCE K. ZICKLER, Assistant
Director
GLENN B. CANNER, Senior Adviser
DAVID S. JONES, Senior Adviser
JOHN J. MINGO, Senior Adviser

DIVISION OF MONETARY
DONALD L. KOHN,

AFFAIRS

Director

DAVID E. LINDSEY, Deputy
Director
BRIAN F. MADIGAN, Associate
Director
RICHARD D. PORTER, Deputy Associate
Director
VINCENT R. REINHART, Deputy Associate
Director
WILLIAM C. WHITESELL, Assistant
Director
NORMAND R.V. BERNARD, Special Assistant to the Board

DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
DOLORES S . S M I T H ,

Director

GLENN E. LONEY, Deputy
Director
SANDRA F. BRAUNSTEIN, Assistant
Director
MAUREEN P. ENGLISH, Assistant
Director
ADRIENNE D. HURT, Assistant
Director
IRENE S H A W N M C N U L T Y , Assistant

Director

67

ROGER W . FERGUSON, JR.
EDWARD M . GRAMLICH

OFFICE OF
STAFF DIRECTOR FOR

MANAGEMENT

STEPHEN R. MALPHRUS, Staff
JOHN R . WEIS,

MANAGEMENT

Director

Adviser

DIVISION

STEPHEN J. CLARK, Associate Director, Finance Function
DARRELL R. PAULEY, Associate Director, Human Resources
Function
SHEILA CLARK, EEO Programs
Director

DIVISION OF SUPPORT
R O B E R T E . FRAZIER,

SERVICES

Director

GEORGE M. LOPEZ, Assistant Director
DAVID L. WILLIAMS, Assistant Director

DIVISION OF INFORMATION
RICHARD C . STEVENS,

TECHNOLOGY

Director

MARIANNE M. EMERSON, Deputy Director
TILLENA G. CLARK, Assistant
Director
MAUREEN HANNAN, Assistant
Director
P o KYUNG KIM, Assistant
Director
RAYMOND H. MASSEY, Assistant
Director
EDWARD T. MULRENIN, Assistant
Director
DAY W. RADEBAUGH, JR., Assistant
Director




DIVISION OF RESERVE BANK
AND PAYMENT SYSTEMS
C L Y D E H . F A R N S W O R T H , JR.,

OPERATIONS

Director

LOUISE L. ROSEMAN, Associate
Director
PAUL W. BETTGE, Assistant
Director
KENNETH D. BUCKLEY, Assistant
Director
JACK DENNIS, JR., Assistant
Director
JOSEPH H. HAYES, JR., Assistant
Director
JEFFREY C. MARQUARDT, Assistant
Director
MARSHA REIDHILL, Assistant
Director
JEFF STEHM, Assistant
Director

OFFICE OF THE INSPECTOR

GENERAL

BARRY R

- SNYDER, Inspector
General
DONALD L. ROBINSON, Assistant Inspector

General

161

Federal Reserve Bulletin • June 1999

Federal Open Market Committee
and Advisory Councils
FEDERAL

OPEN MARKET

COMMITTEE
MEMBERS

A L A N GREENSPAN,

WILLIAM J. MCDONOUGH, Vice

Chairman

Chairman

EDWARD G. BOEHNE

E D W A R D W . KELLEY, JR.

MICHAEL H . MOSKOW

ROGER W . FERGUSON, JR.

LAURENCE H . MEYER

GARY H . STERN

E D W A R D M . GRAMLICH

ROBERT D . MCTEER, JR.

ALICE M . R I V L I N

ALTERNATE
J. A L F R E D B R O A D D U S , JR.

JERRY L . JORDAN

JACK G U Y N N

ROBERT T. PARRY

MEMBERS
JAMIE B . STEWART, JR.

STAFF
STEPHEN G. CECCHETTI, Associate
Economist
PETER HOOPER III, Associate
Economist
WILLIAM C. HUNTER, Associate
Economist
RICHARD W. LANG, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
DAVID J. STOCKTON, Associate
Economist

DONALD L. KOHN, Secretary and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
LYNN S. FOX, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
THOMAS C. BAXTER, JR., Deputy General
Counsel
M I C H A E L J. PRELL,
K A R E N H . JOHNSON,

Economist
Economist

LEWIS S. ALEXANDER, Associate

Economist

PETER R. FISHER, Manager,

FEDERAL

ADVISORY

System

Account

COUNCIL

ROBERT W . GILLESPIE,

President

KENNETH D. LEWIS,Vice

President

NORMAN R. BOBINS, Seventh District
KATIE S. WINCHESTER, Eighth District
RICHARD A. ZONA, Ninth District
C. Q. CHANDLER, Tenth District
RICHARD W. EVANS, JR., Eleventh District
WALTER A. DODS, JR., T w e l f t h District

LAWRENCE K. FISH, First District
DOUGLAS A. WARNER III, Second District
RONALD L. HANKEY, Third District
ROBERT W. GILLESPIE, Fourth District
KENNETH D. LEWIS, Fifth District
STEPHEN A. HANSEL, Sixth District




Open Market

JAMES A N N A B L E ,
WILLIAM J. KORSVIK,

Co-Secretary
Co-Secretary

69

CONSUMER

ADVISORY

COUNCIL

Y V O N N E S . SPARKS STRAUTHER, S t . L o u i s , M i s s o u r i ,

DWIGHT GOLANN, Boston, Massachusetts, Vice

Chairman

Chairman

LAUREN ANDERSON, N e w O r l e a n s , L o u i s i a n a

JOHN C . L A M B , S a c r a m e n t o , C a l i f o r n i a

WALTER J. B O Y E R , G a r l a n d , T e x a s
W A Y N E - K E N T A . BRADSHAW, LOS A n g e l e s , C a l i f o r n i a

ANNE S. LI, Trenton, N e w Jersey
MARTHA W. MILLER, Greensboro, North Carolina

MALCOLM M . B U S H , C h i c a g o , I l l i n o i s

DANIEL W . MORTON, C o l u m b u s , O h i o

M A R Y E L L E N DOMEIER, N e w ULM, M i n n e s o t a

CAROL J. PARRY, N e w Y o r k , N e w Y o r k

JEREMY D . EISLER, B i l o x i , M i s s i s s i p p i

PHILIP PRICE, JR., P h i l a d e l p h i a , P e n n s y l v a n i a

ROBERT F. ELLIOT, Prospect Heights, Illinois

MARTA RAMOS, San Juan, Puerto Rico

JOHN C . GAMBOA, S a n F r a n c i s c o , C a l i f o r n i a

DAVID L . RAMP, S t . P a u l , M i n n e s o t a

ROSE M . GARCIA, EL P a s o , T e x a s

MARILYN Ross, Omaha, Nebraska

VINCENT J. GIBLIN, West Caldwell, N e w Jersey

ROBERT G . SCHWEMM, L e x i n g t o n , K e n t u c k y

KARLA S . IRVINE, C i n c i n n a t i , O h i o

DAVID J. SHIRK, E u g e n e , O r e g o n

WILLIE M . JONES, B o s t o n , M a s s a c h u s e t t s

GAIL M. SMALL, Lame Deer, Montana

J A N E T C . KOEHLER, J a c k s o n v i l l e , F l o r i d a

G A R Y S . WASHINGTON, C h i c a g o , I l l i n o i s

G W E N N S. KYZER, A l l e n , T e x a s

ROBERT L . W Y N N , II, M a d i s o n , W i s c o n s i n

THRIFT INSTITUTIONS

ADVISORY

COUNCIL

WILLIAM A. FITZGERALD, Omaha, Nebraska, President
F. WELLER MEYER, Falls Church, Virginia, Vice President

GAROLD R . BASE, P i a n o , T e x a s

BABETTE E. HEIMBUCH, Santa Monica, California

JAMES C. BLAINE, Raleigh, North Carolina

THOMAS S . JOHNSON, N e w Y o r k , N e w Y o r k

D A V I D A . BOCHNOWSKI, M u n s t e r , I n d i a n a

WILLIAM A . LONGBRAKE, S e a t t l e , W a s h i n g t o n

LAWRENCE L . B O U D R E A U X III, N e w O r l e a n s , L o u i s i a n a

KATHLEEN E . M A R I N A N G E L , M c H e n r y , I l l i n o i s

RICHARD P. C O U G H L I N , S t o n e h a m , M a s s a c h u s e t t s

A N T H O N Y J. POPP, M a r i e t t a , O h i o




163

Federal Reserve Bulletin • June 1999

Federal Reserve Board Publications
For ordering
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1 9 9 4 . 1 5 7 pp.
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T H E FEDERAL RESERVE A C T A N D O T H E R STATUTORY PROVISIONS
THE FEDERAL RESERVE

SYSTEM,

as

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A Guide to Business Credit for Women, Minorities, and Small
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Series on the Structure of the Federal Reserve
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The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Settlement Costs
A Consumer's Guide to Mortgage Refinancings
H o m e Mortgages: Understanding the Process and Your Right
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H o w to File a Consumer Complaint
Making Sense of Savings
SHOP: The Card You Pick Can Save You M o n e y
W e l c o m e to the Federal Reserve
When Your H o m e is on the Line: What You Should K n o w
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71

STAFF STUDIES: Only Summaries

Printed in the

163.

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CLEARANCE A N D SETTLEMENT IN U . S . SECURITIES

MAR-

KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.

BULLETIN

164.

THE

1989-92

CREDIT

CRUNCH

FOR

REAL

ESTATE,

James T. Fergus and John L. Goodman, Jr. July
20 pp.

by

1993.

1 6 5 . T H E D E M A N D FOR TRADE CREDIT: A N INVESTIGATION OF

Staff Studies 1 - 1 5 7 , 161, and 1 6 8 - 1 6 9 are out of print.
1 5 8 . T H E ADEQUACY A N D CONSISTENCY OF M A R G I N
MENTS

IN

THE

MARKETS

FOR STOCKS

AND

MOTIVES FOR TRADE CREDIT U S E BY SMALL BUSINESSES, b y

Gregory E. Elliehausen and John D. Wolken. September
1 9 9 3 . 1 8 pp.

REQUIRE-

DERIVATIVE

166.

159.

160.

N E W DATA ON THE PERFORMANCE OF N O N B A N K

SUBSIDI-

167.

A SUMMARY OF M E R G E R PERFORMANCE S T U D I E S IN B A N K -

ARIES OF B A N K HOLDING COMPANIES, b y N e l l i e L i a n g a n d

ING, 1 9 8 0 - 9 3 , A N D AN ASSESSMENT OF THE

Donald Savage. February 1990. 12 pp.

PERFORMANCE"

BANKING
VICES

BY

MARKETS
SMALL

AND

AND

THE

USE

OF FINANCIAL

MEDIUM-SIZED

by

170.

RATES

IN

TWENTY

Rhoades. February 1992. 11 pp.




CITIES,

by

Stephen

A.

"EVENT

STUDY"

"OPERATING

METHODOLOGIES,

T H E COST OF IMPLEMENTING CONSUMER F I N A N C I A L R E G U LATIONS: A N A N A L Y S I S OF EXPERIENCE WITH THE T R U T H

IN SAVINGS ACT, by Gregory Elliehausen and Barbara R.
Lowrey, December 1997. 17 pp.

EVIDENCE ON THE S I Z E OF B A N K I N G MARKETS FROM M O R T GAGE L O A N

AND

by Stephen A. Rhoades. July 1994. 37 pp.

SER-

BUSINESSES,

Gregory E. Elliehausen and John D. Wolken. September
1 9 9 0 . 35 pp.
162.

T H E ECONOMICS OF THE PRIVATE PLACEMENT M A R K E T , b y

Mark Carey, Stephen Prowse, John Rea, and Gregory Udell.
January 1994. 111 pp.

PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.

171.

T H E COST OF B A N K REGULATION: A R E V I E W OF THE E V I -

DENCE, by Gregory Elliehausen, April 1998. 35 pp.

165

Federal Reserve Bulletin • June 1999

ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES OF THE BOARD OF GOVERNORS OF
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73

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Corresponding

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List of Foreign Margin Stocks

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1. Please note that for some releases there is normally a certain variability in the release date because of reporting or processing procedures. Moreover,
for all series unusual circumstances may, from time to time, result in a release date being later than anticipated.
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3. These releases are also available on the Board's World Wide Web site (http://www.federalreserve.gov) under Domestic and International Research,
Statistical releases.
n.a. Not available.




167

Federal Reserve Bulletin • June 1999

Maps of the Federal Reserve System

tetew*^"
HSHifJii
•Bi&ki
H 0 9 L

ADELPHIA
YORK

v *

J W

ALASKA
HAWAII

#

LEGEND

fiof/i pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.

Facing page
• Federal Reserve Branch city
— Branch boundary

NOTE

The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by
letter (shown on the facing page).
In the 12th District, the Seattle Branch serves Alaska,
and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as
follows: the New York Bank serves the Commonwealth




of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of
Governors revised the branch boundaries of the System
most recently in February 1996.

75

1-A

3-C

2-B

ME

4-D

5-E
Pittsburgh

Baltimore MD

X
VT
NH

Buffalo

»

4*f
NY

CT
N E W YORK

BOSTON
6-F

PTv

T N — 9
•

Birmingham.

" #-I1

PHILADELPHIA

cinnati

RICHMOND

CLEVELAND
8-H

7-G

Nashville

•

\ llllliPck.
7alSMkville

s i

sville

>

New Drlrleans

Miami

ATLANTA

CHICAGO

S T . LOUIS

9-1

MINNEAPOLIS
10-J

12-L

wy

m

tm

I*

oktafaoiBaCiv^
* '

KANSAS CITY
11-K




DALLAS

S A N FRANCISCO

169

Federal Reserve Bulletin • June 1999

Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip

Chairman
Deputy Chairman

President
First Vice President

BOSTON*

02106

William C. Brainard
William O. Taylor

Cathy E. Minehan
Paul M. Connolly

NEW YORK*

10045

John C. Whitehead
Peter G. Peterson
Bal Dixit

William J. McDonough
Jamie B. Stewart, Jr.

Buffalo

14240

PHILADELPHIA

19105

Joan Carter
Charisse R. Lillie

Edward G. Boehne
William H. Stone, Jr.

CLEVELAND*

44101

Jerry L. Jordan
Sandra Pianalto

Cincinnati
Pittsburgh

45201
15230

G. Watts Humphrey, Jr.
David H. Hoag
George C. Juilfs
John T. Ryan, III

RICHMOND*

23219

J. Alfred Broaddus, Jr.
Walter A. Varvel

Baltimore
Charlotte

21203
28230

Claudine B. Malone
Jeremiah J. Sheehan
Daniel R. Baker
Joan H. Zimmerman
John F. Wieland
Paula Lovell
V. Larkin Martin
Marsha G. Rydberg
Mark T. Sodders
N. Whitney Johns
R. Glenn Pumpelly

Jack Guynn
Patrick K. Barron

Lester H. McKeever, Jr.
Arthur C. Martinez
Florine Mark

Michael H. Moskow
William C. Conrad

Susan S. Elliott
Charles W. Mueller
Diana T. Hueter
Roger Reynolds
Mike P. Sturdivant, Jr.

William Poole
W. LeGrande Rives

David A. Koch
James J. Howard
Thomas O. Markle

Gary H. Stern
Colleen K. Strand

Jo Marie Dancik
Terrence P. Dunn
Kathryn A. Paul
Larry W. Brummett
Gladys Styles Johnston

Thomas M. Hoenig
Richard K. Rasdall

Roger R. Hemminghaus
James A. Martin
Patricia Z. Holland-Branch
Edward O. Gaylord
Bartell Zachry

Robert D. McTeer, Jr.
Helen E. Holcomb

Gary G. Michael
Nelson C. Rising
Lonnie Kane
Nancy Wilgenbusch
Barbara L. Wilson
Richard R. Sonstelie

Robert T. Parry
John F. Moore

ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans

30303
35283
32231
33152
37203
70161

CHICAGO*

60690

Detroit

48231

ST. LOUIS

63166

Little Rock
Louisville
Memphis

72203
40232
38101

MINNEAPOLIS

55480

Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio

59601
64198
80217
73125
68102
75201
79999
77252
78295

SAN FRANCISCO

94120

Los Angeles
Portland
Salt Lake City
Seattle

90051
97208
84125
98124

Vice President
in charge of branch

Carl W. Turnipseed1

Charles A. Cerino1
Robert B. Schaub

William J. Tignanelli 1
Dan M. Bechter 1

James M. Mckee
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell1
Robert J. Musso 1

David R. Allardice 1

Robert A. Hopkins
Thomas A. Boone
Martha Perine Beard

Samuel H. Gane

Carl M. Gambs 1
Kelly J. Dubbert
Steven D. Evans

Sammie C. Clay
Robert Smith, III1
James L. Stull 1

Mark L. Mullinix 1
Raymond H. Laurence1
Andrea P. Wolcott
Gordon R. G. Werkema 2

* Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424;
Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee,
Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Executive Vice President




All

Publications of Interest
FEDERAL RESERVE REGULATORY

SERVICE

To promote public understanding of its regulatory functions, the Board publishes the Federal Reserve Regulatory Service, a four-volume loose-leaf service containing all Board regulations as well as related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary
policy, securities credit, consumer affairs, and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains citation indexes and a subject index.
The Monetary Policy and Reserve
Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations 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 is the Board's list of
foreign margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, BB, and DD,
and associated materials.

GUIDE TO THE FLOW OF FUNDS

ACCOUNTS

Guide to the Flow of Funds Accounts explains in detail
how the U.S. financial flow accounts are prepared. The
accounts, which are compiled by the Division of
Research and Statistics, are published in the Board's
quarterly Z.l statistical release, "Flow of Funds
Accounts, Flows and Outstandings." The Guide updates
and replaces Introduction to Flow of Funds, published
in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds accounts
and their relationship to the national income and
product accounts prepared by the U.S. Department of
Commerce. Also discussed are the individual data
series that make up the accounts and such proce-




The Payment System Handbook deals with expedited
funds availability, check collection, wire transfers, and
risk-reduction policy. It includes Regulations CC, J, and
EE, related statutes and commentaries, and policy
statements on risk reduction in the payment system.
For domestic subscribers, the annual rate is $200 for
the Federal Reserve Regulatory Service and $75 for
each handbook. For subscribers outside the United
States, the price including additional air mail costs is
$250 for the service and $90 for each handbook.
The Federal Reserve Regulatory Service is also available on CD-ROM for use on personal computers. For a
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Subscribers outside the United States should add $50
to cover additional airmail costs. For further information, call (202) 452-3244.
All subscription requests must be accompanied by a
check or money order payable to the Board of Governors of the Federal Reserve System. Orders should be
addressed to Publications Services, mail stop 127, Board
of Governors of the Federal Reserve System, Washington, DC 20551.

dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory tables
corresponding to the tables of financial flows data that
appeared in the September 1992 Z.l release. These
tables give, for each data series, the source of the data or
the methods of calculation, along with annual data for
1991 that were published in the September 1992 release.
Guide to the Flow of Funds Accounts is available for
$8.50 per copy from Publications Services, Board of
Governors of the Federal Reserve System, Washington,
DC 20551. Orders must include a check or money order,
in U.S. dollars, made payable to the Board of Governors
of the Federal Reserve System.

171

Federal Reserve Bulletin • June 1999

Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve System makes some of its statistical releases available to
the public through the U.S. Department of Commerce's economic bulletin board. Computer access
to the releases can be obtained by subscription.

For further information regarding a subscription to
the economic bulletin board, please call (202) 4821986. The releases transmitted to the economic bulletin board, on a regular basis, are the following:

Reference
Number

Statistical release

Frequency of release

H.3

Aggregate Reserves

Weekly/Thursday

H.4.1

Factors Affecting Reserve Balances

Weekly /Thursday

H.6

Money Stock

Weekly/Thursday

H.8

Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions

Weekly/Monday

H.10

Foreign Exchange Rates

Weekly/Monday

H.15

Selected Interest Rates

Weekly/Monday

G.5

Foreign Exchange Rates

Monthly/end of month

G. 17

Industrial Production and Capacity Utilization

Monthly/midmonth

G.19

Consumer Installment Credit

Monthly/fifth business day

Z.l

Flow of Funds

Quarterly