Full text of Federal Reserve Bulletin : March 1982

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VOLUME 68 •

NUMBER 3 •

MARCH 1 9 8 2

FEDERAL RESERVE

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

PUBLICATIONS COMMITTEE

Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield
John M. Denkler • Janet O. Hart • James L. Kichline • Edwin M. Truman
Naomi P. Salus, Coordinator

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. The artwork is provided by the Graphic Communications Section under the
direction of Peter G. Thomas. Editorial support is furnished by the Economic Editing Unit headed by Mendelle T. Berenson.




Table of Contents
budget deficits, before the Senate
Committee on the Budget, March 2, 1982,
and before the Senate Committee on
Appropriations, March 4, 1982.

125 MONETAR Y POLIC Y REP OR T
TO CONGRESS

While economic activity was disappointing
last year, signs of progress in reducing
inflationary pressures emerged.
135 INDUSTRIAL DEVELOPMENT
BONDS:
SOME ASPECTS OF THE CURRENT
CONTROVERSY

The growth of financing through industrial
development bonds has raised questions
about the appropriate use of implicit federal
subsidies and the impact on borrowing
costs of state and local governments and on
federal revenues.
143 TREASURY AND FEDERAL
RESERVE
FOREIGN EXCHANGE
OPERATIONS

In the exchange markets the dollar first
declined and then firmed over the period
from August 1981 through January 1982.
165 INDUSTRIAL

PRODUCTION

Output increased about 1.6 percent in February.
167 STATEMENTS

TO

CONGRESS

Paul A. Volcker, Chairman, Board of Governors, comments on the implications of
congressional decisions on spending and
revenue measures for the overall fiscal position of the government and for financial
markets, before the House Committee on
Ways and Means, February 23, 1982, and
before the Senate Finance Committee on
February 24, 1982.
171 Chairman Volcker reviews the recent and
prospective course of monetary policy and
its relationship to the problem of curtailing



174 Lyle E. Gramley, Member, Board of Governors, gives his views regarding the effects
of financial innovations on the conduct of
monetary policy and recommends that the
Congress impose reserve requirements on
money market fund shares and other similar
investments to the extent that they serve as
the functional equivalent of transaction balances, regardless of the issuer, before the
Subcommittee on Domestic Monetary Policy of the House Committee on Banking,
Finance and Urban Affairs, March 3, 1982.
178 Theodore E. Allison, Staff Director for
Federal Reserve Bank Activities, presents
the views of the Board on delayed funds
availability, including what the Board has
learned from studies of the problems and
practices of delayed availability and what
would be the most productive approach to
the problems, before the Subcommittee on
Consumer Affairs of the Senate Committee
on Banking, Housing, and Urban Affairs,
March 19, 1982.

185

ANNOUNCEMENTS

Resignation of Frederick H. Schultz as a
member of the Board of Governors.
Amendment of Regulation Z with respect to
the definition of an "arranger of credit"
under the Truth in Lending Simplification
Act. (See Legal Developments.)
Publication of a supplement to the list of
over-the-counter stocks that are subject to
the Federal Reserve's margin regulations.

Publication of revised money stock data.

AI

Proposed policy statement to provide
guidance on reviews of applications for
approval of bank acquisitions, mergers, or
consolidations; proposed regulatory framework that could be used to establish margin
requirements on futures contracts based on
stock indexes.

A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A54 International Statistics

Admission of six state banks to membership
in the Federal Reserve System.
189 LEGAL

DEVELOPMENTS

Amendment to Regulation Z; various rules
and bank holding company and bank merger orders; and pending cases.




FINANCIAL

AND BUSINESS

STATISTICS

A69 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A70 BOARD OF GOVERNORS

AND

STAFF

A72 FEDERAL OPEN MARKET
COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A73 FEDERAL RESERVE
BANKS,
BRANCHES, AND OFFICES
A74 FEDERAL RESERVE
PUBLICATIONS

BOARD

A76 INDEX TO STATISTICAL

TABLES

A78 MAP OF FEDERAL RESERVE

SYSTEM

Monetary Policy Report to Congress
Report submitted to the Congress on February
10, 1982, pursuant to the Full Employment and
Balanced Growth Act of 1978.1
MONETARY POLICY AND THE
PERFORMANCE OF THE ECONOMY

IN 1981

The economy was growing rapidly as 1981 began, continuing the sharp cyclical rebound that
had started in mid-1980. Activity leveled out
during the spring and summer, however, and it
fell in the final quarter of the year. As a result,
the rate of production of goods and services—
real gross national product—was only slightly
higher at the end of 1981 than it had been a year
earlier. With the weakening of output late in the
year, the margin of unutilized plant capacity
widened and the unemployment rate rose sharply
to near postwar record levels.
While economic activity was disappointing last
year, signs of progress in reducing inflationary
pressures were emerging. The rate of price inflation slowed from the extremely rapid pace of the
preceding two years, and as 1981 progressed
there also were indications of an easing in the
rate of wage increases, particularly in some key
pattern-setting industries.
Confidence in the restoration of reasonable
overall price stability is needed if economic
growth is to be resumed on a sustained basis.
The accelerating inflation of earlier years had
been eroding the foundations of the nation's
economy: capital formation had slowed; productivity was sagging; the functioning of basic market mechanisms was being impaired; and inequitable and capricious transfers of wealth were
harming many of the weakest among us. The task
of reversing the inflationary trend of earlier years
was made more difficult because a decade of
escalating prices and unsuccessful anti-inflation
policies had led to firmly held expectations of
1. The charts for the report are available on request from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.




continued high—if not accelerating—rates of inflation. Thus, it was recognized that reducing
inflation would take time and that anti-inflation
policies would have to be applied with persistence if they were to be effective in altering
expectations and slowing the rate of increases in
prices.
While fiscal policy and decisions made in the
private sector have much to do with the course of
economic developments, economic theory and
experience alike indicate that progress toward
price stability cannot be obtained without adequate restraint on the growth of money and
credit. Monetary policy was conducted in 1981
with this crucial fact in mind. The Federal Reserve set objectives for the growth of the monetary aggregates that it believed would help to
damp inflation and would lead to movement over
time toward trend rates of monetary expansion
consistent with the growth of potential output at
stable prices.
Short-term market rates of interest began 1981
at record levels, as rapid growth of economic
activity in the second half of 1980 had pushed up
the demand for money and credit faster than
could be accommodated within the target ranges
for growth of the monetary aggregates and bank
reserves. Early in 1981 these demands began to
subside, pressures on bank reserve positions
were relieved, and money market rates declined
for a time. A bulge in money demand early in the
second quarter was steadily resisted by restraining the supply of reserves, and in the process
short-term interest rates moved back to their
earlier highs. By midsummer, short-term interest
rates were declining, as demands for money and
credit slackened while the Federal Reserve expanded nonborrowed reserves in an effort to
maintain adequate monetary growth. Those declines in interest rates accelerated in October and
November as the recession took hold.
On balance, short-term interest rates—although volatile—moved down considerably over
the course of 1981. In contrast, long-term rates

126 Federal Reserve Bulletin • March 1982

rose substantially over the period, despite declines in the last quarter of the year. The pressure on long-term rates appeared to reflect a
combination of factors. Of continuing strong
investor concern were anticipations that continued, large federal budget deficits would clash
with private credit demands particularly as the
economy expanded and put strong pressures on
credit markets. Despite reductions in the growth
of many federal spending programs, federal borrowing in calendar year 1981 siphoned off roughly a quarter of the total funds available to domestic nonfinancial borrowers. In the background
were continuing doubts and skepticism that antiinflation programs would be carried through.
Moreover, the volatility of the markets may have
inhibited aggressive buying of longer-term securities.
The tensions in credit markets in 1981 had
their greatest impact on capital formation by
businesses and households. Housing construction fell to its lowest level in the postwar period;
only 1.1 million new housing units were started
in 1981. The weakness in real estate markets last
year reflected a number of influences. Of paramount importance in the short run was the cost
of mortgage funds. The average rate on mortgages closed for new homes was 15.3 percent in
the fourth quarter of 1981, up from 12.6 percent a
year earlier. But it was not higher mortgage rates
alone that cut into housing demand: high prices
also adversely affected the ability of those seeking new homes to afford the monthly payments.
Although house prices changed little in 1981,
over the preceding five years prices of new and
existing homes had risen half again as fast at the
overall rate of inflation. As a result, the share of
average family disposable income needed to service the monthly payment on a typical new
mortgage rose from 21 percent in 1976 to nearly
40 percent last year.
Slow income growth and rising unemployment, along with the increased cost of credit,
combined to damp consumer spending in 1981—
particularly for more discretionary, large-ticket
items such as autos, furniture, and appliances.
Since the mid-1970s, household real after-tax
income has only been rising at an annual rate of
Vi percent, compared with a long-run trend of 2
percent. At the same time, the prices of essential
items such as food, gasoline, heating fuel, utili


ties, and medical services—as a group—have
been rising faster than the overall inflation rate,
and the share of disposable income devoted to
these items has been increasing. The resulting
squeeze on family budgets led many households
to overextend themselves during the second half
of the 1970s, taking on more and more debt to
finance their purchases.
With household balance sheets debt-laden and
credit costs rising, a retrenchment in consumer
borrowing began in 1980, and continued through
1981. As the year progressed, household balance
sheets appeared to be improving. Consumer debt
burdens (the ratio of monthly debt repayment
obligations to income) declined to their lowest
level in more than five years. Moreover, partly in
response to the higher after-tax income after the
tax cut on October 1, the saving rate rose from
about 5 percent in the first three quarters of 1981
to 6 percent in the fourth quarter.
In real terms, personal consumption expenditures rose VA percent over the four quarters of
1981. The gain was concentrated in the early
months of the year as real consumer spending
fell, on balance, over the final three quarters of
1981. Purchases of new automobiles were hardest hit. Sales of domestically produced cars
totaled 6.2 million units in 1981, the poorest
performance in 20 years. The depressed conditions in the auto sector were related, in part, to
the typical cyclical volatility in the demand for
motor vehicles and to credit market conditions,
which affected the cost of financing new car and
truck purchases. However, the current problems
in the industry appear to be related mainly to
longer-term trends in the demand for automobiles. These include the rapid increase in the
price of new cars, high gasoline and other operating costs, sluggish growth of real income, intense
foreign competition, and government regulations
that have necessitated large investments to comply with emission control standards and to improve fuel efficiency. As 1981 was ending, the
auto industry appeared to be taking aggressive
actions to reduce costs and to improve the competitiveness of its products.
Business firms, like households, restrained
their spending on investment goods in 1981.
Demand was damped by a substantial degree of
excess capacity and by the rising trend in corporate bond rates throughout much of the year,

Monetary Policy Report to Congress

which boosted the real cost of capital. In real
terms, expenditures for new plant and equipment
rose only IV2 percent over the four quarters of
1981. Although spending for new structures increased during the year, real equipment outlays
fell for the second year in a row; the biggest
declines were for electrical machinery and transportation equipment, while spending for most
other capital goods remained weak.
In contrast to fixed investment outlays, sizable
unintended inventory accumulation boosted business financing requirements. As the year went
on, unexpectedly weak demand led to a buildup
of excess stocks in several industries. The most
pronounced problem was in autos, but other
manufacturers and retailers also found their inventory levels uncomfortably high relative to
sales. On balance, total nominal business capital
spending—fixed investment and inventories—
rose about 20 percent above the 1980 average.
Early in 1981, strong economic growth helped
boost corporate internal funds, greatly reducing
corporate needs for external financing. But as
the economy slowed, corporate profits turned
sluggish and businesses were forced to rely more
heavily on credit markets to satisfy their rising
capital needs. The bulk of business borrowing
last year was in short-term markets, as most
firms felt it best to defer making long-run commitments in the current financial environment.
With the accumulation of additional short-term
debt, however, corporate balance sheet positions
deteriorated further, and the ratio of short-term
to total debt of the nonfinancial corporate sector
rose to a record high.
Real purchases of goods and services at all
levels of government rose only moderately during 1981 as a sharp increase in purchases by the
federal government was partly offset by curtailed
spending at the state and local level. The rise in
federal spending on goods and services reflected
another large increase in defense purchases,
while federal payroll reductions helped to contain increases in nondefense outlays. At the state
and local level, real purchases fell 2 percent
owing to a combination of the withdrawal of
federal support for many activities, the continued impact of tax limitation measures, and the
effects of a sluggish economy on tax revenues.
The weighted-average value of the dollar
against major foreign currencies rose nearly one


127

fourth during the period from January to August.
The dollar eased somewhat in the last part of
1981, but at the end of the year still remained
well above its year-earlier level. The improvement in the inflation outlook in the United States
was a factor in the appreciation of the dollar.
Moreover, at various times during the year
changes in the differential between interest rates
on dollar assets and rates of return on foreign
currency assets also had a noticeable impact on
exchange rates.
Real exports of goods and services increased
in the first quarter of 1981, in part because of
strong growth of GNP in one of our major trading
partners, Canada. But for the next three quarters, real exports declined in response to a slowing of economic growth abroad and the effect of
the appreciation of the dollar in 1980 and 1981.
The volume of imports, other than oil, rose fairly
steadily throughout the year. The current account, reflecting this weakened trade performance, shifted from a surplus in the first quarter to
a deficit by the fourth quarter.
Employment grew at a moderate rate during
the first three quarters of 1981 and the unemployment rate edged down. Job increases were strongest in the service and trade sectors. As economic activity began to contract in the autumn, the
demand for labor fell sharply and the unemployment rate climbed to 8.8 percent in December—
only fractionally below its postwar high. Layoffs
in the durable goods and construction industries
accounted for much of the drop in employment.
As a result, the unemployment rate of adult
men—who tend to be more heavily employed in
these industries—jumped to a postwar record of
7.9 percent in December 1981.
Labor productivity (output per hour worked)
showed considerable fluctuation during 1981,
reflecting the course of economic activity. Productivity rose at an annual rate of 1 VA percent in
the first three quarters of 1981. However, as
often happens at the beginning of a cyclical
downturn, output fell more than employment in
the fourth quarter and productivity declined,
offsetting the gains earlier in the year. Averaging
across short-run cyclical movements, productivity has shown little improvement in recent years,
and thus has provided virtually no offset to the
impact of rapidly rising compensation on unit
labor costs.

128 Federal Reserve Bulletin • March 1982

Compensation and wage increases did decelerate during 1981—with continuing progress observed throughout the year. But the slowing was
moderate, reflecting the basic inertia of the
wage-determination process, in which many
union contracts last three years or more and
nonunion wage agreements usually are set annually. By the second half of 1981, however, some
changes in those traditional wage-setting practices were under way in several important industries: management and workers alike began to
reconsider planned wage adjustments; some expiring contracts were renegotiated well in advance of termination dates; and labor agreements
at a number of firms were modified in an effort to
ease cost pressures and to enable firms to compete more effectively. These adjustments, coupled with the progress seen in reducing inflation
during 1981, suggest that the nation's anti-inflation policies have set the stage for a sustained
unwinding of wage and price increases.
The trend in inflation improved noticeably
during 1981, and by year-end virtually all aggregate price indexes were advancing well below
double-digit rates for the first time since 1978.
The consumer price index rose 8.9 percent over
the course of 1981, down from the average rate of
nearly 13 percent in 1979 and 1980. Important
factors in the slowing of inflation were exceptionally favorable agricultural supplies and declines, after the first quarter, in world oil prices.
Inflation in areas other than food and energy—
particularly consumer commodities and capital
equipment—also began to abate, although price
pressures persisted in the consumer service sector, notably for medical care. As the year progressed, surveys of consumer expectations suggested that the inflationary psychology, which
had increasingly permeated many aspects of economic behavior in earlier years, appeared to be
subsiding.

THE GROWTH OF
MONEY AND CREDIT IN 1981

The Board of Governors in its report to the
Congress last February indicated that the System
intended to maintain restraint in the expansion of
money and credit in 1981. The specific ranges
chosen by the Federal Open Market Committee



(FOMC) for the various monetary aggregates
anticipated a deceleration in monetary growth
that would encourage further improvement in
price performance. Measured from the fourth
quarter of 1980 to the fourth quarter of 1981, and
abstracting from the effects on deposit structure
of the authorization of negotiable order of withdrawal (NOW) accounts nationwide, the ranges
adopted were as follows: for Ml-A, 3 to 5VI
percent; for Ml-B, V/2 to 6 percent; for M2,6 to 9
percent; and for M3, 6V2 to 9VI percent. The
associated range for commercial bank credit was
6 to 9 percent.
In formulating its objectives for 1981, the
FOMC knew that the growth rates of the narrow
aggregates would be affected markedly by shifts
into NOW accounts, which for the first time
became available on a nationwide basis in January. Transfers into NOW accounts, which are
included in Ml-B, from savings deposits and
other asset holdings not included in Ml were
expected to be particularly large in the early
months of the year. Thus, in order to avoid
confusion about the intent of policy and to facilitate comparisons with previous years, the objectives announced for Ml-B abstracted from such
shifts.2 Even after accounting for such shifts,
however, the FOMC anticipated that the growth
rates of the various aggregates were likely to
diverge more than usual, reflecting the rapid
pace of institutional change in financial markets.
The FOMC indicated that if Ml-B growth
(adjusted for shifts into new NOW accounts and
other checkable deposits) was about in the middle of its annual range, the growth of M2 was
likely to be in the upper part of its range, given
the popularity of the nontransaction components
of M2 that pay market-related interest rates. It
also was noted that the relationship of M3 and
bank credit to their respective ranges would be
influenced in an important way by the pattern of
credit flows that would emerge, and particularly
by whether financial conditions would be conducive for corporations to refinance short-term
borrowing in the bond and equity markets.
It soon became apparent as 1981 unfolded that
the behavior of the aggregates was turning out to
2. The shift adjustments were estimated on the basis of
survey evidence and were published regularly over the past
year.

Monetary Policy Report to Congress

be even more divergent than had been anticipated. Growth rates of the shift-adjusted narrow
aggregates were low in the opening months of the
year, a development that was welcome following
rapid growth in the latter part of 1980. A strong
surge in April was offset by weakness over the
remainder of the second quarter. On the whole,
average growth in adjusted Ml-B over the first
half of 1981 was well below the growth that
would have been expected on the basis of historical relationships among money, GNP, and interest rates. On the other hand, despite the weakness in Ml-B, the broader aggregates expanded
quite rapidly in early 1981. Growth in M2 over
the first half was near the upper end of its annual
range, while the expansion of M3 placed this
aggregate above the upper bound of its range at
midyear.
After reassessing its objectives for 1981 at
midyear, the FOMC elected to leave unchanged
the previously established ranges for the aggregates over the remainder of the year. However,
in light of the reduced growth in Ml-type balances over the first half of the year, indications
that this weakness might reflect a lasting change
in cash management practices of individuals and
businesses related to the growth of alternative
means of holding highly liquid funds, and given
the relatively strong growth of the broader aggregates, the FOMC anticipated that growth of the
narrow aggregates might likely and desirably end
the year near the lower bounds of their annual
ranges. Even so, given the sluggishness early in
the year, this decision implied that growth of
Ml-A and Ml-B would accelerate over the balance of the year. At the same time, the FOMC
indicated that M2 and M3 might well end the year
around the upper ends of their ranges. This
expectation also reflected in part the possibility
that regulatory and legislative actions as well as
the popularity of money market mutual funds
might intensify the public's preference to hold
the type of assets encompassed in the broader
aggregates.
Although growth of narrow money in the second half of the year was on average about the
same as in the first half, Ml-B strengthened
appreciably in the final two months of the year.
This acceleration appeared to reflect in part a
lagged response to large short-term interest rate



129

declines in the summer and fall and in part a shift
to preferences for very liquid assets in an environment of heightened economic and financial
uncertainty. Similarly, M2 growth in the second
half was about in line with expansion in the first
half, although growth in this measure also picked
up at the end of the year. The expansion in M3,
on the other hand, decelerated from the rapid
pace of the first half, as sales of large certificates
of deposit slowed in concert with a slackening in
growth of bank credit and stronger growth in
core deposits.
Measuring growth for the year from the fourth
quarter of 1980 to the fourth quarter of 1981,
growth in Ml-B adjusted for shifts into NOW
accounts was about 2!/4 percent—VA percentage
points below the lower end of its targeted range.3
Growth rates, of course, are affected by the
particular pattern of variation that develops over
the course of the year. Measuring expansion
from December to December, growth in adjusted
Ml-B in 1981 was at a rate of 3Vi percent. On a
yearly average basis, which reflects movements
through the year as a whole relative to the level
of the previous year, the increase was at a rate of
43/4 percent. At the same time, measured from
the fourth quarter of 1980 to the fourth quarter of
1981, growth of M2 was 9.4 percent, 0.4 percentage point above the upper limit of its range. Also,
growth of M3 exceeded the upper end of its range
by 1.9 percentage points, while bank credit
growth was just inside the upper end of its annual
range.
Table 1 puts the performance of the aggregates
during 1981 into a somewhat longer-term perspective, showing two measures of annual
growth. No matter which of the measures of
annual growth is used, a marked deceleration in
Ml-B since 1978 is apparent. The table also
clearly illustrates that growth rates for the broader aggregates have been maintained around a
higher level, and larger divergences have developed from growth of Ml-B. In considerable part,
these differences can be explained by structural
changes in financial markets.
As noted earlier, it was already obvious last
February when the FOMC was meeting to set its
3. Unadjusted for shifts into NOW accounts, Ml-B increased 5.0 percent from the fourth quarter of 1980 to the
fourth quarter of 1981.

130 Federal Reserve Bulletin • March 1982

1. G r o w t h o f m o n e y a n d b a n k credit
Percentage changes
Period

Ml-B 1

M2

M3

Bank credit2

Fourth quarter to
fourth quarter
1978
1979
1980
1981

8.3
7.5
6.6
2.3

8.3
8.4
9.1
9.4

11.3
9.8
9.9
11.4

13.3
12.6
8.0
8.8

Annual average to
annual average
1978
1979
1980
1981

8.2
7.7
5.9
4.7

8.8
8.5
8.3
9.7

11.8
10.3
9.3
11.5

12.4
13.5
8.5
9.4

1. Growth rates for 1980 and 1981 adjusted for shifts to other
checkable deposit accounts since the end of the preceding year.
2. The December level used for calculating these 1981 growth rates
incorporates an adjustment to abstract from the shifting of assets from
domestic banking offices to international banking facilities.

objectives for 1981 that shifts into NOW accounts after their nationwide authorization at the
beginning of 1981 would alter the behavior of the
narrow aggregates. Data for early January had
pointed to a very large movement of funds at the
beginning of the year. However, the pattern and
magnitude of subsequent movements could not
be predicted with any certainty. As events unfolded, the shifts into NOW accounts were more
concentrated in the early part of 1981 than was
anticipated by the working assumptions of the
Board's staff. Through June, the adjustments
made to the aggregates to correct for such shifts
had the effect of raising Ml-A by $28 billion and
lowering Ml-B by %9Vi billion. Over the second
half of 1981, further adjustments for shifts into
NOW accounts raised Ml-A by only another $6
billion and lowered Ml-B by about %2Vi billion
more. While these adjustments are imprecise and
based on evidence from a variety of sources,
data on the number of NOW accounts coupled
with other available information confirm that the
shifting of funds from demand deposits to new
interest-bearing checking accounts tapered off
considerably by the fall. A surge in NOW account balances near the end of the year and early
in 1982 appeared to reflect primarily the precautionary savings behavior already noted rather
than shifting of funds into new accounts.
As already indicated, the growth of the narrow
aggregates adjusted for shifts into NOW accounts was low in 1981 compared with the other
aggregates and also relative to past relationships
with income and interest rates. Continued high



interest rates provided a substantial incentive for
businesses to intensify efforts to pare narrow
money balances and to make increasingly widespread use of sophisticated cash management
techniques. At the same time, explosive growth
of money market mutual funds (MMMFs), many
of which offer check-writing or other third-partypayment services comparable with conventional
checking accounts, appeared to induce some
households to minimize checking account balances. Also, the broader availability of NOW
accounts may have stimulated households to
reconsider in a more general way their habits of
cash management.
Likewise, the strong growth of M2 over the
past few years reflected changing financial practices. Money market funds and instruments offered by depository institutions that pay marketrelated interest rates have been accounting for an
increasing proportion of M2, as such assets have
become much more competitive with open market instruments. Indeed, the attractiveness of
small time deposits was enhanced last year by
the liberalization of the interest rate ceilings on
small savers certificates and to a limited extent
by the introduction of all savers certificates.
Even so, three-fourths of the increase in the
nontransaction components of M2 was accounted for by MMMFs, which grew 140 percent last
year.
The distortions in the aggregates resulting
from the expansion in MMMFs are difficult to
quantify. Surveys of household behavior and
data on account turnover suggest that most
shareholders of money funds have made little or
no use of their accounts for transaction purposes. Thus, the direct substitution effect of
MMMFs on the growth of Ml has appeared
small, perhaps on the order of 1 percentage point
on the rate of growth for the year. However,
indirect effects may have been larger as the
potential availability of such a highly liquid asset
may facilitate holding less funds in demand and
NOW accounts.
The direct effect of MMMFs on M2 appears
more substantial in dollar terms. Presumably, the
great bulk of the inflow of $20 billion in 1981 to
MMMFs catering only to institutional investors
was funds that otherwise would have been invested in assets not included in M2. In addition,
it seems likely that a small portion of the growth

Monetary Policy Report to Congress

of $90 billion in other types of MMMFs also
reflected diversions from assets not in M2.
In light of the sizable distortions created by the
growth of institution-only MMMFs, such funds
have been excluded from the revised M2, but
they will continue to be a component of M3. In
addition, M2 has been revised to include retail
repurchase agreements (RPs). Retail RPs, which
previously had been a component only of M3,
were promoted on a substantial scale in 1981,
likely attracting funds mainly from household
small-denomination time deposits and MMMF
holdings and thus resulting in a downward bias
on M2 growth. The net effect on M2 growth of
reclassifying institution-only MMMFs and retail
RPs, along with other minor revisions, was
small.
M3 increased more rapidly than M2 last year
largely because of the substantial expansion in
large CDs, particularly over the first half of the
year. With growth of core deposits weak on
balance over the year, depository institutions
increased their managed liabilities to support
expansion in loans and investments.
Growth in bank credit accelerated somewhat
in 1981 but stayed just within the upper end of its
annual target range. The pickup in bank credit
growth was concentrated in business loans.
Growth in this category was bolstered by the
high level of corporate bond rates through most
of the year, which tended to focus business
credit demands on short-term borrowing such as
bank loans and commercial paper. Although
merger activity contributed significantly to the
growth of loan commitments over the year, actual takedowns for this purpose influenced loan
growth only slightly. Real estate loans at banks
in 1981 grew at about the same moderate pace as
in 1980, while consumer lending strengthened a
little from 1980. Security holdings at banks grew
somewhat more slowly than loans in 1981.
The bank credit data in December were affected by the shifting of assets to accounts in the
newly authorized international banking facilities
(IBFs). About $22 billion of loans to foreign
customers are estimated to have shifted from
U.S. offices to IBFs in December. The data
presented in this report are adjusted for this shift.
Without this adjustment, the increase in bank
credit from the fourth quarter of 1980 to the
fourth quarter of 1981 was SlA percent, Vi per


131

centage point less than shown by the adjusted
data.
Broader measures of credit flows reflected the
slowing pace of production and income in 1981
and the effects of high interest rates. Households
and businesses continued to increase their borrowing over the first three quarters, but their use
of credit contracted in the fourth quarter in
response to the weakening of the economy. In
view of the high level of long-term interest rates
during most of 1981, virtually all of the increase
in funds raised was in short-term debt instruments. Overall, net funds raised by nonfinancial
sectors rose 7 percent in 1981 and continued to
fall relative to GNP for the third consecutive
year.

THE FEDERAL RESERVE S OBJECTIVES
FOR THE GROWTH OF MONEY AND CREDIT

The Federal Reserve remains committed to restraint on the growth of money and credit in
order to exert continuing downward pressure on
the rate of inflation. Such a policy is essential if
the groundwork is to be laid for sustained economic expansion.
A distinct slowing of inflation occurred during
1981, and the prospects for further progress are
good. Failure to persist in the effort to maintain
the improvement would have long-lasting and
damaging consequences. Once again, underlying
expectations would deteriorate, with potentially
adverse effects on financial markets, particularly
long-term rates. The result would be to embed
inflation even more deeply into the nation's
economic system—with the attendant debilitating consequences for the performance of the
economy. A failure to continue on the current
path would mean that the next effort would be
associated with still greater hardship.
Progress toward price stability can be
achieved most effectively and with the least
amount of economic disruption by the concerted
application of monetary, fiscal, regulatory, and
other economic policies. But quite clearly inflation cannot persist over an extended period
unless financed by excessive growth of money.
Thus, a policy of restraint on the growth of the
monetary aggregates is a key element in an antiinflation strategy.

132 Federal Reserve Bulletin • March 1982

Targets for the monetary aggregates have been
set with the aim of slowing the expansion of
money over time to rates consistent with the
needs of an economy growing in line with its
productive potential at reasonably stable prices.
The speed with which the trend of monetary
growth can be lowered without unduly disturbing
effects on short-run economic performance depends, in part, on the credibility of anti-inflation
policies and their effects on price expectations as
well as on other forces influencing interest rates
and credit market demands, including importantly the fiscal position of the federal government.
More technically, financial innovation or other
factors affecting the demand for specific forms of
money need to be monitored.
In its deliberations concerning the target
ranges for 1982, the Committee recognized that
the recent rapid increase in Ml placed the measure in January well above the average level
during the fourth quarter of 1981, the conventional base for the new target. Experience has
shown that, from time to time, Ml growth can
fluctuate rather sharply over short periods, and
these movements may be at least partially reversed fairly quickly. The available analysis suggested that the recent increase reflected in part
some temporary factors of that kind, rather than
signaling a basic change in the amount of money
needed to finance growth in nominal GNP.
In light of all these considerations, the FOMC
reaffirmed the following ranges of monetary expansion—tentatively set out in mid-1981—for the
year ending in the fourth quarter of 1982: for Ml,
2Vi to 51/2 percent; for M2, 6 to 9 percent, and for
M3, VA\o 9V 2 percent. 4 The FOMC also adopted
a corresponding range of 6 to 9 percent for
commercial bank credit. These ranges are the
same as those agreed to in July and reaffirm the
4. The objective for growth of narrowly defined money
over 1982 is set in terms of Ml only. Last February, when the
FOMC set its targets for narrow money, it recognized that
regulatory changes allowing for the establishment of nationwide NOW accounts would distort the observed behavior of
Ml-A and Ml-B. Accordingly, the targets were set on a basis
that abstracted from the shifting of funds into interest-bearing
checkable deposits. Based on a variety of evidence suggesting that the bulk of the shift to NOW accounts had occurred
by late 1981, the Federal Reserve reaffirmed in December its
previously announced intention that starting in January 1982
shift adjustments would no longer be published and only a
single Ml figure would be released with the same coverage as
Ml-B.




Federal Reserve's commitment to reduce inflationary forces. As has been typical in the past,
these changes are measured from actual fourthquarter levels from the previous year.5
During 1981, Ml-B (shift-adjusted) rose slowly
in relation to nominal GNP. 6 On the assumption
that the relationship between growth of Ml and
the rise of nominal GNP is likely to be more
normal in 1982, and given the relatively low base
for the range of Ml-B, the Committee contemplated that growth in Ml this year may well be in
the upper part of its range. At the same time, the
FOMC elected to retain the lower bound of 2Vi
percent for growth of Ml that was tentatively set
last July in recognition of the possibility that
financial innovations—especially techniques for
economizing on the use of checking account
balances included in Ml—could accelerate, with
restraining effects on growth of Ml.
The actual and potential effects on Ml of
ongoing changes in financial technology and the
greater availability of a wide variety of moneylike instruments and near-monies strongly suggest the need for also giving careful attention to
developments with respect to broader money
measures in the implementation of monetary
policy. The range for growth of M2 is the same as
in 1981 when actual growth slightly exceeded the
upper bound of the range. The Committee contemplated that M2 growth in 1982 would be
somewhat below the 1981 pace, although probably in the upper part of the range. However,
should personal saving, responding to recent
changes in tax law or other influences, grow
much more rapidly in relation to income than
now anticipated, or should depository institutions attract an exceptionally large inflow to
individual retirement accounts from sources outside measured M2, growth of M2 might appropriately reach—or even slightly exceed—the upper

5. Because of the introduction of IBFs, the bank credit data
after December 1981 are not comparable with earlier data.
Thus, the targets for 1982 are in terms of growth from an
average of December 1981 and January 1982 to the average
level in the fourth quarter of 1982.
6. Ml-B velocity, before shift adjustment, rose at a rate
closer to historical experience. However, the shift of funds
from savings accounts or other sources of funds not included
in measures of the narrow money supply temporarily depressed that velocity figure, particularly early in the year.

Monetary Policy Report to Congress

end of the range. The ability of depository institutions to compete for the public's savings will,
of course, also be affected in part by deregulatory decisions that may be made by the Depository Institutions Deregulation Committee.
The 1982 ranges for M3 and bank credit were
left unchanged from those for 1981. These aggregates again will be influenced importantly by the
degree to which credit demands tend to be focused on short-term borrowing and are funded at
home or abroad.

THE OUTLOOK FOR THE ECONOMY IN 1982

Economic activity still appears to be contracting;
industrial production and employment certainly
declined further in January, with the extent of
the fall worsened by exceptionally bad winter
storms. Demand in the key sectors that had led
the decline—housing and consumer spending—
showed some signs of leveling off as the year
began, and the recent cuts in production likely
have helped to relieve some of the remaining
inventory imbalances. Recent weather-related
disruptions may affect the incoming data for a
time, but the economy appears to be in the
process of bottoming out, and a perceptible
recovery in business activity seems likely before
midyear.
One element supporting final demands in the
economy is the federal government. Part of the
recent expansion in the deficit reflects the cushioning effects of reduced taxes and increased
government expenditures that result from declining income growth and rising unemployment. In
addition, however, the buildup in defense spending is a continuing source of stimulus. The second phase of the tax reductions that occurs in
July will provide another expansionary impetus
to the economy. At the same time, the deficit—
particularly if expected to continue at exceptionally high levels in later years—adversely influences current financial market conditions.
The Federal Reserve's objectives for money
growth in 1982 are consistent with recovery in
economic activity. The expansion is likely to be
concentrated initially in consumer spending.
Given the substantial margin of excess capacity,
outlays for business fixed investment may remain weak, particularly if long-term interest
rates continue to fluctuate near their current high




133

levels. A continuation of high levels of long-term
rates also would inhibit the recovery in residential housing, although demographic factors will
continue to buttress demands in that sector.
The effort to deal with inflation is at a critical
juncture. The upward trend in inflation clearly
has been halted and the process of reversal is
under way. There are signs that price setting,
wage bargaining, and personal spending decisions are beginning to be made and that these
decisions over time will serve to moderate, rather than to intensify, inflationary pressures. Nonetheless, the behavior of financial markets and
other evidence strongly suggests the continued
existence of considerable skepticism that progress in reducing inflation will be maintained.
Lasting improvement in financial markets—particularly for longer-term instruments—is dependent on confidence that progress against inflation
will continue; looming federal deficits have
served to shake that confidence. Prospects for
lower interest rates and for sustaining recovery
over a long period—indeed for the timing of
recovery—are thus tied to prospects for a more
stable price level.
How we emerge from the current recession
will be crucial to further curtailing inflation. The
recovery phases that have followed recent recessions have sometimes been associated with an
acceleration of inflation. However, if monetary
and fiscal policies are appropriately disciplined,
this pattern need not recur; and recovery from
the current recession will be consistent with
further progress toward achieving sustainable
growth, price stability, and lower levels of interest rates.
Given the current circumstances and in light of
the objectives for the monetary aggregates for
the coming year, the individual members of the

2. Economic projections for 1982
Percent

Period

Changes, fourth quarter to
fourth quarter
Nominal GNP
Real GNP
GNP deflator
Average level in the
fourth quarter
Unemployment rate

Actual
1981

Projected for 1982
FOMC
members

Administration

9.3
.7
8.6

8 to 10'/2
Vt to 3
6l/z to 7%

10.4
3.0
7.2

8.3

8l/4 to 9Vi

8.4

134 Federal Reserve Bulletin • March 1982

FOMC have formulated projections for economic performance in 1982 that generally fall within
the ranges indicated in table 2. The members of
the FOMC expect inflation to continue to moderate in 1982. At the same time, real activity is
expected to accelerate with most of the growth
coming in the second half of the year. With
inflation continuing to be substantial and the
prospect of the federal budget deficit remaining
large even as the recovery gathers momentum,
demands for credit should intensify as the year
progresses. In these circumstances, the recovery
is likely to be somewhat restrained, with the
result that unemployment probably still will be
substantial at year-end.




The FOMC members' projections generally
encompass those that underlie the administration's recent budget proposals. The consensus
view of the FOMC anticipates an improvement
in inflation during 1982 comparable with the
administration's as well as a similar outlook for
the labor market. The administration's projection for real growth falls at the high end of the
FOMC consensus. In the event prices and wages
should respond more rapidly to anti-inflation
policies than historical experience would suggest
or should more favorable productivity trends
develop, then the recovery could be faster without adverse pressures developing on prices,
wages, and interest rates.
•

135

Industrial Development Bonds:
Some Aspects of the Current Controversy
Daniel E. Laufenberg of the Board's Division of
Research and Statistics prepared this article.
Tax-exempt securities have been the traditional
means by which state and local governmental
units have financed the construction of schools,
roads, hospitals, and other public improvements.
In recent years, another category of these "municipal" securities, generally referred to as industrial development bonds (IDBs), has become
important. IDBs are issued by state and local
units on behalf of private businesses to finance
industrial and commercial projects. The growth
of IDB financing has stirred considerable controversy, centering on the appropriate use of implicit federal subsidies and the impact on the borrowing costs of state and local governments.
Moreover, concern has arisen about the impact
on federal revenues of the tax exemption of
interest earned on IDBs; partly for this reason,
the Reagan administration has proposed curtailment of IDB issuance as part of its budget
program.
Hundreds of state agencies, local development
agencies, counties, and cities have issued IDBs
in the name of local economic development. But
many of the uses to which this financing vehicle
has been put has raised doubts about legitimate
public purpose. A recent study by the Congressional Budget Office noted that some less conventional uses of small-issue IDBs have become
common, such as commercial real estate development, retail stores, recreational facilities, tourist facilities, and proprietary health facilities.1
Moreover, small-issue IDB financing is being
used extensively by large national retailers and
somewhat less extensively by large manufac-

1. Small Issue Industrial Revenue Bonds. Congress of the
United States, Budget Office, September 1981.




turing corporations. Such uses seem to contradict the intent of the Revenue and Expenditure
Control Act of 1968, which imposed maximum
dollar limits on the size of the IDB issue or on the
total capital expenditures on any one project
financed in part or in whole by IDBs, except for
special purposes.
This paper reviews the legal definitions of
small-issue and selected-purpose IDBs to provide a clearer distinction between IDBs and
traditional municipal issues; analyzes the costs
and benefits of using tax-exempt financing to
promote local development; and discusses the
current concerns about IDB issuance.

BACKGROUND

The use of public tax-exempt credit for private
business purposes had its origin in the United
States in 1936, when Mississippi authorized cities and counties to incur general-obligation indebtedness to construct industrial buildings for
lease to private enterprise. Other states in the
South and a few in other regions followed suit
after World War II, but through the 1950s the
volume of IDBs was relatively small.
In the early 1960s, the total of IDB issuance
picked up substantially as more use was made of
the revenue version of IDBs, which is secured by
the property or receipts of the project financed
rather than the full faith and credit of the issuer,
and as businesses of all sizes participated in
locally sponsored development programs. By
1968, IDBs, most of which were revenue bonds,
represented 10 percent of all long-term tax-exempt bond sales.
The growing popularity of such bonds alarmed
Treasury Department officials because IDBs
threatened sizable losses of tax revenues. As a
result, the Treasury ruled in 1967 that IDBs were

136 Federal Reserve Bulletin • March 1982

subject to taxation. This ruling was withdrawn,
however, when the Congress enacted the Revenue and Expenditure Control Act of 1968, the
statute that still governs IDB issuance. Under
this statute, tax-exempt status is denied IDBs
except those that are designated as "small issues" or those that finance certain types of
facilities.

LEGAL LIMITS ON IDB

ISSUANCE

Securities issued by state and local governmental
units are defined as IDBs in the 1968 legislation if
they satisfy two tests. The first is the "trade or
business test," which is met if a major portion of
bond proceeds are used in business by a nonexempt entity—one other than a state or local
government or organization. The second is the
"security interest test," which is met if a major
portion of the debt service is secured by property
used in or payments derived from a business,
regardless of whether the bonds are also general
obligations of the issuer. IDB issues in recent
years have been exclusively revenue bonds, and
increasingly have been called industrial revenue
bonds (IRBs). For the remainder of this paper,
IDB and IRB are used synonymously.

Small Issues of
Industrial Development

Bonds

The Revenue and Expenditure Control Act of
1968 provides a tax exemption for certain small
issues of industrial development bonds. Under
this exemption, the governmental unit issuing the
bonds may select a limit of either $1 million or
$10 million. In either case, substantially all of the
proceeds from the issues must be used to acquire, construct, or improve depreciable property. An IDB issue is within the $1 million exemption if the sum of the proposed issue and
outstanding IDBs, whether or not by the same
issuer but used to finance facilities for the principal user in the same jurisdiction, is no greater
than $1 million. If the issuer elects the $10 million
limit, all capital expenditures incurred by the
principal user in the issuing jurisdiction during
the six-year period beginning three years before



the issuance of the bonds also must be counted
against the limit.2
In general, capital expenditures must be taken
into account if those expenditures are properly
chargeable to the capital account of the principal
user or a related person. There are, however,
exceptions to the "related person" rule when
such capital expenditures are made by exempt
entities. For example, the IRS has ruled that
capital expenditures by the local governmental
unit do not count against the $10 million limit
unless the expenditures are used to construct
facilities that are clearly a part of the project
financed with IDBs. On the other hand, capital
expenditures by a charitable trust or a nonprofit
corporation involved in an IDB financing do not
count against the limit even if the expenditures
are directly for the financed project.

Exempt

Facilities

In addition to the small-issue exemption, the
Revenue and Expenditure Control Act permits
the issuance of IDBs, without limits on the size
of the issue or the total capital expenditures on
the project being financed, if substantially all of
the proceeds are used for selected purposes. 3
Although a few of these purposes are considered
to be traditional municipal functions when provided by state and local governments, most of
them are not generally viewed as appropriate
uses of tax-exempt financing.
The Public Securities Association, the primary
source of data on the issuance of tax-exempt
securities, reports the volume of all municipal
bonds on the basis of the purpose for which they
are issued (table 1), but does not provide a
breakdown between IDBs and other tax-exempt
securities issued for each purpose. Thus the
precise relative importance of IDBs in the taxexempt market is impossible to quantify, but it is

2. For a project that also has financing under the Urban
Development Action Grant program, the capital expenditure
limit is $20 million, but the tax-exempt issue cannot exceed
$10 million.
3. Substantially all of the proceeds, defined as 90 percent
of an amount equal to the bond proceeds less the issuance
cost and a reasonable debt reserve fund, must be used to
purchase land or depreciable property.

Industrial Development Bonds

1. New security issues of state and local
governments, 1978-81
Item

1978

1979

1980

1981

Millions of dollars
All issues1
Refunding and advance
refunding
New capital

48,352

43,335

48,368

47,515

10,767
37,585

1,925
41,410

1,768
46,600

46,314

1,201

Percent
Use of proceeds
Education
Social welfare and public
services
Transportation
Hospitals
Utilities
Housing
Recreation
Industrial aid2
Industrial pollution control
Other purposes

13.0

12.5

10.0

10.0

6.0
9.0
6.0
24.0
16.0
2.0
2.0
7.0
15.0

2.0
6.0
8.0
20.5
29.0
1.0
4.0
5.0
12.0

2.0
5.5
8.0
17.0
33.0
1.0
4.0
5.0
14.5

3.0
7.0
12.0
22.0
13.0
1.0
7.0
9.0
16.0

1. Par amounts of long-term issues based on date of sale.
2. The percent of new capital used for industrial aid purposes is
based on data from the Public Securities Association, which according
to a recent Congressional Budget Office study, substantially understate the volume of small-issue industrial development bonds sold
during the past four years. The reason for this discrepancy is that
many small issues are privately placed with commercial banks or
other lenders and are seldom reported beyond the state level.
SOURCE. Public Securities Association.

clearly greater than that inferred from simply
adding the industrial-aid and pollution-control
categories in table 1, given the following long list
of purposes that are eligible for the special exemption.
Sewage or Sold-Waste-Disposal Facilities.
Privately owned sewage and solid-waste-disposal facilities qualify for a special-purpose exemption if they are used for the collection, storage,
treatment, utilization, processing, or final disposal of sewage and solid waste, and if they are
available to the general public. In recent years
the separation from garbage of combustible material used as fuel has given this material market
value in some areas. As such, it did not qualify as
solid waste within the meaning of the Revenue
and Expenditure Control Act of 1968. For example, boilers that burned combustible waste no
longer qualified as solid waste disposal facilities.
To clarify this point, the Windfall Profits Tax Act
of 1980 added a section to the Internal Revenue
Code that expanded the definition of solid-wastedisposal facilities to include qualified steam-generating facilities and qualified alcohol-producing



137

facilities. At least 90 percent of such fuel must be
produced at, or adjacent to, the steam- or alcohol-producing facilities.
Electric Energy and Gas Facilities. The principal factor in determining whether tax-exempt
financing is available for privately owned electric
energy and gas facilities is the size of the service
areas. Only "local furnishing" facilities, which
are facilities that service an area no larger than
two contiguous counties or a city and a contiguous county, qualify for the exemption. Moreover, the Internal Revenue Service has ruled to
allow tax-exempt financing for a privately owned
electric generating facility that served a distribution system located entirely within two counties
but was owned and operated by a wholly owned
subsidiary corporation of a utility that furnished
electric energy to the general public in many
areas of the state.
Airports, Docks, and Wharves. Privately
owned airports, docks, and wharves are eligible
for tax-exempt financing if they satisfy the public-use test. Airports satisfy this test if they are
available to the general public or are served by a
common or charter carrier that is publicly available. This exemption applies to facilities that are
directly related and essential to aircraft landing
and takeoff, as well as to those related to servicing aircraft and transferring passengers and cargo. Subordinate facilities that also qualify for the
exemption include in-flight meal facilities; commercial space in terminals and hotels to be used
by passengers, all of which must be located at the
airport; and certain improved or unimproved
land adjacent to the airport. Facilities at the
airport used to customize new aircraft do not
qualify.
Docks and wharves satisfy the public-use test
if they are available for use by the general public,
are served by a common or charter carrier that is
publicly available, or are part of a public port.
Functionally related and subordinate facilities
include cranes, conveyors, and training and storage facilities. The IRS has ruled that offshore oil
ports and onshore oil-storage facilities qualify as
exempt facilities but that docks located in a
public port to be used for construction of vessels
do not qualify.

138 Federal Reserve Bulletin • March 1982

Pollution-Control Facilities. Facilities for air
or water pollution control installed by privately
owned companies are considered exempt if they
remove, alter, dispose, or store pollutants. In
this regard, smokestacks do not qualify because
they merely disperse pollutants. Moreover, no
part of the cost of a new production facility that
avoids the creation of pollutants, rather than
treating the pollutants after they are created,
qualifies for the exemption.
Facilities for the Furnishing of Water. An
exemption is provided in the tax code for privately owned facilities that furnish water to the
general public, and that are operated by a governmental unit or charge rates established or
approved by a state or political subdivision, an
agency or instrumentality of the United States,
or a public utility commission or a similar body
of any state or political subdivision.
Sports and Convention or Trade-Show Facilities. Privately owned sports facilities that are
eligible for tax-exempt financing without limits
on the size of the issue include baseball and
football stadiums, indoor sports arenas, swimming pools, golf courses, ski slopes, and tennis
courts. Facilities directly related to exempt
sports facilities, including bathhouses, clubhouses, parking lots, and ski lifts (but not an
overnight ski lodge), are also exempt.
For convention or trade-show facilities, only
the special-purpose buildings and structures such
as meeting halls and display areas qualify under
this exemption. To meet the public-use test, the
facility must be available for rent by the general
public, which means it cannot be leased subject
to a long-term contract with one user or group of
users. Tax exemption does not apply to bonds
issued to finance a hotel, even though most of its
clientele are expected to be delegates or participants at conventions and trade shows.
Qualified Hydroelectric Generating Facilities.
In 1980, the tax code was amended to permit the
issuance of IDBs for qualified hydroelectric generating facilities. Such a facility qualifies if the
property is owned for tax purposes by a state or
political subdivision, and if the facility generates
electricity from the flow or fall of water. The



exemption does not apply if debt service is
guaranteed, either directly or indirectly, by the
federal government pursuant to an energy-production or conservation program.
Industrial Parks. IDBs are exempt if they are
issued to finance the acquisition or development
of land used as building sites by industrial,
distribution, or wholesale businesses. These are
industrial parks and must be administered by an
exempt entity or developed under an overall plan
subject to special zoning restrictions to qualify
for the exemption. For the purposes of this
exemption, development of land includes providing water, sewage, and drainage facilities; road,
railroad, docking, and similar transportation facilities; and power or communication facilities. It
does not include the construction of buildings or
other structures.
Mass Commuting Facilities. Mass commuting
facilities eligible for tax-exempt financing include
real property and improvements and personal
property including buses, train cars, subway
cars, and similar vehicles leased to mass transit
systems owned by state or local governments.
Residential Mortgage Programs. Proceeds of
tax-exempt bonds also are used to finance residential mortgages. Single-family mortgage bonds
are issued under two general types of programs,
mortgage-purchase programs and loan-to-lender
programs. Under a mortgage-purchase program,
the proceeds are used by the issuer to acquire
mortgages that are originated and serviced by
participating financial institutions. This type of
program has been viewed traditionally by bond
counsel as not being an IDB-financed project
because the mortgages purchased are considered
assets of the issuer rather than of the participating financial institutions. Under a loan-to-lender
program, the bonds are issued on behalf of
participating financial institutions, which in turn
use the proceeds to finance mortgages that are
held as assets of the financial institutions rather
than the governmental authority. This type of
program has been viewed by bond counsel as an
IDB-financed project.
The marked increase in the issuance of taxexempt bonds during 1979-80 to finance residen-

Industrial Development Bonds

tial mortgages, mortgages that largely benefited
middle-income households, raised doubts about
the propriety of this use of tax-exempt financing.
This concern and the potential loss of tax revenue to the Treasury were the principal factors
behind the passage of the Mortgage Subsidy
Bond Tax Act of 1980, which prohibits the
issuance of any bonds to subsidize single-family
mortgages after December 31, 1983, and places
substantial restrictions on the issuance of such
bonds in the interim:
1. The residence securing the mortgage must
be the principal residence of the borrower.
2. A borrower may not have had an ownership
interest in a principal residence during the threeyear period before execution of the mortgage.
3. The purchase price of the residence financed may not exceed 90 percent of the average
purchase price of single-family residences during
the most recent 12-month period for which such
information is available in the statistical area in
which the residence is located.
4. Each state is limited in the aggregate principal amount of bonds that it and its political
subdivisions can issue annually.
5. The arbitrage differential permitted between the effective rate of interest on the mortgages financed by the bond proceeds and the
yield on the bonds cannot exceed 1 percent for
mortgage-purchase programs and IV2 percent for
loan-to-lender programs. The less stringent arbitrage restriction on loan-to-lender programs may
explain, in part, why many of the mortgagesubsidy programs in 1981 were of this type.
The Mortgage Subsidy Bond Act also amended the tax code governing IDB issuance to allow
tax-exempt financing for multifamily housing
only if at least 20 percent of the financed units
are occupied by low- or moderate-income tenants, as defined by the Department of Housing
and Urban Development. This qualification reportedly deterred some tax-exempt issuers from
offering multifamily housing bonds during 1981.

THE EFFECTS OF INDUSTRIAL

BONDS

IDB issuance, despite the legal restrictions imposed on it in 1968, has once again surfaced as an



139

important topic in the current debate on tax
reform. The advantages of IDBs explain why the
volume of such bonds has become so great, and
the disadvantages of IDBs explain why their
purposes have been questioned.

Some

Advantages

Industrial development bond financing is one of a
variety of incentives a state or local government
can offer business firms to locate or to remain
within its jurisdiction.4 In principle, IDBs can be
an effective way to target investment on industries and areas so as to contribute substantially to
more balanced national economic growth. However, to the extent that local authorities everywhere use IDB financing to compete against each
other, any regional benefits to private businesses
are eliminated and such financing functions simply as a conduit to the tax-exempt market.
Like that of any other tax-exempt security, the
cost of the IDB subsidy is borne by the federal
government but the subsidy is used at the discretion of the local authority. Moreover, in the case
of revenue bonds no liability is assigned to the
issuing authority for the debt service on the
bonds, and few if any limits are placed on the
total volume issued.5 Thus, constituents of the
issuing jurisdictions are seldom concerned about
the volume or purposes of IDB issues.
Private businesses benefit from the issuance of
IDBs because such bonds give them access to
the capital market at a rate of interest below
market rates on taxable debt obligations. For
firms that might otherwise be denied access to
capital markets, the relative benefit from IDB
financing may be the firm's existence. The opportunity cost to society, in the form of misallocated resources, of providing this subsidy may,
however, more than offset any benefit.

4. Other incentives frequently offered by state governments in competing for private business include exemption
from state taxes, loan guarantees, and below-cost facilities
and services.
5. While the size of any one IDB issue is restricted (except
for those whose proceeds finance the exempt facilities discussed above), there are no limits on the number of such
issues by any one jurisdiction.

140 Federal Reserve Bulletin • March 1982

2. Benefit to the firm of IDB financing
Percent of taxable yield
Ratio of tax-exempt to taxable yields
(percent)

Marginal tax rate of
the firm (percent)

26
48

50

60

70

80

90

37
26

30
21

22
16

15
10

7
5

the commercial loan department, they are often
reported as loans rather than tax-exempt securities. By classifying IDBs as loans, banks can
avoid the question of whether the obligations are
of "investment grade," which is required of
securities held by banks.

Some
If the IDB issue acts solely as a means for a
firm to borrow at lower costs in the tax-exempt
market, the relative benefit to that firm depends
on the ratio of tax-exempt to taxable yields and,
because interest expenses are tax deductible, on
the marginal tax rate of the borrowing firm.6
As table 2 shows, an increase in the ratio of
tax-exempt to taxable yields results in a decline
in the relative benefit to the firm of IDB financing
regardless of the firm's marginal tax rate. Moreover, the higher the tax rate of the firm, the lower
the relative benefit of tax-exempt financing.
Because of the tax-exempt nature of municipal
securities, investors generally are persons and
institutions that are subject to high marginal tax
rates. Chief among these are individuals and
individual trusts, property and casualty insurance companies, and commercial banks. At present, commercial banks are the primary holders of
municipal bonds, but, reportedly, they are relying more often on small-issue IDBs to satisfy
their demand for tax shelter. One attractive
feature that small-issue IDBs offer banks is their
resemblance to business loans. Thus the commercial loan departments of banks often assume
responsibility for evaluating the risks and negotiating the terms of such IDB issues. Moreover,
because these transactions are handled within
6. The benefit of IDB financing, in this case, is assumed to
be the spread between taxable and tax-exempt yields, both of
which are adjusted for the tax deductibility of interest costs;
that is,
B = (R, - Rle)( 1 -

t),

where B is the benefit, R, is the taxable interest rate, Rte is the
tax-exempt rate, and t is the marginal tax rate of the firm.
This expression can be transposed into the following form:
B =

(1 - r)(l -

t) R„

where r is the ratio of tax-exempt to taxable yields. The
percentages reported in table 1 represent the coefficient
(1 - r)(l - t) in the above expression.




Disadvantages

Public programs that offer credit to private business under conditions more favorable than those
conventionally offered by the market inevitably
involve some element of subsidy. In the case of
IDBs, the subsidy is from the federal government, but is triggered by a local authority. Opponents of IDB financing contend that local authorities might dispense a federal subsidy either
less carefully than would federal officials or less
carefully than a subsidy of local money. They
also argue against the use of a federal subsidy to
foster new private business that may place established businesses at a competitive disadvantage.
Furthermore, they assert that the IDB loses any
justification for tax exemption if it is issued for
corporations that do not need assistance in financing expansion and in areas where commercial credit is readily available.7
Tax-exempt financing entails the loss of tax revenues rather than an increase in actual expenditures. This characteristic of IDBs makes them, in
the eyes of critics, an inequitable and inefficient
way for the federal government to provide financial assistance to state and local governments.
From the viewpoint of tax equity, the exemption permits individuals and institutions in high
tax brackets to avoid the full burden of the
progressive federal income tax. While the bondholders could be viewed as paying a "tax" to the
state and local governments by accepting lower
interest rates on tax-exempt bonds, they are in
fact net gainers, because they are willing to
engage in the transaction only if the "tax" allows
them to avoid a higher federal income tax.
With regard to the cost effectiveness of IDBs
as a subsidy, the exemption gives less financial
assistance in the form of lower interest rates than
7. Advisory Commission on Intergovernmental Relations,
Industrial Development
Bond Financing (ACIR, June 1963),
pp. 40-46.

Industrial Development Bonds

it costs the federal government in foregone revenue. Opponents of IDBs contend that, to make
the tax exemption attractive to investors in lower
tax brackets, the issuance of such bonds pushes
yields higher on municipal securities relative to
taxable securities. While a relatively higher taxexempt yield is necessary to attract the marginal,
low-bracket investor into the municipal market,
the higher yield is available to all who invest in
newly issued securities, including those in the
higher tax brackets. Moreover, the value of taxexempt financing to state and local governments
declines because they must pay higher relative
interest rates on all bond issues regardless of the
purpose. The net effect is an increase in the
overall cost of tax-exempt financing to the federal government in the form of tax revenue foregone and a smaller relative benefit to municipal
issuers. In other words, the efficiency of this
type of revenue sharing declines as the ratio of
tax-exempt to taxable yields rises.

CURRENT

PROBLEMS

Questions about the public purpose and the
inefficiency of IDBs sold during the mid-1960s
resulted in the enactment of the Revenue and
Expenditure Control Act of 1968, which still




141

governs the issuance of such bonds. Once again,
these concerns have surfaced in relation to the
reportedly growing volume of small-issue IDBs,
but have yet to result in additional legislation.
Under current federal law anyone may use smallissue IDBs, and only a few states limit the
projects benefiting from tax-exempt financing
within their jurisdictions. Thus small-issue IDBs
finance a wide variety of business ventures,
including projects like private golf courses and
fast-food outlets as well as small industrial firms.
Another serious problem with the current use
of small-issue IDBs is that many of the bond
issues are for business firms that do not need
financial assistance to undertake their projects.
Critics object to this use of tax-exempt financing
because it serves simply as a source of cheap
credit at the expense of federal tax revenues.
Addressing these concerns, as well as the
federal revenue loss arising from IDBs, the administration has proposed legislation that would
limit the use of IDBs to small businesses and bar
firms that use IDB financing from also taking
accelerated depreciation write-offs for the same
projects. Moreover, tax exemption would be
limited to IDBs approved before their issuance
by state or local elected officials. These restrictions would apply to the issuance of both smallissue and exempt-facility IDBs.
•

143

Treasury and Federal Reserve
Foreign Exchange Operations
This 40th joint report reflects the TreasuryFederal Reserve policy of making available additional information on foreign exchange operations from time to time. The Federal Reserve
Bank of New York acts as agent for both the
Treasury and the Federal Open Market Committee of the Federal Reserve System in the conduct
of foreign exchange operations.
This report was prepared by Sam Y. Cross,
Manager of Foreign Operations for the System
Open Market Account and Senior Vice President
in charge of the Foreign Group of the Federal
Reserve Bank of New York. It covers the period
August 1981 through January 1982. Previous
reports have been published in the March and
September BULLETINS of each year beginning
with September 1962.
There were two key turning points for the dollar
in the exchange market during the period under
review. In early August, the year-long advance
of the dollar against major foreign currencies
came to an end. Then, after a four-month decline, dollar rates started to firm at the beginning
of December, a trend that continued through the
remainder of the period.
Several factors supported the long advance of
the dollar through early August. Inflation in the
United States had begun to moderate even as the
U.S. economy withstood recessionary tendencies longer than most forecasters had expected.
The Reagan Administration's leadership in translating its economic policy into action was greeted
positively in the exchange markets, particularly
as the program gained support in the Congress.
At the same time, the U.S. current account
continued to post a surplus. Meanwhile, the
demand for credit in the United States remained
strong, and with the Federal Reserve continuing
to restrain monetary expansion, interest rates
stayed high. Thus, although differentials favoring



the dollar were well below their peaks of late
1980, they were widening again during the summer, attracting interest-sensitive funds into dollar-denominated assets once again.
Most other industrial countries by contrast
continued to show disappointingly slow progress
in pulling out of the difficulties associated with
the prolonged adjustment to the oil price increases of 1979-80. Many countries had a public
debate over the appropriate course of fiscal and
monetary policy in the face of unacceptably high
inflation and mounting unemployment. In this
context, foreign governments expressed open
concern over the high level of U.S. interest rates
and the inflationary consequences of the depreciation of their currencies against the dollar. Furthermore, political developments in Eastern Europe and the Middle East clouded the outlook for
many countries abroad, leaving traders and in1. Federal Reserve
reciprocal currency arrangements
Millions of dollars
Amount of facility
Institution

Jan. 1,
1981

Jan. 31,
1982

Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
German Federal Bank

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

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

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

3,000
5,000
700
500
250
500
4,000

3,000
5,000
700
500
250
300'
4,000

600

600

Bank for International Settlements
Swiss francs/dollars
Other authorized European
currencies/dollars
Total

1,250

1,250

30,300

30,100

1. Decreased by $200 million effective May 23, 1981.

144 Federal Reserve Bulletin • March 1982

2. Drawings and repayments under reciprocal currency arrangements, January 1, 1981-January 31, 19821
Millions of dollars equivalent; drawings, or repayments ( - )
Activity by the Federal Reserve System
Transactions with

Commitments,
Jan. 1, 1981

1981
Q1

Q2

Q3

Q4

January
1982

Commitments,
Jan. 31, 1982

Public series
German Federal Bank
Swiss National Bank

5,233.6
1,203.0

0
0

0
0

-

680.3
744.5

-931.1
0

0
0

3,622.3
458.5

Total

6,436.6

0

0

-1,424.8

-931.1

0

4,080.8

Activity by foreign central banks
Bank drawing on System

Bank of Sweden

Outstanding
Jan. 1, 1981
0

1981
Q1

Q2

Q3

Q4

January
1982

Outstanding,
Jan. 31, 1982

200.0

-200.0

0

0

0

0

1. Because of rounding, figures may not add to totals. Data are on a value-date basis.

vestors with the view that the United States was
a relatively attractive outlet for investment.
As the dollar continued its advance in early
August, however, sentiment became more cautious. Market participants were aware that major
European central banks had stepped up their
dollar sales and, in view of the rapid runup of the
dollar in late July and early August, began to
expect a correction. Consequently, once the
upward momentum broke, dollar rates fell back
sharply in mid-August and then declined irregularly through late November.
The August turnaround in the exchange markets coincided with a shift in focus in the U.S.
financial community from the immediate issues
surrounding the passage of the administration's
program to its implications for the fiscal deficit
and U.S. capital markets. As market attention
turned to estimates of the fiscal gap, skepticism
deepened that the administration's program
could proceed without having the government's
burgeoning financing needs exert renewed
strains on the credit markets. In this environment, a growing concern arose over the potential
for conflict between fiscal and monetary policy,
leading market participants to question whether
the Federal Reserve might back away from its
anti-inflation stance.
At the same time, the economy began to show
signs of weakening. U.S. short-term interest
rates were therefore easing, even though the
Federal Reserve continued its policy of restrain


ing monetary expansion. Reflecting the slow
growth of the narrowly defined money supply,
the federal funds rate dropped about 600 basis
points over the four months to the end of November. The Federal Reserve progressively
eliminated its surcharge of 4 percent on large
banks that frequently borrowed at the discount
window, and by early December it had reduced
its basic discount rate 2 percentage points to 12
percent. By November evidence was already
mounting that the U.S. economy was in a sharp
recession, leading to expectations that privatesector credit demands would decline substantially. These expectations contributed to a rally in
the bond market, which brought long-term rates
down more than 200 basis points by the end of
the month.
The four-month decline of short-term interest
rates in the United States was reflected in a
narrowing of interest differentials favorable to
the dollar vis-a-vis most other currencies. At
least initially, monetary authorities abroad felt
they had little room to respond to the lower U.S.
interest rates by easing their own money market
rates. They were concerned about entrenched
inflationary pressures at home; and in some
countries, notably France, Switzerland, and the
United Kingdom, the central banks acted to raise
interest rates. In addition, some countries felt
constrained by the pressures against their currencies within the European Monetary System
(EMS).

Foreign Exchange Operations

Beginning in October, however, as U.S. interest rates continued to decline, monetary authorities in some countries began to allow an easing of
their own short-term interest rates. Their economies were making little headway in recovering
from recession, and unemployment was rising
rapidly. Government deficits were already large
relative to historical standards and in many cases
were placing strains on the domestic financial
markets. Consequently, the authorities in several
countries felt that only limited scope existed for
further fiscal stimulus. The current account deficits of a number of countries were beginning to
decline so that the authorities felt they no longer
needed such high interest rates to attract capital
from abroad. There were widespread forecasts of
a U.S. move from current account surplus to
deficit in 1982; Japan's current account had
already swung from a deep deficit into surplus;
and a German export surge had led officials and
private forecasters alike to predict an elimination
of that country's current account deficit in 1982.
Moreover, strains in the EMS were relieved by a
multilateral realignment of parities on October 5.
As a result, foreign monetary authorities felt they
had greater scope for easing their domestic interest rates. Even so, with the drop in short-term
U.S. rates accelerating, particularly in November, interest differentials favoring the dollar continued to narrow.
Meanwhile, other factors lent support to the
dollar. Orders to buy dollars emerged repeatedly
whenever the dollar moved substantially lower,
as commercial interests in a number of centers
sought to take advantage of what they consid3. U.S. Treasury and Federal Reserve
foreign exchange operations1
Net profits or losses (—), in millions of dollars
U.S. Treasury
Period

Federal
Reserve

1981—Q1
Q2
Q3
Q4
January 1982
Valuation profits and losses on
outstanding assets and liabilities as of January 31, 1982
1. Data are on a value-date basis.




-

6.2
1.4
.1
0
0

-374.8

Exchange
Stabilization
Fund
-

General
account

.7
3.8
0
0
15.2

-144.3
0
85.9
- 39.2
- 4.2

-1,102.1

826.4

145

ered favorable rates for current payments or
investments. From time to time substantial purchases of dollars were made by the monetary
authorities in the Organization of Petroleum Exporting Countries (OPEC) and other countries
outside the Group of Ten. In addition, a continuing inflow of funds into dollars came from Japan,
where residents were taking advantage of a recent relaxation of exchange controls or were for
other reasons seeking to diversify their portfolios
internationally. Furthermore, the November rally in the U.S. bond market reportedly attracted
capital from abroad, as investors sought to lock
in high yields and position themselves for capital
appreciation. Moreover, the increasingly fragile
situation in the Middle East and Poland depressed sentiment toward those countries seen
as more vulnerable than the United States to
heightened geopolitical tensions. The recession
in the U.S. economy led forecasters to expect
less deterioration in this country's current account than previously. Even so, by the end of
November the dollar had dropped SlA percent
from levels at the end of July against sterling,
about 11 percent against the Japanese yen and
the German mark, and as much as 18 percent
against the Swiss franc.
Early in December the dollar turned around
once more and began an advance that carried
through the end of January. This second turning
point was triggered by a reappraisal of the view
that a continuing drop in economic activity in the
United States would lead to further substantial
declines in U.S. interest rates and, therefore, to
further movements adverse to the dollar in interest rate differentials.
That reappraisal was based on a number of
developments. In the United States, the Federal
Reserve was perceived as moving cautiously to
reduce its discount rate and to supply bank
liquidity. Although output was falling and unemployment was climbing, credit demands were not
fading. In fact, commercial financing needs were
heavy, with corporate issues flooding the bond
market in December and commercial demand for
bank credit remaining strong. Also, estimates of
the federal deficit for current and future fiscal
years had undergone repeated and large upward
revisions, and the prospective borrowing requirement for the first quarter of 1982 was seen

146 Federal Reserve Bulletin • March 1982

as likely to be greater than previously had been
estimated. Moreover, the release of figures
showing no letup in a series of large weekly
increases in the monetary aggregates began to
generate expectations of a substantial tightening
of money market conditions. Under these circumstances, U.S. money market rates rose in
December and faster in early January.
Abroad, by contrast, persistent weakness of
domestic economies had led to near-record levels of unemployment, and in some countries
official financial policies were coming under domestic criticism. As pressures for measures to
boost employment intensified, expectations
strengthened that some countries in Europe
might ease their restrictive monetary postures
even if U.S. interest rates did not decline further.
In fact, during January, the central banks of
many major industrialized countries either reduced their official lending rates or facilitated
some easing of local money market rates.
As interest rate differentials once more moved
strongly in favor of the dollar, they began to
attract funds into dollar-denominated assets. The
dollar was bid up across the board during the
final two months of the period. By the end of
January it had risen about 6 percent against the
European currencies and 8 percent against the
yen from the levels at the end of November. As a
result, the dollar closed the six-month period
down on balance about 1 percent against sterling,
4 percent against the yen, 5!/2 percent against the
German mark, and 13 percent against the Swiss
franc. The trade-weighted value of the dollar in
terms of ten major currencies declined 316 percent during the period.
During the six-month period, there were occasions when the market experienced unusually
sudden and sharp exchange rate movements during a single day. Some of these episodes were
associated with major political events, such as
the assassination of Egypt's President Anwar
Sadat on October 6 and the imposition of martial
law in Poland over the December 12-13 weekend. Other episodes were less dramatic and were
not associated with such identifiable events. The
U.S. authorities were prepared to intervene on
some occasions had the market disturbances
persisted or cumulated during the U.S. trading
session; as it turned out, the Federal Reserve
undertook no intervention operations on behalf



of the U.S. authorities. The Trading Desk at the
Federal Reserve Bank of New York continued
its longstanding practice of cooperating with
other central banks by intervening as their agent
from time to time in the New York market.
On September 1 and December 15 the U.S.
Treasury paid off the first two maturing tranches
equivalent to $1,611.4 million of its securities
denominated in German marks. After those redemptions, the Treasury had outstanding
$4,080.8 million equivalent of the foreign currency notes, public series, which had been issued
with the cooperation of the German and Swiss
authorities in connection with the dollar-support
program of November 1978. Of the notes outstanding as of January 31, 1982, a total of
$3,622.3 million is denominated in German
marks and $458.5 million is denominated in
Swiss francs. The maturity dates for the remaining securities range between May 12, 1982, and
July 26, 1983.
In the seven months through January 1982, the
Federal Reserve had gains of $0.1 million on its
foreign currency transactions. The Exchange
Stabilization Fund (ESF) gained $15.2 million in
connection with sales of foreign currencies to the
Treasury General Fund to finance interest and
principal payments on securities denominated in
foreign currencies. The Treasury's general account gained $42.5 million net. This gain reflected $94.8 million of profits on the redemption at
maturity of securities denominated in Swiss
francs and German marks, partly offset by $52.3
million of losses as a result of annual renewals at
current market rates of the agreement to warehouse Swiss franc and German mark proceeds of
Treasury securities with the Federal Reserve. As
of January 31, 1982, valuation losses on outstanding balances were $374.8 million for the
Federal Reserve and $1,102.1 million for the
Exchange Stabilization Fund. The Treasury's
general account had valuation gains of $828.4
million related to outstanding issues of securities
denominated in foreign currencies.

GERMAN

MARK

In early August, the German mark was subject to
divergent tendencies: weak against the dollar but
strong against European currencies.

Foreign Exchange Operations

With respect to the dollar, market sentiment
toward the mark remained bearish. Domestically, the German economy was relatively weak:
unemployment was rising, and inflation was high
by historical standards. Moreover, the government deficit remained large, capital markets continued under strain, and fiscal policy was under
heated discussion publicly and within Germany's
coalition government.
Internationally, Germany had experienced
substantial deterioration in its terms of trade
because of the increase in oil prices and the
depreciation of the mark. The current account
was in heavy deficit, and wide interest rate
differentials favored investment in the United
States. On top of these economic considerations,
the mark was seen in the exchanges as more
exposed than the dollar to international political
tensions. This vulnerability reflected Germany's
strategic position, its ties to Eastern Europe, and
its greater reliance on the Middle East for energy
resources and export markets. In consequence,
the mark was subject to capital outflows, all the
more as market sentiment toward the dollar
became increasingly bullish. On August 10 the
rate plunged to a five-year low of DM 2.5773, a
decline of some 45 percent since mid-1980.
Against other EMS currencies, however, the
mark remained strong. It benefited from the
market's view that the authorities in Germany
were still placing priority on correcting the external imbalance and on financing the current account deficit in the interim by inflows of private
and official capital. The federal government continued the practice, unusual for Germany, of
placing German mark-denominated debt instruments directly with foreign official institutions.
Following the move in February 1981 to introduce a special Lombard facility, German interest
rates increased so that adverse interest rate
differentials vis-a-vis other EMS currencies were
either narrowed or eliminated. The German Federal Bank had announced that because of the
inflation problem it would aim at the lower part
of the 4- to 7-percent target range for the growth
of central bank money. Thus, with the market
apprehensive about prospects for other EMS
currencies, the mark had moved toward the top
of the EMS, at times hitting its upper intervention limit.
As a result of these crosscurrents in the ex


147

changes, the German Federal Bank had frequently bought French and Belgian francs to ease
pressures within the EMS while selling dollars,
at times heavily, to support the mark against the
dollar. Through the end of July, Germany's
foreign currency reserves had increased to stand
at $43.4 billion. During August, however, as the
German Federal Bank stepped up its dollar sales
to support the mark, German foreign currency
reserves fell by $1.5 billion.
Once the mark came close to its lows, market
participants became wary of a shift in market
direction and professionals moved quickly to
cover their short positions. The mark bounced
back sharply, and as the dollar fell lower in the
exchanges, market sentiment toward the German
currency became more favorable. In part, the
turnaround reflected developments in the United
States, where the initial euphoria surrounding
the adoption of the administration's economic
program gave way to skepticism that the program would achieve all its goals.
At the same time in Germany, trade and current account figures for July were released,
pointing to a dramatic improvement in export
sales and providing the first concrete evidence
that the earlier surge in export orders was finally
showing through. Official commentary about this
improvement gave rise to expectations that Germany's current account deficit would continue to
narrow in subsequent months—a time when
most forecasters were expecting the U.S. current
account to deteriorate. Furthermore, the government finalized a 1982 budget proposal according
to which nominal expenditure growth would be
slowed to 4 percent and the net financing requirement of the federal government would be cut to
DM 27 billion or 1.6 percent of gross national
product, down from a revised estimate for 1981
of DM 34.3 billion or 2.2 percent of GNP. As the
dollar eased, therefore, the German mark moved
up to trade around DM 2.3195 by the end of
September.
Meanwhile, the strengthening of the mark added to strains within the EMS. The markets
became vulnerable, especially before weekends,
to repeated rumors of an imminent realignment
of the participating currencies. Speculative bidding for marks against the French and Belgian
francs frequently stretched the EMS to its limits,
generating sizable intervention in several centers

148 Federal Reserve Bulletin • March 1982

and pushing the mark up against the dollar as
well. The German Federal Bank responded to
these pressures by purchasing both dollars and
EMS currencies in the exchanges so that, by the
end of September, German foreign exchange
reserves increased by $1.1 billion.
Over the weekend of October 3 and 4, the
EMS finance ministers announced a realignment
of parities to take effect October 5. The mark, as
well as the Dutch guilder, was revalued by 5l/2
percent against those currencies whose parities
remained unchanged and in effect by 8V2 percent
against the French franc and the Italian lira.
Immediately thereafter, the mark traded in the
lower portion of the new band, reflecting reflows
of speculative investments as well as a reversal
of commercial leads and lags. Accordingly, other
central banks began purchasing marks in the
exchanges so as to cover the liabilities within the
EMS that had built up over preceding months.
Against the dollar, however, the realignment was
seen as freeing the mark to strengthen further,
and in subsequent days the mark moved up to
DM 2.1815, 15V2 percent above its August low.
Following the realignment of the EMS, the
German Federal Bank confirmed the easing of
interest rates that had already begun in Germany's money and capital markets by cutting
the special Lombard facility rate from 12 percent
to 11 percent effective October 9. The German
Federal Bank felt able to take action to support
the domestic economy because of the overall
strength of the mark, the improving outlook for
the balance of payments, and the achievement of
a compromise on fiscal policy. Even so, the
German Federal Bank was careful not to signal
more forceful action, because at home inflation
continued to accelerate to an annual rate of 7
percent year on year and in the United States
interest rates remained high so that interest rate
differentials adverse to the mark remained large.
Later the same day the Federal Reserve lowered
its surcharge on discount window borrowing by
large banks from 3 percent to 2 percent, the
second cut of 1 percentage point in this rate in
three weeks. Thus, the German Federal Bank's
action did not contribute to any further widening
of interest rate differentials versus dollar assets.
After mid-October a number of developments
within Germany weighed on the mark. Unemployment was increasing as declining corporate



profits forced many firms to move aggressively
to economize on labor. As a result, market
participants came to expect that the German
Federal Bank would take advantage of whatever
opportunity developed to allow German interest
rates to follow U.S. rates down. In addition, the
earlier optimism over a quick and sustained
improvement in Germany's balance of payments
faded, as first August and then September
monthly trade figures disappointed market expectations. Late in October the government revised its budget estimates for 1982 to take account of climbing unemployment and revenues
that were lower than expected, thereby eliminating virtually all of the planned drop in the borrowing requirement. Although this new budget
gap was later covered, largely by an expected
increase in profits of the Federal Bank available
to be transferred to the government, the episode
underscored the differences that still existed
within the government coalition on major issues
of economic policy. Also, political tensions abroad
adversely affected sentiment toward the mark.
The assassination of Egyptian President Anwar
Sadat pointed up the potential for instability in
the Middle East and Germany's reliance on that
region for oil supplies. Repeated reports of military maneuvers around Poland were also an unsettling reminder of Germany's vulnerability to
potential Soviet interference in Eastern Europe.
Under these circumstances, the mark did not
strengthen even though interest differentials adverse to the mark were narrowing sharply. Also,
the German Federal Bank moved cautiously to
provide some short-term liquidity to the banking
system through swaps and repurchase agreements and did not change official interest rates
again until December 4, when it cut its special
Lombard rate V2 percentage point to 10.5 percent. By contrast, in the two months to early
December, the Federal Reserve had twice lowered its discount rate by 1 percentage point to 12
percent and also eliminated the remaining surcharge of 2 percentage points on frequent borrowers. Short-term interest rates in the United
States had fallen sufficiently to cut in half—from
about 5 percentage points to 2V2 percentage
points—the short-term differentials vis-a-vis the
mark.
During the six weeks to the end of November,
the mark occasionally came into demand, espe-

Foreign Exchange Operations

daily at times when U.S. interest rates were
declining. But the mark did not keep pace with
currencies outside the EMS that were continuing
to strengthen against the dollar. Instead, movements of the rate above the DM 2.20 level
regularly prompted commercial and investor selling of marks against dollars. On occasion, the
mark came sharply on offer, especially in the
wake of political developments in Eastern Europe or the Middle East. At these times, the
German Federal Bank intervened promptly and
forcefully to sell dollars while EMS central banks
were also buying marks. These operations contributed to better market balance.
In December and January the mark was adversely affected by developments abroad. On
December 14, martial law was declared in Poland, triggering a brief scramble for dollars
against marks and sending the rate as low as
DM 2.3650 for a few hours. Prompt intervention
by the German Federal Bank and other central
banks, together with commercial activity and
professional profit taking, quickly restored balance to the market, and the rate almost fully
recovered in just a matter of hours. Yet the
Polish situation remained a matter of market
concern. In the United States, interest rates
stopped declining, disappointing market expectations that the deepening U.S. recession would
continue to ease credit demands. Indeed, U.S.
money market rates moved strongly higher, casting doubt that the strengthening of Germany's
external position would show through in the
mark exchange rate.
This development focused attention anew on
the dilemma facing the German authorities. With
the level of unemployment heading to a record 2
million persons, political pressures mounted, not
only from labor unions but also within parties in
the governing coalition, for more action to deal
with the deteriorating unemployment situation.
But the government was concerned about actions that either would increase taxes and thereby hamper a recovery or would increase government borrowing and thereby add to inflation.
There were also pressures to ease monetary
conditions. But the German Federal Bank remained concerned that a renewed easing in interest rates would exacerbate the decline in the
mark, which would exert a further upward push
on costs and prices.



149

In the event, the government presented to
Parliament a compromise program, approved
shortly after the close of the period, that was
designed to stimulate jobs through investment
subsidies, lending programs for small companies,
and modest direct government spending on energy-saving projects—financed mainly by an increase of 1 percentage point in the value-added
tax in 1983. Meanwhile, new figures showed that
an export surge late in the year had boosted
Germany's trade account and helped pull its
current account deficit for 1981 as a whole down
to DM 17.5 billion, significantly lower than had
been forecast. The improving external position
gave the German Federal Bank scope to lower its
special Lombard rate a further ¥z percentage
point to 10 percent on January 21 and ensure a
similarly modest easing in money market rates.
At the end of January the mark was trading at
DM 2.3420, down about 6]A percent from the
late-November levels while up about 9 percent
from its lows of early August. The German
Federal Bank was at times active in the markets
during December and January, selling dollars in
support of the mark, while other central banks
within the EMS continued to acquire marks.
Reflecting dollar sales by the Federal Bank during the two months, German foreign currency
reserves fell $3.0 billion to close the period at
$37.5 billion, down $5.9 billion for the period as a
whole.

Swiss

FRANC

In mid-1981, Switzerland was faced with the
resurgence of inflationary pressures. Part of the
inflationary impulse stemmed from the buoyancy
of the domestic economy—in contrast to the
stagnation in other European countries—led by
strong consumption and construction activity.
Shortages developed in the housing market and
domestic house prices and rents exhibited sharp
increases, contributing to a strong rise in consumer prices. Also, the decline of the Swiss franc
in the exchanges substantially boosted the cost
of imports, particularly by raising the domestic
price of oil and other dollar-denominated raw
materials.
Though Swiss interest rates had risen progressively, they were still well below those in other

150 Federal Reserve Bulletin • March 1982

industrial countries. At midyear, interest differentials adverse to the franc were about 9 to 10
percentage points vis-a-vis the dollar and more
than 3 percentage points vis-a-vis the German
mark. Consequently, foreign official and corporate borrowers continued to place heavy demands on the Swiss franc money and capital
markets. The Swiss authorities did not seek to
restrain these outflows. They hoped to avoid the
development of sizable external markets in Swiss
franc-denominated assets, particularly for longer
maturities, and in any event the current account
had moved into surplus, estimated to be $2.0
billion to $2.5 billion for 1981. Nonetheless, the
pressure of outflows of capital pushed the Swiss
franc down in the exchanges. At the end of July
the franc was trading at SF 2.15 against the dollar
and SF 0.87 against the German mark. Along
with other major currencies, it declined further
against the rising dollar to a four-year low of
SF 2.2095 on August 10, a decline of some 39
percent since its peak of 1980. On July 31,
Switzerland's foreign exchange reserves stood at
$9.9 billion.
The Swiss authorities continued to pursue a
policy of monetary restraint to combat inflationary pressures. Increasingly, however, the authorities had reason to question whether policy
was as restrictive as developments in the monetary aggregates would suggest or, in view of the
inflationary situation, whether policy was as
tight as circumstances warranted. For some time
the monetary base was below the annual growth
target of 4 percent for 1981. However, as in many
other countries, continuing financial innovations
in Switzerland, coupled with unusually high interest rates by historical standards, had altered
the behavior of banks and the public, making the
monetary base as well as the broader monetary
aggregates less reliable than in the past as a guide
to policy. Questions about the adequacy of monetary restraint were highlighted by the release of
consumer price numbers for August, showing
inflation rising 11.3 percent at an annual rate in
the most recent quarter and 7.4 percent year on
year.
Early in September the authorities began taking aggressive action to tighten monetary policy
and thereby underscore the primacy of the antiinflation struggle. Effective September 2 the
Swiss National Bank boosted its discount rate to



6 percent from 5 percent and its Lombard rate to
7.5 percent from 6.5 percent, the fourth rise in
1981 in those official lending rates. The authorities also made the refinancing of credit through
foreign exchange swaps with the central bank
more expensive. Following these actions, Swiss
franc interest rates shot up temporarily before
settling down around 11 percent.
The rise in Swiss interest rates during September and October, which occurred at a time when
interest rates in other centers were easing, meant
that differentials adverse to the franc either narrowed dramatically, as in the case of the dollar,
or were reversed, as in the case of the German
mark. Nonresidents therefore found incentives
to begin repaying their Swiss franc-denominated
debt, while investors sought out higher-yielding
franc investments, and these actions helped to
propel the franc sharply higher in the exchanges.
As the franc strengthened, the view developed in
the market that the Swiss authorities might allow
the franc to appreciate beyond SF 0.80 against
the mark—a level considered an upper bound in
the market since September 1978 when the Swiss
National Bank had intervened forcefully at that
rate. In addition, many European countries were
regarded as more vulnerable than Switzerland to
political tensions in Eastern Europe and the
Middle East, and this concern over the prospects
for other currencies continued to benefit the
Swiss franc. In these circumstances, the franc
became exceptionally well bid. By mid-November the rate advanced 18 percent from levels in
early September to a high of SF 1.7475 against
the dollar and some 10 percent to SF 0.7935
against the German mark.
The strong appreciation of the franc, while
welcome as a contribution in the fight against
inflation, was nevertheless a matter of concern to
the authorities. Of special worry was the rapid
rise against the German mark, the currency of
Switzerland's main foreign trade partner and
major competitor in third markets, because it
threatened to put Swiss exporting and tourist
industries in a difficult position. Still, the authorities made clear in public statements that largescale intervention similar to that undertaken in
1978 would be inappropriate. Sizable sales of
Swiss francs would lead to an expansion in
Switzerland's money supply, and large purchases of dollars would push the dollar higher in

Foreign Exchange Operations

the exchanges—both developments that would
exacerbate inflationary pressures.
In the event, by November the economy
showed clear signs of flattening out and some
private forecasters began to express fears that
economic activity would weaken to the point at
which unemployment might rise. In addition, the
need to avoid liquidity strains from developing
with the approach of the year-end argued for
some relaxation in monetary restraint. Accordingly, the Swiss National Bank progressively
reduced the rate charged to domestic banks for
Swiss-franc swap credit against dollars and provided somewhat more liquidity than it absorbed
via maturing swaps. On December 4 the authorities reduced the Lombard rate from 7.5 percent
to 7.0 percent—an action taken in coordination
with interest rate reductions in other industrial
countries and designed to bring the Lombard rate
more closely in line with prevailing Swiss money
market rates. But at the same time the Swiss
National Bank was anxious to avoid the impression of a fundamental shift in policy course and
consequently left the discount rate unchanged at
6 percent. In the exchange market the franc lost
its upward momentum as domestic and EuroSwiss money market rates eased downward.
Against the dollar the franc slipped back to trade
around SF 1.80 by the end of December. Against
the mark, however, the franc remained well bid
around SF 0.7985, principally in response to
market concerns over the foreign and domestic
implications for Germany of the declaration of
martial law in Poland.
By January the need for such a tight monetary
policy in Switzerland appeared to have passed,
particularly with the release of inflation figures
showing a marked deceleration in consumer
prices to around 6 percent. The monetary growth
target of 3 percent announced by the authorities
for 1982 was generally viewed as consistent with
the policy of fighting inflation, while also providing sufficient liquidity so as not to exacerbate the
developing weakness of the economy. Even so,
the Swiss authorities were thought to be under
less pressure than others in Europe to ease credit
conditions, given Switzerland's low unemployment rate and the still relatively favorable performance of the economy. In fact, the Swiss
National Bank did not lower its official lending
rates following the reduction by the German



151

Federal Bank on January 21 of its special Lombard rate. In these circumstances the franc,
though fluctuating widely at times, remained firm
against the German mark. But vis-a-vis the dollar, the franc continued to ease as money and
capital market rates in the United States firmed
substantially and were generally expected to
remain high despite the weakness of the U.S.
economy.
By the end of January the franc was trading at
SF 1.8680 against the dollar and at SF 0.7976
against the German mark. At these levels the
franc was up 15^2 percent against the dollar since
its August low. Over the six months under review the franc gained WA percent against the
dollar and 8 percent against the German mark.
Between the end of July and the end of January,
Switzerland's foreign exchange reserves rose
$600 million to 10.5 billion in response to foreign
currency swap operations, the net purchase of
dollars in intervention operations, and interest
earnings on outstanding reserves.

JAPANESE

YEN

By mid-1981, the Japanese economy had made
impressive adjustments to the second round of
oil price increases of 1979-80. Changes in production processes in many of Japan's largest
enterprises had substantially reduced Japan's
dependence on oil imports. These developments,
together with the continuing impact of the 197980 depreciation of the yen, had led to a sharp
improvement in Japan's current account, which
swung from deep deficit to moderate surplus in
just one and a half years. The rate of inflation at
the wholesale level, which at one point in 1980
had reached 24 percent, had slowed to just about
1 percent. Meanwhile, restrictive monetary and
fiscal policies had helped limit the extent to
which rising prices of material were passed on in
the economy so that inflation at the consumer
level, which had never exceeded 9 percent, was
around 5 percent per year.
The process of adjustment had been uneven,
however, and domestic demand remained weak.
Important sectors of the economy remained severely depressed. Moreover, consumer expenditures were slow to recover from the deflationary
impact of rising energy prices, despite the mod-

152 Federal Reserve Bulletin • March 1982

eration of inflation. The sluggishness of domestic
demand cast doubt that a firm basis for sustained
recovery had been established, and domestic
pressures on the authorities intensified to adopt
reflationary measures. Anxiety rose that the
weakness of demand at home, in combination
with the legacy of the yen's earlier depreciation,
would provoke another surge of exports and
exacerbate protectionist reactions in Japan's major markets overseas.
As a result, the authorities had already begun
to provide stimulus to the economy. The government had announced measures to aid small companies and speed up expenditures for public
works. But the scope for further expansionary
fiscal policies was limited by virtue of the fact
that the levels of the government's overall deficit
and borrowing requirement continued to be considered excessive by many Japanese and were
already exerting pressures in the local capital
markets. Thus, the larger source of stimulus
came from an easing of monetary policy. During
the spring, the Bank of Japan lowered its discount rate, eased banks' reserve requirements,
and substantially relaxed "window guidance"
ceilings on the growth of bank lending.
In the exchange markets, the yen had benefited from Japan's improving economic performance to recover from its 1980 lows against most
European currencies. Relative to the German
mark, it had risen nearly 40 percent to trade at 97
yen to the mark by early August. Against the
dollar, however, a tentative recovery late in 1980
had given way to a renewed and protracted
decline. With interest rates in Japan lower than
in any other industralized country, Japanese
residents had taken advantage of newly liberalized foreign exchange controls to make longterm investments abroad. Then during midsummer, when a long-awaited decline in U.S.
interest rates failed to materialize, market participants lost hope that the large interest differentials adverse to the yen would soon narrow so as
to permit Japan's improving competitiveness to
show through in the yen-dollar exchange rate.
Thus, as Japanese importers sought to limit their
losses during the August vacation period, they
accelerated their yen sales to hedge remaining
future dollar needs. In addition, foreign corporations continued short-term yen borrowings to
meet financing needs in other currencies. As the



selling of yen gathered force, it pushed the spot
rate down to ¥ 246.10 by the first business day in
August—a level only about 6 percent above its
1980 low.
At this point, many market participants felt
that the yen's decline had been overdone in view
of Japan's steadily improving current account
position. With banks generally in an oversold
position, the market was ripe for a reversal of
sentiment toward the yen when the dollar began
its general decline during August. Reports that
some Middle Eastern investors had been attracted in size by the rally in Japan's securities
markets and purchases on the international monetary market helped spur the turnaround in demand for the currency in early August. The yen's
rise initially outpaced that of other currencies
against the dollar, bringing the exchange rate to
¥ 228.20 against the dollar and to a high of
¥ 91.64 against the German mark on August 18.
A sense of caution soon overcame the yen
market, however. Participants recalled the disappointment earlier in the year when the yen's
appreciation had not gone as far as expected.
They worried about the possibility that new
protectionist barriers might be erected in markets where Japan's exports were penetrating
rapidly. Moreover, pressures built up over the
summer and autumn for the government to introduce further monetary and fiscal stimulus to the
still flagging domestic economy. In this atmosphere, the yen's rise seemed to stall after midAugust at a level around ¥ 230 against the dollar
even as the European currencies continued rising.
In September, the monetary authorities announced that window guidance ceilings on commercial banks' lending would be further increased for the fourth quarter, even though
monetary growth, running close to 10 percent at
an annual rate, was just within the Bank of
Japan's projections. Further, the government
announced on October 2 a four-point program of
fiscal and other measures intended to stimulate
domestic demand and imports while assisting
Japanese industries and regions that were experiencing particularly severe structural difficulties.
The Ministry of Finance also set wider limits on
foreign lending by Japanese banks for the halfyear beginning in October, in keeping with the
projected financing needs accompanying the

Foreign Exchange Operations

growing surplus on the current account and
reflecting the continuing policy of allowing the
country's banks to maintain their overall share of
lending in the Euromarkets.
Long-term capital outflows from Japan remained large even though interest differentials
favoring dollar investments narrowed during the
late summer and autumn. Using their new freedom under the 1980 Foreign Exchange Law,
Japanese institutional investors continued programs begun earlier in the year to diversify
internationally. Also, some Japanese firms with
large import requirements had experienced significant losses earlier in the year on their uncovered future dollar commitments and were now
adopting more conservative policies regarding
the hedging of forward obligations in foreign
currency.
In the case of firms in some structurally depressed industries, such as oil refining, the need
to protect weak financial positions by hedging
more of their future import requirements was
encouraged as part of the government's efforts to
support long-term adjustment. Under these influences, the yen-dollar rate wavered around the
¥ 230 level through September and October.
Against the German mark, whose continuing rise
against the dollar was partly influenced by the
pressures building for realignment within the
EMS, the yen declined steadily to reach a low
point of nearly ¥ 105 per mark on October 30.
During November the yen became well bid
again, as U.S. interest rates declined further, and
hopes became widespread that this trend would
continue. Market participants felt that, despite
renewed arguments being heard in Japan for a
further easing of monetary policy, Japan's already low interest rates offered less scope for the
monetary authorities in Japan compared with
those in Europe to match U.S. interest rate
reductions. Therefore, further drops in U.S.
rates were expected to be reflected in a significant narrowing of the differentials adverse to yen
investments. Foreign transactions in Japan's securities markets, including purchases of bonds
under short-term repurchase arrangements, reversed direction in November to become sizable
net purchases. Market participants were also
impressed by trade figures released for September and October that showed a further strong
improvement in the current account surplus,



153

even though the October figures on export letters
of credit already gave some warning that the
growth of exports might be slowing in subsequent months. Under these positive influences,
the yen rose some 8 percent against the dollar
during November, reaching its high for the sixmonth period of ¥ 213.40 on November 30 while
recovering to ¥ 96.80 against the German mark.
Toward the end of the year there still was no
clear evidence of recovery in the domestic economy and predictions of a very large current
account surplus in 1982 became widely accepted.
Statistics on consumer and wholesale prices continued to show the lowest rate of inflation among
industrial countries. Information released about
the real economy indicated that growth of the
third quarter had been heavily concentrated in
the foreign sector. Public-sector spending and
domestic consumption were virtually flat while
private investment actually declined slightly for
the third quarter in a row. Investment by small
and medium-sized firms showed an especially
large drop, continuing the trend that had been of
concern to policymakers for some time. After the
third quarter, monthly trade statistics revealed
that even export growth had slowed at least
temporarily in November under the influence of
government-imposed restraints as well as sluggish demand in major export markets. While
welcome from the point of view of mitigating
trade frictions, this development lent further
emphasis to the need for recovery in the domestic economy.
The new budget, announced in December for
the fiscal year beginning in April 1982, retained
the relatively restrictive stance that had been
adopted for fiscal year 1981 in keeping with the
long-range objective of containing and eventually
reducing the size of the government's deficit and
borrowing requirement. In these circumstances
and with the yen exhibiting more strength than it
had in the earlier part of the year, the monetary
authorities took further action to help spur the
faltering recovery. On December 11, the Bank of
Japan reduced its discount rate for lending to
commercial banks 3/4of a percentage point to 5'A
percent following similar actions in the United
States and other industrial countries. This step
was supplemented later in the month by the
announcement that overall credit ceilings limiting loans extended by Japan's leading commer-

154 Federal Reserve Bulletin • March 1982

cial banks, already progressively eased in previous quarters, would be lifted entirely for the
calendar quarter beginning in January 1982.
In announcing the cut in the official lending
rate, the authorities made it clear that they had
confined the reduction to less than 1 percentage
point so as not to interfere with the recent rising
tendency of the yen and that they were prepared
to counter any short-term effect on the yendollar rate by intervening in the exchange markets. Nonetheless, when the U.S. and Eurodollar interest rates began to rise during December,
the relative unattractiveness of yields on yendenominated assets showed through in the exchanges once again and the yen began moving
down.
When the upward movement of U.S. interest
rates continued into January, rather than reversing with the new year as many had hoped, the
depreciation of the yen continued. Potential yen
holders became interestingly impressed with the
discrepancy between the pressures building for
sustained high interest rates in the United States,
as new statistics were released showing higherthan-expected growth of the U.S. monetary aggregates, and the situation of Japan's monetary
authorities, who faced a continued need to ease
credit policy to stimulate the flagging domestic
economy. Hope that wide interest differentials
might soon be reversed thus faded in the first
weeks of the new year. Pressure against the yen
intensified, bringing the exchange rate against
the dollar to ¥ 230.00 by the close of January,
down 8 percent from the November 30 high but
up 6V2 percent above the low of August 1981. The
yen's cross rate in terms of the German mark had
changed even less on balance to ¥ 98.21 by the
end of January as compared with ¥ 97.00 six
months earlier.
The Bank of Japan continued its policy of
intervening in the exchange markets to smooth
erratic fluctuations in the exchange rate, intervening to support the yen at various times when
the rate moved down rapidly. Such dollar sales
contributed to net declines recorded in Japan's
foreign exchange reserves for December and
January. For the six months as a whole, however, Japan's foreign exchange reserves rose $600
million to $24.6 billion by the end of January,
mainly reflecting interest earnings on Japan's
outstanding holdings.



STERLING

In mid-1981, deep-seated concerns over the prospects for the economy of the United Kingdom
continued to weigh on market sentiment toward
the pound. While the worst of the 2Vi-year-old
recession appeared over, evidence of an economic upturn had not yet materialized and, with
interest rates lower than earlier in the year, there
was concern that the government might be easing
its stringent financial policies prematurely. It
appeared likely that the U.K. share in world
export markets was falling—inasmuch as persistently high rates of inflation and the earlier
appreciation of the exchange rate had severely
eroded the competitiveness of British industry.
The trade and current accounts remained in
surplus. However, softening world oil prices
prompted worries that the substantial benefits
that Britain's oil self-sufficiency had provided to
the balance of payments might diminish. Moreover, in other major industrial countries interest
rates had increased, particularly over the summer. But in the United Kingdom the pressures of
high and rising unemployment were seen in the
exchange market as limiting the rationale, as well
as the scope, for the authorities to raise domestic
interest rates, and interest differentials in fact
moved adversely to sterling-denominated assets.
By the end of July the pound had dropped 24
percent from the highs registered in January of
last year to $1.84 against the dollar. It also
declined IOV2 percent to DM 4.55 against the
German mark and 10 percent in effective terms to
92.5 on a trade-weighted basis. The Bank of
England, acting to smooth fluctuations in the
exchange rate, had maintained its policy of intervening modestly on both sides of the market.
Nonetheless, mainly reflecting the repayment of
outstanding loans, Britain's foreign exchange
reserves had declined to $13.6 billion by the end
of July.
The pronounced drop of the dollar in August
was reflected in only a temporary rebound of
sterling in the exchanges. Indeed, bearish sentiment toward the pound deepened in September
and October so that, while other European currencies were advancing against the dollar, the
pound declined in the exchanges. In part, renewed downward pressure on sterling reflected
fears that the monetary authorities had relaxed

Foreign Exchange Operations

the restrictive stance of monetary policy before
inflationary expectations had been firmly laid to
rest, thereby threatening the progress already
under way in bringing inflation under control. In
the view of many, the growth of the targeted
aggregate sterling M3 substantially above its 8 to
10 percent annual range could not be fully explained by temporary distortions, such as the
delay of tax payments caused by a civil servants'
strike, or by technical factors, such as a shift in
housing finance from the building societies to the
banks. After allowing for these considerations,
the "underlying" rate of growth of sterling M3
remained high. The banking data released for
August were particularly discouraging in this
respect, reflecting a rapid expansion of bank
lending to finance personal consumption and to
satisfy growing needs of the corporate sector.
The downward pressure on sterling also resulted from nervousness ahead of the publication of
trade figures for September and October—the
first full figures since February 1981 when the
civil service pay dispute interrupted the compilation of data. In the interval, expectations for a
reduction of the trade surplus had developed.
Weakened competitiveness was thought likely to
restrict the volume of exports, while import
volume was expected to rebound as the previous
sharp rundown of domestic stocks abated and
was gradually reversed. The decline of sterling
during 1981 was also presumed to have weakened the terms of trade. In the event, the actual
trade figures confirmed a fall in the trade surplus
from the exceptional level of the winter of 198081, though gaps in the data posed greater-thanusual problems of interpretation. Looking ahead,
reductions in crude oil prices, which had taken
place on a selective basis following the breakdown of OPEC price discussions in late summer,
added to the unfavorable outlook for Britain's
balance of payments trends.
As broad-based selling pushed the pound precipitously lower, the rate dropped in September
to $1.7695 against the dollar and DM 4.10 against
the mark. In effective terms it traded as low as
86, representing a trade-weighted drop in sterling
to the lowest levels since March 1979. At this
point British policymakers faced a choice. On
the one hand, the depreciation of the exchange
rate improved competitiveness and brightened
the outlook for a recovery of depressed profit



155

margins and of investment activity. But, on the
other hand, the fall in the exchange rate following the decline that had already taken place
earlier in 1981 threatened anti-inflationary goals
at a time when wage and price inflation were
showing improvement. Inflation had already fallen to around 10 percent, close to rates prevailing
among Britain's major trading partners. Moreover, a sharp drop in average wage settlements
had occurred, which, coupled with productivity
gains, had stabilized unit labor costs for the first
time in a decade. A failure by the authorities to
respond forcefully to the rapid buildup of selling
pressures might risk accelerating sterling's fall
given the development of a severely adverse
market psychology. Furthermore, domestic
monetary developments, particularly the expansion of bank lending, suggested that policy action
was appropriate to avoid a further buildup of
domestic liquidity. Thus, on balance, both external and internal considerations pointed to the
desirability of increasing U.K. money market
rates.
Accordingly, in mid-September the authorities
raised short-term interest rates sharply, under
new monetary control arrangements that came
into effect the previous month, first through the
discount window and then by operations in the
bill market. In addition, the authorities began
operating more actively in the exchange market
as a seller of dollars. Meanwhile, interest rates
moved lower in the United States, and as a result
British interest rates stood above comparable
U.S. interest rates for the first time since November 1980. Then, immediately following the
realignment within the EMS, interest rates softened in a number of continental European countries as well so that interest differentials moved
favorably for sterling more generally. These developments prompted widespread demand for
sterling, which gathered momentum in November when the rally in the U.S. bond market
carried over to the gilt-edged market and attracted foreign investors seeking to benefit from
capital gains in addition to exchange rate returns.
By late November the pound had recovered 11
percent from its lows to trade around $1.98
against the dollar and 91.9 on an effective basis.
During December, domestic debate over the
state of the economy intensified against the background of increased labor unrest. On December

156 Federal Reserve Bulletin • March 1982

2, Chancellor Howe announced a £5 billion increase in projected public spending for the 1982—
83 fiscal year (April-March), mainly for the local
authorities and for spending on employment and
training programs. But these measures were generally seen as no more than a passive adjustment
by the government to rising unemployment and
continued low levels of economic activity because they did not imply a significant shift in the
already restrictive stance of fiscal policy. Most
private forecasters remained relatively pessimistic concerning the strength of any recovery given
the lackluster prospects for government expenditure, consumer spending, and exports. The rebuilding of inventories was thought to compensate only partly for the weakness in other areas
of economic activity. In these circumstances,
exchange market participants remained concerned that the government would have to relax
its restrictive policies after all and the pound
again came under selling pressure, with the rate
slipping back 6 percent from its late-November
highs to $1.8690 by mid-December before
steadying around the year-end.
Sentiment toward sterling turned more optimistic during January. The labor situation improved, particularly following the unexpected
decision of the miners not to strike and instead to
accept the management pay offer—a development that seemed to validate the perseverance of
the government in its overall strategy. The miners' decision brightened the outlook for inflation
to abate, and in the exchange market this boosted sentiment for sterling. Domestically, this
prospect gave a lift to the capital markets and
generated hopes that conditions in the money
markets would ease. In fact, a softening in shortterm interest rates materialized and was not
resisted by the authorities. Even so, the decline
in short-term U.K. interest rates was less than
reductions on the Continent where the monetary
authorities were taking advantage of some improvement in their external positions to allow
interest rates to decline and thus support their
economies. As a result, interest rate differentials
favoring sterling investments over those denominated in continental currencies widened. At the
same time, trade figures released for December
were better than expected and the pound also
benefited from oil company demand. As a result,
sterling held generally firm against the rising



dollar and advanced strongly against the continental currencies. By the end of January the
pound was trading at $1.8670 for a net rise of Wz
percent against the dollar since the end of July.
On an effective basis, sterling stood at 91.8 for a
3
/4 percent decline over the six-month period
under review.
Between the end of July 1981 and the end of
January 1982 the foreign exchange reserves of
the United Kingdom declined $1.0 billion to
$12.6 billion. The authorities' intervention operations in the exchange market had a small impact
on reserves as compared with other influences,
such as the repayments and accruals of external
public-sector borrowings and the revaluation
losses of gold and dollar swaps against European
currency units (ECUs) done with the European
Monetary Cooperation Fund.

FRENCH

FRANC

During late summer 1981, major elements of the
economic strategy adopted by France's new government were under exchange market scrutiny.
The government had moved aggressively to reduce burgeoning unemployment through monetary and fiscal measures to stimulate consumption and investment, and it was pledged to a
program to redistribute income and to nationalize major banks and industrial groups. In other
European countries the case for a shift toward
policy stimulus was under intense political debate, but most governments opted for continued
monetary and fiscal restraint. Consequently,
pessimism deepened in the exchange markets
over the outlook for the French franc, since the
divergence in policies was expected to produce a
deterioration in inflation and the current account
deficit in France while improvements were anticipated in some other European countries. The
franc fell in these circumstances more rapidly
than other European currencies against the rising
dollar. From FF 5.8775 at the end of July it
plummeted to a record low of FF 6.1870 on
August 10, while also dropping to the floor of the
EMS. Moreover, in subsequent weeks as the
dollar declined in the exchanges, the franc had
difficulty keeping pace with the advance of the
German mark and other EMS currencies against
the U.S. currency.

Foreign Exchange Operations

The French government sought to contain the
selling pressures on the franc during August and
September so as not to jeopardize its domestic
program. The Bank of France intervened heavily
in the exchange markets, selling mainly dollars
as well as European currencies, to keep the franc
within the mandatory 2VA percent trading limit
against the German mark and occasionally also
against other currencies that traded at the top of
the joint float. The government also tightened
exchange controls to limit further the scope for
leading and lagging of commercial payments by
temporarily suspending the facility for importers
to purchase foreign currency forward. Previously, one-month forward cover had been permitted
except for importers of raw materials, who were
allowed up to three months to purchase forward
exchange ahead of delivery. In addition, the
Bank of France raised on September 21 its
money market intervention rates 1 percentage
point—to 191/2 percent for seven-day maturities—thereby reversing the previously easier tendency in domestic interest rates. However, the
authorities did not wish to undercut the basic
policy aim of reducing the high interest rate
burden on French industry, and thus the government requested that the increase in banks' costs
be financed out of profits and not by raising base
lending rates.
Otherwise, with respect to domestic policy,
the government continued to address the problems of an economy showing only limited signs
of recovery from more than sixteen to eighteen
months of recession. Late in September the
government presented its 1982 budget proposals,
aimed foremost at increasing employment by
supporting economic activity. The budget provided for the creation of 70,000 new publicsector jobs, increased spending on private and
public investment, raised aid and financial incentives to industry, and hiked outlays on education
and various social welfare programs. On the
revenue side, the imposition of new taxes, higher
tax rates, and steps to reduce tax evasion fell
short of the nearly 27 percent increase in expenditures, leaving the government with a projected
fiscal deficit of FF 95 billion, roughly equivalent
to 3 percent of GNP, compared with about FF 70
billion in 1981 or about 2.4 percent of GNP. The
government also approved a bill nationalizing
five industrial groups and a large segment of the



157

private banking sector, with the takeover shifting
approximately 750,000 workers from private industry to the government sector.
In the exchange market, participants continued to be concerned about the direction of economic policy. They feared an adverse impact on
already depressed business spending plans of the
government's efforts to nationalize and restructure industry. They were troubled by the prospect of a sharp rise in the fiscal deficit, which
seemed likely if an economic recovery did not
materialize. They worried that an expansion in
the deficit in a short period could compromise
the government's growth target for the monetary
aggregates and, thereby, risk substantially increasing inflationary pressures. These concerns
prompted large flows of funds to move out of
France amid growing speculation that the franc
would be devalued within the EMS. The outflows of funds were reflected in a decline of $3
billion in French foreign exchange reserves from
$22.6 billion at the end of July to $19.8 billion by
the end of September.
On October 5 the central EMS parity of the
French franc, along with the Italian lira, was
adjusted downward 3 percent against the Danish
krone, the Irish pound, and the Belgian franc—
whose central rates remained unchanged—and in
effect 8!/2 percent against the German mark and
the Netherlands guilder, currencies whose central rates were moved upward within the joint
float. Immediately after the EMS realignment,
the franc traded at the top of the new band amid a
reflow of funds that took the form of a reversal of
commercial leads and lags and also represented a
reflux of speculative and investment capital. As a
result, the franc rose in tandem with the mark
against the dollar to trade around FF 5.58 by
mid-October.
In the weeks that followed, French government officials stated that henceforth the government would give the same priority to fighting
inflation as to unemployment to ensure maximum positive effects from the currency realignment. The authorities acted on several fronts to
blunt the inflationary impact of the devaluation
of the franc. The government imposed temporary
price controls or freezes on a wide range of
services and food items, on which prices had
shown marked acceleration, and introduced an 8
percent guideline on annual increases for indus-

158 Federal Reserve Bulletin • March 1982

trial products. Regarding wages, the government
began discussions with the country's main
unions to alter cost-of-living provisions in future
wage negotiations so as to stabilize real earnings.
In addition, the government froze FF 15 billion in
budgeted 1982 expenditures, while also raising
employer and worker contributions to the social
security fund. These various measures helped
improve the atmosphere in the domestic bond
market, and the government, unable to issue new
bonds for some time previously, began to borrow
successfully on a large scale. The government's
access to the bond market in financing its deficit
made possible a deceleration in monetary growth
and enhanced prospects for the monetary aggregates to stay within the 1982 range.
With the realignment in place and with policies
in France appearing to move toward greater
balance between the goals of combating unemployment and curbing inflation, the franc remained firm within the EMS. The impact of
stimulative policies on France's inflation and
trade performance remained a source of concern.
However, these issues became somewhat less
acute, as other countries moved cautiously to
provide stimulus to their flagging economies
through an easing in monetary conditions and as
they came under growing pressure to adopt programs of fiscal stimulus. With the divergence in
policies somewhat less pronounced, some forecasters began to look for a smaller deterioration
than previously expected in the 1982 French
current account.
Moreover, nominal French interest rates remained relatively high—commanding a premium of 6 to 7 percentage points over German
interest rates—even though the authorities had
renewed their efforts to reduce French money
market rates in the aftermath of the EMS realignment. French firms sought foreign currency
loans to finance domestic expenditures, while
foreign official and private investors maintained
and even increased their holdings of franc-denominated assets. In these circumstances, the
French authorities were able to ease the ban on
forward purchases of foreign currencies, allowing importers of selected basic commodities to
purchase foreign exchange up to three months
ahead of delivery. Otherwise, exchange controls
remained intact, limiting the scope for resident
outflows. Moreover, France continued to be



seen in the exchanges as less vulnerable than
other continental countries to political disruptions in the Middle East and in Eastern Europe, a
perception that helped to bolster the franc, particularly following the declaration of martial law
in Poland in December.
For all these reasons, the franc remained firm
at the top of the joint float even as EMS currencies as a group weakened against the dollar
during December and January. By the end of
January, the franc was trading at FF 5.96 against
the dollar, a net decline of about 1V4 percent over
the six-month period under review but a rise of
more than 3Vi percent from its August lows. The
relative strength of the franc enabled the Bank of
France to acquire sufficient marks in the market
to reimburse in advance the main part of its very
short-term obligations to the European Fund for
Monetary Cooperation (FECOM) stemming
from earlier exchange market intervention in
1981. The outstanding amount was fully repaid
by early January in ECUs, foreign currency, and
special drawing rights. By the end of January,
France's foreign exchange reserves stood at
$18.3 billion. At this level, France's foreign
exchange reserves were $4.3 billion lower over
the six-month period under review, in part reflecting these repayments as well as the revaluation losses of gold and dollar swaps against
ECUs done with FECOM.

ITALIAN

LIRA

At the beginning of August the Italian lira had
fallen against the strongly rising dollar to stand at
LIT 1,227.50. However, it was trading comfortably near the top of the EMS, holding its position
firmly in relation to other European currencies
after its earlier downward adjustment within the
joint float. The Bank of Italy had recently taken
advantage of the lira's position within the EMS
to rebuild foreign currency reserves to a level of
$16.5 billion.
The relatively firm performance of the lira at
that time reflected sizable tourist inflows that
offset the adverse impact of Italy's deteriorating
terms of trade following the sharp increase in
dollar prices for energy and other products as
well as a weakening of demand in Italy's principal export markets. In addition, a tight control on

Foreign Exchange Operations

liquidity and credit at home helped shield the lira
from high interest rates abroad. The Bank of
Italy, as part of its continuing struggle against
inflation, had tightened monetary policy progressively by widening the scope of its ceilings on
bank lending, raising reserve requirements, and
hiking its discount rate to 19 percent. In addition,
the monetary authorities were changing their
procedures for issuing Treasury bills so that the
Bank of Italy could vary its purchases of bills
according to its assessment of domestic liquidity
needs rather than buying all unsold Treasury bills
at auction. Moreover, a deposit scheme had been
imposed in May for a four-month period on
purchases of foreign exchange for imports. This
scheme, which required the placement with the
Bank of Italy for ninety days of a non-interestbearing lira deposit equal to 30 percent of the
exchange transaction, had the effect of increasing the cost of payments in foreign currency as
well as cutting into credit available for domestic
purposes.
Nevertheless, problems were continuing. Inflation was still running at a rate of 18 percent,
considerably higher than most of Italy's trading
partners. The public-sector debt had continued
to exceed expectations despite persistent attempts at expenditure control. A collapse in the
stock market had seriously threatened the authorities' long-standing efforts to rebuild the financial structure of Italy's industrial sector. Evidence then available indicated that the domestic
economy was weak, with industrial production
still declining. The terms of trade were falling, as
the U.S. dollar continued to climb in the exchanges and the traditional surplus on service
income was contracting because of growing international debt service.
To deal with these problems, a new coalition
government led by Republican Giovanni Spadolini announced that it would not rely on any
further sharp contraction of economic activity to
curb inflation. Instead, it would seek to contain
inflationary pressures through a series of negotiations with business, labor, and various political
interests aimed foremost at adjusting Italy's
wage indexation system, the scala mobile. For
the first time, two of the three major labor unions
indicated a willingness to negotiate limited adjustments to the system. Furthermore, proposals
were put forth for "receding targets" and



159

"norms" for prices, wages, and public utility
rates. At the same time, the government decided
to extend the four-month-old import deposit
scheme until the end of February 1982. In an
agreement with the European Community, however it announced a phased reduction of the
proportion of foreign exchange purchases held in
non-interest-bearing deposits and increased
somewhat the products exempted from the deposit requirement.
During August and September, the lira remained firm within the joint float even as seasonal tourist inflows tapered off. Italy's trade balance was beginning to improve, as export
volumes picked up in response to the earlier
devaluation and as softness in the domestic economy held import volumes down. Although the
weakness of the EMS bloc had pushed the lira to
a new record low of LIT 1,268.50 against the
dollar on August 10, the Bank of Italy was able to
purchase sizable amounts of dollars to rebuild its
reserve position through early September. These
purchases were reflected in the $1.0 billion increase in foreign currency reserves over the two
months.
Late in September the lira dropped from the
middle to the bottom of the joint float. Rumors
began to circulate in the market that an EMS
realignment would be broad enough to include
the lira, whereas previously only a limited adjustment focusing on other currencies was thought
likely. New estimates, putting the public-sector
borrowing requirement as large as 12.5 percent
of gross domestic product, also generated concern that the escalating deficit would undermine
the efforts to curb inflation. As Italian importers
moved to accelerate foreign currency purchases,
sizable intervention by the Bank of Italy was
required to steady the rate.
On October 5, the lira was, in fact, devalued
along with the French franc by 3 percent against
the currencies whose official parities remained
unchanged and, in effect, by 8V2 percent against
the German mark and the Dutch guilder. In
public statements after the realignment, the Italian government stressed that it had not taken the
initiative for the change and that the effect of the
revaluation of the mark versus the lira, while
insufficient to reestablish the competitive position of Italian exports to West Germany, would
make German exports to Italy more expensive

160 Federal Reserve Bulletin • March 1982

and thereby add to Italian inflation in the short
run.
After the EMS realignment and through the
end of November the lira, although generally
trading around the middle of the EMS band,
firmed against the dollar. Italian interest rates
remained high while those in other centers were
generally declining so that favorable interest rate
differentials for the lira widened against most
currencies. Concern remained, however, that the
new government would not win quick agreement
from unions and business on approaches to reduce price and wage pressures. Similarly, in
November a record rise in the scala mobile
underscored the risk that the gains in international competitiveness resulting from the two devaluations would be quickly eroded by inflation.
Thus, at times the lira came on offer and the
Bank of Italy promptly intervened to resist declines in the rate, as reflected in the two-month
drop of $469 million in foreign currency reserves.
Beginning in late December and continuing
through the end of January, the lira firmed to
trade at or near the top of the EMS, even though
it fell back in relation to the U.S. dollar along
with other currencies in the joint float. The
Italian trade and current accounts had made
considerable and sustained improvement. Export and import volumes, as well as service
income, were responding favorably to the depreciation of the lira, declining real incomes in Italy,
and inventory liquidation. Moreover, long-term
capital continued to flow into Italy, mainly in the
form of Eurodollar borrowings, as credit availability at home remained tight. To reinforce the
slowdown that was under way in inflation, the
Bank of Italy extended in late December the 1981
ceilings on growth of bank lending until the end
of 1982. These ceilings were extremely restrictive in that they required a reduction of lending in
real terms. Nevertheless, the lira came on offer
on occasion, for example, when a bunching of
foreign currency purchases entered the market
following reductions in the proportion of transactions covered by the import deposit scheme. But
intervention by the Bank of Italy helped the lira
remain near the top of the EMS. By the end of
January the lira was trading at LIT 1,250.00
against the dollar, up 1 Vi percent from its August
lows. However, over the six-month period under
review, the lira declined PA percent against the



dollar and 7lA percent against the mark, in part
reflecting the results of the October EMS realignment. Meanwhile, Italy's foreign exchange reserves advanced $1.3 billion over the period to
stand at $17.8 billion at the end of January.

EUROPEAN

MONETARY

SYSTEM

The persistence of serious recession and high
inflation provoked major policy debates in most
countries in the EMS over the summer of 1981.
Complaints intensified that high U.S. interest
rates were exacerbating the already difficult
process of adjustment by forcing a choice between accepting the inflationary consequences of
depreciation of their currencies against the rising
dollar or by raising interest rates in defense of
home currencies and accepting a loss in economic output. Domestically, pressures built up for a
relaxation in monetary policy, for fiscal expansion—through some combination of increased
expenditures and tax cuts—or otherwise for a
change in policy emphasis. In some countries,
such as Germany, the commitment to restrictive
policies already in place remained firm. In other
nations, including Belgium and the Netherlands,
the debate made it difficult for newly elected
legislatures to reach agreement on a ruling government or on a common program. In France
there was an explicit shift in strategy, under new
leadership elected in the spring, in favor of
reducing unemployment through domestic stimulus and specific job-creating measures.
In the exchange markets, expectations intensified during the summer and early autumn that
divergent policies and economic trends among
participating EMS countries—particularly Germany and France—would force a realignment of
the joint float. These expectations gained
strength, particularly after the turnaround of the
dollar in August, since market participants felt
that tensions within the joint float would more
readily show through once there was greater
scope for the mark to rise in the exchanges. In
the event, large speculative flows emerged, imposing major strains on the joint float arrangement. To contain the selling pressures, the monetary authorities in many countries raised
domestic interest rates. Moreover, EMS central

Foreign Exchange Operations

banks intervened heavily during August and September to keep their currencies within agreed
limits. In contrast to the spring, the intervention
largely took the form of sales of dollars rather
than EMS currencies. Then, on October 5 the
EMS currencies were realigned with the German
mark and Dutch guilder each revalued 5V2 percent and the French franc and the Italian lira
each devalued 3 percent in relation to the Belgian
franc, the Danish krone, and the Irish pound
whose bilateral central rates against each other
remained unchanged.
The new exchange rate structure and the lessening of strains within the EMS provided more
countries than previously with the scope to begin
lowering interest rates and thereby provide some
monetary stimulus to their economies. France
and Denmark permitted money market rates to
ease, while Germany and the Netherlands lowered official lending rates in the October-December period. However, the reduction of European
interest rates lagged behind the decline of rates in
the United States and partly for this reason EMS
currencies advanced against the dollar by as
much as 11 to 16 percent from their August lows.
In December when U.S. interest rates moved
higher, the currencies of the EMS started to
decline against the rising dollar in the exchanges.
Although exchange rates fluctuated rather widely against the dollar, the configuration of currencies within the EMS remained comparatively
stable.
The French franc, which moved to the top of
the band immediately after the realignment, was
soon joined by the Dutch guilder in the upper
part of the EMS. The guilder was supported by a
current account surplus and improving inflation
prospects in the Netherlands. From a deficit in
1980, the current account moved to a surplus of
about NG 7 billion last year, with further improvement expected this year. The turnaround in
the current account reflected delayed increases
in the price of natural gas exports and the effect
on imports of weak domestic investment and
consumer demand. In addition, direct incomes
policies pursued by the authorities in 1980 and
1981 improved competitiveness, with labor costs
per unit of output lagging behind those of most
other countries. Also contributing to the guilder's strength in the EMS was the formation of a
government in autumn after many false starts



161

since the general elections in May. The government was pledged to a program of reducing the
fiscal deficit as a proportion of GNP, while also
directing part of the country's substantial gas
revenues to specific employment-creating projects.
Even though Denmark in contrast to the Netherlands was running a current account deficit,
the Danish krone also traded firmly in the upper
portion of the joint float. Gains in export market
shares and the depressed level of imports supported the krone by narrowing Denmark's current account deficit over the course of 1981. The
central bank also made sizable foreign currency
payments on behalf of the government from
official reserves, thereby helping maintain balance in the exchange market.
Trading around the middle of the EMS band
was the Italian lira, bolstered by a contraction in
Italy's current account deficit and a tight monetary policy that induced long-term capital to flow
in from abroad. Meanwhile, the Irish pound
tended to fluctuate somewhat below the middle
of the joint float even as Irish domestic interest
rates rose significantly. Although conversions of
private- and public-sector foreign borrowings
helped underpin the pound, the inflows of capital
had difficulty keeping pace with the widening of
the current account deficit, as a recovery in
stock building and fixed investment from earlier
depressed levels began to draw in imports.
The German mark, after having initially moved
to the floor of the EMS following the October
realignment, remained near the bottom of the
joint float through the end of 1981. Accordingly,
EMS central banks were able to purchase marks
in exchanges to cover liabilities incurred earlier
in the year to the FECOM. Together with the
mark at the bottom of the EMS was the Belgian
franc, pushed lower by concerns over Belgium's
large and protracted budget and current account
deficits. After elections in November, expectations built up that a downward adjustment of the
franc within the EMS would occur. As selling
pressures intensified in late November and early
December, the Belgian National Bank supported
the franc at the floor of the 2V4 percent band
through increasingly heavy sales of foreign currency. The authorities also raised the discount
rate and the Lombard rate each by 2 percentage
points to 15 percent and 17 percent respectively,

162 Federal Reserve Bulletin • March 1982

effective December 11, and enforced other measures making it prohibitively expensive for nonresidents to speculate against the franc. Then,
over the December 13-14 weekend, a new government was formed, pledged to restrain wage
increases under the wage indexation system and
curtail the budget deficit. With the new government providing grounds for a more effective
approach than previously to reducing government expenditures and lowering the costs of
industry, market sentiment toward the Belgian
franc improved.
After the new year, as the currency bloc
declined against the dollar, the configuration of
currencies within the EMS shifted somewhat,
but without imposing new strains on the jointfloat mechanism itself. As before, the Dutch
guilder and the French franc remained strong
within the joint float, and the authorities in both
countries were able to lower interest rates in line
with reductions in Germany. The Italian lira also
traded at the top of the band as the authorities
kept interest rates high. The Danish krone
slipped lower in the middle of the band in response to projections of a widening in Denmark's
current account deficit irl 1982 and the authorities, unable to take advantage of the tendency for
major European interest rates to come down,
tightened money market conditions instead.
The German mark moved higher in the joint
float even as the German Federal Bank, acting to
stimulate domestic demand, lowered on January
21 the special Lombard rate for the third time in
six months. As the mark moved higher and as
debate within Ireland over economic policy intensified, the Irish pound came under modest
pressure and moved into the lower half of the
EMS band. For its part, the Belgian franc traded
steadily at the bottom of the EMS and the
authorities cut the discount rate, effective January 7, 1 percentage point to 14 percent and the
Lombard rate 2 percentage points to 15 percent.
The authorities did not, however, further reduce
lending rates when the German Federal Bank
acted on January 21 to cut its official lending
rate. By the end of January the EMS currencies
had relinquished much of the gains recorded
against the dollar in the autumn months to end
the six-month period about Wi percent to 10^4
percent higher against the U.S. currency from
their August lows.



CANADIAN

DOLLAR

The Canadian dollar was heavily on offer in mid1981, dropping on August 4 to a fifty-year low of
Can. $1.2445 (U.S. $0.8035). The decline reflected market concerns over the balance of payments implications of Canadian energy policy,
constitutional issues, and persistent inflation.
The main focus of exchange market attention
was Canadian energy policy announced in the
autumn of 1980, especially the establishment of
incentives for exploration and development of
domestic energy that favor Canadian ownership,
and an ensuing dispute between the federal government and Alberta over energy pricing and
taxation. By mid-1981, the "Canadianization"
policy had stimulated sales of foreign-owned
energy companies and outflows of capital. Moreover, the policy was seen as threatening the
inflows of investment capital needed to offset the
traditional current account deficit and to provide
capital required to develop Canadian energy reserves and other economic resources. Also, to
press their position in the dispute with the federal
government, the provincial authorities in Alberta
had cut oil production temporarily within the
province, increasing Canada's short-term dependence on imported crude oil.
Other factors beyond the energy problems
weighed on market sentiment in early August.
Strong upward pressure on Canadian prices and
wage costs had continued through the first half of
1981 in contrast to the United States where
improvement on the inflation front had begun to
appear. The move to patriate the Canadian constitution by the federal government led to legal
challenges by provincial governments at a time
when relations were already strained by the
energy issues. Earlier in the summer, the traditional interest rate differentials in favor of the
Canadian currency nearly disappeared at times
when short-term U.S. rates climbed sharply.
Against this background, the Canadian dollar
had become increasingly vulnerable, dropping
sharply at the end of July and the first week of
August. The authorities took several actions in
response. The Bank of Canada intervened heavily to support the rate and by the end of July,
Canadian foreign currency reserves had declined
to $748 million. It also drew $700 million in July
and $500 million in August under the $3.5 billion

Foreign Exchange Operations

standby facility with domestic chartered banks to
replenish reserves. At the end of August total
borrowings under the facility stood at $1.5 billion. Beginning in late July, the Bank of Canada
aggressively pushed up interest rates. In roughly
three weeks, short-term rates jumped about 3
percentage points, restoring substantial interest
rate differentials in favor of Canadian assets by
early August. In addition, the Canadian Ministry
of Finance asked commercial banks to reduce
their lending to corporations for purposes of
financing buy-outs involving foreign currency
conversions.
In the wake of these actions, the Canadian
dollar rebounded in the exchanges. Also during
August, expectations developed that a compromise would soon be reached between the federal
and provincial governments on the troublesome
issues of pricing, taxation, and revenue sharing
in the energy field. On September 1, an agreement was in fact announced that provided for the
rapid move of domestic oil prices toward world
market levels, helping to alleviate exchange market concern that the government's policy would
limit future energy development. With agreement now reached, chances increased that several major oil exploration projects that had been
suspended in earlier months would be resumed.
Also, Alberta moved to restore oil production
cutbacks, easing Canadian needs for imported
crude. A compromise on revenue sharing was
also achieved, providing for increases in federal
revenues. Under these circumstances, and with
the U.S. dollar generally in decline, the Canadian
dollar recovered substantially after mid-August
to Can. $1.1929 by September 3. The Bank of
Canada was a net purchaser of U.S. dollars
during August and September and repaid $700
million of the $1.5 billion in credits drawn during
the summer.
The Canadian dollar then steadied to trade in a
fairly narrow range, easing back slightly on balance through the remainder of September and
October. The Bank of Canada, stressing its view
that reduction of inflation was crucial to a return
to healthy economic growth and external balance, resisted declines in Canadian interest rates
as large as those then developing in the United
States. Nevertheless, a sudden increase in unemployment in September and other signs of developing economic slack led to questions in the



163

market as to how much longer the authorities
could maintain their policies of restraint even
with no evidence of a slowing of inflation. Moreover, the Canadian trade surplus had weakened
through the summer, pushing the current account more deeply into deficit. The Bank of
Canada was a net purchaser of U.S. dollars
during these two months. It paid down $200
million in borrowings from domestic banks and
by the end of October foreign currency reserves
stood at $1,270 million.
During November, the Canadian dollar
climbed about 2 percent as the U.S. dollar declined against most major currencies and as
several factors shifted in favor of the Canadian
dollar. The Bank of Canada responded to the
continued decline in U.S. interest rates by limiting the fall in Canadian interest rates. As a result,
interest rate differentials favorable to the Canadian dollar widened, spurring borrowings abroad,
especially by public authorities. As the exchange
rate rose, borrowers moved to accelerate conversions of foreign currency. The government
also introduced a generally restrictive 1982 federal budget to Parliament. The exchange market
was impressed that monetary and fiscal policy in
Canada continued to be directed toward control
of entrenched inflationary pressures. At about
the same time, new oil and gas finds in the
Beaufort Sea seemed to improve the chances of
achieving the Canadian goal of energy self-sufficiency by 1990. Also, Prime Minister Trudeau
announced in early November a compromise
agreement with all provinces except Quebec
approving patriation of the Canadian constitution.
By November 30, the Canadian dollar had
reached Can. $1.1761 (U.S. $0.8503), its highest
level in over a year. With the Canadian dollar
strengthening sharply, the Bank of Canada
bought U.S. dollars in the exchange markets.
During November, the government finalized a
$300 million medium-term loan from the Saudi
Arabian Monetary Agency. In total, Canadian
foreign currency reserves rose $1.75 billion during the month and stood at $3.0 billion at the
month-end. In November and December the
Bank of Canada repaid the final amounts borrowed to finance intervention during the summer.
In December and January, with U.S. interest

164 Federal Reserve Bulletin • March 1982

rates rising, concern developed that Canadian
interest rates would not increase sufficiently to
maintain interest rate differentials. Successive
monthly figures on unemployment confirmed the
weakness of the Canadian economy and triggered a debate over fiscal and monetary policy.
The restrictive tone of the 1982 budget had
generated substantial domestic criticism, and
many analysts were predicting that the Canadian
economy had by then entered its worst recession
of the postwar period. Yet, inflation had not
decelerated and wage settlements continued
above 12 percent at a time when the United
States was showing progress in both of these
areas. In the event, Canadian interest rates drifted slightly lower and favorable differentials,




which at their peak had been more than 5 percentage points, nearly evaporated by the end of
January. Capital inflows tapered off and the
Canadian dollar dropped back to Can. $1.1988.
Thus, by the end of January, the Canadian
dollar was trading about 2 percent below its highs
at the end of November but still nearly 3 percent
above its lows reached just after the opening of
the period. The Bank of Canada was a net seller
of U.S. dollars, so that Canadian foreign currency reserves declined in January to stand at $2.9
billion. Even so, over the six-month period,
Canadian foreign currency reserves increased
$2.2 billion and all drawings on the standby
facility with domestic chartered banks had been
repaid.
•

165

Industrial Production
Released for publication March 16
Industrial production increased an estimated 1.6
percent in February, reflecting a rebound in
activity from the sharply curtailed output levels
that resulted in part from severe January weather. Gains were generally widespread, with output
of autos and trucks also rebounding in February
from the very low level a month earlier. The
index for February at 141.8 percent of the 1967
average was 1.0 percent below the December
1981 level and 6.6 percent below its level a year
earlier. Industrial production in January is now
estimated to have declined about 2.5 percent
from December's level rather than the 3 percent
originally estimated.
In market groupings, production of consumer
goods increased 1.7 percent in February, after a
decline of 2 percent in January. Autos were
assembled at an annual rate of 4.1 million units,
up about 14 percent from the January assembly
rate. Output of durable goods for the home
increased 2.8 percent; revised estimates now
indicate only a slight decline in January. In
February, output of consumer nondurable goods
regained almost three-fifths of the 1.5 percent
drop in the preceding month, a part of which

apparently was weather related. Output of business equipment increased 0.5 percent after a
decline of 3.4 percent in January; a further
weakening occurred in the output of building and
Seasonally adjusted, ratio scale, 1967=100

Federal Reserve indexes, seasonally adjusted. Latest figures: February. Auto sales and stocks include imports.

Major market groupings
1967 = 100

Percentage change from preceding month

1982

Grouping

1981
Oct.

Nov.

Jan."

Feb.®

Total industrial production

139.6

141.8

-1.7

-1.9

Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment
Defense and space
Intermediate products
Construction supplies
Materials

142.3
142.3
138.6
118.9
146.5
172.4
105.5
141.9
122.3
135.6

144.3
144.2
140.9
123.5
147.8
173.3
107.7
144.4
124.9
138.1

-1.1
-.7
-.9
-2.9
-.2
-1.2
1.5
-2.1
-3.2
-2.6

-1.3
-1.1
-1.7
-4.8
-.5
-.8
.8
-1.8
-3.8
-2.6

p Preliminary.

e Estimated.




NOTE. Indexes are seasonally adjusted.

1982
Dec.

Percentage
change,
Feb. 1981
to Feb.
1982

Jan.

Feb.

-2.1

-2.5

1.6

-6.6

-1.2
-1.0
-1.8
-5.0
-.7
-.3
1.6
-1.9
-2.2
-3.8

-2.4
-2.4
-2.0
-3.5
-1.5
-3.4
-1.4
-2.7
-3.9
-2.5

1.4
1.3
1.7
3.9
.9
.5
2.1
1.8
2.1
1.8

-3.9
-2.7
-4.7
-12.5
-1.8
-2.4
7.2
-8.4
-16.1
-10.5

166 Federal Reserve Bulletin • March 1982

Major industry groupings
1967 = 100

Jan."

Feb.

6

Oct.

Nov.

Dec.

Jan.

Feb.

Percentage
change,
Feb. 1981
to Feb.
1982

137.6
126.6
153.5
143.8
168.8

140.1
129.2
155.8
142.0
167.4

-2.1
-2.2
-1.9
.2
.2

-2.0
-2.5
-1.5
-1.4
.5

-2.3
-2.4
-2.1
-.6
-.9

-2.9
-3.5
-2.2
.9
.9

1.8
2.1
1.5
-1.3
-.8

-7.3
-8.2
-6.3
-.8
.6

Grouping

1982

Manufacturing
Durable
Nondurable
Mining
Utilities
p Preliminary.

Percentage change from preceding month

e Estimated.

1981

NOTE. Indexes are seasonally adjusted.

mining equipment and of farm equipment, while
small rebounds occurred in manufacturing, power, commercial, and transit equipment.
Production of defense and space equipment
increased 2.1 percent last month, more than the
drop in January, and was IVA percent above a
year earlier. Output of construction supplies
increased 2.1 percent in February, after a 3.9
percent decline the previous month. Output of
materials increased 1.8 percent, recovering most
of the January decline; both durable and nondu-




1982

rable materials rebounded 2.1 percent, and energy materials increased 0.8 percent.
In industry groupings, manufacturing output
increased an estimated 1.8 percent in February;
it had declined almost 3 percent the preceding
month. Both durable and nondurable manufactures regained about two-thirds of their January
declines. Mining output was reduced 1.3 percent
in February, largely because of reduced oil and
gas extraction activity. Production by utilities
declined 0.8 percent.

167

Statements to Congress
Statement by Paul A. Volcker, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on Ways and Means, U.S.
House of Representatives, February 23, 1982.
I appreciate this opportunity to participate in
your hearings on the President's economic program. The responsibilities of the Federal Reserve
are, of course, limited to monetary policy, but
we must necessarily recognize the broad interrelationships among monetary and other policies
bearing upon national economic performance.
Your committee has particular responsibility for
initiating specific revenue and spending measures; in reaching your decisions, you must also
take into account the implications of these decisions for the overall fiscal position of the government and for financial markets. At that point our
concerns intersect, and my comments this morning will be largely directed to that area.
I have often expressed my concern about the
critical need to break the inflationary momentum
that had come to grip the nation in the 1970s, and
I have spoken of the indispensable role that
monetary policy has to play in that effort. At the
same time, I have emphasized the extra difficulties that result from placing too heavy a burden
on monetary policy alone in the fight on inflation—difficulties manifested in exceptionally
heavy pressures on financial markets and interest rates, and therefore on credit-dependent sectors of the economy.
Current developments both reflect needed
progress on the inflation front and reinforce my
concern about the burdens placed on monetary
policy to bring about and sustain that progress.
In the best of circumstances, ending an inflation,
once it has become embedded in behavior and
expectations, can be painful in the short run,
however necessary that effort is to our future
strength and prosperity. The hard fact is that the
economy is now in the grip of a second recession in as many years. Recent developments
have some of the characteristics of earlier cycli


cal downturns. But the current recession has
been superimposed on a pattern of stagnation
extending over a number of years—years characterized by a rising trend of unemployment, lagging productivity, and particularly strong pressures on the older industrial sectors and regions.
And even now, after months of rising unemployment, interest rates have remained painfully
high, delaying recovery in some important sectors of the economy.
In broad terms, I do not think there is any
great mystery as to why the economy and financial markets have behaved in this way. During
the 1970s, inflation increasingly became viewed
as a way of life, and in the process economic
incentives were distorted and our productive
energies sapped. As we lost our most important
financial yardstick—a stable dollar—interest
rates rose and became highly volatile. As monetary policy moved to deal more forcefully with
the inflation—particularly in a context of fiscal
imbalance—the strain on financial markets became more acute. But the alternative course of
trying to accommodate inflation by providing
excessive monetary growth would offer no lasting relief—and probably little respite even in the
short run—for that approach would only feed
inflationary expectations and reinforce the reluctance of lenders to commit funds for any substantial period of time.
Now we can see clear signs of progress on the
inflation front. A reversal of the pattern of the
inflation rate ratcheting higher in each successive
economic cycle would be an event of profound
importance, not least in encouraging a return to
much lower and more stable interest rates. We
cannot "prove" that we have yet turned that
corner. Indeed, some of the progress against
inflation reflects the more immediate and temporary effects of recession-weakened markets, the
pressures of extraordinarily high interest rates
on commodity and other sensitive prices, and
recent surpluses in petroleum and grain production. But we are also seeing signs of potentially

168 Federal Reserve Bulletin • March 1982

more lasting changes in attitudes of business and
labor toward pricing, wage bargaining, and productivity. Not surprisingly, the effort is most
clearly apparent in industries in which costs and
wages have been most out of line, in which
international competitive pressures are particularly intense, or in which regulatory change has
encouraged greater price competition. But I believe the pattern is likely to spread, "building in"
lower rates of increase in nominal wages and
prices over time. And as the inflationary and cost
pressures ease, the economy can resume a
healthy pattern of growth, with greater job opportunities, increasing productivity, and higher
real wages.
But if that bright prospect is to be achieved,
we simply cannot afford now—just as the disinflationary process is beginning to take hold and
beginning to be believed—to abandon our monetary vigilance. Past failures to "carry through"
have left a legacy of skepticism and uncertainty
among workers and businessmen, among consumers, and among participants in financial markets in which lenders demand "inflation" and
"uncertainty" premiums when committing their
funds. Credibility in dealing with inflation will
have to be earned by performance and persistence over time. Prudent fiscal and other policies
must help in achieving that credibility. But I
believe it is broadly and rightly recognized that,
whatever those other policies, appropriate restraint on the expansion of money and credit will
continue to be fundamental to restoring price
stability.
As you know, I testified two weeks ago before
the House and Senate Banking Committees to
report the Federal Reserve's specific intentions
with respect to money and credit growth for
1982. Without repeating the details, I would like
to highlight a few of the major points.
Developments during 1981 were broadly consistent with the continuing effort to reduce
growth of money and credit to noninflationary
levels over time. There were, to be sure, some
divergent movements among the various monetary and credit aggregates that we target. Those
movements are largely explicable in terms of
technological and regulatory change—the introduction of negotiable order of withdrawal
(NOW) accounts nationwide, the enormous
growth of money market funds, and other factors



affecting the preferences of the public for different types of financial assets. Specifically, growth
of Ml-B (adjusted for the estimated shift of funds
into NOW accounts) decelerated further last
year, averaging, over the year as a whole, a little
more than 1 percent below the previous year—
the third consecutive year of lower growth. From
the fourth quarter of 1980 to the fourth quarter of
1981, growth of Ml-B (adjusted) was 2.3 percent,
a little more than 1 percentage point below the
lower end of the target that we had indicated was
desirable at midyear. The growth of the broader
aggregate M2—about 9Vi percent over the fourquarter period—was a bit higher than in 1980,
partly reflecting the extraordinary growth in
money market funds.
As you know, the money supply had a particularly sharp increase in the early weeks of 1982,
after fairly large increases in November and
December. Increases of that size are unusual
when production and incomes are weak, and the
recent rise appears to be related in considerable
part to the desire of individuals to place marginally more of their assets in highly liquid form.
Interest rates, after falling sharply last fall, retraced part of that decline in January and early
February, partly because the rising money supply was reflected in renewed pressure on bank
reserve positions. More recently, monetary
growth appears to be moderating, and bond
markets have rallied.
These recent movements, in my mind, emphasize again two relevant points in assessing our
monetary targets and their implications. First, in
a large and complex economy, short-term fluctuations in money supply data—for a month or
even a quarter, and much more so from week to
week—can be anticipated as consumers and businesses adjust their cash holdings. So long as the
trend is appropriate, those short-term fluctuations should have no important implication for
economic activity or inflation.
Second and more fundamentally, our targets
are, by design, limited to amounts necessary to
finance real growth in a framework of declining
inflation. The stronger the inflationary momentum, and the more pressure on credit markets
from other directions, the greater the risk that
high interest rates will squeeze out housing,
investment, and other private activity supported
by borrowing.

Statements to Congress

We believe the targets for 1982 established this
month (reaffirming tentative targets set last July)
will be consistent with recovery in business
activity over the second half of the year. Our
target range for Ml of 2Vi to 5Vi percent is
consistent with larger growth in money over the
year as a whole than during 1981, and the Federal
Open Market Committee has suggested that, as
things now stand, growth in the upper part of the
range would be acceptable. The FOMC also
suggested that growth of M2 toward the upper
end of its 6- to 9-percent range (the same as last
year) would also be acceptable. But these ranges
also imply a "tight fit," in the sense that they are
predicated on the assumption and prospect of a
further decline in the rate of inflation.
The fact is that consolidating and extending
our progress on inflation will require continuing
restraint on monetary growth, and we intend to
maintain the necessary degree of restraint. That
restraint, by providing assurance that inflation
will continue to decline, should over time be a
powerful influence in bringing down interest
rates as well, particularly in the long-term area.
Indeed, prospects for any lasting relaxation of
interest rate pressures would be dim without the
continuing monetary discipline that success
against inflation requires.
For the more immediate future, interest rate
prospects depend crucially on other factors as
well, and I am fully aware that interest rates are
vitally important to the timing, strength, and
sustainability of economic recovery. The most
important of those "other" factors is surely the
outlook for the federal deficit, a factor that is
directly within your own purview.
As you know, this year, fiscal 1982, we will
have a very large federal deficit—on the order of
$100 billion. To a considerable extent, that deficit is a reflection of the recession, which reduces
revenues and raises outlays. In the particular
circumstances of today, the current deficit, to a
large degree, acts as an "automatic stabilizer"
for the economy. The financing load should be
manageable in a context of reduced credit demands by other sectors.
As we look ahead to 1983 and beyond, the
situation is quite different, and that is the source
of my concern about the budgetary situation.
What is so disturbing is that the current services
budget (taking account of the administration's



169

defense program) shows a sharply rising deficit,
even if we assume revenues are lifted and spending restrained by a rather strong recovery. All
the estimates before you, by the administration,
by the Congressional Budget Office, or by private forecasters, point in the same direction. In
the absence of action to close the potential gap,
the deficit will rise to about $150 billion or more
in fiscal 1983, and to still larger amounts in later
years. Looking at the same situation in another
way, even if we assumed the unemployment rate
would soon drop back to 6 percent or so—about
the level of the best recent years—we would be
faced with large and rising deficits unless strong
new measures are taken to contain them.
In recognition of this outlook, the administration has, as you know, proposed substantial
measures to reduce the potential deficit for fiscal
1983, and the years beyond. The emphasis is on
spending reductions, but some revenue measures
are also proposed. That program is estimated to
reduce the projected fiscal gap $56 billion in 1983
and $84 billion in 1984. If enacted, as proposed, it
would go a considerable way toward dealing with
the fiscal problem.
As you consider those and other proposals, I
must emphasize the threat that, unless substantial budgetary actions are undertaken, private
borrowers would be squeezed out of the market,
with adverse consequences for homebuilding, for
business investment, and for other credit-dependent sectors. In other words, the budgetary
outlook as it stands does not seem to me consistent with the expansion in private investment we
seek and have sought to encourage through tax
reduction and other measures.
The problem is not simply one for the future—
for 1983 and 1984 and beyond. Financial markets
constantly look ahead—any lender or borrower
tries to anticipate and "discount" what lies
ahead. Anticipations of a future "squeeze" are
translated into present high interest rates, into a
desire to "stay short" in lending, into a reluctance to set into motion plans to build and to
invest. Moreover, the deep-seated public instinct
that sustained large deficits will lead, sooner or
later, to pressure to create more money to finance those deficits, or will otherwise stimulate
inflation, undercuts the effort to restore stability.
I would also point out that, even with measures as large as those proposed by the adminis-

170 Federal Reserve Bulletin • March 1982

tration, we would be left with historically high
deficits in relation to gross national product or
our probable savings potential, as the projected
recovery proceeded. And those projections have
little margin for misjudgment of the underlying
trend in spending or revenues, in interest rates,
in the inflation rate and the like—areas in which
any projection has an element of uncertainty. I
note, in that respect, that projections of the
existing budget gap by the Congressional Budget
Office run somewhat higher than those of the
administration.
The potential for a continuing squeeze on
financial markets could be alleviated by increases in business and personal saving. Such
saving has been abysmally low in recent years.
Greater price stability, positive real interest
rates, and the tax measures introduced last year,
all should work in the direction of greater savings. But to count on a dramatically large increase in savings to "bail" us out of the budgetary problem would be to miss the point, at best.
We need larger saving to finance higher levels of
business investment and housing construction;
we cannot afford to have it dissipated in financing prolonged excessive budget deficits—deficits
that, as matters stand, would absorb, or more
than absorb, a reasonable projection of increased
savings.
Given the nature of the problem before us, and
the clear risks of underestimating the size of the
budgetary problem, I can only conclude that the
Congress should set its sights for still larger
budgetary savings, keeping in mind the widening
gap now projected beyond fiscal 1983.
Credible steps to assure substantially declining
federal deficits as the economy expands, looking
toward balance as we restore satisfactory levels
of unemployment, would be enormously helpful
in resolving some of the problems in our financial
markets today. Indeed, such action could have a
galvanizing effect in bringing about lower interest
rates because concern about the budgetary prospects preoccupies the thinking of many potential
investors in the market today.




In carrying the primary responsibility for originating tax legislation and for certain large spending programs, your committee has the excruciating job of translating general budgetary
objectives into concrete legislation. You must
make choices involving social, national security,
and programmatic considerations far beyond the
purview of the Federal Reserve or me. As a
purely economic matter, I do believe that, in
general, lower taxes—particularly lower marginal income tax rates—will permit the private economy to perform more effectively, tending to
increase incentives and to reduce distortions.
From that standpoint, control of spending clearly
deserves priority. But to the extent that the
needed job cannot be done by expenditure control alone, I see no alternative to considering new
sources of revenue.
The difficult economic circumstances of today
should not blind us to the fact that we have much
upon which to build. We can see the tangible
progress against inflation. The administration
and the Congress have taken action to spur
productivity, work, and savings through the tax
system. The inexorable upward trend in spending has been bent lower. Regulatory reform is
under way. From that perspective, what we need
is not any basic change in direction, but a sense
of urgency and persistence in "carrying
through." That sense has clear implications for
continued discipline in monetary policy. And it
has direct implications for dealing with the budgetary problem that looms so large before you.
Seldom in my experience has the challenge
been so clear for all to see. And seldom has there
been so strong a consensus on the need to meet it
with bold measures. Those facts give me confidence that you and your colleagues, working
with the administration, will find the way to
reconcile the competing priorities among the
particulars of spending and revenue decisions in
a way consistent with needed reduction in the
deficit. The quicker that can be done, the
brighter, in my judgment, will be the outlook for
the economy.
•

Chairman Volcker gave similar testimony before
the Finance Committee, U.S. Senate, February
24, 1982.

Statements to Congress

Statement by Paul A. Volcker, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on the Budget, U.S. Senate, March 2, 1982.
I appreciate this opportunity to discuss with you
important economic issues that are of concern to
all of us. Obviously, interrelationships among
monetary, fiscal, and other policies have important bearing on our national economic performance and, especially, on the performance of our
credit markets. The Federal Reserve has responsibilities only for monetary policy. This committee has an important role in shaping the broad
outlines of congressional budget policy and, particularly, in focusing on longer-term budget prospects. This longer-term focus is especially important at the current juncture.
Clearly, the economy is going through troubled times. Unemployment is painfully high,
particularly in older industrial regions. Interest
rates are imposing severe strains on housing,
small business, and agriculture, and also on thrift
institutions and certain other financial institutions. These problems are in major part a legacy
of high inflation and lagging growth in productivity over a number of years. The recession has also
played a major role in the current budgetary
deficit, which is likely to be more than double the
deficit you planned about a year ago.
I believe that there are strong reasons to
expect a cyclical upturn later this year. Our
monetary policy targets will accommodate such
an upturn. And the deficit for the current year,
with its large cyclical component, should be
manageable; to a considerable extent, by supporting income flows and spending during the
recession, it can help stabilize the economy and
induce recovery.
For future years the situation is quite different.
We face the bleak prospect, as things now stand
and without strong action to contain spending
and to increase revenues, that budgetary deficits
will rise very substantially, even assuming satisfactory economic growth. That prospect threatens the recovery we need in business investment
and housing by potentially preempting a sizable
fraction of our savings potential; moreover, the
future implications for congested credit markets
feed back on present interest rates, as lenders
and borrowers "discount" what might happen in



171

the years ahead. While it might be argued that
larger growth in the money supply, now or in the
future, could relieve the pressure, one result
would be to renew fears of inflation, just as
marked progress toward greater price stability is
apparent. An inflationary increase in the money
supply cannot substitute for real savings, and in
time would result in higher rather than lower
interest rates.
Clearly, the potential problem before us lies
squarely at the point where monetary and fiscal
policies intersect our respective responsibilities.
For that reason, I should like, first, to review the
recent and prospective course of monetary policy and then to discuss its relationship to the
fiscal problem.
Monetary policy has, of course, been directed
toward restraining growth in money and credit
with the important objective of reducing inflationary pressures and placing the economy on a
course toward price stability. The hard fact is
that uprooting a deeply embedded inflationary
process is difficult; it is made even more difficult
to the extent that the effort is concentrated on
one policy instrument. The fact that interest
rates have remained painfully high in the midst of
recession, restraining activity in credit-dependent sectors of the economy, is one reflection of
the difficulty. But the problem extends back over
a number of years. As you know, the current
recession has been superimposed on a pattern of
stagnation extending over a considerable period.
In broad terms I do not think there is any great
mystery as to why the economy has behaved this
way. Beginning in the mid-1960s, inflation increasingly became a way of life and in the
process distorted economic incentives, sapped
our productive energies, and caused arbitrary
and capricious transfers of income and wealth.
For a time, as inflation gained momentum, real
interest rates were low or negative. But after
inflation took hold and became embedded in
behavior and expectations, anticipations by borrowers and lenders alike tended to propel interest rates higher. And as monetary policy moved
to deal more forcefully with the inflation—particularly in a context of fiscal imbalance—the strain
on financial markets became more acute.
The alternative course of simply accommodating inflation by providing it monetary sustenance
would, however, offer no lasting relief. By feed-

172 Federal Reserve Bulletin • March 1982

ing expectations of inflation and reinforcing the
reluctance of lenders to commit funds for any but
the briefest periods of time, the high level of
interest rates (particularly long-term rates) would
only become further embedded in the economy.
The hard fact is that loss of our most important
financial yardstick—a stable dollar—bred high
and volatile interest rates. Restoration and maintenance of lower interest rates are ultimately
dependent on greater confidence that stability
can and will be restored.
Developments during 1981 seem to me broadly
consistent with that effort. While particular measures of money and credit diverged, responding
in large part to legislative, regulatory, and institutional change affecting the way businesses and
individuals chose to hold their financial assets,
the general direction was consistent with the
effort to curb the monetary sources of inflation.
Specifically, Ml-B growth (adjusted for the estimated shift of funds into negotiable order of
withdrawal accounts) decelerated further last
year, averaging a little more than 1 percent lower
than the previous year—the third consecutive
year of such deceleration. Growth of the broader
aggregate, M2, averaged a bit higher than in
1980, but that rise, at the margin, reflected
extraordinary growth in money market funds and
regulatory and legislative changes affecting the
attractiveness of time deposits, which pulled into
M2 some funds that otherwise would have been
placed elsewhere.
Despite the slow growth of the narrowly defined money supply, short-term interest rates fell
substantially from midyear peaks, and had a
particularly sharp drop after the recession took
hold. As you know, however, short-term rates
retraced part of that decline late in the year and
early in 1982. The money supply rose sharply in
the early weeks of 1982, and as a result, bank
reserve positions came under renewed pressure.
A spurt in money growth is unusual in a context
of weak production and income, and it appeared
at least in part related to uncertainties on the part
of individuals, leading them to shift a portion of
their financial assets into the most liquid form.
More recently, the excessive growth has appeared to be subsiding, and interest rates have
turned somewhat lower. But a characteristic of
the past year has been the persistently high level
of intermediate- and long-term interest rates, an



area of the market most heavily affected by
expectations.
Those interest rates have remained high despite visible progress—and potentially lasting
progress—on the inflation front. To be sure,
some of the progress against inflation reflects the
more immediate, and potentially reversible, effects of recession-weakened markets, current
surpluses in petroleum and grain production, and
reduced commodity speculation and pressures
generally for inventory liquidation due to extraordinarily high interest rates. However, we
can now also see encouraging signs of more
lasting progress. Attitudes of business and labor
toward pricing and wage bargaining, and toward
work rules that hamper productivity, seem to be
changing. Not surprisingly, that change is most
apparent in industries in which costs and wages
have been most clearly out of line and in which
international competitive pressures or those resulting from regulatory change are particularly
intense. But—so long as monetary and fiscal
policies are appropriate—I believe these changes
will be reflected in a spreading pattern of cost
and price restraint. Individually, workers and
businessmen are naturally reluctant to maintain
such restraint, partly for fear their concessions
will not be matched by those of others. But
collectively, such restraint, combined with higher productivity, will be amply repaid in the form
of higher real wages and better prospects for job
security. This is the foundation on which we can
expect to build a sustainable recovery.
If these brighter prospects are to be achieved,
however, we cannot afford—just as the disinflationary process is beginning to take hold—to
abandon our monetary vigilance. Past failures to
"carry through" have left a legacy of skepticism
and uncertainty among workers and businessmen, among consumers, and, not least, among
participants in financial markets in which lenders
demand "inflation" and "uncertainty" premiums when committing their funds. That is one
important factor holding up longer-term interest
rates. Credibility in dealing with inflation will
have to be earned by performance and persistence over time. And, I believe, it is broadly and
rightly recognized that appropriate restraint on
the expansion of money and credit will continue
to be fundamental to restoring price stability.
Our intentions with respect to money and

Statements to Congress

credit growth in 1982 reported to the Congress
three weeks ago seem to me consistent with that
need. The monetary targets are, we believe,
consistent with recovery in real business activity
over the second half of the year; in fact, the
target range for Ml is consistent with somewhat
larger growth in that aggregate than actual
growth of the adjusted measure during 1981. At
the same time, the targets do assume and are
designed to encourage further progress toward
price stability. In that sense, they are a "tight
fit."
The performance of the credit markets in 1982
and beyond, in a framework of disciplined monetary policy, will be heavily influenced by supply
and demand forces other than the course of
inflation and inflationary expectations. Key
among these is the size of the federal deficit.
Government borrowing and private borrowing
compete for a limited supply of available savings
and credit. That competition is usually ameliorated in the midst of recession because private
credit demands are reduced. But a more prosperous economy also implies much stronger needs
for mortgage and business credit; indeed, sustained recovery of the private economy and the
investment we need to support productivity are
dependent on more favorable financial market
conditions. Precisely those more favorable market conditions are threatened by prospects for
sharply rising deficits in fiscal 1983 and the years
beyond. Members of this committee are acutely
aware that all of the familiar projections, by the
administration, the Congressional Budget Office,
and private forecasters, point to historically huge
deficits, assuming that the administration's defense plans are broadly carried out and no new
steps are taken to curtail nondefense spending or
raise revenues. We can debate whether the estimates of the administration or the Congressional
Budget Office are more accurate. But the point is
that there is no disagreement that deficits would
rise to $150 billion and beyond, in a context of a
steadily expanding economy, under either set of
assumptions, and deficits of those magnitudes
cannot be acceptable—not if we, in fact, want to
see the rise in investment and housing we want.
Projecting the federal budgetary position for
several years ahead necessarily involves a range
of uncertainty about spending and tax programs,
the level of interest rates, and overall gross



173

national product. Moreover, a range of possible
outcomes exists with respect to our savings
potential and sources of funds in the credit
markets, even with the given assumptions regarding GNP. Nevertheless, some general implications of the budgetary outlook as it stands are
clear enough.
In the absence of action, the projected deficits
would be outside the range of peacetime experience for good business years, whether measured
in absolute terms or in relation to the potential
GNP and savings.
In recognition of those concerns, the administration has proposed large cuts in spending and
some measures to increase revenues. Such action would go a long way toward bringing the
deficits down, cutting them by one-half or so in
fiscal 1984 according to administration estimates.
But even with such forceful action, the size of
the projected deficits would remain large, relative to savings and GNP, for a relatively prosperous business year. While a few years in the 1970s
appear roughly comparable, there would seem to
be little or no "safety margin" for meeting
expanded investment requirements. Should the
deficit trends be more adverse, as the Congressional Budget Office suggests, the potential for
"crowding out" private investment would be
greater.
A substantial increase in savings could help
protect against the implied squeeze on financial
markets. Indeed, business saving is likely to be
enhanced substantially by the provisions of last
year's tax bill,- and personal saving should also
be increased as inflation declines and in response
to other incentives. But we also need to remember that the larger savings potential should not be
dissipated in financing government purchases or
transfer payments when our investment needs
are so urgent.
The hard fact is we cannot escape a choice—
whether we want to encourage more favorable
financing conditions for the private sector or
whether we are willing to risk seeing our savings
and financial resources diverted in large measure
to financing a federal deficit.
While it is the deficits for fiscal 1983, 1984, and
beyond that loom so large, action is needed now
for several reasons. First, as you know, the
budgetary momentum cannot be curbed without
planning ahead. Steps to achieve large reduc-

174 Federal Reserve Bulletin • March 1982

tions in spending or higher receipts in fiscal
1983—only six months off—need to be put in
place soon, and measures of spending restraint
should be undertaken during the current congressional session to be fully effective in fiscal 1984.
Second, deficits of the projected magnitude
are in some degree self-reinforcing. Prolongation
of high deficits and high interest rates feeds back
into future debt service and budget expenditures.
Finally, and most important, uncertainties
about future credit market pressures cloud the
planning of investors today. Strong actions taken
now to assure that deficits can and will be
reduced as the economy recovers can go far
toward galvanizing investor attitudes in a favorable direction. Paradoxical as it may seem in
light of some past economic analysis—analysis
developed when inflation and high interest rates
were not a preoccupation—prospects for recovery can be speeded by decisive action by this
committee and your congressional colleagues to
curb future deficits, for the result would be to
relieve apprehension in the market that contributes to today's high rates.
As I noted earlier, if enacted, the proposals by
the administration for deficit-reducing measures
totaling more than $55 billion in fiscal 1983 and
approaching $85 billion in 1984 would go a long
way toward ameliorating the potential problem.
They represent a major challenge to the Congress, but I would urge upon you the desirability
of going even further to reduce demonstrably the
pattern of deficits as the economy recovers. The
appropriate target, it seems to me, would be to
restore the prospect of budgetary balance as a
high level of economic activity is restored.
On purely economic grounds, I believe that
lower taxes will enable the economy to perform

more effectively and that higher marginal tax
rates distort incentives and impede economic
efficiency. But you must weigh many considerations, and I recognize the choices before you
are extremely difficult and involve detailed considerations of social objectives and program objectives beyond the purview of the Federal Reserve. To the extent that the job cannot be
accomplished by further steps to reduce growth
in spending, I see no alternative but action to
bring the trend of revenues into better alignment
with spending prospects.
In concluding, I would emphasize that the
main directives of economic policy laid out last
year seem to me broadly appropriate to the
challenge before us. We are making progress
against inflation, and sustaining that progress is
fundamental to a brighter future. Tax and other
policies developed last year should contribute to
a more productive, competitive economy. Some
steps have been taken to slow the strong upward
momentum in government spending.
At the same time, the agenda for action is
clear. The Federal Reserve will maintain the
needed degree of monetary discipline. We need
decisive action to curtail budget deficits.
As we approach that agenda, I can only be
encouraged by the degree of understanding of the
nature and the urgency of the problems before
us. I believe a sense exists that, difficult as it is,
the Congress and the administration have an
opportunity in coming weeks to seize the initiative with a strong budgetary program. We in the
Federal Reserve mean to do our part in fostering
confidence in financial markets. Together, the
Federal Reserve and the Congress can move
from challenge to conviction that the base has
been laid for national recovery.
•

Chairman Volcker gave similar testimony before
the Committee on Appropriations, U.S. Senate,
March 4, 1982.

Statement by Lyle E. Gramley, Member, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Domestic Monetary
Policy of the Committee on Banking, Finance
and Urban Affairs, U.S. House of Representatives, March 3, 1982.



I appreciate the opportunity to present my views
regarding the effects of financial innovations on
the conduct of monetary policy.
Innovation in U.S. financial markets and practices has been proceeding at a phenomenal pace
in the last decade. The innovational process is by

Statements to Congress

no means completed. It is therefore appropriate
and timely to examine the implications of this
development for monetary policy. Let me begin,
if I may, with a review of the principal forces
responsible for the drastic changes we have seen
in financial markets.
Our economy has suffered from a rising trend
of inflation since the mid-1960s. As borrowers
and lenders came to expect inflation to continue,
or even to accelerate, market interest rates
moved progressively upward.
Higher market rates of interest increased the
penalty for holding deposits whose yields were
constrained by law or regulation. The yields that
depository institutions could pay were limited by
prohibitions or ceilings on the payment of explicit interest and also by reserve requirements that
reduced the rate of return on the investment of
deposit proceeds. Moreover, the thrift institutions have been, and still are, severely limited in
their capacity to pay market interest rates on
deposits because they hold a substantial volume
of longer-term assets acquired earlier when inflation and interest rates were lower.
As the public has become increasingly sensitive to the earnings lost by holding non-interestbearing or low-yielding deposits, it has become
more adept at economizing on cash balances and
more receptive to new kinds of financial investments. The increased financial sophistication of
households and businesses, moreover, has been
coupled with technological advances in the computer and telecommunications industries that
have reduced the transaction costs of transferring funds.
New institutions and instruments have
emerged to satisfy the public's demand for highyielding liquid assets. The most widely publicized of these are the money market mutual
funds, which have grown explosively during the
past several years. These investment companies
offer small savers the opportunity to invest indirectly in diversified pools of very short-term,
large-denomination, money market instruments
such as commercial paper and negotiable certificates of deposit. While money market funds are a
repository for savings, they also can serve as
transaction balances, or as a very close substitute for them. Most money market funds allow
the immediate withdrawal of balances by check
or other convenient means.



175

More recently, other interest-bearing assets
have attracted considerable public interest as
substitutes for money. A number of brokerage
firms now offer cash management accounts,
which combine the features of money market
funds and margin accounts. Most of these allow
for withdrawal of funds by check in any denomination and by debit card. The money market
fund component of the Merrill Lynch Cash Management Account has already grown to more
than $13 billion. Very recently, new types of
"sweep" arrangements have emerged, some designed primarily for smaller businesses and others for households. Sweep arrangements permit
funds to move automatically into or out of conventional transaction balances to investment accounts paying market-related yields.
The financial innovations of recent years have
affected principally the asset portfolios and the
cash management practices of individuals and
other small investors. They parallel developments that began many years earlier in the management of cash by nonfinancial corporations
and other large investors. The problems for
monetary policy posed by these innovations
have thus been around for a while.
Financial innovation has, however, raised
more questions in recent years about the appropriate definition of money, about the precision of
the Federal Reserve's control over the money
stock, and about the meaning of changes in
money balances. I will touch on each of these
issues in turn.

DEFINITIONS

OF

MONEY

The difficulties associated with defining money
are not new: the existence of money substitutes
and "near-monies" has always made it hard to
decide which assets should be included in a
particular measure of money. Traditionally, the
issue has boiled down to drawing the line somewhere along a spectrum of assets ranked according to degrees of "moneyness," starting with
balances serving as a generally accepted means
of payment—having few investment characteristics—and moving successively to less liquid assets offering higher returns. The difficulties of
defining money have increased as new instruments have come into use that possess overlap-

176 Federal Reserve Bulletin • March 1982

ping transaction and investment characteristics.
The conventional measure of transaction balances, Ml, now includes interest-bearing checkable deposits that have a significant savings
component. At the same time, money market
funds and cash management accounts—which
are not included in Ml—are also used in part for
transaction purposes.
Periodic redefinitions of money are needed
when financial innovation proceeds rapidly. The
1980 redefinition of the monetary aggregates was
designed to bring all transaction accounts into
Ml. Available evidence at that time suggested
that money market mutual funds were not extensively used for transaction purposes, and so they
were included in M2. Last month, M2 was revised to exclude shares in money market mutual
funds held by institutional investors; retail repurchase agreements, which are close substitutions
for small-denomination time deposits, were
brought into the definition of M2.
Further revisions in definitions of the monetary aggregates may be necessary in the near
future. The staff of the Federal Reserve Board,
with the help of the Investment Company Institute, is undertaking a survey to determine the
extent to which money market mutual funds are
used for transaction purposes. The staff will also
be gathering data this year on individual retirement and Keogh accounts. These latter data may
provide the basis for removing these accounts—
which are of a long-term nature—from the definition of M2 or for a better understanding of
changes in M2.

CONTROLLING THE
MONETARY
AGGREGATES

Turning next to the issue of controlling the
monetary aggregates, my judgment is that financial innovations have not, as yet, created a
serious problem. The Monetary Control Act of
1980 extended reserve requirements to all depository institutions, a step that helped to strengthen
the link between reserves and narrow money
balances. The extent to which balances used for
transaction purposes escape reserve requirements because they are held outside depository
institutions is not known with precision, but it
appears to be small at present. For example, the



average turnover rate of shares in money market
mutual funds is about two to three times per
year, slightly lower than that for passbook savings deposits at banks and thrift institutions.
However, the prospect of rapid growth of transaction balances not covered by reserves poses a
potentially serious problem for monetary control
in the future. I will return to that subject shortly.

STABILITY

OF MONEY

DEMAND

In recent years, the principal monetary policy
problem stemming from financial innovations
has been their effect on the relationship among
the money stock, nominal gross national product, and interest rates. Relative stability in this
relationship is an important ingredient in a central bank's use of monetary aggregates as intermediate targets or as indicators of policy. Before
1974, it was possible to predict reasonably well
the amount of Ml that the public would want to
hold given the size of the economy and the level
of interest rates. Since then, however, growth of
Ml has been considerably slower, relative to the
rise of nominal GNP, than indicated by historical
relationships. More important, the period since
1974 has been characterized by a greater degree
of short-run instability in money demand.
Estimates of the amount of shortfall in money
growth, relative to expectations based on historical experience, differ from one money demand
equation to another. But a large number of
studies of the public's demand for transaction
balances point to a similar conclusion: for reasons that we understand only imperfectly, money demand has grown more slowly than expected
over the past seven or eight years, and it has also
been rather unstable in the short run.
The relationship between the broader monetary aggregates and GNP has also changed in
recent years because of financial innovations and
regulatory changes. In past periods of rising
market interest rates, growth of M2 tended to
slow abruptly because the flow of funds was
diverted from depository institutions to market
securities. But the composition of M2 has
changed materially since 1978; now, more than
60 percent of its nontransaction component consists of assets bearing market-related yields. This
change helps to insulate the growth of M2 and its

Statements to Congress

relationship to GNP from the effects of changing
market interest rates. Consequently, even in the
face of substantial interest rate variations, the
velocity of M2 has changed relatively little over
each of the last three years, in contrast to the
swings that used to occur.
I do not by any means conclude that the recent
instability of money demand requires a basic
change in our procedures for implementing monetary policy. On the contrary, setting targets in
advance for growth of money provides an important safeguard against the pitfalls that would be
encountered in a policy focused largely on interest rates. As history before October 6, 1979,
amply demonstrates, focusing too much attention on interest rates in the conduct of monetary
policy is apt to lead to a rate of monetary
expansion that produces inflation. We have
made substantial progress since the fourth quarter of 1979 in reducing the expansion of money
and credit, and also in reducing the rate of
inflation. The methods of monetary control employed since then have contributed to those
developments.
However, several implications for monetary
targeting can be drawn from the experience of
recent years. First, short-run movements of the
money stock have even less meaning than they
once did as indicators of monetary policy. What
happens to money growth over longer periods is
what counts. Second, monetary targets should
be expressed in rather wide ranges: the present
ranges of 3 percentage points are certainly not
too wide. Third, we need to continue to use
multiple targets, rather than to focus on any
single measure of money. Indeed, somewhat
greater weight may need to be given to the
broader monetary aggregates in the future as a
consequence of the relative instability of the
demand for Ml. Finally, we need to stand ready
to accept growth of money outside of our target
ranges—or even to modify the ranges—if
changes in the public's asset preferences warrant
it.
What we cannot do, and what the Federal
Reserve will not do, is to abandon the basic objective of gradually slowing the growth of money and credit in the interests of reducing inflation.
It is sometimes argued that our present monetary targets should be replaced by the monetary



177

base. I do not believe that such a step would
improve monetary policy. The base is a rather
arbitrary combination of the various components
of the monetary aggregates. Its largest component is currency, whose magnitude has always
been—and, I believe, always should be—determined by the public's demands for currency. The
remaining portion of the base, reserves, is basically a weighted sum of the reservable deposit
components of the monetary aggregates, with the
weights determined by their respective reserve
ratios. When the significance of movements in
the aggregates is uncertain, so also is the significance of changes in the monetary base. Furthermore, there is little reason to think that stability
in the growth of the base will produce economic
stability. Annual growth in the base actually was
very stable over the 1970s, with yearly growth
rates never deviating more than 1 VA percentage
points from their average for the decade. Nevertheless, the 1970s was a period of considerable
economic instability.
Finally, targeting on a broad credit aggregate—another suggestion sometimes offered—
has some intellectual appeal for me. Unfortunately, the suggestion seems impractical. The
data on credit flows become available with very
substantial lags and are subject to large revisions.

LEGISLATIVE

REMEDIES

Let me turn now to legislative actions that would
enhance the effectiveness of monetary policy.
The greatest concern at this moment is the
possibility that an increasing proportion of the
financial assets used for transaction purposes
will, over time, be held in forms other than
deposits, thus escaping Federal Reserve reserve
requirements. Such a development, besides its
implications for monetary control, would mean
that a growing fraction of the nation's money
stock would lack the protection of deposit insurance and be held at institutions beyond the scope
of supervision and regulation of the traditional
federal financial regulatory authorities. If such
shifts in asset preferences occurred suddenly,
and on a wide scale, they might be accompanied
by rather marked reductions in the supply of
credit to borrowers heavily dependent on deposi-

178 Federal Reserve Bulletin • March 1982

tory institutions as a source of funds—borrowers
such as farmers, other small businesses, consumers, and homebuyers.
I would therefore recommend that the Congress authorize the Federal Reserve to impose
reserve requirements on money market fund
shares and all other instruments to the extent
that they serve as the functional equivalent of
transaction balances, regardless of the issuer.
Such legislation would keep intact the basic
philosophy of the Monetary Control Act, which
extended reserve requirements to transaction
balances of all depository institutions. It would
also provide a framework for fairer competition
among financial intermediaries.
In implementing the Monetary Control Act,
the Federal Reserve designated as a transaction
account one that is accessible by check or debit
card, or one that can be used with some frequency for third-party transfers by other means, such
as by telephone. The distinction between a transaction account and other accounts payable on
demand inevitably is vague at the margin, and I
believe the Federal Reserve should retain sufficiently flexible authority to put forward definitions to include the many new types of plans with
transaction capabilities that are likely to be developed.
My expectation would be that money market
funds would react to the imposition of such
reserve requirements by segregating shares that
can be used for transaction purposes from other
accounts. Their customers would be offered a
choice among types of funds, with the "transaction balance" account offering a somewhat lower
yield. During the short period in 1980 when
marginal reserve requirements were imposed on

money market funds, fund managements amply
demonstrated the feasibility and relative ease of
"cloning" their funds to accommodate changes
in the regulatory environment. Such an approach
would not affect the returns available to individuals holding shares in money market funds purely as a savings vehicle.
This step alone would not address fully the
existing disparities of regulatory treatment
among financial intermediaries. Given the prohibition of explicit interest payments on demand
deposits and the ceiling rates on time and savings
deposits, deposit-taking institutions are unable to
compete on an equal footing with intermediaries
offering new instruments. The depository institutions have long been the core of our financial
system, and many of their customers have no
ready alternatives for the particular types of
credit such institutions extend. I do not think we
can take lightly the erosion of their competitive
position.
Ceilings on rates paid on time and savings
deposits will be phased out under existing legislation over the next four years. I wish the process
could take place faster, and that we could also
remove the prohibition of interest on demand
deposits. Great caution must be exercised, however, to ensure that the process of deregulation
does not add unnecessarily to the burdens of
thrift institutions, whose earnings are already
under severe strain.
Financial innovation will no doubt continue at
a rapid pace in the foreseeable future. We as
regulators and legislators must ensure that the
process of innovation is consistent with an effective monetary policy and equitable treatment of
financial institutions.
•

Statement by Theodore E. Allison, Staff Director
for Federal Reserve Bank Activities, before the
Subcommittee on Consumer Affairs of the Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, March 10, 1982.

credit unions, other depository institutions, and
nondepository institutions such as money market
mutual funds whereby the depositor of a check
may not withdraw the funds represented by the
check for some period of time to assure that
funds are available in the depositor's account if
the check is returned unpaid. When confronted
with problems involving these policies, many
depositors are understandably irritated; often
they must delay other transactions, and some
may even realize costs as a result.

I am pleased to have the opportunity to present
the views of the Board of Governors on policies
and practices regarding delayed funds availability. Delayed funds availability is a practice used
by some banks, savings and loan associations,



Statements to Congress

I would like to explain briefly how the check
collection system works and how it relates to
delayed funds availability; to share with you
what the Board has learned from its studies of
delayed availability problems and practices; and
to explain what, in the Board's view, would be
the most productive approach in seeking solutions to the problems that exist.

THE CHECK COLLECTION

SYSTEM

The check collection system in the United States
frequently involves many handlings of a check
between its deposit in one depository institution
and its payment by the paying depository institution. Checks deposited to accounts in the same
institution at which they are to be paid account
for about 51 percent of all checks written. The
remaining 49 percent of the checks must be
collected by sending them to any of the following:
• A correspondent bank1
• A Federal Reserve office2
• A check clearinghouse3
• The paying depository institution directly
• Some combination of the above (the most
likely alternative).
As little as one day or as many as six or more
days may be required for a check to move from
the institution at which it is first deposited (the
endorsing institution) to the paying institution.
The actual time required depends on the number
of intermediary institutions involved, the weather, distance, whether there are holidays or weekends involved, the exposure to mechanical
breakdowns in transportation or sorting equipment, and potential human error. Upon receipt
of the check, the paying institution deducts funds
equal to the amount of the check from the
balance in the maker's account if the check is
properly drawn and endorsed, if funds are avail1. A correspondent bank is any depository institution that
provides services and holds balances for other depository
institutions.
2. Federal Reserve Banks process approximately 40 percent of all checks written.
3. A check clearinghouse is usually an association of
depository institutions, which may serve many needs of its
member institutions including the exchange or clearing of
checks.




179

able, and if no stop-payment order is made. But
if the check is not properly drawn or endorsed, if
funds are not available, or if a stop-payment
order exists, then the paying institution will send
the check back to the endorsing institution (table
1). When a paying institution returns a check, it
must do so by midnight of the day after it
receives the check.
Article 4 of the Uniform Commercial Code,
which has been adopted in all states, governs
check clearing and requires the paying institution
to return the check to the institution from which
it received the check. Thus, if several institutions
were involved sequentially in the clearing process, each institution must also handle the check
as it is returned to the depositor. Although the
processing of return items is the reverse of the
original processing for collection, this process is
much more labor intensive. The machine-readable coding at the bottom of the check allows for
collection routing through the use of computercontrolled high-speed check sorters. A check
being returned, however, must be processed
manually because each endorsement stamp on
the back of the check must be read to determine
the institution to which the check should be
returned. As a result, return routing might typically require twice as much time as collection
routing. For example, a check requiring two days
to be delivered to the paying institution might
require four additional days to be returned to the
institution of first deposit. Unfortunately, at the
time a check is first deposited, there is no way of
knowing whether it will be paid or returned
unpaid.
Slightly more than 1 percent of all checks the
Federal Reserve collects—about half a million
checks per day— are returned unpaid (table 1).
We believe that the rate of return is similar for
the checks not collected through the Federal
Reserve.
Correspondent institutions and the Federal
Reserve grant credit for checks that they collect
for depository institutions that use an availability
schedule, which reflects the normal processing
and transportation time involved. For example,
if a Federal Reserve office normally is able to
collect a check in one day, it gives one-day
availability. Most commonly, the Federal Reserve provides credit within two days. However,
reflecting the uncertainty regarding the payment

180 Federal Reserve Bulletin • March 1982

1. R e a s o n s f o r r e t u r n e d c h e c k s
Percent
Maker

Insufficient
funds

Account
closed

Endorsement
errors

Payment
stopped

Postdated

Uncollected
funds

Other

Total

Individual
Business
Other

60
12
0

9
2
0

2
2
1

2
3
0

2
0
0

1
1
0

2
1
0

78
21
1

Total

72

11

5

5

2

2

3

100

SOURCE. Federal Reserve Bank of Philadelphia, sample of 1,119 returned items, September 1981. Findings correspond to similar study by Bank
Administration Institute.

or return of a check, the credit granted is provisional, and the institution receiving the credit
must be prepared to give it up immediately
should the check be returned unpaid. Depository
institutions' depositors must also be prepared to
make restitution of any funds credited to their
account should a deposited check be returned
unpaid, even though a delay in availability may
have been imposed.
Several alternatives exist to the use of checks
that can ensure against the problems and risks
associated with checks being returned unpaid.
Many payments—especially those that recur regularly such as salary, dividends, and social security—can be received through automated
clearinghouses, and others can be handled as
wire transfers. Both of these electronic means of
payment are secure against loss or theft, and
entail immediate and (usually) irrevocable credit
to the receiver's account. I will discuss these
alternatives in more detail later.

DELAYED FUNDS

AVAILABILITY

Delayed funds availability is one way that institutions may protect themselves from the risks
involved in the event a check is returned unpaid
by the paying institution to the institution in
which it was first deposited.
Delayed funds availability is practiced by all
types of depository institutions but varies widely
among individual institutions. A study by federal
banking agencies in 1978 found that 38 percent of
the commercial banks surveyed had adopted
some formal policy on delayed funds availability,
often specifying widely different procedures and
criteria. Some institutions rarely or never delay
availability. Frequently, institutions tailor the
delay by considering their own exposure to indi


vidual risk—how well known the depositor is to
the bank, the amount of the check, the average
time required for collection and return of unpaid
checks between this institution and the paying
institution, and so forth. In other cases, institutions apparently delay funds on all checks or all
out-of-town checks.
Whether the delay is imposed selectively or
not, delayed funds availability is often characterized as "unfair" to depositors. Institutions, however, defend the practice as a means of protecting themselves from losses associated with
returned checks. As the previous description of
the check collection system shows, no mechanism exists for informing an endorsing institution
affirmatively that a check has been paid. One
way for an institution to avoid loss in the event a
check is returned unpaid is to delay the depositor's use of the funds. The longer the delay, the
less risk that the check might be returned and
loss incurred by the institution. Thus, in view of
the check collection system in this country,
selective policies and practices on delayed availability have a legitimate business basis and may
contribute to the safety and soundness of depository institutions.
It is frequently charged that delayed funds
availability practices are intended to generate
increased revenues for depository institutions at
the expense of depositors. Certain institutions
may be able to enhance their revenue through the
practice of imposing blanket, rather than selective, delay policies because blanket delay programs are relatively easy to implement and affect
all or most checks that are deposited. However,
a selective policy of delayed availability may
entail considerable expense for the institution
because training employees to identify the need
for and length of delay is costly, and selectively
imposed delays are handled as exceptions to

Statements to Congress

routine procedures. Moreover, delayed availability policies are just one of a number of terms and
conditions—including service levels, check fees,
required balances, hours of operation, location
of branches, and interest rates—that must be
considered as a whole in determining the costs
and benefits of the account relationship for the
customer. Thus, a less selective policy, such as
imposing a delay on all out-of-area checks deposited, which would seemingly be more profitable
for the institution, might be used in conjunction
with lower fees or lower minimum balance requirements than would otherwise be the case. In
effect, a less costly, less selective policy could be
part of a product preferred by customers who are
more interested in low fees and low minimum
balances than a short delay in using their funds.
The Federal Reserve has made an effort to
keep informed of delayed availability practices
and problems, both because of its role in the
monitoring of consumer complaints about banking practices and because of its responsibility for
the effectiveness of the payments system. For
example, we have a formal procedure for receiving, tabulating, and investigating consumer complaints involving banks. In the past five years the
number of complaints involving delays in the use
of funds has consistently been only about 1 or 2
percent of the total number of consumer complaints (table 2).
In addition, the Board has sponsored three
surveys of consumer problems with delays in use
of funds deposited by check in their accounts—
one in 1977 and two in 1981—all conducted by
the University of Michigan's Survey Research
Center. Of the 1,200 account holders queried in
the two most recent surveys, 90 percent had
rarely or never experienced delays over the past
few years. Less than 4 percent had experienced
frequent problems. The same question was asked
in the 1977 survey, and indications are that a
2. Complaints of funds availability received by the
Federal Reserve System, 1977-81
Year

Total
complaints

Funds
availability

Percent

3,474
3,301
4,065
4,568
3,913

45
46
75
95
75

1
1
2
2
2

1977
1978
1979
1980
1981




181

slight increase in consumer problems has occurred during the intervening period. One possible explanation for this increase may be the
higher level of interest rates recently, which may
have provided incentives for banks to be more
cautious in making funds available and for depositors to maintain lower checking and savings
account balances.
Of the 4 percent of all respondents who reported problems, the consequence of delayed funds
availability for about one-fifth was having checks
they had written on their accounts returned,
which probably led to personal distress and
possibly to the levy of a service charge as well.
By contrast, four-fifths of the consumers experiencing problems said their problem involved
inconvenient delays in purchasing goods, or in
getting cash, or some other inconvenience. More
often than not, consumers indicated that the
inconvenience had not been serious.
The cause of the delayed availability problem
mentioned most frequently by consumers was
lack of awareness of the bank's policy—either
they never were informed of the policy or they
had forgotten it. Of those depositors who experienced problems, substantially more than half
appear to have contacted their depository institution and believed that the institution was helpful.
The 1978 bank survey found that 97 percent of
the banks that had a policy of delayed funds
availability also had an officer authorized to
make exceptions to the policy.
In addition, the consumer surveys indicated
that depositors know a variety of ways to avoid
problems once they become aware of the practice and that those who have had the most
problems are most likely to have changed their
habits or practices to avoid further problems.
For example, many said they would plan ahead,
keep enough money in their account, carry more
cash, or cash their checks elsewhere and then
deposit the balance not needed right away. When
consumers are asked what they would do if they
thought they would have to wait at least four
days to use their money, the most frequent
response was that they would change depository
institutions. Consequently, depositors who are
better informed apparently can and do take steps
to avoid future problems and are better equipped
to bring competitive forces to bear when policies
are judged unreasonable.

182 Federal Reserve Bulletin • March 1982

WHAT SHOULD BE

DONE?

The Board is sympathetic to the problems that
depositors face as a result of policies of delayed
availability, especially when delays appear long
relative to normal check-collection time requirements and when problems result from consumers
not being aware of the policies. The Board
believes that two approaches warrant further
attention. First, the Federal Reserve System will
expand its efforts to investigate possible ways to
speed up the handling of returned checks. If
substantial progress can be made in this area,
depository institutions that impose delayed availability could reduce the length of the delays. In
this connection, the Board has also directed that
a study be conducted to determine whether existing Federal Reserve services can be enhanced or
new Federal Reserve services developed to
achieve prompt final settlement of certain types
of checks that seem to cause delayed availability
problems more frequently. These might include
large payments for deposit in another part of the
country—such as for the purchase of a house—
or periodic payments by parents to students
attending school away from home.
Second, the Board believes that financial institutions should, on their own initiative, better
inform their depositors of the extent and nature
of the policies and practices of delayed availability that they employ. Improved consumer awareness is needed on this subject. Our surveys show
that depositors who ask often get some accommodation in particular cases from an official of
their institution, generally avoid problems thereafter, and are prepared to change institutions if
necessary when confronted by what they consider an unreasonable policy on funds availability.
In this connection, the Federal Reserve and the
American Bankers Association have agreed to
reinstate a joint task force on delayed availability
practices to address, among other things, the
issue of disclosure by banks of their funds availability policies. The recommendations developed
through this joint effort will be made available to
other interested parties, including other supervisory agencies and other depository institution
trade associations.
The Board does not believe that adoption of a
legislative or regulatory approach to this practice



would be advisable. To attempt to define,
through legislation or regulation, an "appropriate" maximum period of delay would be difficult
or impossible, given the complexity of our nation's check collection process. Any such legislative or regulatory maximum could well become
the industry standard, thus worsening the situation for the majority of customers and reducing
the efficiency of the payments system. Moreover, under any legislative or regulatory approach, if the risk of loss could not be avoided by
selectively delaying funds availability beyond
some maximum, fees or required balances would
probably be increased by depository institutions
to fund anticipated or actual losses.
Meanwhile, the Board will continue to monitor
carefully the complaints it receives on this issue,
and it will periodically conduct further surveys
through the University of Michigan.
Finally, the Board wishes to note some alternatives to receiving payments by check that
depository institutions and their customers can
use to avoid the need for or the effects of delayed
funds availability. Recurring check payments,
such as salary, dividends, social security, and so
forth, can most efficiently be accomplished
through the automated clearinghouse (ACH).
The ACH is a form of electronic fund transfer
that does not have the delays associated with
check collection.
Less frequent, large dollar-value transactions,
such as the transfer of the proceeds from the sale
of a former residence to a depository institution
in a new location, are suitable for wire transfer, a
service designed to accomplish large payments in
a secure, rapid, and irrevocable manner.
A depositor having a large check and wishing
to use a check collection method that includes an
affirmative notice of payment or nonpayment
may use the "noncash collection" service,
which functions in the following manner. Upon
instructions from its depositor, a depository institution may send a collection letter to the
paying institution, enclosing the check and specifying that funds in payment of the check are to be
wired to the originating institution for deposit to
its depositor's account. Funds will not be credited to the depositor's account until received.
Moreover, the preparation of the letter at the
sending institution and processing at the paying

Statements to Congress

institution are manual processes, the cost is
substantially higher than the regular check collection costs, and five to ten business days may
be required for completion of the transaction.
Nonetheless, this may be a desirable alternative
to assure that the check will not be returned
because the transaction is final once the paying
institution has sent the funds. In this manner, the
depositor can invest or spend the funds when
received without concern that the check may be
returned later.
CONCLUSION

Consumers have experienced difficulties with the
funds availability policies and practices of some




183

depository institutions, and the Board and the
Reserve Banks are moving on two fronts to help
find ways of improving the situation. They are
undertaking a study of possible improvements in
check collection procedures that would achieve
faster handling of return items or faster confirmation of payment or nonpayment of checks; and
they will be working with the American Bankers
Association on ways that depository institutions
might improve customer awareness of their policies on funds availability. The Board does not
believe that delayed availability problems are
sufficiently widespread that federal legislation or
regulation would be desirable at this time. The
Board will, of course, continue to monitor consumer problems and attitudes in this area.
•

185

Announcements
FREDERICK H.
SCHULTZ:
RESIGNATION AS A MEMBER
OF THE BOARD OF GOVERNORS

Frederick H. Schultz has resigned as a member of
the Board of Governors, effective February 11,
1982. Mr. Schultz's letter of resignation follows.
February 11, 1982

estate brokers as arrangers of credit in sellerfinanced home sales.
The Board said that ideally the matter should
be resolved by action of the Congress, and that it
was excluding real estate brokers at this time to
give the Congress time to act. Depending upon
action by the Congress, the Board will review the
question early in 1983.

Dear Mr. President:
Although my term of office officially expired on the
last day of January, the law provides that I continue to
serve until my successor is sworn in. However, the
high ethical standards of the Federal Reserve require
that I not take part in Board meetings within 30 days of
the time that I am involved in activities in the private
sector. Therefore, in an abundance of caution, I am
herewith submitting my resignation as a Governor and
Vice Chairman of the Federal Reserve Board.
It has been a great honor to serve in this capacity.
This organization creates justifiable pride in its members. You can continue to be confident of the quality
of the Federal Reserve and its commitment.
Sincerely,
Frederick H. Schultz

REGULATION

Z.

AMENDMENT

The Federal Reserve Board has amended Regulation Z (Truth in Lending) with respect to the
definition, under the Truth in Lending Simplification Act, of an "arranger" of credit, effective
February 19, 1982.
The definition includes those who regularly
arrange for consumer loans by another person
who is not a creditor. The amendment specified
that this definition excludes those (such as real
estate brokers) who arrange for the financing of
the sale of a residence or real property by the
seller.
The Board's action was taken after consideration of some 3,000 letters of comment on a
proposal that would have included certain real



SUPPLEMENT

TO OTC STOCK

LIST

The Federal Reserve Board has published a
supplement to its list of over-the-counter (OTC)
stocks that are subject to its margin regulations,
effective March 1, 1982. The supplement to the
list issued October 5, 1981, makes the following
changes: 173 stocks have been included for the
first time; 17 stocks previously on the list have
been removed for substantially failing to meet
the requirements for continued listing; and 54
stocks have been removed for reasons such as
being listed on a national securities exchange or
the companies being acquired by another firm.
The supplement is available on request from
Publications Services, Board of Governors of the
Federal Reserve System, Washington, D.C.
20551.

MONEY STOCK

REVISION

On February 5, 1982, the Board published revised money stock data incorporating annual
seasonal adjustment and benchmark changes, as
well as minor compositional changes.
Seasonal adjustment factors were updated using data for 1981, and in accordance with a
recommendation of the Committee of Experts on
Seasonal Adjustment Techniques, an X - l l ARIMA method was used to compute seasonal
factors for 1982. Updated monthly seasonal factors for 1981 and 1982 and weekly factors for late
1981 and 1982 are shown in tables 1 and 2.

186 Federal Reserve Bulletin • March 1982

1. Seasonal factors for currency, traveler's checks, and deposit components of the money stock, monthly
Commercial banks
Month

1981
January
February
March
April
May
June
July..:
August
September
October
November
December
1982
January
February
March
April
May
June
July
August
September
October
November
December

Currency

Nonbank
traveler's
checks

Demand
deposits
plus
OCD 1

Demand1
deposits

.9941
.9874
.9908
.9935
.9984

.9467
.9515
.9528
.9494
.9624
1.0351

1.0179
.9736
.9782
1.0129
.9810
.9970

Savings
deposits

Small
time
deposits

Large
time
deposits

1.0182
.9742
.9792
1,0136
.9810
.9971

.9981
.9905
.9865
.9938
.9914
.9939

1.0030
1.0104
1.0109
1.0038
1.0031
1.0032

1.0191
1.0212
1.0194
1.0053
.9954
.9842

Small
time
deposits

Large
time
deposits

.9906
.9869
.9888
.9934
.9899
.9961

1.0079
1.0099
1.0102
1.0098

Savings
deposits

.9998

1.0005
1.0078
.9951
.9852
.9997
.9960

1.0070
1.0048
.9975
.9990
1.0092
1.0183

1.1111

1.1137
1.0599
1.0078
.9609
.9442

1.0044
.9930
1.0005
1.0052
1.0078
1.0284

1.0039
.9920
.9995
1.0042
1.0077
1.0292

1.0092
1.0120
1.0094
1.0128
1.0031
1.0015

.9962
.9917
.9914
.9970
.9931
.9958

.9732
.9788
.9857
.9889
1.0052
1.0214

1.0137
1.0112
1.0179
1.0127
1.0041
.9955

.9932
.9878
.9906
.9978
.9952
.9969

1.0005
1.0036
1.0068
1.0067
.9993
.9968

.9952
.9873
.9898
.9945
.9983
.9990

.9477
.9529
.9537
.9497
.9630
1.0377

1.0177
.9738
.9787
1.0126
.9812
.9970

1.0180
.9744
.9794
1.0134
.9812
.9972

.9982
.9902
.9851
.9931
.9908
.9931

1.0031
1.0108
1.0115
1.0038
1.0029
1.0030

1.0194
1.0223
1.0200
1.0063
.9951
.9847

.9906
.9868
.9882
.9931
.9895
.9956

1.0081
1.0103
1.0108
1.0101
1.0002
1.0003

1.0027
1.0100
.9964
.9851
.9993
.9946

1.0072
1.0039
.9974
.9999
1.0081
1.0192

1.1118
1.1118
1.0643
1.0121
.9595
.9451

1.0042
.9931
1.0002
1.0052
1.0079
1.0282

1.0037
.9923
.9993
1.0041
1.0078
1.0290

1.0098
1.0126
1.0098
1.0126
1.0032
1.0020

.9959
.9913
.9911
.9971
.9934
.9959

.9731
.9784
.9856
.9890
1.0043
1.0211

1.0144
1.0115
1.0183
1.0124
1.0043
.9953

.9924
.9870
.9904
.9980
.9952
.9970

.9988
1.0020
1.0056
1.0070
1.0003
.9987

1.0000

1. In constructing Ml the seasonal factors for "demand deposits plus other
checkable deposits" are used to derive the sum of demand deposits and other
checkable deposits, seasonally adjusted. The demand deposit component season-

Several benchmark revisions were made.
• Commercial bank deposits data were benchmarked to the March, June, and September 1981
call reports.
• A consolidation adjustment has been made to
remove at the Ml level the portion of thrift
institutions' holdings of vault cash that is estimated to be used for servicing their other checkable deposit liabilities; this adjustment lowers the
currency component of the money stock that
previously included all vault cash at thrift institutions. The remainder of thrift institution vault
cash has been removed at the M2 level.
• Cash items in the process of collection
(CIPC) of thrift institutions have been netted
against transaction deposits at the Ml level.
Owing to unavailability of data, CIPC of thrift
institutions previously had not been deducted
from measures of the money stock.
• Daily deposits data for savings and time
deposits at thrift institutions—reported since November 1980 as a consequence of the Monetary
Control Act of 1980—have been incorporated,
making these components for thrifts comparable
to those of commercial banks in terms of fre-




Thrift institutions

1.0001

ally adjusted is constructed using the demand deposit seasonal factors. Other
checkable deposits (OCD) seasonally adjusted, is derived as the difference
between these two series.

quency of data and definition (daily deposits data
include balances in escrow accounts and certain
primary obligations). Historical data on savings
and small time deposits at thrift institutions before November 1980 have been revised to be
consistent with the broader daily deposits report
definition.
In the revised measures, retail repurchase
agreements (RPs) at all depository institutions—
issued in denominations of less than $100,000—
appear in the small-denomination time deposit
component of M2; in the old measures, retail RPs
entered at the M3 level as a component of term
RPs. Institution-only money market mutual
funds—which do not offer accounts to individuals—are removed from the money market mutual fund component of M2 and enter the money
stock at the M3 level, along with large-denomination time deposits and large-denomination term
RPs.
A more detailed description of these revisions
and revised historical data are available on request from the Banking Section, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.

Announcements

187

2. Seasonal factors for currency and deposit components of Ml and commercial bank deposit components of
broader aggregates, weekly
Commercial banks
Currency

Demand
deposits
plus OCD 1

Demand
deposits'

7
14
21
28

1.0050
1.0060
.9970
.9890

1.0200
1.0170
1.0040
.9790

November 4
11
18
25

.9990
1.0150
1.0090
1.0070

December

2
9
16
23
30

Large
time
deposits

Savings
deposits

Small
time
deposits

1.0180
1.0150
1.0010
.9770

1.0177
1.0159
1.0128
1.0082

.9951
.9984
.9983
.9965

.9958
.9925
.9873
.9890

1.0110
1.0140
1.0140
.9890

1.0110
1.0120
1.0140
.9870

1.0050
1.0042
1.0024
1.0025

.9954
.9933
.9923
.9928

.9917
.9980
1.0032
1.0135

1.0080
1.0210
1.0170
1.0240
1.0170

1.0150
1.0250
1.0280
1.0280
1.0270

1.0170
1.0230
1.0300
1.0290
1.0310

1.0031
1.0069
1.0043
.9988
.9972

.9930
.9946
.9951
.9961
.9982

1.0159
1.0118
1.0158
1.0256
1.0333

6
13
20
27

1.0110
1.0030
.9930
.9810

1.0760
1.0370
1.0150
.9740

1.0720
1.0370
1.0180
.9730

1.0021
1.0024
.9987
.9936

.9999
1.0015
1.0033
1.0049

1.0186
1.0180
1.0163
1.0206

February

3
10
17
24

.9820
.9950
.9910
.9820

.9820
.9820
.9790
.9570

.9860
.9830
.9810
.9570

.9905
.9910
.9916
.9894

1.0073
1.0100
1.0102
1.0104

1.0225
1.0214
1.0183
1.0214

March

3
10
17
24
31

.9840
1.0000
.9940
.9880
.9820

.9740
.9850
.9840
.9710
.9750

.9740
.9840
.9880
.9710
.9780

.9857
.9846
.9841
.9856
.9908

1.0105
1.0121
1.0126
1.0109
1.0084

1.0227
1.0197
1.0192
1.0189
1.0168

April

7
14
21
28

1.0000
1.0050
.9930
.9820

1.0170
1.0260
1.0210
.9940

1.0160
1.0280
1.0230
.9930

1.0011
.9991
.9902
.9870

1.0047
1.0041
1.0040
1.0035

1.0107
1.0069
1.0015
1.0032

May

5
12
19
26

.9970
1.0060
.9980
.9910

.9930
.9840
.9820
.9640

.9990
.9840
.9820
.9630

.9892
.9914
.9921
.9909

1.0025
1.0025
1.0028
1.0032

.9924
.9946
.9960
.9980

June

2
9
16
23
30

.9960
1.0090
1.0020
.9970
.9910

.9860
1.0000
1.0090
.9920
.9890

.9860
.9990
1.0090
.9920
.9900

.9907
.9934
.9934
.9932
.9971

1.0045
1.0056
1.0043
1.0022
.9993

.9953
.9889
.9832
.9780
.9821

July

7
14
21
28

1.0190
1.0130
1.0050
.9960

1.0250
1.0150
1.0030
.9780

1.0190
1.0180
1.0010
.9780

1.0067
1.0098
1.0100
1.0089

.9984
.9972
.9958
.9943

.9758
.9703
.9716
.9738

August

4
11
18
25

1.0030
1.0150
1.0080
.9980

1.0060
.9960
.9770

1.0000

1.0010
1.0060
.9940
.9760

1.0112
1.0136
1.0129
1.0115

.9918
.9921
.9915
.9909

.9738 '
.9767
.9786
.9803

September 1
8
15
22
29

.9900
1.0130
1.0010
.9940
.9840

.9900
1.0040
1.0200
.9970
.9770

.9870

1.0190
.9960
.9770

1.0096
1.0103
1.0098
1.0069
1.0083

.9935
.9912
.9911
.9912
.9905

.9845
.9862
.9809
.9846
.9922

October

6
13
20
27

1.0050
1.0070
.9990
.9900

1.0220
1.0150
1.0060
.9810

1.0160
1.0140
1.0020
.9800

1.0165
1.0166
1.0135
1.0091

.9945
.9980
.9985
.9969

.9869
.9913
.9879
.9884

November 3
10
17
24

.9970
1.0150
1.0090
1.0070

1.0060
1.0150
1.0160
.9940

1.0120
1.0130
1.0150
.9900

1.0057
1.0041
1.0027
1.0024

.9956
.9936
.9924
.9927

.9913
.9969
1.0025
1.0121

December

1.0050
1.0210
1.0180
1.0220
1.0200

1.0050
1.0240
1.0270
1.0300
1.0200

1.0110
1.0220
1.0290
1.0310
1.0250

1.0028
1.0067
1.0049
.9998
.9975

.9928
.9946
.9951
.9960
.9980

1.0158
1.0117
1.0147
1.0236
1.0319

Week

1981
October

1982
January

1
8
15
22
29

1. In constructing Ml the seasonal factors for demand deposits plus other
checkable deposits are used to derive the sum of demand deposits and other
checkable deposits seasonally adjusted. The demand deposit component season-




1.0000

ally adjusted is constructed using the demand deposit seasonal factors. Other
checkable deposits (OCD), seasonally adjusted, is derived as the difference
between these two series.

188 Federal Reserve Bulletin • March 1982

PROPOSED

ACTIONS

The Federal Reserve Board has proposed a policy statement to provide guidance on certain
types of competitive situations in which the
Board, or a Federal Reserve Bank, would subject applications for approval of bank acquisitions, mergers, or consolidations to intensive
scrutiny. The Board requested comment by April
9, 1982.
The Federal Reserve Board has also issued for
comment a regulatory framework that could be
used to establish margin requirements on futures
contracts based on stock indexes. Comments
should be received by April 30, 1982.




SYSTEM
MEMBERSHIP:
ADMISSION OF STATE BANKS

The following banks were admitted to membership in the Federal Reserve System during the
period February 11 through March 10, 1982:
Florida
Miami
Bayshore Bank of Florida
Tampa
Great American Bank of Tampa
Oregon
Lincoln City
Pacific State Bank
Texas
Dallas
Texas Independent Bank
Virginia
Louisa
Bank of Louisa
Vienna
Commercial Bank of
Tysons Corner

189

Legal Developments
AMENDMENT

TO REGULATION

Z

The Board of Governors of the Federal Reserve System has amended its Regulation Z-Truth in Lending
(12 CFR Part 226 to change the definition of "arranger
of credit" to state that it does not include anyone who
arranges for seller financing of a dwelling. However, in
light of the possibility of Congress' addressing the
question of whether arrangers of credit should have
the responsibility for providing Truth in Lending disclosures, the Board has decided not to adopt the
amendment as proposed previously.
Effective February 19, 1982, the Board revises
§ 226.2(a)(3) of revised Regulation Z (46 FR 20848), by
adding a sentence at the end, so that it will read as
follows:

Section 226.2—Definitions and Rules of
Construction
(a) Definitions. * * *
(3) "Arranger of credit" means a person who regularly arranges for the extension of consumer credit2
by another person if:
(i) A finance charge may be imposed for that
credit, or the credit is payable by written agreement in more than four installments (not including
a downpayment); and
(ii) The person extending the credit is not a
creditor.
The term does not include a person (such as a
real estate broker) when arranging seller financing
of a dwelling or real property.

AMENDMENT

TO RULES

DELEGATION

OF

REGARDING

AUTHORITY

The Board of Governors of the Federal Reserve System has amended its "Rules Regarding Delegation of
Authority" in order to delegate to the Director of its
Division of Consumer and Community Affairs, the
authority to issue examination or inspection manuals,
2. [Footnote unchanged]




report, agreements, and examination forms, guidelines, instructions or other similar materials, in consultation with the Board's Legal Division where appropriate, for use in connection with several laws and
regulations that are part of the Board's Consumer
Affairs and Civil Rights Compliance Program.
Effective January 28, 1982, the Board amends 12
CFR 265.2 by amending paragraph (h)(1) by revising
(h)(1) introductory text, (h)(l)(i) and (h)(l)(ii) and
adding (h)(l)(v) through (h)(l)(vii), effective immediately to read as follows:

Section 265.2—Specific Functions Delegated to
Board Employees and to Federal Reserve
Banks
(h) * * *
(1) Pursuant to the provisions of section 11(a) of the
Federal Reserve Act (12 U.S.C. 248(a)), sections
108(b), 621(c), 704(b), 814(c) and 917(b) of the
Consumer Credit Protection Act (15 U.S.C. 1607(b),
1681s(c), 1691c(b), 16921(c), and 1693o(b), section
305(c) of the Home Mortgage Disclosure Act (12
U.S.C. 2804(c)), section 18(f)(3) of the Federal
Trade Commission Act (15 U.S.C. 57a(f)(3), section
808(c) of the Civil Rights Act of 1968 (42 U.S.C.
3608(c)), and section 5(c) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1844(c)), to issue
examination or inspection manuals, report, agreement, and examination forms, guidelines, instructions or other similar materials, in consultation with
the Board's Legal Division where appropriate, for
use in connection with:
(i) Sections 1 through 921 (excluding sections 201
through 500) of the Consumer Credit Protection
Act (15 U.S.C. 1601—1693r).
(ii) Sections 301 through 312 of the Home Mortgage Disclosure Act (12 U.S.C. 2801-2811).
(iii) * * *
(iv) * * *
(v) Section 1364 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4101 (a)) and Sections
105(b) and 202(b) of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4012a(b) and 4106(b)).
(vi) Section 19(j) of the Federal Reserve Act (12
U.S.C. 371b).

190 Federal Reserve Bulletin • March 1982

(vii) Sections 801-806 of the Community Reinvestment Act (12 U.S.C. 2901-2905).

BANK

HOLDING

ORDERS

ISSUED

COMPANY

AND BANK

BY THE BOARD

OF

MERGER
GOVERNORS

Orders Under Section 3 of Bank Holding
Company Act
Barnett Banks of Florida, Inc.,
Jacksonville, Florida
Order Approving Acquisition of Bank Holding
Company
Barnett Banks of Florida, Inc., Jacksonville, Florida,
a bank holding company within the meaning of the
Bank Holding Company Act, has applied for the
Board's approval under section 3 of the Act (12 U.S.C.
§ 1842) to directly acquire 100 percent of the voting
shares of First Marine Banks, Inc. ("First Marine"),
and to indirectly acquire at least 98 percent of the
voting shares of its subsidiary bank, First Marine Bank
and Trust of the Palm Beaches ("Bank"), both of
Riviera Beach, Florida, and subsequently to merge
with First Marine.
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired,
and the Board has considered the applications and all
comments received in light of the factors set forth in
section 3(c) of the act (12 U.S.C. § 1842(c)).
Applicant, the 2nd largest banking organization in
Florida, controls 24 subsidiary banks with aggregate
deposits of about $3.7 billion, representing 9.5 percent
of the total deposits in commercial banks in the state. 1
Acquisition of First Marine, the 17th largest banking
organization in Florida, controlling one bank with
deposits of $376.2 million, would increase Applicant's
share of commercial bank deposits in Florida by 1.0
percent but would not alter its statewide ranking.
The banking subsidiaries of Applicant and First
Marine, with the exception of the banking subsidiaries
in the Eastern Palm Beach banking market, 2 do not
compete directly with each other in any banking

1. All deposit data are as of June 30, 1980.
2. The Eastern Palm Beach banking market includes the developed
coastal area of Palm Beach County between Broward and Martin
Counties, but excludes the Belle Glade-Pahokee area in the western
part of Palm Beach County, Florida.




market. Bank is the largest of 24 banking organizations
competing in the Eastern Palm Beach banking market,
controlling 15.6 percent of the deposits in the market.
Applicant is the 4th largest banking organization in the
relevant market, controlling $179.1 million in deposits,
representing 7.4 percent of the total deposits in commercial banks in the market. Acquisition of First
Marine by Applicant would significantly increase Applicant's share of market deposits, to 23.0 percent,
causing Applicant to become the largest banking organization in the market.
As a means of reducing the anticompetitive effects
of its proposed acquisition upon existing competition
in the Eastern Palm Beach market, Applicant has
committed to divest 9 of Bank's 17 offices located in
the banking markets as soon as possible within nine
months of the Board's approval of the application. To
document its commmitment, Applicant has submitted
a detailed outline of the manner in which it intends to
acquire First Marine and subsequently divest 9 of its
offices (40 percent of First Marine's assets). 3 Upon
completion of the proposed divestiture, Applicant's
market share would drop to 17.0 percent of the deposits in the banking market. The resulting four-firm
concentration ratio would be 46 percent and the market would remain relatively unconcentrated with 23
banking organizations represented. In addition, the
competitive effects of consummation of this proposal
would be further mitigated by the substantial presence
of thrift institutions within the relevant banking market.
The Board wishes to emphasize that a divestiture,
such as the one proposed by Applicant, should be
completed prior to or concurrent with consummation
of the proposal so as to avoid the existence of significant anticompetitive effects for even a short period of
time. The Board expects that future bank holding
company applicants will make every effort to arrange
their proposals to comply with this policy. However,
the Board recognizes that special circumstances exist
in this case that justify an exception to this policy. In
particular, the Board notes that Applicant has submitted a detailed outline of its divestiture plan and has
signed an agreement with a potential purchaser of the
banking offices to be divested. In addition, and of
greater importance, is that the facts of record indicate
that, in this case, Board approval is a prerequisite to
further regulatory approvals. Thus, additional time is
necessary to accomplish the divestiture and additional
time is required to obtain these approvals. Therefore,
3. On November 3, 1981, Applicant and Pan American Banks Inc.,
Miami, Florida ("Pan American"), signed a stock purchase and sale
agreement concerning Pan American's proposed purchase of the 9
offices of Bank. Pan American is the 14th largest banking organization
in the relevant market and controls 2.0 percent of deposits.

Legal Developments

in light of these considerations, as well as the fact that
Applicant has committed to divest the nine banking
offices as soon as possible within nine months of the
Board's approval, the Board concludes that the application should be approved on the condition that Applicant divest the nine branches of Bank within nine
months of the Board's approval of the acquisition of
First Marine. Based upon this condition, the Board's
judgment is that consummation of the acquisition and
divestiture plan would not have any significantly adverse effects upon existing or potential competition, or
on the concentration of resources in any relevant
market.
The financial and managerial resources and future
prospects of Applicant, First Marine, and their subsidiary banks are regarded as generally satisfactory and
their future prospects appear favorable. Accordingly,
banking factors are consistent with, but lend no weight
toward, approval of the proposal.
Applicant intends to make the following services
available to-Bank's customers: a centralized securities
portfolio management that permits Applicant's banking subsidiaries to maintain well-balanced bond portfolios suitable to their individual needs; the fiduciary
management and portfolio expertise of Barnett Bank
Trust Company, N.A.; access by Bank's existing
customers to Applicant's statewide system of automated teller machines; Applicant's "umbrella" advertising program and its expertise in the marketing of
banking products for business and customers; Bank's
access to Applicant's experienced banking officers;
the substantial efficiencies resulting from the standarization of forms and procedures relating to compliance
with the federal and state laws and regulations governing banking; regular a u d i t i n g by Applicant's staflf of
internal auditors; Applicant's loan review team; availability of the expertise of Applicant's international
banking department and its corporate cash management services designed to assist businesses in making
the most advantageous use of their liquid assets. While
it appears that these banking services are already
available in the market through Applicant's subsidiaries, making these services more widely available
throughout the market would lend slight weight toward
approval of this application and outweigh any anticompetitive effects associated with this proposal.
Accordingly, on the basis of the record, the application is approved subject to the condition that the
proposed divestiture plan be completed as soon as
possible within nine months of the Board's approval of
the proposal. The transaction shall not be made before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective data of this Order, unless such period is
extended for good cause by the Board, or by the



191

Federal Reserve Bank of Atlanta, under delegated
authority.
By order of the Board of Governors, effective
February 17, 1982.
Voting for this action: Chairman Volcker and Governors
Wallich, Partee, Teeters, and Rice. Absent and not voting:
Governor Gramley

[SEAL]

(Signed) J A M E S M C A F E E ,
Associate Secretary of the Board.

Concurring Statement of Governor Teeters
The Board's action approving this application based
upon Applicant's divestiture commitment implicitly
permits an anticompetitive situation to persist for at
least nine months following the Board's approval of
the proposal. This result concerns me, and in order to
avoid this consequence, I believe that such divestitures should be timed to occur prior to or concurrent
with consummation of an applicant's proposal.
In this instance, I concur in the judgment of the
Board that this application be conditionally approved.
However, I believe this action represents an exception
to the policy stated by the Board today, prohibiting
horizontal acquisitions that result, even for a short
period, in significant anticompetitive effects in a banking market.
February 17, 1982
Statement by the Board of Governors of the Federal
Reserve System Regarding the Application of
Mercantile Texas Corporation
By Order dated December 21, 1981, the Board approved the application of Mercantile Texas Corporation, Dallas, Texas ("Mercantile"), a bank holding
company within the meaning of the Bank Holding
Company Act to acquire by merger under section
3(a)(5) of the act (12 U.S.C. § 1842(a)(5)), PanNational
Group Inc., El Paso, Texas ("PanNational"), 1 a registered bank holding company.
Mercantile, the fifth largest banking organization in
Texas, controls nine banks with aggregate deposits of
about $3.8 billion, representing 4.2 percent of total
commercial bank deposits in the state. 2 PanNational is
1. PanNational has two nonbanking subsidiaries engaged in activities permissible under sections 225.4(a)(6) and (8) of the Board's
Regulation Y. Because Mercantile plans to convert these subsidiaries
into an operating subsidiary of a national bank and a bank service
corporation, respectively, applications pursuant to section 4(c)(8) of
the act are not necessary in this case.
2. All banking data are as of December 31, 1980, and reflect bank
holding company formations and acquisitions approved as of November 30, 1981.

192 Federal Reserve Bulletin • March 1982

the fourteenth largest banking organization in Texas,
and controls six banks with aggregate deposits of
about $711.7 million, representing 0.8 percent of commercial bank deposits in the state.
PanNational is the second largest banking organization in the El Paso banking market, 3 and controls five
banks in that market with deposits representing 29.8
percent of market commercial bank deposits. PanNational also controls the second largest banking organization in the Waco banking market, 4 through its control of deposits representing 26.7 percent of the
deposits in the market. None of Mercantile's subsidiary banks has an office in either of these banking
markets. Both the El Paso and Waco banking markets
are concentrated, with the four largest banking organizations in each market controlling, respectively, 82.7
and 70.8 percent of total market commercial bank
deposits.
The Board originally denied Mercantile's application by Order dated April 15, 1980,5 on the ground that
consummation of Mercantile's proposal would have
substantially adverse effects on probable future competition in the relevant banking markets that were not
clearly outweighed by considerations relating to the
convenience and needs of the communities to be
served. The Board also expressed its concern over the
possibility that continued approval of acquisition or
merger proposals involving large statewide holding
companies and relatively sizable banking organizations might perpetuate the size disparity between
statewide and regional banking organizations, and
result in an increase in concentration ratios.
Mercantile petitioned the United States Circuit
Court of Appeals for the Fifth Circuit for review of the
Board's Order. On February 25, 1981, the Court
vacated 6 the Board's Order and on July 10, 1981,
formally remanded Mercantile's petition to the Board
for reconsideration and additional findings of fact with
regard to the applicability of probable future competition analysis to the circumstances involved. Specifically, the Court directed the Board to address questions of fact related to the number of other potential
entrants into the El Paso and Waco markets, the
likelihood that Mercantile would enter either market
independently if this and comparable applications
were denied, and the deconcentrating or other procompetitive effects associated with such independent
entry. The Court's analysis requires the Board to

3. The El Paso banking market is approximated by the El Paso
SMSA, which is represented by El Paso County, Texas.
4. The Waco banking market is approximated by the Waco SMSA,
which is represented by McClennan County, Texas.
5. Mercantile

Texas

Corporation,

6 6 FEDERAL RESERVE BULLETIN

423 (1980).
6. Mercantile Texas Corp. v. Board of Governors, 638 F.2d 1255
(5th Cir. 1981).




make findings of fact with respect to each of four
issues7 if the Board is to deny a particular application
on the basis of the probable future competition doctrine.
The Board has made a thorough investigation of the
Mercantile application. On the basis of the record a
majority of the Board has concluded that there is
insufficient ground for making the factual findings that
would justify denial under the evidentiary standards
established in the Court's Mercantile decision. Therefore, the majority cannot conclude that there would be
a substantially adverse competitive effect were Mercantile to enter the El Paso or Waco markets by the
means proposed in its application. However, the
Board wishes to note that in arriving at its final
determination in this case it reserves judgment as to
the appropriateness of applying the Court's analysis in
all circumstances.
The financial and managerial resources and future
prospects of Mercantile and PanNational and their
respective subsidiaries are considered satisfactory and
consistent with approval. While some new or expanded services may result from approval of this acquisition, including the offering of automated teller machine
services to PanNational's customers, there is no evidence in the record indicating that the banking needs
of the communities to be served are not being met.
Considerations relating to the convenience and needs
of the communities to be served are consistent with
approval.
On the basis of the above, the Board concludes that
the facts of record pertaining to this proposal do not
provide a sufficient basis for making findings such as
those listed by the Circuit Court of Appeals for the
Fifth Circuit.8 On reconsideration of all the facts of
record, the Board's judgment is that approval of this
application would not be contrary to the public interest
and that the application should be approved.
Board of Governors of the Federal Reserve System,
February 1, 1982.

[SEAL]

(Signed) W I L L I A M W . W I L E S ,
Secretary of the Board.

7. In addition to the three areas of inquiry described above, the
Court also required the Board to consider the degree of concentration
in the relevant banking markets if the Board is to deny a proposal on
the basis of the probable future competition doctrine. The Court did
not require the Board to make a finding on this issue on remand in this
case because the opinion indicates the Board has made an adequate
finding with respect to the degree of concentration in El Paso and
Waco.
8. The Court held that the Board may not deny a proposed merger of
bank holding companies without finding a violation of "the antitrust
standards explicitly incorporated into" the act. 638 F.2d at 1263.
However, the Board continues to be of the view that the last sentence
of section 3(c) of the act, which requires that "[i]n every case the
Board shall take into consideration . . . the convenience and needs of
the community to be served," authorizes the Board to consider all
competitive aspects of an acquisition or merger proposal.

Legal Developments

Dissenting Statement of Governor Teeters
The majority of the Board has determined that the
facts in this case, under the standards enunciated by
the United States Circuit Court of Appeals for the
Fifth Circuit, are insufficient to support a denial of the
application. If the facts in this case are insufficient to
support denial, then the possibility of developing a
sufficient case for denial of future applicants is severely limited. The standards set by the Court require
evidence that is so subjective that the Board will have
great difficulty in enforcing them.
Probable future competition analysis has been burdened with standards that are unrealistic and not
susceptible to objective determination. Four standards
are established:
(1) The target market is concentrated and noncompetitive;
(2) There are a limited number of potential entrants
into the market;
(3) There is a reasonable probability that the applicant would enter the market on a de novo or
foothold basis if the proposed merger or acquisition
is denied; and
(4) Such de novo or foothold entry would result in
deconcentration of the market or in other significant
procompetitive effects.
Whether the first standard is met can be determined
objectively with relative ease. But the other three
present difficulties. In the case of the second, for
example, the number of potential entrants into a
particular market depends most prominently on the
intent of those entrants. Adequately and reliably measuring the intent of a business organization is extremely difficult. Moreover, changes in policy or goals can
alter such "intent" in a very short period.
In the case of the third standard, applicants can
readily argue that they would never enter a market on
an independent basis, whether or not they intend to do
so; and they can ensure that their records give no
indication to the contrary. Thus attempts by the Board
to meet this standard could often result in a mere
contest of credibility between the Board and the
applicant.
Finally, in applying the Court's fourth standard,
regarding market deconcentration or other procompetitive effects, I believe insufficient account has been
taken of the significant differences in competitive
effects in a banking market between a large outside
holding company opening a small branch and that
same company acquiring a large bank, or the largest
bank, in the market.
I do not believe that the Board has given sufficient
attention to ways of administering these standards that
would make their application more realistic and less



193

cumbersome. It is evident to me that the facts of
record in this case, when viewed realistically, support
a finding that the acquisition will substantially lessen
competition on the basis of the probable future competition doctrine, and warrant denial of this application.
Indeed, as mentioned above, if the majority cannot
find material in the evidence of record for this application adequate to make the findings required by the
Court, I doubt that such material could be found for
many future applications.
Furthermore, I believe that the precedential impact
of this action may serve to greatly reduce the role of
probable future competition analysis as a tool in
monitoring the development of banking markets. Such
analysis can be an important tool in shaping the
Board's regulatory policy. For many years marketextension acquisitions and mergers have been the
predominant force in consolidating the banking industry. Probable future competition analysis is the primary regulatory tool that is suitable for dealing with
this phenomenon. The majority's interpretation of the
standards expressed in the Court's opinion blunts this
tool.
I recognize that the banking industry in the United
States is undergoing significant change. These
changes, however, do not render competitive analysis
meaningless in terms of distinct banking markets. A
bank charter continues to convey a degree of monopoly power with respect to particular banking product
markets. Moreover, state boundaries cannot be ignored as long as the McFadden Act and the Douglas
Amendment to the Bank Holding Company Act continue to restrict interstate competition. I believe that
many local banking markets deserve the protection
afforded them by the competitive standards enunciated in the Bank Holding Company Act. In my opinion,
with respect to market-extension mergers and acquisitions, the majority demonstrates insufficient concern
for these standards.
February 1, 1982
Dissenting Statement of Governor Rice
I share some of the concerns expressed in the Dissenting Statement of Governor Teeters with respect to the
application of Mercantile Texas Corporation, although
I am not prepared at this time to conclude with
Governor Teeters, that the evidence required by the
Court's standards would always be so subjective that
the Board will have great difficulty in enforcing those
standards. Indeed, I believe the evidence of record in
this case is adequate to support a denial of this
application, even taking into account the Court's criteria. In my view, the Court has deliberately left a
considerable margin of discretion for the application of

194 Federal Reserve Bulletin • March 1982

the Board's expertise and judgment. In light of the
substantial degree of latitude afforded by the Court's
opinion, I believe a denial of this application would be
supportable under the Court's standards.
I consider it necessary, in view of my position on
this case, to indicate the reasons underlying my participation in the majority Statement regarding the application of Republic of Texas Corporation to acquire
The Citizens National Bank of Waco, which is also
being issued today. In my opinion, there are significant
distinctions between the factual situations surrounding
the two applications. The Waco banking market is less
concentrated than the El Paso banking market. The
most recent available statistics indicate that the fourfirm concentration ratio in El Paso is 82.7 percent
while the corresponding figure for Waco is 70.8 percent. The number of additional potential entrants into
the Waco market is also likely to be somewhat greater
than that for the El Paso market, in view of the
relatively attractive geographic location of the Waco
market and the number of major banking organizations
already represented in El Paso. Thus, although the
facts of record warrant denial of Mercantile Texas
Corporation's application, I believe such a conclusion
is less warranted with respect to Republic of Texas
Corporation's application. I accordingly dissent from
the majority view in the one case and join it in the
other.
February 1, 1982

Provident National Corporation,
Philadelphia, Pennsylvania
Order Approving Acquisition of Bank
Provident National Corporation, Philadelphia, Pennsylvania, a bank holding company within the meaning
of the Bank Holding Company Act, has applied for
approval under section 3(a)(3) of the Act (12 U.S.C.
§ 1842(a)(3)) to acquire Provident of Delaware Bank,
Wilmington, Delaware, a proposed new bank.
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired,
and the Secretary of the Board has considered the
application and all comments received in light of the
factors set forth in section 3(c) of the act (12 U.S.C.
§ 1842(c)).
Applicant, controlling one banking subsidiary with
aggregate deposits of approximately $2.14 billion, has
applied to acquire Bank, which will be located in
Delaware.1 Section 3(d) of the Bank Holding Company
1. Deposit data are as of September 30, 1981.




Act (12 U.S.C. § 1842(d)) prohibits the Board from
approving any application by a bank holding company
to acquire any bank located outside the state in which
the operations of the bank holding company's banking
subsidiaries are principally conducted unless such
acquisition is "specifically authorized by the statute
laws of the state in which such bank is located, by
language to that effect and not merely by implication."
On February 18, 1981, Delaware amended its banking
laws to permit an out-of-state bank holding company
to acquire a single de novo bank that, among other
things, will be "operated in a manner and at a location
that is not likely to attract customers from the general
public in [Delaware] to the substantial detriment of
existing banking institutions located in this state." 2
The State Bank Commissioner of Delaware, after a
hearing on the matter, approved the application of
Applicant to acquire Bank and found that the acquisition meets the statutory requirements for approval
under Delaware law. In reviewing the application, the
Secretary of the Board has determined that the proposed acquisition conforms to Delaware law and has
determined that, as provided in section 3(d) of the act,
the statute laws of Delaware specifically authorize the
acquisition of a bank chartered in Delaware by an outof-state bank holding company. In connection with the
application, the Secretary of the Board has taken into
consideration the competitive effects of the proposed
transaction, the financial and managerial resources
and future prospects of the company and the banks
concerned, and the convenience and needs of the
community to be served. After consideration of the
record of this application in light of the factors contained in the act, the Secretary has determined that
consummation of the transaction would be in the
public interest. On the basis of these considerations,
the application is approved.
The transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective date of this Order, and Provident of Delaware
Bank, Wilmington, Delaware, shall be opened for
business not later than six months after the effective
date of this Order, unless such periods are extended
for good cause by the Board or by the Federal Reserve
Bank of Philadelphia acting pursuant to delegated
authority.
By order of the Secretary of the Board acting
pursuant to delegated authority for the Board of Governors, effective February 8, 1982.

[SEAL]

(Signed) J A M E S M C A F E E ,
Associate Secretary of the Board.

2. 5 Del. Code § 801, et. seq. (1974).

Legal Developments

Statement by the Board of Governors of the Federal
Reserve System Regarding the Application of
Republic of Texas Corporation
By Order dated December 21, 1981, the Board approved the application of Republic of Texas Corporation, Dallas, Texas ("Republic"), a bank holding
company within the meaning of the Bank Holding
Company Act, to acquire The Citizens National Bank
of Waco, Waco, Texas ("Bank"), under section
3(a)(3) of the act.
Republic, the fourth largest banking organization in
Texas, controls 31 banks with aggregate deposits of
approximately $6.8 billion, representing 7.6 percent of
total commercial bank deposits in the state. 1 Bank is
the thirtieth largest banking organization in Texas,
with deposits of approximately $238.6 million, representing 0.27 percent of commercial bank deposits in
the state.
Bank is the largest bank in the Waco banking
market;2 its deposits represent 29.4 percent of commercial bank deposits in the market. None of Republic's subsidiary banks has an office in the Waco
banking market. The Waco banking market is concentrated; its four largest banking organizations control
70.8 percent of total market commercial bank
deposits.
The Board originally denied Republic's application
by Order dated August 20, 1980.3 The Board's Order
indicated that consummation of Republic's proposal
might substantially lessen probable future competition
in the relevant banking market, and that such an
anticompetitive effect 4 was not clearly outweighed by
considerations relating to the convenience and needs
of the community to be served. The Board also
expressed its concern over the possibility that continued approval of acquisition or merger proposals involving large statewide holding companies and relatively sizable banking organizations might perpetuate
the size disparity between statewide and regional
banking organizations, and result in an increase in
concentration ratios.5
Republic petitioned the United States Circuit Court
of Appeals for the Fifth Circuit (the "Court") for
1. All banking data are as of December 31, 1980, and reflect bank
holding company formations and acquisitions approved through
April 30, 1980.
2. The Waco banking market is approximated by the Waco SMSA,
which is represented by McClennan County, Texas.
3. Republic

of Texas

Corporation,

66 FEDERAL RESERVE BULLE-

TIN 787 (1980).
4. The Board's August, 1980 Order stated that even if the anticompetitive effects of Republic's proposal were viewed as less than
substantial, the Board considered such effects to be so seriously
adverse as to warrant denial.
5. In addition, the Board stated that consummation of Republic's
proposal would eliminate the procompetitive effect Republic exerts as
a result of its position as a perceived potential entrant into the market.




195

review of the Board's Order. On June 24, 1981, the
Court vacated 6 the Board's Order and on July 16,
1981, formally remanded Republic's petition to the
Board for reconsideration and additional findings of
fact with regard to the applicability of probable future
competition analysis to the circumstances involved.
The Court directed the Board to address the same
questions of fact that the Court had directed the Board
to address regarding the application of Mercantile
Texas Corporation, Dallas, Texas ("Mercantile"), to
acquire by merger PanNational Corporation, El Paso,
Texas. 7 These questions, as they apply to Republic's
proposal, relate to the number of other potential
entrants into the Waco banking market, the likelihood
that Republic would enter the market independently if
this and comparable applications were denied, and the
deconcentrating or other procompetitive effects associated with such independent entry. The Court's analysis requires the Board to make findings of fact with
respect to each of four issues8 if the Board is to deny a
particular application on the basis of the probable
future competition doctrine.
The Board has made a thorough investigation of
Republic's application. On the basis of the record, a
majority of the Board has concluded that there is
insufficient ground for making the factual findings that
would justify denial under the evidentiary standards
established in the Court's Republic decision. 9 Therefore, the majority cannot conclude that there would be
a substantially adverse competitive effect were Republic to enter the Waco market by the means proposed in
its application. However, the Board wishes to note
that in arriving at its final determination in this case it
reserves judgment as to the appropriateness of applying the Court's analysis in all circumstances.
The financial and managerial resources and future
prospects of Republic, Bank and Republic's subsidiaries are considered satisfactory and consistent with
approval. Although some new or expanded services
may result from approval of this acquisition, there is
no evidence in the record indicating that the banking
needs of the community to be served are not being
met. Considerations relating to the convenience and
needs of the community to be served are consistent
with approval.
6. Republic of Texas Corp. v. Board of Governors, 649 F.2d 1026
(5th Cir. 1981).
7. See Mercantile Texas Corp. v. Board of Governors, 638 F.2d
1255 (5th Cir. 1981).
8. In addition to the three areas of inquiry described above, the
Court also required consideration of the degree of concentration in the
relevant banking market. The Court did not require the Board to make
a finding on this issue on remand since the Court states in its opinion
that Republic had not rebutted the Board's prima facie showing that
the Waco banking market was behaving oligopolistically.
9. Although the Board has analyzed the present application chiefly
with regard to the probable future competition doctrine, the Board
continues to take into consideration procompetitive effects exerted by
banks outside a particular market as perceived potential entrants.

196 Federal Reserve Bulletin • March 1982

On the basis of the above, the Board concludes that
the facts of record pertaining to this proposal do not
provide a sufficient basis for making findings such as
those listed by the Circuit Court of Appeals for the
Fifth Circuit.10 On reconsideration of all the facts of
record, it is the Board's judgment that approval of this
application would not be contrary to the public interest
and that the application should be approved.
Board of Governors of the Federal Reserve System,
February 1, 1982.

[SEAL]

(Signed) W I L L I A M W . W I L E S ,
Secretary of the Board.

area of safeguarding banking competition. I believe
that the majority's action regarding the application by
Republic of Texas Corporation could have the same
type of destructive precedential impact. Accordingly,
I dissent from the majority's Statement with respect to
this application as well.
February 1, 1982

Tulsa Commerce Bancshares, Inc.,
Tulsa, Oklahoma
Order Approving the Formation of a Bank Holding
Company

Dissenting Statement of Governor Teeters
I dissented from the Statement of the majority of the
Board issued on today's date with respect to the
application of Mercantile Texas Corporation because I
believe that the facts of record in that case, when
realistically viewed, are adequate to support a denial
of that application on the basis of the probable future
competition doctrine. I stated my opinion that if the
facts in that case were insufficient to support denial,
the possibility of developing a sufficient case for denial
of future applicants would be severely limited. The
standards set by the United States Circuit Court of
Appeals for the Fifth Circuit require evidence that is
so subjective that the Board will have great difficulty
in enforcing them.
In my Dissenting Statement, I described in some
detail the reasons for my dissatisfaction with these
standards. I find these standards no less unrealistic
and subjective when applied to the facts of this case,
and I do not believe that the majority has given
sufficient attention to ways of administering these
standards that would make their application more
effective and less cumbersome. I believe that the facts
of record in this case, viewed realistically, also warrant denial of the application of Republic of Texas
Corporation.
I also expressed my concern that the majority's
action regarding the application of Mercantile Texas
Corporation would greatly reduce the role of the
probable future competition doctrine as a tool in
fulfilling the Board's statutory responsibilities in the
10. The Court held that the Board may not deny a section 3(a)
application to acquire a bank unless the Board finds that the acquisition would constitute a violation o f ' 'the antitrust standards explicitly
incorporated into" the act. 649 F.2d at 1043. However, the Board
continues to be of the view that the last sentence of section 3(c) of the
act, which requires that "fi]n every case the Board shall take into
consideration . . . the convenience and needs of the community to be
served," authorizes the Board to consider all competitive aspects of
an acquisition or merger proposal.




Tulsa Commerce Bancshares, Inc., Tulsa, Oklahoma,
has applied for the Board's approval under section
3(a)(1) of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1)) of formation of a bank holding company
by acquiring 99.4 percent or more of the voting shares
of Bank of Commerce and Trust Company, Tulsa,
Oklahoma ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 2(b) of the act.
The time for filing comments and views has expired,
and the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the act (12 U.S.C. § 1842(c)).
Applicant is a nonoperating company with no subsidiaries organized for the purpose of becoming a bank
holding company by acquiring Bank. Upon the acquisition of Bank (which holds $172.1 million in deposits),
Applicant would control the twelfth largest of 497
commercial banking organizations in Oklahoma and
approximately 0.9 percent of the total deposits in
commercial banks in the state. 1
Bank is the sixth largest of 48 commercial banks
located in the relevant banking market, 2 and holds 4.19
percent of total deposits in commercial banks in the
market. Principals of Applicant and Bank have ownership interests in Gilcrease Hills Bank ("Gilcrease"),
Tulsa, Oklahoma, which is located in Bank's market.
Gilcrease is the smallest bank in the market and none
of Applicant's or Bank's principals is in a policy
making position with Gilcrease. In light of these facts
and the existence of numerous intervening banking
alternatives between Gilcrease and Bank, the Board
has concluded that the relationship between Applicant, Bank, and Gilcrease has no significant effect on
competition. Other principals of Applicant and Bank
1. All Banking data are as of March 31, 1981.
2. The relevant banking market is the Tulsa, Oklahoma RMA.

Legal Developments

who are associated with various banking organizations
in the market own less than 1.0 percent of the stock
and hold no management positions in these organizations. Two of Bank's directors hold management positions in other banking organizations in Bank's market.
These directors will hold no policy-making positions
with Applicant and will own less than 1.0 percent of
Applicant's voting stock. In light of these facts, the
Board concludes that these affiliations have no significant effect on competition in the relevant market. It
appears from these facts, and other facts of record,
that consummation of the proposal would not result in
any adverse effects upon competition or increase the
concentration of banking resources in any relevant
area. Accordingly, the Board concludes that competitive considerations are consistent with approval of this
application.
The financial and managerial resources of Applicant
and Bank are satisfactory and the future prospects for
each appear favorable. In its consideration of this
application, the Board applied the less restrictive debt
service standards for one-bank holding company formations announced by the Board in March of 1980.3
Although the Board stated at that time that these
standards would be applicable to one-bank holding
companies whose subsidiary bank would have total
assets of approximately $150 million or less, the Board
intended to permit larger one-bank holding companies
to come under the policy if the Board found that
circumstances warranted such an exception. 4 After
reviewing all the facts of record, the Board finds such
circumstances exist in this case.
Approval of this application would solidify local
ownership of Bank and perpetuate Bank's current
management, both of which the Board finds to be
substantial public benefits. Principals of Applicant
acquired control of Bank in 1979 at a time when
Bank's earnings were low and it was experiencing
large loan losses. Since that time, Applicant's principals have effected significant improvements in Bank's
overall financial condition, including improvements in
Bank's asset quality and capital position. Moreover,
Applicant's principals appear willing to provide continuing support to Bank's capital position. Thus, under
the direction of Applicant's principals, Bank's condition has become satisfactory and its future prospects
are favorable. Accordingly the Board finds that under
these circumstances, and in light of the general public
interest in facilitating local ownership, it is appropriate
to apply the standards that would be applicable for
one-bank holding company formations involving

3. 4 5 Federal

Register

24,233 (1980).

4. See e.g., The Union of Arkansas Corporation, 66 FEDERAL
RESERVE BULLETIN 6 5 9 ( 1 9 8 0 ) .




197

banks with assets of $150 million or less. In applying
such a standard, the Board's opinion is that banking
factors are consistent with approval of this application.
While no immediate changes in Bank's services are
anticipated as a result of approval of this application,
considerations relating to the convenience and needs
of the community to be served are consistent with
approval. Accordingly, the Board has determined that
consummation of the transaction would be in the
public interest and that the application should be
approved.
On the basis of all the facts of record, the application
is approved for the reasons summarized above. The
transaction shall not be made before the thirtieth
calendar day following the effective date of this Order,
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Kansas City, pursuant to delegated authority.
By Order of the Board of Governors, effective
February 5, 1982.
Voting for this action: Chairman Volcker and Governors
Schultz, Partee, Rice, and Gramley. Absent and not voting:
Governors Wallich and Teeters.

[SEAL]

(Signed) J A M E S M C A F E E ,
Associate Secretary of the Board.

Yip Financial Investment, Ltd.,
Hong Kong
Yip Bancorporation, N.V.,
Netherlands Antilles
Yip Bancorp,
San Francisco, California
Chung Hwa Bancorp,
San Francisco, California
Order Approving Formation of Bank Holding
Companies
Yip Financial Investment, Ltd., Hong Kong ("YFI,
Ltd."); Yip Bancorporation, N.V., Netherlands Antilles ("YB-N.V."); Yip Bancorp, San Francisco, California ("YB-U.S."); and Chung Hwa Bancorp, San
Francisco, California ("CHB"), have applied for the
Board's approval under section 3(a)(1) of the Bank
Holding Company Act (12 U.S.C. § 1842(a)(1)) to
become bank holding companies through the acquisition by CHB of 100 percent of the voting shares of

198 Federal Reserve Bulletin • March 1982

Commercial Bank of San Francisco, San Francisco,
California ("Bank").
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired
and the Board has considered the applications and all
comments received in light of the factors set forth in
section 3(c) of the act.
Applicants are nonoperating corporations organized
for the purpose of becoming bank holding companies
by acquiring Bank. YFI, Ltd., a corporation organized
under the laws of Hong Kong, owns all of the outstanding shares of YB-N.V. which is organized under
the laws of the Netherlands Antilles. YB-N.V. owns
100 percent of the shares of YB-U.S. which in turn
owns all of the shares of CHB. Both CHB and YBU.S. are organized under the laws of California. Upon
acquisition of Bank (deposits of $36.3 million as of
September 30, 1981), Applicants will control the 108th
largest commercial bank in California with 0.04 percent of the total deposits in commercial banks in that
state.1
Bank is the 35th largest of 62 commercial banks in
the relevant market and holds 0.1 percent of total
deposits in commercial banks in the market. 2 Inasmuch as Applicants and their principal control no
other banks and conduct no nonbanking business in
the United States, consummation of the proposed
transaction would have no adverse effects on existing
or potential competition in any relevant market, and
would not increase the concentration of resources in
any relevant area. Therefore, competitive considerations are consistent with approval of the applications.
The financial and managerial resources of Applicants are considered satisfactory and their future
prospects favorable. The financial and managerial
resources of Bank will be enhanced by consummation
of the transaction and Bank's future prospects appear
favorable, especially in light of the additional capital
Applicants have committed to furnish Bank. Thus,
considerations relating to banking factors lend weight
toward approval of the applications. Applicants also
propose to improve the international financing services offered by Bank. Therefore, considerations relating to the convenience and needs of the community to
be served are consistent with approval of the applications. Accordingly, the Board has determined that
consummation of the transaction would be in the
public interest and that the applications should be
approved.
1. Statewide banking data are as of December 31, 1980.
2. Market data are as of June 30, 1980. The relevant market is
approximated by the San Francisco-Oakland-San Jose Ranally Metropolitan Area ("RMA").




On the basis of the record, the applications are
approved for the reasons summarized above. The
transaction shall not be made before the thirtieth day
following the effective date of this Order, or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco, pursuant to delegated authority.
By order of the Board of Governors, effective
February 5, 1982.
Voting for this action: Chairman Volcker and Governors
Schultz, Partee, Rice, and Gramley. Absent and not voting:
Governors Wallich and Teeters.

[SEAL]

(Signed) J A M E S M C A F E E ,
Associate Secretary of the Board.

Orders Under Section 4 of Bank Holding
Company Act
Orbanco Financial Services Corporation,
Portland, Oregon
Order Denying Investment Note Activity
Orbanco Financial Services Corporation, Portland,
Oregon, a bank holding company within the meaning
of the Bank Holding Company Act, has applied for the
Board's approval under section 4(c)(8) of the act, 12
U.S.C. § 1843(c)(8), to engage in offering an investment note ("Note") with transactional characteristics.
The proposed activity is not included in the list of
permissible activities for bank holding companies contained in the Board's Regulation Y, 12 C.F.R.
§ 225.4(a).
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been duly published. (46 Federal Register 52426). The
time for filing comments and views has expired and the
Board has considered the application and all comments received in light of the public interest factors set
forth in section 4(c)(8) of the act.
Applicant, the fourth largest commercial banking
organization in Oregon with consolidated assets of
$1.4 billion,1 controls three banks with aggregate deposits of $726.7 million, representing about 6.1 percent
of the total deposits in commercial banks in that state.
Applicant also controls several nonbanking subsidiaries engaged in commercial finance and mortgage lending activities.

1. Banking data are as of June 30, 1980.

Legal Developments

The Note that Applicant proposes to offer would be
available in minimum denominations of $5,000 and
would bear an interest rate computed daily on the
basis of current market rates, and paid monthly. Note
purchasers would be required to hold each Note for a
minimum of eight days, after which the Note would
have a one day maturity and would be automatically
renewed daily. Note purchasers would be required to
maintain a checking account at The Oregon Bank
("Bank"), Applicant's lead subsidiary bank, through
which additional purchases and redemptions could be
effected by means of telephone transfer. 2 Although the
initial purchase of Notes would be made directly with
Orbanco at its offices, all subsequent transactions
would occur through the Bank. Withdrawals and purchases could be made in denominations of $500 or
more, provided a minimum balance of $2500 were
maintained. Checks could be drawn on the checking
account in any amount. Investors would not be issued
individual Notes but would receive monthly statements of all transactions involving the Notes. Orbanco
proposes to register a $50 million Note issue with the
Oregon Corporation Commissioner. Applicant indicates that the issue would be offered to Oregon residents only and, as an intrastate offering, would be
exempt from registration under the Securities Act of
1933. Proceeds of the Note would be used to fund
Orbanco's nonbanking activities and no proceeds
would be channeled to Applicant's banking subsidiaries.
As noted above, the proposed activity is not included in the list of permissible bank holding company
activities contained in Regulation Y. Applicant maintains that the activity is nevertheless permissible without prior Board approval as a method of funding its
nonbanking operations. The Board has permitted bank
holding companies to engage in funding activities
under section 4(a)(2) of the act, which authorizes bank
holding companies to engage in "banking or . . .
managing or controlling banks and other subsidiaries
authorized under [the] Act or . . . furnishing services
to or performing services for its subsidiaries." (12
U.S.C. § 1843 (a)(2)). The funding activities that the
Board has permitted in the past, however, have involved either investment certificates or thrift notes
with fixed maturities of at least 14 days, or commercial
paper. Orbanco's proposed activity differs significantly from traditional funding activities that the Board has

2. The Board does not regard the tie-in of the Note with the
checking account at The Oregon Bank as unlawful under the anti-tie-in
provisions of section 106 of the Bank Holding Company Act Amendments of 1970. The use of the Bank's services is intended to facilitate
sale of the Notes rather than to benefit the Bank. The Board regards
the Note as a single product not involving any tie-in of additional
services for purposes of section 106.




199

permitted in the past due to the demand feature 3 and
transactional capability of the Note Plan. Accordingly,
the Board has determined that the activity is not
permissible as a funding method under section 4(a)(2)
of the act and consequently, prior Board approval to
engage in the activity is required under section 4(c)(8)
of the act.
The Board is authorized under section 4(c)(8) of the
Bank Holding Company Act to approve nonbanking
activities for bank holding companies if the Board
determines that the proposed activity is so closely
related to banking or managing or controlling banks as
to be a proper incident thereto. Banks in fact provide,
or are particularly well equipped to provide, services
similar to those involved in Orbanco's proposal. Accordingly, the Board has determined that the proposed
activity is closely related to banking. See National
Courier Association v. Board of Governors, 516 F.2d
1229 (D.C. Cir. 1975). In determining whether a particular activity is a proper incident to banking, however,
the Board is required to determine whether the proposal can reasonably be expected to produce benefits
to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh
possible adverse effects.
The Note involves the taking of a deposit through
Bank and the use of this deposit to establish a debt
obligation of the parent holding company that can be
redeemed virtually on demand through a checking
account at Bank. In view of the extensive contact with
Bank required to purchase and redeem the Note, and
because of the fact that the Note is an obligation of the
parent holding company, the Board believes that the
Note has a high degree of potential for public confusion inasmuch as the Note is targeted at retail bank
customers and is sold to these customers in small
denominations. Customers may not appreciate fully
the fact that their funds would be shifted from insured
to non-insured status and that when so shifted the
Note would lack the prudential safeguards associated
with bank deposits. Although Bank itself is subject to
bank regulation, the organization that ultimately receives and places the public's funds at risk is not
regulated to the same degree.
In light of this potential for customer confusion, the
fact that customers' funds would be invested only in
nonbank subsidiaries of Orbanco causes particular
concern. This special concern derives, in major part,
from the fact that the security underlying the Note
would not provide diversification of risk or liquidity
usually required with respect to short term financial
instruments available to small savers and investors.
3. The Board regards any instrument with a maturity of less than 14
days as a demand obligation.

200 Federal Reserve Bulletin • March 1982

The Board does not believe that these problems can
be fully eliminated through disclosures or disclaimers
in a situation where the holding company's obligations
and the originating deposit are linked in a parentsubsidiary relationship. The Board thus concludes that
such factors represent adverse effects that weigh
against approval of the proposal.
The Board also considered the fact that the money
market rate payable on the Note has the potential to
interfere with the orderly transition to market rates
that Congress mandated in the Depository Institutions
Deregulation and Monetary Control Act of 1980
("DIDMCA"). Until that transition is completed, the
Congress has indicated a policy that all transaction
accounts at depository institutions should be subject
to the same rate ceiling. Approval of the proposed
Note, issued by a bank holding company, in effect
would permit the offering of a transaction account by
Bank, an affiliate of the issuer, at an interest rate far in
excess of the rate that banks and thrift institutions are
permitted to pay on NOW accounts. The Board concludes that this arrangement is inconsistent with congressionally mandated policy for an orderly phaseout
of Regulation Q, and thus is an adverse effect that
weighs against approval.
Similarly, the Board regards the Note's transaction
account feature as undermining the objective of the
DIDMCA to impose reserve requirements on transaction accounts at all depository institutions. Funds in
the Note flow through a transaction account at Bank to
the parent holding company and, thus, balances maintained in the Note are not now subject to reserve

ORDERS APPROVING
AND BANK MERGER

APPLICATIONS
ACT

UNDER

requirements because the Note constitutes a liability
of the holding company. In view of the likelihood that
a number of bank holding companies may wish to offer
similar debt obligations, this adverse effect also appears significant and weighs against approval of the
application.
Applicant asserts that the proposal could result in
public benefits by providing a higher rate of return on
customers' funds and greater efficiencies in funding
Orbanco's nonbank operations. While some public
benefits may be associated with the proposal, the
Board does not believe that such benefits are sufficient
to outweigh the adverse effects of the proposal. Indeed, each of the adverse effects that the Board has
determined weigh against approval of the application
are sufficient, in the Board's view, to outweigh any
public benefits associated with the proposal.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that,
in the particular factual situation presented in this
case, the balance of the public interest factors that the
Board is required to consider under section 4(c)(8) is
not consistent with approval of the application. Accordingly, the application is hereby denied.
By order of the Board of Governors, effective
February 16, 1982.
Voting for this action: Chairman Volcker and Governors
Wallich, Partee, Teeters, Rice, and Gramley.

(Signed) W I L L I A M W . W I L E S ,
Secretary of the Board.

[SEAL]

THE BANK

HOLDING

COMPANY

ACT

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

Section 3
Applicant
Exchange Bancorporation, Inc.,
Tampa, Florida
First City Bancorporation of
Texas, Inc.,
Houston, Texas
Pioneer American Bancorporation,
Pendleton, Oregon
Southwest Bancshares, Inc.,
Houston, Texas



Bank(s)

Effective
date

First National Bank of Englewood,
Englewood, Florida
First City National Bank of Floresville,
Floresville, Texas

February 9, 1982

Pendleton Banking Company,
Pendleton, Oregon
First Pasadena State Bank,
Pasadena, Texas

February 12, 1982

February 22, 1982

February 17, 1982

Legal Developments

201

Section 3—Continued
Applicant
Texas American Bancshares Inc.,
Fort Worth, Texas
Texas Commerce Bancshares, Inc.
Houston, Texas

Bank(s)

Reserve
Bank

Charter National Bank,
Piano, Texas
Texas Commerce Bank-Cypress Station, N.A.
Houston, Texas

Effective
date
February 5, 1982
February 10, 1982

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

Section 3
Applicant
Allied Bancshares, Inc.,
Houston, Texas
Amarillo National Bancorp, Inc.,
Amarillo, Texas
Argyle Financial Services, Inc.,
Argyle, Minnesota
Azle Bancorp,
Azle, Texas
BSD Bancorp, Inc.,
San Diego, California
Banks of Iowa, Inc.,
Des Moines, Iowa
Buffalo Bancorporation, Inc.,
Buffalo, South Dakota
Carolina Bancorp, Inc.,
Sanford, North Carolina
Chebelle Corporation,
Solon, Iowa
Commerce Bancshares, Inc.,
Kansas City, Missouri
Commercial National Corporation,
Peoria, Illinois

The Conifer Group, Inc.,
Worcester, Massachusetts
Corporate Bankshares, Inc.,
Overland Park, Kansas
Crookston Financial Services,
Inc.,
Crookston, Minnesota



Bank(s)
Lakewood Bank and Trust Company,
Dallas, Texas
Amarillo National Bank,
Amarillo, Texas
Argyle State Bank,
Argyle, Minnesota
Azle State Bank
Azle, Texas
American Valley Bank,
El Cajon, California
The Avoca State Bank,
Avoca, Iowa
First State Bank of Buffalo,
Buffalo, South Dakota
Bank of Alamance,
Graham, North Carolina
Chelsea Savings Bank,
Belle Plaine, Iowa
Wentzville State Bank,
Wentzville, Missouri
Prospect National Bank of Peoria,
Peoria, Illinois
University National Bank of
Peoria,
Peoria, Illinois
Commonwealth National
Corporation,
Boston, Massachusetts
Corporate Woods State Bank,
Overland Park, Kansas
Crookston National Bank,
Crookston, Minnesota

Reserve
Bank

Effective
date

Dallas

February 5, 1982

Dallas

February 11, 1982

Minneapolis

February 1, 1982

Dallas

February 10, 1982

San Francisco

February 16, 1982

Chicago

January 22, 1982

Minneapolis

February 22, 1982

Richmond

February 24, 1982

Chicago

January 27, 1982

Kansas City

February 16, 1982

Chicago

January 21, 1982

Boston

February 8, 1982

Kansas City

February 12, 1982

Minneapolis

February 19, 1982

202 Federal Reserve Bulletin • March 1982

Section 3—Continued
Applicant
El Campo Bancshares, Inc.,
El Campo, Texas
Far-Mer Bankshares, Inc.,
Reyno, Arkansas
Fifth Third Bancorp,
Cincinnati, Ohio
First Alsip Bancorp, Inc.,
Alsip, Illinois
First Bancorp of Belleville, Inc.,
Belleville, Illinois

First Bancshares, Inc.,
Slidell, Louisiana
First Bancshares of Texas, Inc.,
Longview, Texas

First Colonial Bancshares
Corporation,
Chicago, Illinois
First Delhi Corporation,
Delhi, Louisiana
First State Holding Company,
Inc.,
Mullinville, Kansas
First Texas Financial Corporation,
Dallas, Texas
Fourth Financial Corporation,
Wichita, Kansas

Fulton Bancshares, Inc.,
Alpharetta, Georgia
Gaylord Bancorporation Ltd.,
Gaylord, Minnesota
Great Guaranty Bancshares, Inc.,
New Roads, Louisiana
HNB Corporation,
Homer, Louisiana
Highland Park Bancorporation,
Inc.,
St. Paul, Minnesota
Island American Bancshares, Inc.,
Galveston, Texas



Bank(s)

Reserve
Bank

Effective
date

Commercial State Bank of El
Campo,
El Campo, Texas
Farmers & Merchants Bank,
Reyno, Arkansas
The Bank of Russellville,
Russellville, Ohio
First State Bank of Alsip,
Alsip, Illinois
First United Bancshares, Inc.,
Belleville, Illinois
Bank of Belleville,
Belleville, Illinois
First Bank,
Slidell, Louisiana
Cushing Bancshares, Inc.,
Cushing, Texas
Van Bancshares, Inc.,
Van, Texas
White Oak Bancshares, Inc.,
White Oak, Texas
All American Bank of Chicago,
Chicago, Illinois
(additional shares)
Capital Bank of Delhi,
Delhi, Louisiana
First State Bank,
Mullinville, Kansas

Dallas

January 28, 1982

St. Louis

January 29, 1982

Cleveland

February 17, 1982

Chicago

February 12, 1982

St. Louis

February 16, 1982

Atlanta

February 12, 1982

Dallas

February 2, 1982

Chicago

February 1, 1982

Dallas

February 1, 1982

Kansas City

February 11, 1982

First Texas Bank,
Dallas, Texas
M-L Bancshares, Inc.,
Wichita, Kansas
Newton Bancshares, Inc.,
Newton, Kansas
The Kansas State Bank,
Newton, Kansas
Fulton County Bank,
Alpharetta, Georgia
Citizens State Bank of Gaylord,
Gaylord, Minnesota
Guaranty Bank and Trust
Company,
New Roads, Louisiana
The Homer National Bank,
Homer, Louisiana
The Highland Bank,
St. Paul, Minnesota

Dallas

February 16, 1982

Kansas City

January 28, 1982

Atlanta

February 12, 1982

Minneapolis

February 1, 1982

Atlanta

February 18, 1982

Dallas

February 23, 1982

Minneapolis

February 2, 1982

American Bank,
Galveston, Texas

Dallas

February 12, 1982

Legal Developments

203

Section 3—Continued
Applicant
Kansas Unlimited Investments,
Inc.,
Pleasanton, Kansas
Keene Bancorp, Inc.,
Keene, Texas
Keyesport Bancshares, Inc.,
Keyesport, Illinois
Liberty Holding Company,
Cantonment, Florida
Liberty National Bancshares, Inc.,
Lovington, New Mexico
M-L Bancshares, Inc.,
Wichita, Kansas

Mark Twain Bancshares, Inc.,
St. Louis, Missouri
Maryland National Corporation,
Baltimore, Maryland
Mason State Company,
Mason City, Nebraska
Merchants Bancorp, Inc.,
Aurora, Illinois
Midwest National Bancshares,
Inc.,
Midwest City, Oklahoma
Minnehaha Bancshares, Inc.,
Sioux Falls, South Dakota
Minto Bancorporation, Inc.
Minto, North Dakota
NCB Corp.,
Mansfield, Georgia
Northern Trust Corporation,
Chicago, Illinois
North Plaza Bancshares, Inc.,
Topeka, Kansas
Ogden-Saratoga Corporation,
Downers Grove, Illinois
Paraclete Bancorp.,
Afton, Iowa
Prairie Bancorp, Inc.,
Bloomington, Illinois
Ramsey Bancshares, Inc.,
Devils Lake, North Dakota
Sesser Bancorporation, Inc.,
Sesser, Illinois



Bank(s)

Reserve
Bank

Effective
date

Bank of Pleasanton,
Pleasanton, Kansas

Kansas City

January 21, 1982

First State Bank,
Keene, Texas
State Bank of Keyesport,
Keyesport, Illinois
Liberty Bank of Cantonment,
Cantonment, Florida
Liberty National Bank,
Lovington, New Mexico
Newton Bancshares, Inc.,
Newton, Kansas
The Kansas State Bank,
Newton, Kansas
Hub State Bank,
Independence, Missouri
Central Atlantic Bank, N.A.,
Newark, Delaware
Mason State Bank,
Mason City, Nebraska
The Merchants National Bank of
Aurora,
Aurora, Illinois
Midwest National Bank,
Midwest City, Oklahoma

Dallas

February 16, 1982

St. Louis

February 5, 1982

Atlanta

February 12, 1982

Dallas

February 19, 1982

Kansas City

January 28, 1982

St. Louis

February 12, 1982

Richmond

February 12, 1982

Kansas City

January 22, 1982

Chicago

February 18, 1982

Kansas City

January 28, 1982

Minneapolis

February 12, 1982

Minneapolis

February 17, 1982

Atlanta

February 1, 1982

Chicago

February 5, 1982

Kansas City

February 5, 1982

Chicago

January 26, 1982

Chicago

January 25, 1982

Chicago

February 5, 1982

Minneapolis

February 3, 1982

St. Louis

February 8, 1982

Farmers State Bank of Flandreau,
Flandreau, South Dakota
Bank of Minto,
Minto, North Dakota
Newton County Bank,
Mansfield, Georgia
Security Trust Company of Sarasota, N.A.,
Sarasota, Florida
North Plaza State Bank,
Topeka, Kansas
First Security Bank of Downers
Grove,
Downers Grove, Illinois
Commercial State Bank,
Afton, Iowa
Prairie State Bank,
Bloomington, Illinois
Ramsey National Bank & Trust of
Devils Lake,
Devils Lake, North Dakota
Bank of Sesser,
Sesser, Illinois

204 Federal Reserve Bulletin • March 1982

Section 3—Continued
Applicant

Reserve
Bank

Bank(s)

Tuscola Bancorp, Inc.,
Springfield, Illinois
United Missouri Bancshares, Inc.,
Kansas City, Missouri
Union Colony Bancorp.,
Greeley, Colorado
United Madison Bancshares, Inc.,
Houston, Texas
Uptown Bancorporation, Inc.,
Moline, Illinois
Wabash Valley Bancorporation,
Inc.,
Peru, Indiana
Wells-Foster Bankshares, Inc.,
Carrington, North Dakota
Westlake Bancshares, Inc.,
Austin, Texas
Woodriver Banco, Inc.,
Oconto, Nebraska
Youell Sales Department, Inc.,
Manson, Iowa

The First National Bank of Douglas County,
Tuscola, Illinois
Paris Savings Bank,
Paris, Missouri
Union Colony Bank,
Greeley, Colorado
United Madison Bank, N.A.,
Houston, Texas
Uptown National Bank of Moline,
Moline, Illinois
Wabash Valley Bank and Trust
Company,
Peru, Indiana
Farmers State Bank,
Carrington, North Dakota
Westlake National Bank,
Austin, Texas
The Farmers Bank,
Oconto, Nebraska
Manson State Bank,
Manson, Iowa

Effective
date

Chicago

February 6, 1982

Kansas City

January 25, 1982

Kansas City

February 12, 1982

Dallas

February 18, 1982

Chicago

February 1, 1982

Chicago

February 19, 1982

Minneapolis

February 19, 1982

Dallas

February 5, 1982

Kansas City

February 19, 1982

Chicago

February 12, 1982

Sections 3 and 4
Applicant

Bank(s)

Hoi-Ark, Inc.,
Blytheville, Arkansas

The First National Bank
in Blytheville,
Blytheville, Arkansas

Pioneer Bancshares
Corporation,
Shreveport, Louisiana

Zachary Taylor Life Insurance Company,
Shreveport, Louisiana
Pioneer Bank and Trust
Company
Shreveport, Louisiana

Nonbanking
company
(or activity)
to retain and service
certain notes receivable directly connected with previous business activities.

Reserve
Bank

Effective
date

St. Louis

February 4, 1982

Dallas

February 2, 1982

Section 4
AAp p i l C a n tA

First Glen Bancorp Inc.,
Glens Falls, New York



Nonbanking
company
(or activity)
Van Dyke Associates Inc.,
Glens Falls, New York

Reserve
Bank
New York

Effective
date
February 17, 1982

Legal Developments

ORDERS APPROVED

UNDER BANK

MERGER

205

ACT

By Federal Reserve Banks
Bank(s)

Applicant
The FTB Fifth Bank,
Russellville, Ohio
The Interim Dime Bank of Marietta,
Marietta, Ohio
Michigan Bank-Port Huron,
Port Huron, Michigan
United Jersey Bank/Southwest,
Camden, New Jersey

PENDING

CASES INVOLVING

The Bank of Russellville,
Russellville, Ohio
The Dime Bank of Ross County, N.A.,
Adelphi, Ohio
Marine Bank & Trust,
Marine City, Michigan
Pine Hill office of The Bank of New
Jersey
Pine Hill, New Jersey

THE BOARD

OF

Effective
date

Cleveland

February 17, 1982

Cleveland

February 12, 1982

Chicago

February 5, 1982

Philadelphia

February 4, 1982

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.
Darnell Hilliard v. Esmond Langley, filed February
1982, Superior Court of the District of Columbia.
C. A. Cavendes, Sociedad Financiers v. Board of
Governors, filed January 1982, U.S.C.A. for the
District of Columbia.
First Lakefield BanCorporation v. Board of Governors, et al, filed January 1982, U.S.D.C. for the
District of Minnesota.
C. A. Cavendes, Sociedad Financiers v. Board of
Governors, filed December 1981, U.S.C.A. for the
District of Columbia.
Option Advisory Service, Inc. v. Board of Governors,
filed December 1981, U.S.C.A. for the Second
Circuit.
Edwin F. Gordon v. Board of Governors, et al., filed
October 1981, U.S.C.A. for the Eleventh Circuit
(Two Consolidated Cases).
Wendall Hall v. Board of Governors, et al., filed
September 1981, U.S.D.C. for the Northern District
of Georgia.
Allen Wolf son v. Board of Governors, filed September
1981, U.S.D.C. for the Middle District of Florida.
Option Advisory Service, Inc. v. Board of Governors,
filed September 1981, U.S.C.A. for the Second
Circuit (two cases).
American Bankers Association v. Federal Home Loan
Bank Board, et al., filed August 1981, U.S.D.C. for
the District of Columbia.
Bank Stationers Association, Inc., et al. v. Board of
Governors, filed July 1981, U.S.D.C. for the Northern District of Georgia.



Reserve
Bank

Public Interest Bounty Hunters v. Board of Governors, et al., filed June 1981, U.S.D.C. for the
Northern District of Georgia.
Edwin F. Gordon v. John Heimann, et al., filed May
1981, U.S.C.A. for the Fifth Circuit.
Louis J. Rous sell v. Board of Governors, filed May
1981, U.S.C.A. for the District of Columbia.
Wilshire Oil Company of Texas v. Board of Governors, et al., filed April 1981, U.S.C.A. for the Third
Circuit.
People of the State of Arkansas v. Board of Governors, et al., filed March 1981, U.S.C.A. for the
Western District of Arkansas.
First Bank & Trust Company v. Board of Governors,
filed February 1981, U.S.D.C. for the Eastern District of Kentucky.
9 to 5 Organization for Women Office Workers v.
Board of Governors, filed December 1980,
U.S.D.C. for the District of Massachusetts.
Securities Industry Association v. Board of Governors, et al., filed October 1980, U.S.D.C. for the
District of Columbia.
Securities Industry Association v. Board of Governors, et al., filed October 1980, U.S.C.A. for the
District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
October 1980, U.S.D.C. for the District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
October 1980, U.S.C.A. for the District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
August 1980, U.S.D.C. for the District of Columbia.
Otero Savings and Loan Association v. Board of
Governors, filed August 1980, U.S.D.C. for the
District of Colorado.

206 Federal Reserve Bulletin • March 1982

Berkovitz, et al. v. Government of Iran, et al., filed
June 1980, U.S.D.C. for the Northern District of
California.
Louis J. Roussel v. Comptroller of the Currency and
Federal Reserve Board, filed April 1980, U.S.D.C.
for the District of Columbia.
Donald W. Riegle, Jr. v. Federal Open Market Com-




mittee, filed July 1979, U.S.D.C. for the District of
Columbia.
Security Bancorp and Security National Bank v.
Board of Governors, filed March 1978, U.S.C. A. for
the Ninth Circuit.
Darnell Hilliard v. G. William Miller, et al., filed
September 1976, U.S.C.A. for the District of Columbia.

1

Financial and Business Statistics
CONTENTS

WEEKLY REPORTING

Domestic Financial

Statistics

A3 Monetary aggregates and interest rates
A4 Reserves of depository institutions, reserve,
bank credit
A5 Reserves and borrowings of depository
institutions
A6 Federal funds and repurchase agreements of
large member banks

MARKETS

INSTRUMENTS

A7 Federal Reserve Bank interest rates
A8 Depository institutions reserve requirements
A9 Maximum interest rates payable on time and
savings deposits at federally insured institutions
A10 Federal Reserve open market transactions

FEDERAL RESERVE

BANKS

All Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings

MONETARY

BANKS

Assets and liabilities
A18 All reporting banks
A19 Banks with assets of $1 billion or more
A20 Banks in New York City
A21 Balance sheet memoranda
A22 Branches and agencies of foreign banks
A23 Commercial and industrial loans
A24 Gross demand deposits of individuals,
partnerships, and corporations

FINANCIAL
POLICY

COMMERCIAL

AND CREDIT

AGGREGATES

A12 Bank debits and deposit turnover
A13 Money stock measures and components
A14 Aggregate reserves of depository institutions
and monetary base
A15 Loans and securities of all commercial banks

COMMERCIAL

BANKS

A16 Major nondeposit funds
A17 Assets and liabilities, last Wednesday-of-month
series




A25 Commercial paper and bankers dollar
acceptances outstanding
A26 Prime rate charged by banks on short-term
business loans
A26 Terms of lending at commercial banks
A27 Interest rates in money and capital markets
A28 Stock market—Selected statistics
A29 Selected financial institutions—Selected assets
and liabilities

FEDERAL

A30
A31
A32
A32

FINANCE

Federal fiscal and financing operations
U.S. budget receipts and outlay
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A33 U.S. government marketable securities—
Ownership, by maturity
A34 U.S. government securities dealers—
Transactions, positions, and financing
A35 Federal and federally sponsored credit
agencies—Debt outstanding

85

Federal Reserve Bulletin • March 1982

International

SECURITIES MARKETS
AND
CORPORATE
FINANCE

A36 New security issues—State and local
governments and corporations
A37 Open-end investment companies—Net sales and
asset position
A37 Corporate profits and their distribution
A38 Nonfinancial corporations—Assets and
liabilities
A38 Total nonfarm business expenditures on new
plant and equipment
A39 Domestic finance companies—Assets and
liabilities; business credit

REAL

ESTATE

A40 Mortgage markets
A41 Mortgage debt outstanding

CONSUMER

INSTALLMENT

CREDIT

A42 Total outstanding and net change
A43 Extension and liquidations

FLOW OF

A44 Funds raised in U.S. credit markets
A45 Direct and indirect sources of funds to credit
markets

Statistics

A46 Nonfinancial business activity—Selected
measures
A46 Output, capacity, and capacity utilization
A47 Labor force, employment, and unemployment
A48 Industrial production—Indexes and gross value
A50 Housing and construction
A51 Consumer and producer prices
A52 Gross national product and income
A53 Personal income and saving




A54
A55
A55
A55

U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A56 Foreign branches of U.S. banks—Balance sheet
data
A58 Selected U.S. liabilities to foreign official
institutions

REPORTED

BY BANKS

IN THE UNITED

STATES

A58
A59
A61
A62

Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A62 Banks' own claims on unaffiliated foreigners
A63 Claims on foreign countries—Combined
domestic offices and foreign branches

REPORTED BY NONBANKING
ENTERPRISES IN THE UNITED

BUSINESS
STATES

A64 Liabilities to unaffiliated foreigners
A65 Claims on unaffiliated foreigners

FUNDS

Domestic Nonfinancial

Statistics

SECURITIES

HOLDINGS

AND

TRANSACTIONS

A66 Foreign transactions in securities
A67 Marketable U.S. Treasury bonds and notes—
Foreign holdings and transactions

INTEREST AND EXCHANGE

RATES

A67 Discount rates of foreign central banks
A68 Foreign short-term interest rates
A68 Foreign exchange rates

A69 Guide to Tabular
Presentation,
Statistical Releases, and Special
Tables

Domestic Financial Statistics
1.10

A3

MONETARY A G G R E G A T E S A N D INTEREST RATES
1981

1981

1982

Item
Q1

02

Q3

Q4

Sept.

Oct.

Nov.

Dec.

Jan.

Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1

1
2
3
4

Reserves of depository institutions
Total
Required
Nonborrowed
Monetary base2

5.5
6.4
10.7
5.2

4.2
5.0
-2.4
5.8

4.0
3.1
7.9
4.3

3.2
3.5
10.5
3.9

5
6
7
8

Concepts of money and liquid assets3
Ml
M2
M3
L

4.6'
7.5
11.2
11.6

9.2
12.0
12.2
10.6

.3
8.3
11.2
11.9

5.7
8.8
9.2
n.a.

16.0
-28.3
28.5
34.3
4.0

11.9
-8.9
16.2
19.9
3.2

18.4
-22.7
24.3
36.0
2.6

11.3

8.4

8.7

Time and savings deposits
Commercial banks
9
Total
10 Savings4
11 Small-denomination time 5
12 Large-denomination time 6
13 Thrift institutions 7
14 Total loans and securities at commercial banks 8

8.3
-11.9
20.8'
5.4 r
2.7
3.7

15.1
18.6
14.5
6.0
.3
4.0
6.9
8.2 r

Q1

Q2

4.7
7.6
7.3
10.3 r

9.8
-22.4
23.7
11.2
-2.5

6.2
-16.8
22.2
.4
5.1

5.2

5.6

1981

1.0
-1.1
17.0
3.3

-5.8
-1.7
2.5
0.7

11.3'
12.1
12.3
11.3

22.2
19.4
-4.0
11.6

9.7
13.7'
13.1
12.0

12.4'
8.4
7.3'
n.a.

21.0
11.7
8.8
n.a.

6.9'
8.5
17.4'
-5.2
4.2

1.6 r
4.6
-.3
2.2'
1.3

4.2
14.5
2.0
1.1
1.1

3.3

-8.8

1981
Q3

Q4

Oct.

Nov.

4.2
1982

Dec.

Jan.

Feb.

Interest rates (levels, percent per annum)

15
16
17
18

Short-term rates
Federal funds 9
Discount window borrowing 10
Treasury bills (3-month market yield) 11
Commercial paper (3-month) 11,14

Long-term rates
Bonds
19 U.S. government 13
20
State and local government 14
21
Aaa utility (new issue)15
22 Conventional mortgages' 6

16.57
13.00
14.39
15.34

17.78
13.62
14.91
16.15

17.58
14.00
15.05
16.78

13.59
13.04
11.75
13.04

15.08
14.00
13.54
14.85

13.31
13.03
10.86
12.16

12.37
12.10
10.85
12.12

13.22
12.00
12.28
13.09

14.78
12.00
13.48
14.53

12.74
9.97
14.45
15.10

13.49
10.69
15.41
16.15

14.51
12.11
16.82
17.50

14.14
12.54
15.67
17.33

15.13
12.83
16.94
18.05

13.56
11.89
15.56
16.95

13.73
12.91
15.20
17.00

14.57
13.28
15.68
17.30

14.48
12.97
15.93
17.20

1. Unless otherwise noted, rates of change are calculated from average amounts
outstanding in preceding month or quarter.
2. Includes reserve balances at Federal Reserve Banks in the current week plus
vault cash held two weeks earlier used to satisfy reserve requirements at all depository institutions plus currency outside the U.S. Treasury, Federal Reserve Banks,
the vaults of depository institutions, and surplus vault cash at depository institutions.
3. Ml: Averages of daily figures for (1) currency outside the Treasury, Federal
Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due
to domestic banks, the U.S. government, and foreign banks and official institutions
less cash items in the process of collection and Federal Reserve float; and (4)
negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at banks and thrift institutions, credit union share draft (CUSD) accounts,
and demand deposits at mutual savings banks.
M2: Ml plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and balances of money market mutual funds (general purpose and broker/
dealer).
M3: M2 plus large-denomination time deposits at all depository institutions and
term RPs at commercial banks and savings and loan associations and balances of
institution-only money market mutual funds.




L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper, Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.
4. Savings deposits exclude NOW and ATS accounts at commercial banks and
thrifts and CUSD accounts at credit unions.
5. Small-denomination time deposits—including retail RPs—are those issued in
amounts of less than $100,000.
6. Large-denomination time deposits are those issued in amounts of $100,000 or
more.
7. Savings and loan associations, mutual savings banks, and credit
8. Changes calculated from figures shown in table 1.23. December 1981 and 1981
Q4 rates reflect shifts of foreign loans and securities from U.S. banking offices to
international banking facilities.
9. Averages of daily effective rates (average of the rates on a given date weighted
by the volume of transactions at those rates).
10. Rate for the Federal Reserve Bank of New York.
11. Quoted on a bank-discount basis.
12. Unweighted average of offering rates quoted by at least five dealers.
13. Market yields adjusted to a 20-year maturity by the U.S. Treasury.
14. Bond Buyer series for 20 issues of mixed quality.
15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by
Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve compilations.
16. Average rates on new commitments for conventional first mortgages on new
homes in primary markets, unweighted and rounded to nearest 5 basis points, from
Dept. of Housing and Urban Development.

A4
1.11

DomesticNonfinancialStatistics • March 1982
R E S E R V E S OF D E P O S I T O R Y INSTITUTIONS, R E S E R V E B A N K C R E D I T
Millions of dollars
Monthly averages of
daily figures

Weekly averages of daily figures for week ending

Factors
1981

Dec.

1982

1982

Jan.

Feb.?

Jan. 13

Jan. 20

Feb. 3

Jan. 27

Feb. 10

Feb. 17 P

Feb. 2 4 P

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstanding
2
3
4
5
6
7
8
9
10
11

U.S. government securities'
Bought outright
Held under repurchase agreements
Federal agency securities
Bought outright
Held under repurchase agreements
Acceptances
Loans
Float
Other Federal Reserve assets

12 Gold stock
13 Special drawing rights certificate a c c o u n t . . .
14 Treasury currency outstanding

151,920

152,297

150,554

150,931

152,276

151,086

152,857

148,574

151,072

151,391

128.505
127,483
1,022
9,291
9,126
165
315
642
3,456
9,711

127,473
126,112
1,361
9,184
9,084
100
156
1,526
4,485
9,473

126,948
125,599
1,349
9,102
9,044
58
165
1,713
3,292
9,334

127,323
127,323
0
9,100
9,100
0
0
998
4,159
9,351

125,853
125,437
416
9,105
9,082
23
60
951
6,798
9,508

126,143
124,791
1,352
9,103
9,058
45
186
2,469
3,569
9,615

129,016
125,340
3,676
9,206
9,056
150
466
1,851
2,721
9,597

125,075
125,075
0
9,053
9,053
0
0
1,662
3,116
9,668

127,542
125,197
2,345
9,141
9,046
95
396
1,908
2,465
9,622

127,471
126,697
774
9,083
9,040
43
55
1,900
4,060
8,822

11,152
3,318
13,707

11,151
3,318
13,777

11,151
3,559
13,708

11,151
3,318
13,693

11,151
3,318
13,700

11,151
3,318
13,705

11,151
3,389
14,056

11,151
3,568
13,705

11,151
3,568
13,710

11,150
3,568
13,710

143,700
443

142,207
448

140,529
466

143,263
447

141,878
448

140,446
449

140,293
457

140,520
462

141,189
465

140,464
470

2,965
343
605

4,713
389
538

5,506
304
472

3,069
530
480

3,712
334
470

6,147
292
448

7,863
314
475

5,319
279
490

4,568
321
489

6,693
276
431

NO

127

139

125

128

131

135

137

139

141

5,768
26,163

5,401
26,721

5,396
26,161

5,379
25,799

5,391
28,085

5,269
26,078

5,474
26,443

5,097
24,694

5,467
26,863

5,206
26,137

ABSORBING RESERVE FUNDS

15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserves, with Federal
Reserve Banks
17 Treasury
18
Foreign
19
Other
20
Required clearing balances
21 Other Federal Reserve liabilities and
capital
22 Reserve accounts 2

Wednesday figures

End-of-month figures
1982

1981

Dec.

Jan.

1982

Feb.

Jan. 13

Jan. 20

Jan. 27

Feb. 3

Feb. 10

Feb.17

Feb. 2 4

SUPPLYING RESERVE FUNDS

153,136

151,560

147,618

152,714

157,766

155,060

158,376

150,288

155,143

148,050

U.S. government securities 1
Bought outright
Held under repurchase agreements . . . .
Federal agency securities
Bought outright
Held under repurchase agreements . . .
Acceptances
Loans
Float
Other Federal Reserve assets

130,954
127,738
3,216
9,394
9,125
269
195
1,601
1,762
9,230

128,230
124,967
3,263
9,192
9,058
134
597
2,217
1,635
9,689

125,410
125,410
0
9,026
9,026
0
0
1,180
2,959
9,043

125,446
125,446
0
9,089
9,089
0
0
2,906
5,346
9,927

127,787
124,872
2,915
9,217
9,057
160
417
3,682
6,579
10,084

129,047
126,541
2,506
9,159
9,057
102
368
5,109
1,732
9,645

132,942
125,588
7,354
9,460
9,054
406
596
1,800
3,869
9,709

125,183
125,183
0
9,046
9,046
0
0
2,283
3,952
9,824

130,353
126,025
4,328
9,218
9,046
172
453
1,505
4,789
8,825

126,250
126,250
0
9,031
9,031
0
0
1,414
2,400
8,955

34 Gold stock
35 Special drawing rights certificate account
36 Treasury currency outstanding

11,151
3,318
14,480

11,151
3,318
14,523

11,150
3,568
13,713

11,151
3,318
13,698

11,151
3,318
13,705

11,151
3,318
13,705

11,151
3,568
13,705

11,151
3,568
13,705

11,151
3,568
13,710

11,150
3,568
13,710

145,566
444

140,475
462

139,655
475

142,921
449

141,450
446

140,356
448

140,359
457

141,231
464

141,492
464

140,407
471

4,301
505
781
117

8,285
333
393
135

3,835
416
414
139

3,235
275
448
125

3,661
264
543
128

7,169
346
437
131

5,576
274
516
135

4,417
340
529
137

5,541
271
509
139

5,143
264
350
141

5,261
25,111

5,539
24,931

6,291
24,825

5,306
28,122

5,272
34,176

5,044
29,303

5,440
34,043

4,967
26,627

5,488
29,668

4,938
24,764

23 Reserve Bank credit outstanding
24
25
26
27
28
29
30
31
32
33

ABSORBING RESERVE FUNDS

37 Currency in circulation
38 Treasury cash holdings
Deposits, other than reserves, with Federal
Reserve Banks
39
Treasury
40
Foreign
41
Other
42 Required clearing balances
43 Other Federal Reserve liabilities and
capital
44 Reserve accounts 2

.

1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.




2. Excludes required clearing balances,
NOTE. For amounts of currency and coin held as reserves, see table 1.12.

Depository Institutions
1.12

RESERVES A N D BORROWINGS

A5

Depository Institutions

Millions of dollars
Monthly averages of daily figures
Reserve classification
1980
Dec.
1 Reserve balances with Reserve Banks'
2 Total vault cash (estimated)
3
Vault cash at institutions with required
reserve balances 2
4
Vault cash equal to required reserves at
other institutions
5
Surplus vault cash at other institutions3 ..
6 Reserve balances + total vault cash4
7 Reserve balances + total vault cash used
to satisfy reserve requirements 4 - 5
8 Required reserves (estimated)
9 Excess reserve balances at Reserve Banks4 6 .
10 Total borrowings at Reserve Banks
11
Seasonal borrowings at Reserve Banks
12
Extended credit at Reserve Banks

1982

1981
June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.P

26,664
18,149

26,623
18,187

27,111
18,273

27,000
18,435

25,499
18,925

25,690
18,810

25,892
18,844

26,163
19,538

26,721
20,284

26,161
19,254

12,602

12,358

12,443

12,549

13,041

12,924

12,986

13,577

14,199

13,117

704
4,843
44,940

1,462
4,367
44,810

1,457
4,373
45,384

1,477
4,409
45,435

2,053
3,831
44,424

2,097
3,789
44,500

2,073
3,785
44,736

2,178
3,783
45,701

2,290
3,795
47,005

2,187
3,950
45,425

40,097
40,067
30
1,617
116
n.a.

40,443
40,104
339
2,039
291
n.a.

41,011
40,667
344
1,751
248
n.a.

41,026
40,731
295
1,408
220
79

40,593
40,177
416
1,473
222
301

40,711
40,433
278
1,149
152
442

40,951
40,604
347
695
79
178

41,918
41,606
312
642
53
149

43,210
42,785
425
1,526
75
197

41,475
40,992
483
1,713
132
232

Feb. IIP

Feb. 24p

Weekly averages of daily figures for week ending:
1981
Dec. 23
13 Reserve balances with Reserve Banks 1
14 Total vault cash (estimated)
15 Vault cash at institutions with required
reserve balances 2
16 Vault cash equal to required reserves at
other institutions
17 Surplus vault cash at other institutions 3 ..
18 Reserve balances + total vault cash4
19 Reserve balances + total vault cash used
to satisfy reserve requirements 4 - 5
20 Required reserves (estimated)
21 Excess reserve balances at Reserve Banks4-6 .
22 Total borrowings at Reserve Banks
23
Seasonal borrowings at Reserve Banks
24
Extended credit at Reserve Banks

1982
Dec. 30

Jan. 6

Jan. 20

Jan. 27

Feb. 3

Feb. 10

26,940
18,613

26,317
19,749

27,140
19,172

25,799
19,723

28,085
20,980

26,078
21,009

26,443
20,449

24,694
20,062

26,863
19,218

26,137
18,158

13,105

13,891

13,498

14,318

14,459

14,505

14,055

13,609

12,974

12,507

2,076
3,432
45,553

2,152
3,706
46,066

2,137
3,537
46,312

2,399
3,006
45,522

2,288
4,233
49,065

2,318
4,186
47,087

2,286
4,108
46,892

2,346
4,107
44,756

2,215
4,029
46,089

2,062
3,589
44,302

42,121
41,746
375
620
70
161

42,360
42,026
334
882
75
173

42,775
42,148
627
1,452
59
193

42,516
42,173
343
998
53
194

44,832
44,299
533
951
70
195

42,901
42,704
197
2,469
96
199

42,784
42,300
484
1,851
110
212

40,649
40,532
117
1,662
114
225

42,060
41,457
603
1,908
134
227

40,713
40,658
55
1,900
146
222

1. As of Aug. 13, 1981 excludes required clearing balances of all depository
institutions.
2. Before Nov. 13, 1980, the figures shown reflect only the vault cash held by
member banks.
3. Total vault cash at institutions without required reserve balances less vault
cash equal to their required reserves.
4. Adjusted to include waivers of penalties for reserve deficiencies in accordance
with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a
graduated basis over a 24-month period when a nonmember bank merged into an




Jan. 13

existing member bank, or when a nonmember bank joins the Federal Reserve
System. For weeks for which figures are preliminary, figures by class of bank do
not add to total because adjusted data by class are not available.
5. Reserve balances with Federal Reserve Banks which exclude required clearing
balances plus vault cash at institutions with required reserve balances plus vault
cash equal to required reserves at other institutions.
6. Reserve balances with Federal Reserve Banks which exclude required clearing
balances plus vault cash used to satisfy reserve requirements less required reserves.
(This measure of excess reserves is comparable to the old excess reserve concept
published historically.)

A6
1.13

DomesticNonfinancialStatistics • March 1982
FEDERAL FUNDS A N D REPURCHASE AGREEMENTS

Large Member Banks'

Averages of daily figures, in millions of dollars
1981 and 1982, week ending Wednesday
By maturity and source
Jan. 6r
One day and continuing contract
1 Commercial banks in United States
2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies
3 Nonbank securities dealers
4 All other

Jan. 13

Jan. 20

Jan. 27

Feb. 3

Feb. 10

Feb. 17

Feb. 24

57,560

58,089

55,172

50,762

53,711

57,156

56,219

52,871

18,375
3,744
20,501

18,181
3,638
21,715

17,889
4,019
21,558

17,452r
4,368'
21,999 r

16,495
4,202
21,766

17,300
4,099
21,135

19,302
4,102
20,338

19,211
4,011
21,992

All other maturities
5 Commercial banks in United States
6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies
7 Nonbank securities dealers
8 All other

3,622

3,388

3.891

3,824

3,744

3,873

4,908

4,063

7,897
3,459
10,834

7,140
3,603
9,778

7,339
3,718
9,310

7,434
4,151
9,173

7,389
4,183
8,982

7,536
4,027
8,817

7,510
4,572
10,575

7,543
3,814
9,278

MEMO: Federal funds and resale agreement loans in maturities of one
day or continuing contract
9 Commercial banks in United States
10 Nonbank securities dealers

22,231
4,349

18,534
4,227

18,896
4,177

17,811r
3,462

18,477
3,438

19,070
3,318

19,764
2,959

18,974
3,861

1. Banks with assets of $1 billion or more as of Dec. 31, 1977.




Policy Instruments
1.14

A7

F E D E R A L R E S E R V E B A N K INTEREST R A T E S
Percent per annum
Current and previous levels
Extended credit'
Short-term adjustment credit
and seasonal credit

Federal Reserve
Bank

First 60 days
of borrowing

Next 90 days
of borrowing

After 150 days
Effective date
for current rates

Rate on
2/28/82

Effective
date

Previous
rate

Rate on
2/28/82

Previous
rate

Rate on
2/28/82

Previous
rate

Rate on
2/28/82

Previous
rate

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta

12
12
12
12
12
12

12/4/81
12/4/81
12/4/81
12/4/81
12/4/81
12/4/81

13
13
13
13
13
13

12
12
12
12
12
12

13
13
13
13
13
13

13
13
13
13
13
13

14
14
14
14
14
14

14
14
14
14
14
14

15
15
15
15
15
15

12/4/81
12/4/81
12/4/81
12/4/81
12/4/81
12/4/81

Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San F r a n c i s c o . . . .

12
12
12
12
12
12

12/4/81
12/4/81
12/4/81
12/4/81
12/4/81
12/4/81

13
13
13
13
13
13

12
12
12
12
12
12

13
13
13
13
13
13

13
13
13
13
13
13

14
14
14
14
14
14

14
14
14
14
14
14

15
15
15
15
15
15

12/4/81
12/4/81
12/4/81
12/4/81
12/4/81
12/4/81

Range of rates in recent years 2

Effective date

In effect Dec. 31. 1972
1973— Jan. 15
Feb. 26
Mar. 2
Apr. 23
May 4
11

18
June 11
15
July
2
Aug. 14
23
1974— Apr. 25
30
Dec. 9
16
1975— Jan.

6
10
24
Feb. 5
7
Mar. 10
14
May 16
23

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

4 Vi
5
5-5>/i
5>/i
5'/5-53/4

5
5'/5
51/2
5V5

5%

41/2
53/4

Effective date

1976— Jan.

19.
23.
Nov. 22.
26.

7
7
7'/4
71/4
73/4

1.
3.

8-81/5
81/5
81/5-9'/2
91/5

91/2
9V2

1979— July 20.
Aug. 17.

LO-LO'/I

1978— Jan.

7'/5-8
8
7^/4-8
73A

8
8

71/4-73/4
71/4-73/4

71/4

63/4-71/4
63/4
61/4-63/4
61/4

6-61/4

6

71/2
71/5
73/4

73/4

73/4

71/4
71/4
63/4
63/4
6'/4
6'/4
6
6

9.

20.

May 11.
12.
July
3.
July 10.
Aug. 21.
Sept. 22.
Oct. 16.
20.

Nov.

20.

1. Applicable to advances when exceptional circumstances or practices involve
only a particular depository institution and to advances when an institution is under
sustained liquidity pressures. See section 201.3(b)(2) of Regulation A.
2. Rates for short-term adjustment credit. For description and earlier data see
the following publications of the Board of Governors: Banking and Monetary
Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest. 1971-1975, 19721976, 1973-1977. and 1974-1978.




5Vz

51/2
51/4
51/4

6

6'/5
7

7'/I

5Vi

514-5V5
51/4

6-6 Vi
61/5
61/5-7
7
7-71/4
71/4
73/4

6 >/l

1
l-V/2

6
6

5V5-6

F.R.
Bank
of
N.Y.

514-53/4
51/4-53/4
53/4
6

1977— Aug. 30.
31.
Sept. 2.
Oct. 26.

5-V4-6
6
6-6 Vi
6V5

Range (or
level)—
All F.R.
Banks

10
10

Vi

51/4
53/4
53/4
6Vi

6 Vi

8Vi
8'/i

Effective date

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

1979— Sept. 19
21
Oct. 8
10

101/5-11
11
11-12
12

11
11
12
12

1980— Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8

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

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

1981— May
May
Nov.
Nov
Dec.

13-14
14
13-14
13
12

14
14
13
13
12

12

12

5
8
2
6
4

10
10V4

W/2
In effect Feb. 28, 1982

In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than 4 weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980 and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981 and to 2 percent effective Oct. 12. As of Oct. 1, the formula for
applying the surcharge was changed from a calendar quarter to a moving 13-week
period. The surcharge was eliminated on Nov. 17, 1981.

A8
1.15

DomesticNonfinancialStatistics • March 1982
DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS1
Percent of deposits

Type of deposit, and deposit interval
in millions of dollars

Net demand2
0-2
2-10
10-100
100-400
Over 400
Time and savings2^
Savings
Time 4
0-5, by maturity
30-179 days
180 days to 4 years
4 years or more
Over 5, by maturity
30-179 days
180 days to 4 years
4 years or more

Member bank requirements
before implementation of the
Monetary Control Act
Percent

Effective date

7
9!/i
113/4
12 %
161/4

12/30/76
12/30/76
12/30/76
12/30/76
12/30/76

3

3/16/67

3
2Vi
1

3/16/67
1/8/76
10/30/75

6
21/2
1

12/12/74
1/8/76
10/30/75

1. For changes in reserve requirements beginning 1963, see Board's Annual
Statistical Digest, 1971-1975 and for prior changes, see Board's Annual Report for
1976, table 13. Under provisions of the Monetary Control Act, depository institutions include commercial banks, mutual savings banks, savings and loan associations, credit unions, agencies and branches of foreign banks, and Edge Act
corporations.
2. (a) Requirement schedules are graduated, and each deposit interval applies
to that part of the deposits of each bank. Demand deposits subject to reserve
requirements were gross demand deposits minus cash items in process of collection
and demand balances due from domestic banks.
(b) The Federal Reserve Act as amended through 1978 specified different ranges
of requirements for reserve city banks and for other banks. Reserve cities were
designated under a criterion adopted effective Nov. 9,1972, by which a bank having
net demand deposits of more than $400 million was considered to have the character
of business of a reserve city bank. The presence of the head office of such a bank
constituted designation of that place as a reserve city. Cities in which there were
Federal Reserve Banks or branches were also reserve cities. Any banks having net
demand deposits of $400 million or less were considered to have the character of
business of banks outside of reserve cities and were permitted to maintain reserves
at ratios set for banks not in reserve cities.
(c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net
balances due from domestic banks to their foreign branches and on deposits that
foreign branches lend to U.S. residents were reduced to zero from 4 percent and
1 percent respectively. The Regulation D reserve requirement on borrowings from
unrelated banks abroad was also reduced to zero from 4 percent.
(d) Effective with the reserve computation period beginning Nov. 16. 1978,
domestic deposits of Edge corporations were subject to the same reserve requirements as deposits of member banks.
3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such
as Christmas and vacation club accounts were subject to the same requirements as
savings deposits.
(b) The average reserve requirement on savings and other time deposits before
implementation of the Monetary Control Act had to be at least 3 percent, the
minimum specified by law.
4. (a) Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent
was imposed on large time deposits of $100,000 or more, obligations of affiliates,
and ineligible acceptances. This supplementary requirement was eliminated with
the maintenance period beginning July 24, 1980.
(b) Effective with the reserve maintenance period beginning Oct. 25, 1979, a
marginal reserve requirement of 8 percent was added to managed liabilities in
excess of a base amount. This marginal requirement was increased to 10 percent
beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and

NOTE TO TABLE 1.16
NOTE. Before Mar. 31,1980, the maximum rates that could be paid by federally
insured commercial banks, mutual savings banks, and savings and loan associations
were established by the Board of Governors of the Federal Reserve System, the
Board of Directors of the Federal Deposit Insurance Corporation, and the Federal
Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526 respectively. Title II of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to establish
maximum rates of interest payable on deposits to the Depository Institutions Deregulation Committee. The maximum rates on time deposits in denominations of
$100,000 or more with maturities of 30-89 days were suspended in June 1970; such
deposits maturing in 90 days or more were suspended in May 1973. For information
regarding previous interest rate ceilings on all types of accounts, see earlier issues
of the FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank Board Journal,
and the Annual Report of the Federal Deposit Insurance Corporation.




Type of deposit, and
deposit interval

Depository institution requirements
after implementation of the
Monetary Control Act 5
Percent

Effective date

3
12

11/13/80
11/13/80

Nonpersonal time deposits8
By original maturity
Less than 4 years
4 years or more

3
0

11/13/80
11/13/80

Eurocurrency liabilities
All types

3

11/13/80

Net transaction
$0-$26 million

accounts61

was reduced to zero beginning July 24, 1980. Managed liabilities are defined as
large time deposits. Eurodollar borrowings, repurchase agreements against U.S.
government and federal agency securities, federal funds borrowings from nonmember institutions, and certain other obligations. In general, the base for the
marginal reserve requirement was originally the greater of (a) $100 million or (b)
the average amount of the managed liabilities held by a member bank, Edge
corporation, or family of U.S. branches and agencies of a foreign bank for the two
statement weeks ending Sept. 26,1979. For the computation period beginning Mar.
20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's
U.S. office gross loans to foreigners and gross balances due from foreign offices
of other institutions between the base period (Sept. 13-26, 1979) and the week
ending Mar. 12,1980, whichever was greater. For the computation period beginning
May 29,1980, the base was increased by V/i percent above the base used to calculate
the marginal reserve in the statement week of May 14-21, 1980. In addition,
beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and
balances declined.
5. For existing nonmember banks and thrift institutions at the time of implementation of the Monetary Control Act, the phase-in period ends Sept. 3, 1987.
For existing member banks the phase-in period is about three years, depending on
whether their new reserve requirements are greater or less than the old requirements. For existing agencies and branches of foreign banks, the phase-in ends Aug.
12, 1982. All new institutions will have a two-year phase-in beginning with the date
that they open for business.
6. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment
orders of withdrawal, and telephone and preauthorized transfers (in excess of three
per month) for the purpose of making payments to third persons or others.
7. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement will apply be modified
annually to 80 percent of the percentage increase in transaction accounts held by
all depository institutions on the previous June 30. At the beginning of 1982 the
amount was accordingly increased from $25 million to $26 million.
8. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which the beneficial interest is
held by a depositor that is not a natural person. Also included are certain transferable time deposits held by natural persons, and certain obligations issued to
depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
NOTE. Required reserves must be held in the form of deposits with Federal
Reserve Banks or vault cash. After implementation of the Monetary Control Act,
nonmembers may maintain reserves on a pass-through basis with certain approved
institutions.

Policy Instruments
1.16

M A X I M U M I N T E R E S T R A T E S P A Y A B L E on Time and Savings Deposits at Federally Insured Institutions
Percent per annum
Commercial banks

Type and maturity of deposit

In effect Feb. 28, 1982

Percent

1 Savings
2 Negotiable order of withdrawal accounts 2
Time accounts 3
Fixed ceiling rates by maturity 4
3
14-89 days ?
4
90 days to 1 year
5
1 to 2 years 7
6
2 to 214 years 7
7
2V5 to 4 years 7
8
4 to 6 years 8
9
6 to 8 years 8
10
8 years or more 8
11
Issued to governmental units (all maturities) 10
12
Individual retirement accounts and Keogh (H.R. 10)
plans (3 years or more) 1 0 1 1
13
14
15
16

A9

5LA

Effective
date

5 !/4

7/1/79
12/31/80

5'/4
53/4

8/1/79
1/1/80
7/1/73

6</2
71/4

m

73/4

7/1/73
11/1/73
12/23/74
6/1/78
6/1/78
6/1/78

Savings and loan associations and
mutual savings banks (thrift institutions)

Previous maximum

Percent

Effective
date
7/1/73
1/1/74

5
5>/2
5>/5
53/4
53/4
'),
. 7</4

7/1/73
7/1/73
1/21/70
1/21/70
1/21/70




Effective
date

5'
/5
51/4
(6)
6

61/2
63/4
71/5

7/1/79
12/31/80

1/1/80
(')

0)

V3/4

'12/23/74'

11/1/73
12/23/74
6/1/78
6/1/78

73/4

7/6/77

6/1/78

11/1/73

Special variable ceiling rates by maturity
6-month money market time deposits 12
12-month all savers certificates
2'/5 years to 4 years
Accounts with no ceiling rates
Individual retirement accounts and Keogh (H.R. 10)
plans (18 months or more)

1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan
associations.
2. For authorized states only. Federally insured commercial banks, savings and
loan associations, cooperative banks, and mutual savings banks in Massachusetts
and New Hampshire were first permitted to offer negotiable order of withdrawal
(NOW) accounts on Jan. 1, 1974. Authorization to issue N O W accounts was extended to similar institutions throughout New England on Feb. 27, 1976, in New
York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Authorization
to issue N O W accounts was extended to similar institutions nationwide effective
Dec. 31. 1980.
3. For exceptions with respect to certain foreign time deposits see the BULLETIN
for October 1962 (p. 1279), August 1965 (p. 1084). and February 1968 (p. 167).
4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts
at savings and loan associations was decreased to 14 days and the minimum maturity
period for time deposits at savings and loan associations in excess of $100,000 was
decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice
period for time deposits was decreased from 30 to 14 days at mutual savings banks.
5. Effective Oct. 30, 1980, the minimum maturity or notice period for time
deposits was decreased from 30 to 14 days at commercial banks.
6. No separate account category.
7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was
required for savings and loan associations, except in areas where mutual savings
banks permitted lower minimum denominations. This restriction was removed for
deposits maturing in less than 1 year, effective Nov. 1, 1973.
8. No minimum denomination. Until July 1, 1979, the minimum denomination
was $1,000 except for deposits representing funds contributed to an individual
retirement account (IRA) or a Keogh (H.R. 10) plan established pursuant to the
Internal Revenue Code. The $1,000 minimum requirement was removed for such
accounts in December 1975 and November 1976 respectively.
9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or
more with minimum denominations of $1,000 had no ceiling; however, the amount
of such certificates that an institution could issue was limited to 5 percent of its
total time and savings deposits. Sales in excess of that amount, as well as certificates
of less than $1,000, were limited to the 6'/5 percent ceiling on time deposits maturing
in 2 y e a r s or more.
Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4 years or more with minimum denomination of $1,000. There
is no limitation on the amount of these certificates that banks can issue.
10. Accounts subject to fixed-rate ceilings. See footnote 8 for minimum denomination requirements.
11. Effective Jan. 1, 1980, commercial banks are permitted to pay the same rate
as thrifts on I R A and Keogh accounts and accounts of governmental units when
such deposits are placed in the new 2'/5-year or more variable-ceiling certificates
or in 26-week money market certificates regardless of the level of the Treasury bill
rate.
12. Must have a maturity of exactly 26 weeks and a minimum denomination of
$10,000, and must be nonnegotiable.
13. Commercial banks and thrift institutions were authorized to offer money
market time deposits effective June 1, 1978. These deposits have a minimum denomination requirement of $10,000 and a maturity of 26 weeks. The ceiling rate
of interest on these deposits is indexed to the discount rate (auction average) on
most recently issued 26-week U.S. Treasury bills. Interest on these certificates may
not be compounded. Effective for all 6-month money market certificates issued
beginning Nov. 1, 1981, depository institutions may pay rates of interest on these
deposits indexed to the higher of (1) the rate for 26-week Treasury bills established
immediately before the date of deposit (bill rate) or (2) the average of the four
rates for 26-week Treasury bills established for the 4 weeks immediately prior to
the date of deposit (4-week average bill rate). Rate ceilings are determined as
follows:
Bill rate or 4-week
Commercial bank ceiling
average bill rate
7.50 percent or below
7.75 percent
X
Above 7.50 percent
A of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate

In effect Feb. 28, 1982

7%

Previous maximum

Percent

51/4
5
(6)

53/4
53/4
6
6
7>/2

V/4
73/4

13'

(>7)

(17)

C7)

(17)

Bill rate or 4-week
average bill rate

Thrift ceiling

7.25 percent or below
Above 7.25 percent, but below
8.50 percent
8.50 percent or above, but below
8.75 percent
8.75 percent or above

7.75 percent
V5 of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate
9 percent
VA of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate

The maximum allowable rates in February for commercial banks and thrifts based
on the bill rate were as follows: Jan. 26, 13.78; Feb. 2, 14.096; Feb. 9, 14.183;
Feb. 17, 14.61; Feb. 23. 12.945. The maximum allowable rates in February for
commercial banks and thrifts based on the 4-week average bill rate were as follows:
Jan. 26, 13.18; Feb. 2, 13.571; Feb. 9, 13.853; Feb. 17, 14.167; Feb. 23, 13.958.
14. Effective Oct. 1, 1981, depository institutions are authorized to issue all
savers certificates (ASCs) with a 1-year maturity and an annual investment yield
equal to 70 percent of the average investment yield for 52-week U.S. Treasury bills
as determined by the auction of 52-week Treasury bills held immediately before
the calendar week in which the certificate is issued. A maximum lifetime exclusion
of $1,000 ($2,000 on a joint return) from gross income is generally authorized for
interest income from ASCs. The annual investment yields for ASCs issued in
February (in percent) were as follows: Feb. 21, 10.79.
15. Effective Aug. 1, 1981, commercial banks may pay interest on any variable
ceiling nonnegotiable time deposit with an original maturity of 2V5 years to less
than 4 years at a rate not to exceed LA of 1 percent below the average 2'/i-year
yield for U.S. Treasury securities as determined and announced by the Treasury
Department immediately before the date of deposit. Thrift institutions may pay
interest on these certificates at a rate not to exceed the average 2 V2 -year yield for
Treasury securities as determined and announced by the Treasury Department
immediately before the date of deposit. If the announced average 2'/5-year yield
for Treasury securities is less than 9.50 percent, commercial banks may pay 9.25
percent and thrift institutions 9.50 percent for these deposits. These deposits have
no required minimum denomination, and interest may be compounded on them.
The ceiling rates of interest at which they may be offered vary biweekly. The
maximum allowable rates in February (in percent) for commercial banks were as
follows: Feb. 2, 14.3; Feb. 17, 14.80; and for thrift institutions: Feb. 2, 14.55; Feb.
17, 15.05.
16. Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks, and thrift institutions were authorized to offer variable ceiling nonnegotiable time deposits with
no required minimum denomination and with maturities of 2V5 years or more.
Effective Jan. 1, 1980, the maximum rate for commercial banks was 3/4 percentage
point below the average yield on 215-year U.S. Treasury securities; the ceiling rate
for thrift institutions was V4 percentage point higher than that for commercial banks.
Effective Mar. 1, 1980, a temporary ceiling of 11% percent was placed on these
accounts at commercial banks and 12 percent on these accounts at savings and loan
associations. Effective June 2, 1980, the ceiling rates for these deposits at commercial banks and savings and loans was increased V5 percentage point. The temporary ceiling was retained, and a minimum ceiling of 9.25 percent for commercial
banks and 9.50 percent for thrift institutions was established.
17. Effective Dec. 1, 1981, depository institutions were authorized to offer time
deposits not subject to interest rate ceilings when the funds are deposited to the
credit of, or in which the entire beneficial interest is held by, an individual pursuant
to an I R A agreement or Keogh (H.R. 10) plan. Such time deposits must have a
minimum maturity of 18 months, and additions may be made to the time deposit
at any time before its maturity without extending the maturity of all or a portion
of the balance of the account.
For NOTE see opposite page.

A10
1.17

Domestic Financial Statistics • March 1982
FEDERAL RESERVE OPEN MARKET TRANSACTIONS
Millions of dollars
1981
Type of transaction

1979

1980

1982

1981
July

Aug.

Sept.

Nov.

Oct.

Dec.

Jan.

U . S . GOVERNMENT SECURITIES

Outright transactions (excluding matched
transactions)
1
2
3
4

Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions

5
6
/
8
9

15,998
6,855
0
2,900

7,668
7,331
0
3,389

13,899
6,746
0
1,816

1,325
0
0
100

1,713
333
0
0

1,753
945
0
500

241
1,157
0
200

1,765
0
0
16

2,170
0
0
0

0
2,756
0
600

Others within 1 year1
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions

3,203
0
17,339
-11,308
2,600

912
0
12,427
-18,251
0

317
23
13,794
-12,869
0

122
0
1,073
-351
0

0
0
2,807
-2,430
0

0
0
628
-599
0

0
0
425
0
0

0
0
1,389
-3,047
0

80
0
887
-754
0

0
0
542
0
0

10
11
12
13

1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange

2,148
0
-12,693
7,508

2,138
0
-8,909
13,412

1,702
0
-10,299
10,117

607
0
-1,073
351

0
0
-820
1,724

0
0
-628
599

0
0
-425
0

100
0
-1,057
2,325

526
0
-887
754

0
0
-542
0

14
15
16
1/

5 to 10 wars
Gross purchases
Gross sales
Maturity shift
Exchange

523
0
-4,646
2,181

703
0
-3,092
2,970

393
0
-3,495
1,500

64
0
0
0

0
0
-1,987
400

0
0
0
0

0
0
0
0

0
0
-332
400

165
0
0
0

0
0
0
0

18
19
20
21

Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange

454
0
0
1,619

811
0
-426
1,869

379
0
0
1,253

182
0
0
0

0
0
0
305

0
0
0
0

0
0
0
0

0
0
0
322

108
0
0
0

0
0
0
0

22
23
24

All maturities1
Gross purchases
Gross sales
Redemptions

22,325
6,855
5,500

12,232
7,331
3,389

16,690
6,769
1.816

2,301
0
100

1,713
333
0

1,753
945
500

241
1,157
200

1,865
0
16

3,049
0
0

0
2,756
600

25
2b

Matched transactions
Gross sales
Gross purchases

627,350
624,192

674,000
675,496

589,312
589,647

69,972
69,309

54,329
55,917

52,055
51,555

58,581
58,372

42,012
41,900

54,098
54,044

51,132
51,717

27
28

Repurchase agreements
Gross purchases
Gross sales

107,051
106.968

113,902
113,040

79,920
78,733

23,217
21,599

7,199
8,817

0
0

3,902
3,902

9.505
7,709

14,180
12,760

12,962
12,914

6,896

3,869

9,626

3,155

1,350

-192

-1,325

3,534

4,415

-2,724

853
399
134

668
0
145

494
0
108

0
0

0
0

*

*

0
0
33

0
0
15

494
0
10

0
0
4

0
0
68

37,321
36,960

28,895
28,863

13,320
13.576

5,182
4,822

864
1,225

0
0

787
787

1,607
1,288

1,647
1,697

800
935

681

555

130

360

-360

-33

-15

802

-54

-203

36 Outright transactions, net
SI Repurchase agreements, net

0
116

0
73

0
-582

0
453

0
-453

0
0

0
0

0
744

0
-549

0
402

38 Net change in bankers acceptances

116

73

-582

453

-453

0

0

744

-549

402

7,693

4,497

9,175

3,968

536

-225

-1,340

5,080

3,812

-2,524

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

30
31
32

Outright transactions
Gross purchases
Gross sales
Redemptions

33
34

Repurchase agreements
Gross purchases
Gross sales

35 Net change in federal agency obligations
BANKERS ACCEPTANCES

39 Total net change in System Open Market
Account

1. Both gross purchases and redemptions include special certificates created
when the Treasury borrows directly from the Federal Reserve, as follows (millions
of dollars): March 1979, 2,600.




NOTE.Sales, redemptions, and negative figures reduce holdings of the System
Open Market Account; all other figures increase such holdings. Details may not
add to totals because of rounding.

Reserve Banks
1.18

FEDERAL RESERVE BANKS

All

Condition and Federal Reserve Note Statements

Millions of dollars
Wednesday
Account

End of month

1982
Jan. 27

Feb. 3

1982

1981

Feb. 10

Feb. 17

Feb. 24

Dec.

Feb.

Jan.

Consolidated condition statement
ASSETS

11,151
3,318
410

11,151
3,568
416

11,151
3,568
428

11,151
3,568
431

11,150
3,568
439

11,151
3,318
377

11,151
3,318
422

11,150
3,568
453

5,109
0

1,800
0

2,283
0

1,505
0

1,414
0

1,601

2,217
0

1,180
0

1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4
To depository institutions
5
Other
Acceptances
Held under repurchase agreements
6
Federal agency obligations
7
Bought outright
Held under repurchase agreements
8
U.S. government securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total 1
13 Held under repurchase agreements
14 Total U.S. government securities

368

596

0

453

0

195

597

0

9,057
102

9,054
406

9,046
0

9,046
172

9,031
0

9,125
269

9,058
134

9,026
0

48,162
59,978
18,401
126,541
2,506
129,047

47,209
59,978
18,401
125,588
7,354
132,942

46,804
59,978
18,401
125,183
0
125,183

47,646
60,289
18,090
126,025
4,328
130,353

47,801
60,359
18,090
126,250
0
126,250

49,359
59,978
18,401
127,738
3,216
130,954

46,588
59,978
18,401
124,967
3,263
128,230

46,961
60,359
18,090
125,410
0
125,410

15 Total loans and securities

143,683

144,798

136,512

141,529

136,695

142,144

140,236

135,616

6,983
502

10,233
502

9,392
503

13,669
505

8,047
505

8,557
503

8,119
502

8,672
505

5,200
3,943

5,112
4,095

5,132
4,189

5,131
3,189

5,137
3,313

5,129
3,598

5,112
4,075

5,137
3,401

175,190

179,875

170,875

179,173

168,854

174,777

172,935

168,502

127,509

127,527

128,418

128,677

127,607

131,906

126,835

126,869

29,434
7,169
346
437

34,178
5,576
274
516

26,764
4,417
340
529

29,807
5,541
271
509

24,905
5,143
264
350

25,228
4,301
505
781

25,066
8,285
333
393

24,964
3,835
416
414

37,386

40,544

32,050

36,128

30,662

30,815

34,077

29,629

5,251
2,196

6,364
2,627

5,440
2,096

8,880
2,610

5,647
2,061

6,795
2,705

6,484
2,611

5,713
3,341

172,342

177,062

168,004

176,295

165,977

172,221

170,007

165,552

1,286
1,278
284

1,287
1,278
248

1,289
1,278
304

1,291

1,278
309

1,290
1,278
309

1,278
1,278
0

1,287
1,278
363

1,291
1,278
381

175,190

179,875

170,875

179,173

168,854

174,777

172,935

168,502

95,533

92,265

96,024

93,641

94,410

95,220

94,794

94,816

16 Cash items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies 2
19 All other 3
20 Total assets

0

LIABILITIES

21 Federal Reserve notes
Deposits
22
Depository institutions
23
U.S. Treasury—General account
24
Foreign—Official accounts
25
Other
26 Total deposits
27 Deferred availability cash items
28 Other liabilities and accrued dividends 4
29 Total liabilities
CAPITAL ACCOUNTS

30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
34 MEMO: Marketable U.S. government securities held in
custody for foreign and international account

Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to bank) . . . .
36
LESS: Held by bank 5
37
Federal Reserve notes, net
Collateral for Federal Reserve notes
38
Gold certificate account
Special drawing rights certificate account
39
40
Other eligible assets
41
U.S. government and agency securities

150,632
23,123
127,509

150,650
23,123
127,527

150,557
22,139
128,418

150,655
21,978
128,677

150,682
23,075
127,607

151,033
19,127
131,906

150,605
23,770
126,835

150,636
23,767
126,869

11,151
3,318
0
113,040

11,151
3,568
0
112,808

11,151
3,568
0
113,699

11,151
3,568
0
113,958

11,150
3,568
0
112,889

11,151
3,318
0
117,437

11,151
3,318
0
112,366

11,150
3,568
0
112,151

42 Total collateral

127,509

127,527

128,418

128,677

126,607

131,906

126,835

126,869

1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies and foreign currencies warehoused for the U.S. Treasury. Assets shown in this line are revalued monthly at market exchange rates.




3. Includes special investment account at Chicago of Treasury bills maturing
within 90 days.
4. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
5. Beginning September 1980, Federal Reserve notes held by the Reserve Bank
are exempt from the collateral requirement.

A12
1.19

DomesticNonfinancialStatistics • March 1982
FEDERAL RESERVE BANKS

Maturity Distribution of Loan and Security Holdings

Millions of dollars
Wednesday
Type and maturity groupings

End of month

1982
Jan. 27

Feb. 3

1981

Feb. 10

Feb. 17

Feb. 24

1982

Dec. 31

Jan. 29

Feb. 26

1 Loans—Total
2
Within 15 days
3
16 days to 90 days
4 91 days to 1 year

5,109
5,079
30
0

1,800
1,728
72
0

2,283
2,207
76
0

1,505
1,479
26
0

1,414
1,319
95
0

1,601
1,576
25
0

2,217
2,180
37
0

1,180
1,069
111
0

5 Acceptances—Total
6
Within 15 days
7
16 days to 90 days
8 91 days to 1 year

368
368
0
0

596
596
0
0

0
0
0
0

453
453
0
0

0
0
0
0

195
195
0
0

597
597
0
0

0
0
0
0

9 U.S. government securities—Total
10 Within 15 days1
11
16 days to 90 days
12 91 days to 1 year
13 Over 1 year to 5 years
14 Over 5 years to 10 years
15 Over 10 years

129,047
7,801
23,428
33,407
36,025
11,752
16,634

132,942
11,031
23.314
34,237
35,974
11,752
16,634

125,183
5,249
21,587
33,987
35,974
11,752
16,634

130,353
10,609
23,596
33,482
35,764
10,193
16,709

126,250
6,419
24,820
32,295
35,814
10,193
16,709

130,954
3,936
25,190
37,417
36,025
11,752
16,634

128,230
4,618
24,980
34,221
36,025
11,752
16,634

125,410
2,617
26,558
33,520
35,814
10,193
16,708

16 Federal agency obligations—Total
17 Within 15 days1
18
16 days to 90 days
19 91 days to 1 year
20
Over 1 year to 5 years
Over 5 years to 10 years
21
Over 10 years
22

9,159
243
622
1,357
5,404
960
573

9,460
484
708
1,331
5,404
960
573

9,046
135
572
1,378
5,428
960
573

9,218
367
512
1,378
5,428
960
573

9,031
292
540
1,238
5,428
960
573

9,394
529
631
1,443
5,256
962
573

9,192
276
622
1,357
5,404
960
573

9,026
173
540
1,369
5,396
976
572

1. Holdings under repurchase agreements are classified as maturing within 15
days in accordance with maximum maturity of the agreements.

1.20

B A N K DEBITS A N D DEPOSIT T U R N O V E R
Debits are shown in billions of dollars, turnover as ratio of debits to deposit. Monthly data are at annual rates.
1981
Bank group, or type of customer

1979

1978

1980
Aug.

Sept.

Oct.

Nov.

Dec.

1

Debits to demand deposits (seasonally adjusted)
1 All commercial banks
2 Major New York City banks
3 Other banks

40,297.8
15,008.7
25,289.1

49,775.0
18,512.7
31,262.3

63.013.4
25.192.5
37,820.9

89,723.4
41.877.2
47.846.3

87,303.2'
39,209.4'
48,093.8

83,671.3''
35,109.8'
48,561.5

82,000.3'
34,237.6'
47,762.6

86,430.0'
34,937.3'
51,492.7

753.3
96.3
539.7
1,389.2

903.5
117.9
597.0
1,618.4

292.0'
1,128.3'
190.7

309.2'
1,156.8'
206.6

Debits to savings deposits 2 (not seasonally adjusted)
4
5
6
7

ATS/NOW 3
Business4
Others 5
All accounts

17.1
56.7
359.7
432.9

83.3
77.3
515.2
675.8

158.4
93.4
605.3
857.2

745.0
118.1
595.5
1,458.6

820.2
122.0
577.0
1,519.2

833.4
117.2
581.6
1,532.2

Demand deposit turnover 1 (seasonally adjusted)
8 All commercial banks
9 Major New York City banks
10 Other banks

139.4
541.9
96.8

163.5
646.2
113.3

201.6
813.7
134.3

316.8
1,338.1
189.9

309.5'
1,260.1'
191.6

296.2'
1,109.8'
193.6

Savings deposit turnover 2 (not seasonally adjusted)
11
12
13
14

ATS/NOW 3
Business4
Others 5
All accounts

7.0
5.1
1.7
1.9

1. Represents accounts of individuals, partnerships, and corporations, and of
states and political subdivisions.
2. Excludes special club accounts, such as Christmas and vacation clubs.
3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts
authorized for automatic transfer to demand deposits (ATS). ATS data availability
starts with December 1978.
4. Represents corporations and other profit-seeking organizations (excluding
commercial banks but including savings and loan associations, mutual savings banks,
credit unions, the Export-Import Bank, and federally sponsored lending agencies).
5. Savings accounts other than NOW; business; and, from December 1978, ATS.




7.8
7.2
2.7
3.1

9.7
9.3
3.4
4.2

13.5
13.5
3.9
6.7

14.5
14.3
3.9
7.1

14.6
14.1
3.9
7.2

12.8
11.7
3.6
6.4

14.6
13.9
4.0
7.4

NOTE. Historical data for the period 1970 through June 1977 have been estimated;
these estimates are based in part on the debits series for 233 SMS As, which were
available through June 1977. Back data are available from Publications Services,
Board of Governors of the Federal Reserve System, Washington, D.C. 20551.
Debits and turnover data for savings deposits are not available before July 1977.

Monetary Aggregates
1.21

A13

M O N E Y STOCK M E A S U R E S A N D C O M P O N E N T S
Billions of dollars, averages of daily figures
1982

1981
Item

1978
Dec.

1979
Dec.

1980
Dec.

1981
Dec.
Sept.

Oct.

Nov.

Dec.

Jan.

436.4
l,809.7 r
2,174.5 r
2,625.3

440.9 r
l,822.4 r
2,187.8 r
n.a.

448.6
1,840.2
2,203.9
n.a

121.8
4.3
235.7
74.7
340.9
856.8r
300.6

123.1
4.3
236.4
77.0
343.6r
854.7 r
300.4

123.8
4.3
239.3
81.!
348.9
851.6
303.1

439.7
1,809.3
2,175.4 r
2,624.5

451. V
l,829.1 r
2,199.6 r
n.a.

453.4
1,848.1
2,216.7
n.a.

Seasonally adjusted
MEASURES 1

1
2
3
4

Ml
M2
M3
L2

363.2
1,403.9
1,629.0
1,938.9

389.0
1,518.9
1,779.3
2,153.9

414.5
1,656.1
1.963.1
2,370.4

440.9 r
l,822.4 r
2,187.8 r
n.a.

97.4
3.5
253.9
8.4
479.9
533.9
194.6

106.1
3.7
262.2
16.9
421.7
652.6
221.8

116.2
4.2
267.2
26.9
398.9
751.7
257.9

123.1
4.3
236.4
77.0
343.6r
854.7 r
300.4

431.2
1,778.1
2,138.0
2,577.2 r

432.9
1,789.3
2,151.0
2,599.4 r

121.1
4.3
234.7
71.2
343.1
839.7
302.3

121.3
4.3
235.7
71.6
339.6
849.8
302.2

SELECTED COMPONENTS

5
6
7
8
9
10
11

Currency
Traveler's checks 3
Demand deposits
Other checkable deposits 7
Savings deposits 4
Small-denomination time deposits 5
Large-denomination time deposits 6

Not seasonally adjusted
MEASURES 1

12
13
14
15

Ml
M2
M3
L2

372.5
1,408.5
1,637.5
1,946.6

398.8
1,524.6
1,789.2
2,162.8

424.6
1.662.4
1,973.8
2.380.2

451.2''
1.829.l r
2.199.6 r
n.a.

431.5
1,775.6
2,132.2
2,568.3 r

434.5
1,793.1
2,152.4
2,597.8 r

99.4
3.3
261.5
8.4
24.1
478.0
531.1

108.2
3.5
270.1
17.0
26.3
420.5
649.7

118.3
3.9
275.1
27.2
35.0
398.0
748.9

125.4
4.1
243.3
78.4
38.1
343.0'
851.7r

120.8
4.5
234.6
71.7
39.6
347.9
832.1

121.2
4.3
236.6
72.4
36. V
343.9
847.6

122.9
4.1
237.5
75.2
36.9
342.2
851.9

125.4
4.1
243.3
78.4
38.1
343.0 r
851.7 r

123.2
4.1
243.6
82.5
43.3
346.8
856.8

7.1
3.1
198.6

34.3
9.3
226.0

61.8
13.9
262.3

150.8
33.7
305.5r

130.4
26.6
299.1

137.1
29.4
299.8

144.6
32.0
301.8

150.8
33.7
305.5 r

154.4
32.5
308.1

SELECTED COMPONENTS

16
17
18
19
20
21
22

Currency
Traveler's checks 3
Demand deposits
Other checkable deposits 7
Overnight RPs and Eurodollars 8
Savings deposits 4
Small-denomination time deposits 5
Money Market Mutual Funds
23 General purpose and broker/dealer
24
Institution only
25 Large-denomination time deposits 6

1. Composition of the money stock measures is as follows:
Ml: Averages of daily,figures for (1) currency outside the Treasury, Federal
Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due
to domestic banks, the U.S. government, and foreign banks and official institutions
less cash items in the process of collection and Federal Reserve float; and (4)
negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at banks and thrift institutions, credit union share draft (CUSD) accounts,
and demand deposits at mutual savings banks.
M2: Ml plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and balances of money market mutual funds (general purpose and broker/
dealer).
M3: M2 plus large-denomination time deposits at all depository institutions, term
RPs at commercial banks and savings and loan associations, and balances of institution-only money market mutual funds.
2. L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper. Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.
3. Outstanding amount of U.S. dollar-denominated traveler's checks of nonbank
issuers.




4. Savings deposits exclude NOW and ATS accounts at commercial banks and
thrift institutions and CUSDs at credit unions.
5. Small-denomination time deposits—including retail RPs—are those issued in
amounts of less than $100,000.
6. Large-denomination time deposits are those issued in amounts of $100,000
or more and are net of the holdings of domestic banks, thrift institutions, the U.S.
government, money market mutual funds, and foreign banks and official institutions.
7. Includes ATS and NOW balances at all institutions, credit union share draft
balances, and demand deposits at mutual savings banks.
8. Overnight (and continuing contract) RPs are those issued by commercial
banks to other than depository institutions and money market mutual funds (general
purpose and broker/dealer), and overnight Eurodollars are those issued oy Caribbean branches of member banks to U.S. residents other than depository institutions and money market mutual funds (general purpose and broker/dealer).
NOTE. Latest monthly and weekly figures are available from the Board's H.6
(508) release. Back data are available from the Banking Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.

A14
1.22

DomesticNonfinancialStatistics • March 1982
A G G R E G A T E RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE 1
Billions of dollars, averages of daily figures
1981
Item

1978
Dec.

1979
Dec.

1982

1980
Dec.
May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Seasonally adjusted

ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2

1 Total reserves3

35.08

36.37

39.01

39.63

39.62

39.73

39.81

40.31

40.12

40.15

40.53

41.28

2 Nonborrowed reserves
3 Required reserves
4 Monetary base 4

34.22
34.85
134.7

34.90
36.04
145.0

37.32
38.49
158.0

37.40
39.37
161.4

37.58
39.28
161.7

38.05
39.39
162.5

38.39
39.52
162.9

38.86
39.90
163.7

38.94
39.84
163.8

39.49
39.81
164.3

39.89
40.21
165.8

39.76
40.86
167.4

Not seasonally adjusted
5 Total reserves3

35.66

36.97

39.70

39.31

39.05

39.64

39.48

40.09

40.22

40.33

41.26

42.70

6 Nonborrowed reserves
7 Required reserves
8 Monetary base 4

34.80
35.43
137.4

35.50
36.65
147.9

38.01
39.19
161.0

37.08
39.05
160.8

37.02
38.72
161.2

37.96
39.30
163.3

38.06
39.19
163.2

38.63
39.67
163.3

39.04
39.94
163.8

39.67
39.99
165.6

40.63
40.94
168.9

41.18
42.28
168.5

NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 5

9 Total reserves3
10 Nonborrowed reserves
11 Required reserves
12 Monetary base 4

41.68

43.91

40.66

40.52

40.44

41.01

41.02

40.59

40.71

40.95

41.92

43.20

40.81
41.45
144.6

42.43
43.58
156.2

38.97
40.15
162.4

38.29
40.26
162.6

38.41
40.10
163.3

39.33
40.67
165.4

39.60
40.73
165.4

39.13
40.18
163.9

39.53
40.43
164.3

40.29
40.60
166.3

41.29
41.60
169.7

41.69
42.78
169.1

1. Reserves measures from November 1980 to date reflect a one-time increase—
estimated at $550 million to $600 million—in required reserves associated with the
reduction of week-end avoidance activities of a few large banks.
2. Reserve aggregates include required reserves of member banks and Edge Act
corporations and other depository institutions. Discontinuities associated with the
implementation of the Monetary Control Act, the inclusion of Edge Act corporation
reserves, and other changes in Regulation D have been removed.
3. Reserve balances with Federal Reserve Banks (which exclude required clearing balances) plus vault cash at institutions with required reserve balances plus
vault cash equal to required reserves at other institutions.
4. Includes reserve balances and required clearing balances at Federal Reserve
Banks in the current week plus vault cash held two weeks earlier used to satisfy
reserve requirements at all depository institutions plus currency outside the U.S.
Treasury, Federal Reserve Banks, the vaults of depository institutions, and surplus
vault cash at depository institutions.




5. Reserves of depository institutions series reflect actual reserve requirement
percentages with no adjustments to eliminate the effect of changes in Regulation
D. including changes associated with the implementation of the Monetary Control
Act. Includes required reserves of member banks and Edge Act corporations and,
beginning Nov. 13, 1980, other depository institutions. Under the transitional phasein program of the Monetary Control Act of 1980, the net changes in required
reserves of depository institutions have been as follows: effective Nov. 13, 1980,
a reduction of $2.8 billion; Feb. 12, 1981, an increase of $245 million; Mar. 12,
1981. an increase of $75 million; May 14, 1981, an increase of $245 million; Aug.
13, 1981, an increase of $245 million; Sept. 3, 1981, a reduction of $1.3 billion;
and Nov. 19, 1981, an increase of $220 million.
NOTE. Latest monthly and weekly figures are available from the Board's H.3(502)
statistical release. Back data and estimates of the impact on required reserves and
changes in reserve requirements are available from the Banking Section, Division
of Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.

Monetary Aggregates
1.23

A15

L O A N S A N D SECURITIES All Commercial Banks 1
Billions of dollars; averages of Wednesday figures
1981

1982

1980
Dec.

n

Oct.

Nov.

Dec.

2

Jan.

2

1981
Oct.

Seasonally adjusted
1 Total loans and securities

3

1,239.6

1324.0

1327.5

110.0
214.4
915.1
326.8
262.6
179.6
18.5
29.0
31.5
10.9
56.2

112.5
228.7
982.8
363.7
281.8
183.4
19.6
30.5
32.9
12.5
58.3

110.3
231.2
986.0
363.4
283.1
183.7
21.0
30.4
32.9
12.6
58.9

13 Total loans and securities plus loans sold3-6 .

1,242.3

1326.7

1330.3

14 Total loans plus loans sold3-6
15 Total loans sold to affiliates 6
16 Commercial and industrial loans plus loans
sold 6
17 Commercial and industrial loans sold 6 . . .
18 Acceptances held
19 Other commercial and industrial loans ..
20
To U.S. addressees 7
21
To non-U. S. addressees
22 Loans to foreign banks

917.8
2.7

985.5
2.7

988.8
2.7

328.6
1.8
7.8
319.0
297.6
21.4
23.4

365.8
2.0
9.2
354.6
327.8
26.7
23.6

365.5
2.1
8.8
354.5
328.3
26.3
23.4

2 U.S. Treasury securities
3 Other securities
4 Total loans and leases3
5
Commercial and industrial loans
6
Real estate loans
7
Loans to individuals
8
Security loans
9
Loans to nonbank financial institutions ..
10 Agricultural loans
11
Lease financing receivables
12
All other loans

1982

1980
Dec.
Nov.

Dec.

2

Jan. 2

Not seasonally adjusted

1317.7"

1322.2

1,249.5

1329.9

1333.4

114.3
232.1
975.9
360.9
287.3
185.9
20.6
31.1
33.2
13.0
43.9

110.5
215.7
923.3
328.8
263.3
180.9
19.1
29.9
31.4
10.9
59.0

111.5
229.0
989.4
364.2
283.0
185.0
19.4
30.8
33.4
12.5
61.1

109.5
231.9
992.0
364.8
284.4
184.9
21.3
30.9
33.1
12.6
60.0

1320.5"

1325.1

1,252.2

1332.6

1336.2

1330.3"

1327.6

977.94
2.8

978.8
2.9

926.0
2.7

992.0
2.7

994,7
2.7

985.84
2.8

981.6
2.9

360.84-5
2.2
8.9
349.7
335.0
14.7
19.0

363.2
2.2
8.7
352.2
339.6
12.6
15.4

330.6
1.8
8.5
320.3
297.1
23.2
25.1

366.3
2.0
9.2
355.1
328.4
26.7
24.0

366.9
2.1
9.2
355.6
329.2
26.5
23.2

362.94-5
2.2
9.8
351.0
334.4
16.6
20.0

363.0
2.2
9.1
351.7
338.4
13.3
16.1

110.9
231.7
975.04
358.64'5
285.54
185.2
21.9
30.24
33.0
12.7
47.8

1327.5"

111.4
233.1
983.04
360.84-5
286.34
186.5
22.7
31.24
33.0
12.7
49.9

1324.7

113.8
232.3
978.7
360.7
287.9
186.4
20.8
31.2
32.9
13.0
45.7

MEMO:

1. Includes domestically chartered banks; U.S. branches and agencies of foreign
banks, New York investment companies majority owned by foreign banks, and
Edge Act corporations owned by domestically chartered and foreign banks.
2. Beginning December 1981, shifts of foreign loans and securities from U.S.
banking offices to international banking facilities reduced the levels of several items
as follows: line 1, $23.2 billion; line 4, $22.8 billion; line 21, $10.9 billion; line 22,
$5.9 billion; line 12, $11.8 billion; and line 3, $0.5 billion. After December 1981,
levels were reduced as follows: line 1, $30.2 billion; line 4, $29.6 billion; line 21,
$13.9 billion; line 22, $7.5 billion; line 12, $15.7 billion; and line 3, $0.6 billion.
3. Excludes loans to commercial banks in the United States.
4. Absorption of a nonbank affiliate by a large commercial bank added the
following to February figures: total loans and securities, $1.0 billion; total loans
and leases, $1.0 billion; commercial and industrial loans, $.5 billion; real estate
loans, $.1 billion; nonbank financial, $.1 billion.




5. An accounting procedure change by one bank reduced commercial and industrial loans by $0.1 billion as of Apr. 1, 1981.
6. Loans sold are those sold outright to a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company.
7. United States includes the 50 states and the District of Columbia.
NOTE. Data are prorated averages of Wednesday estimates for domestically
chartered banks, based on weekly reports of a sample of domestically chartered
banks and quarterly reports of all domestically chartered banks. For foreign-related
institutions, data are averages of month-end estimates based on weekly reports
from large agencies and branches and quarterly reports from all agencies, branches,
investment companies, and Edge Act corporations engaged in banking.

A16
1.24

DomesticNonfinancialStatistics • March 1982
MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1980

1981

1982

Source
Dec.

1
2
3
4
5
6

Total nondeposit funds
Seasonally adjusted 2
Not seasonally adjusted
Federal funds, RPs, and other borrowings from
nonbanks 3
Seasonally adjusted
Not seasonally adjusted
Net balances due to foreign-related institutions, not seasonally adjusted
Loans sold to affiliates, not seasonally
adjusted 4

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

121.9
122.5

119.3
120.0

113.2
113.4

120.1
125.7

124.1
126.0

122.7
124.6

123.3
127.4

119.8
125.0

116.3
118.3

116.2
120.8

98.7
99.1

89.6
88.0

111.0
111.6

112.9
113.8

110.6
111.4

108.7
114.2

115.3
117.2

113.8
115.7

110.5
114.6

108.2
113.3

109.1
111.1

110.1
114.7

114.4
114.8

116.3
114.7

8.2

3.5

-.7

8.7

5.9

6.2

10.1

8.9

4.5

3.3

-18.5

-29.6

2.7

2.8

2.7

2.8

2.9

2.7

2.6

2.7

2.7

2.7

2.8

2.9

-14.7
37.5
22.8

-17.0
38.8
21.8

-21.3
43.0
21.7

-13.6
43.4
29.8

-14.6
42.5
27.8

-14.6
45.0
30.4

-10.2
43.7
33.5

-12.3
44.5
32.2

-15.4
45.5
30.1

-15.0
47.9
32.9

-22.4
54.9
32.5

-27.1
57.1
30.0

22.9
32.5
55.4

20.5
31.9
52.4

20.6
34.0
54.6

22.3
35.7
57.9

20.6
36.9
57.4

20.8
37.4
58.2

20.4
38.0
58.4

21.2
40.1
61.3

19.9
38.3
58.2

18.4
39.1
57.4

3.9
48.1
52.0

-2.5
50.0
47.5

64.0
62.3

66.9
65.6

67.0
65.5

64.3
67.6

70.8
70.5

69.2
68.9

65.7
67.6

63.0
65.9

64.9
64.7

65.0
67.3

70.0
68.2

73.0
69.2

9.5
9.0

12.0
10.4

12.1
12.2

12.5
12.5

11.4
12.5

10.9
10.8

8.3
7.5

9.3
10.9

11.1
13.3

12.1
9.7

11.8
11.3

13.5
14.6

267.0
272.4

281.4
285.9

283.0
283.9

294.9
293.9

302.4
298.2

313.1
304.7

321.7
314.8

324.7
320.2

324.8
322.6

323.4
324.6

324.0
330.3

324.3
330.6

MEMO

7 Domestically chartered banks net positions
with own foreign branches, not seasonally adjusted 6
8
Gross due from balances
9
Gross due to balances
10 Foreign-related institutions net positions with
directly related institutions, not seasonally adjusted 7
11 Gross due from balances
12 Gross due to balances
13
14
15
16
17
18

Security RP borrowings
Seasonally adjusted®
Not seasonally adjusted
U.S. Treasury demand balances 9
Seasonally adjusted
Not seasonally adjusted
Time deposits, $100,000 or more 10
Seasonally adjusted
Not seasonally adjusted

1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks. New
York investment companies majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. Includes averages of Wednesday data for domestically chartered banks and averages
of current and previous month-end data for foreign-related institutions.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking business.
This includes borrowings from Federal Reserve Banks and from foreign banks,
term federal funds, overdrawn due from bank balances, loan RPs, and participations in pooled loans. Includes averages of daily figures for member banks and
averages of current and previous month-end data for foreign-related institutions.
4. Loans initially booked by the bank and later sold to affiliates that are still
held by affiliates. Averages of Wednesday data.




5. Averages of daily figures for member and nonmember banks.
6. Averages of daily data.
7. Based on daily average data reported by 122 large banks.
8. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
9. Averages of Wednesday figures.
NOTE. Beginning December 1981, shifts of foreign assets and liabilities from U.S.
banking offices to international banking facilities (IBFs) reduced levels for several
items as follows: lines 1 and 2, $22.4 billion; lines 3 and 4, $1.7 billion; line 5,
$20.7 billion; line 7, $3.1 billion; and line 10, $17.6 billion. After December 1981,
levels were reduced as follows: lines 1 and 2, $29.6 billion; lines 3 and 4, $2.4
billion; line 5, $27.2 billion; line 7. $4.7 billion; and line 10 $22.4 billion.
Total nondeposit funds and federal funds, RPs, and other borrowings from
nonbanks have been revised because of new seasonal factors and benchmarking to
the June and September 1980 call reports.

Commercial Banks
1.25

ASSETS A N D LIABILITIES OF C O M M E R C I A L B A N K I N G INSTITUTIONS
Billions of dollars except for number of banks

A17

Last-Wednesday-of-Month Series

1981
Account
July

Aug.

218.8

874.2
295.4
578.8
113.4
218.4

1,214.1
881.2
298.3
582.9
113.1
219.8

1,221.3
888.7
301.2
587.5
111.3
221.4

175.9
19.3
25.2
57.7
73.5

165.7
19.0
25.4
56.8
64.5

156.8
19.5
27.0
52.7
57.6

168.4
20.0
25.4
61.4
61.6

Apr.

May

1.170.4
842.6
279.8
562.8
110.3
217.5

1.188.7
857.5
287.8
569.7
113.1

1,195.5
864.5
290.3
574.3
112.1

218.1

7 Cash assets, total
8
Currency and coin
9
Reserves with Federal Reserve Banks
10
Balances with depository institutions .
11
Cash items in process of collection . . .

163.9
17.7
31.8
51.3
63.1

178.1
18.7
38.3
53.7

12 Other assets 2

167.2

Dec. 1

Oct.

Nov.

1,242.5
906.2
308.5
597.8
109.4
226.9

1,239.9
902.9
308.5
594.3

1,249.4
912.8
312.6
600.2
106.7
229.9

1,268.1
926.6
320.9
605.7
109.6
231.8

1,262.5
920.6
320.9
599.7
111.7
230.2

190.2
19.2
26.8
68.9
75.4

149.8
19.7
25.3
49.3
55.5

162.8

173.1
22.0

155.1
19.8
30.2
50.1
55.0

Sept/

DOMESTICALLY CHARTERED
COMMERCIAL BANKS 1

1 Loans and securities, excluding
interbank
2 Loans, excluding interbank
3
Commercial and industrial
4
Other
5 U.S. Treasury securities
6 Other securities

13 Total assets/total liabilities and capital...

1.501.5

14 Deposits
15
Demand
16
Savings
17
Time

1,135.7
345.3
220.1
570.3

18 Borrowings
19 Other liabilities
20 Residual (assets less liabilities)

67.4
171.1

1,206.1

110.0

227.1

18.3
26.1
52.0
66.4

28.0

54.5
68.7

163.1

172.2

162.8

168.3

184.5

175.5

194.4

212.5

197.8

1,533.7

1,558.0

1,617.2

1,565.2

1,606.7

1,653.7

1,615.5

1,534.4

1,544.0

1,151.2
356.8
222.4
572.0

1,169.3
360.7
220.4
588.3

1,164.6
350.8
220.0
593.8

1,160.0

1,181.3
342.5
217.2
621.6

1,224.4
378.0
216.7
629.7

1,177.1
324.0
214.0
639.1

1,206.0

333.7
219.2
607.2

339.2
217.9
648.9

1,241.2
364.6
222.4
654.2

1,206.3
322.6
223.0
660.7

164.8

180.4

120.4

124.4

156.8
82.5
125.8

170.3
81.8
127.3

160.4
86.3
127.0

164.4
89.8
122.5

176.9
91.4
124.4

174.5
89.3
124.3

179.3
95.2
126.2

190.1
91.7
130.7

191.7
89.9
127.6

5.5
14,719

17.4
14,719

7.2
14,719

6.4
14,720

15.3
14,720

13.9
14,740

5.6
14,743

13.6
14,744

14,690

1,297.9
960.8
350.3'
610.4 r
115.3

219.3

1,291.2
955.1
345.5
609.8
115.8
220.4

1,306.7
969.8
354.2 r
615.6'
113.5
223.4

1,334.3
993.8
366.3
627.5
111.6
228.9

1,324.7
983.6
361. T
621.9 r
111.9
229.2

1,335.5
994.7
365.5 r
629.2'
108.8
232.0

1.330.6
984.7
361.4
623.4
112.3
233.6

1,322.9
976.3
360.3
616.1
114.6
232.0

193.2
17.7
32.7
77.8
65.1

207.5
19.0
26.5
94.4
67.5

187.8
19.5
28.0
81.4
58.9

205.2

234.5
19.2
28.1
110.7
76.5

165.4'
19.7
26.5
62.5 r
56.6

188.0
22.0
29.3
67.0
69.7

169.8
19.8
31.3
62.5
56.1

80.6

1.537.8

81.8

MEMO:

21 U.S. Treasury note balances included in
borrowing
22 Number of banks

10.2

16.8

14,701

14,713

16.6

ALL COMMERCIAL BANKING
INSTITUTIONS 3

23 Loans and securities, excluding
interbank
24 Loans, excluding interbank
25
Commercial and industrial
26
Other
27 U.S. Treasury securities
28 Other securities
29 Cash assets, total
30
Currency and coin
31
Reserves with Federal Reserve Banks
32
Balances with depository institutions .
33
Cash items in process of collection . . .
34 Other assets 2

1,254.6
922.8
331.6
591.3
112.6

221.8

20.1

26.6
95. T
62.9

179.3
18.3
27.5
66.0
67.4

229.0

238.0

228.4

233.7

251.0

244.0

267.0

290.1

275.0

35 Total assets/total liabilities and capital. . .

1,677.0

1,736.9

1,714.1

1,745.6

1,819.8

1,734.0

1,781.7

1.808.7

1,767.8

36 Deposits
37
Demand
38
Savings
39
Time

1,193.3
371.0
220.4
602.0

1,235.5
389.3
220.3
625.9

l,221.5 r
362.4 r
219.5
639.7

1,250.3
378.3
217.5
654.5

1,293.7
412.2
216.9
664.7

1,224.6
337.1
214.3
673.1

1,254.1
352.6
218.1
683.4

1,289.7
378.4
222.7
688.6

1,252.0
335.4
223.2
693.3

224.4
137.1
122.4

231.6
140.6
129.4

218.7 r
145.0'
128.9

223.5
147.4
124.4

242.7
157.0
126.3

236.8
146.4
126.3

246.2
153.3
128.1

250.8
135.6
132.6

253.3
133.0
129.5

7.2
15,188

6.4
15,189

15.3
15,189

13.9
15,209

5.6
15,212

13.6
15,213

16.6
15,185

40 Borrowings
41 Other liabilities
42 Residual (assets less liabilities)
MEMO:

43 U.S. Treasury note balances included in
borrowing
44 Number of banks

10.2
15,147

1. Domestically chartered commercial banks include all commercial banks in the
United States except branches of foreign banks; included are member and nonmember banks, stock savings banks, and nondeposit trust companies.
2. Other assets include loans to U.S. commercial banks.
3. Commercial banking institutions include domestically chartered commercial
banks, branches and agencies of foreign banks, Edge Act and Agreement corporations, and New York State foreign investment corporations.




15,1

NOTE. Figures are partly estimated. They include all bank-premises subsidiaries
and other significant majority-owned domestic subsidiaries. Data for domestically
chartered commercial banks are for the last Wednesday of the month. Data for
other banking institutions are for the last day of the quarter until June 1981;
beginning July 1981, these data are estimates made on the last Wednesday of the
month based on a weekly reporting sample of foreign-related institutions and quarterend condition report data.

A18
1.26

DomesticNonfinancialStatistics • March 1982
A L L L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S with Domestic Assets of $750 Million or More on
December 31, 1977, Assets and Liabilities
Millions of dollars, Wednesday figures
1882

1981
Dec. 30
1 Cash items in process of collection
2 Demand deposits due from banks in the United
States
3 All other cash and due from depository institutions ..
4 Total loans and securities
5
6
7
8
9
10
11
12
13
14
15
16
17
18

Securities
U.S. Treasury securities
Trading account
Investment account, by maturity
One year or less
Over one through five years
Over five years
Other securities
Trading account
Investment account
U.S. government agencies
States and political subdivisions, by maturity
One year or less
Over one year
Other bonds, corporate stocks and securities

Loans
19 Federal funds sold 1
20
To commercial banks
21
To nonbank brokers and dealers in securities
22
To others
23 Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial paper
26
All other
27
U.S. addressees
28
Non-U.S. addressees
29
Real estate
30
To individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
32
Banks in foreign countries
33
Sales finance, personal finance companies, e t c . . .
34
Other financial institutions
35
To nonbank brokers and dealers in securities
36
To others for purchasing and carrying securities 2 ...
37
To finance agricultural production
38
All other
39 LESS: Unearned income
40
Loan loss reserve
41 Otherloans.net
42 Lease financing receivables
43 All other assets
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69

Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
AH other liabilities for borrowed money 3
Other liabilities and subordinated notes and
debentures

70 Total liabilities
71 Residual (total assets minus total liabilities)4

Jan. 6

Jan. 20

Jan.

27p

Feb.

3p

Feb.

10p Feb.

IIP Feb. 24p

54,879

53,600

48,082

49,251

44,111

48,220

43,519

60,614

44,956

118

8,226
36,114

7,230
35,566

6,853
35,090

7,065
40,636

6,773
37,002

6,868
40,816

6,468
34,043

9,121
37,459

6,696
31,168

190
354

608,325

612,198

606,700

604,314

600,360

610,409

603,759

607,023

607,539

1,711

36,819
5.947
30,872
9,861
17,904
3,107
80,086
3,868
76,218
16,300
57,021
8,122
48,899
2,896

37,325
6,604
30,721
9,702
17,991
3,028
81,293
4,677
76,616
16,515
57,194
8,172
49,022
2,907

37,376
6,664
30,712
9,655
18,043
3,014
79,968
3,589
76,378
16,539
56,966
7,891
49,075
2,873

37,577
6,599
30,978
9,970
17,994
3,014
79,267
3,090
76,177
16,383
56,942
7,915
49,027
2,852

37,977
6,854
31,122
10,145
17,958
3,019
79,290
3,088
76,202
16,302
57,081
8,016
49,064
2,818

38,090
7,304
30,785
10,223
17,573
2,989
80,413
4,568
75,845
16,247
56,776
7,853
48,923
2,821

37,606
6,789
30,817
10,304
17,513
3,001
79,328
3,265
76,063
16,287
56,967
7,912
49,055
2,809

38,417
7,606
30,811
10,184
17,709
2,918
79,090
3,101
75,989
16,305
56,882
7,750
49,132
2,801

37,645
6,802
30,844
10,342
17,647
2,855
79,146
3,128
76,018
16,188
57,026
7,860
49,167
2,803

353

35,527
25,740
7,504
2,283
468,270
195,499
4,295
191,205
184,435
6,769
124,444
75,164

38,127
26,958
8,274
2,894
467,900
195,962
3,989
191,973
185,166
6,807
125,644
73,781

37,153
25,740
8,503
2,910
464,724
194,657
4,130
190,528
184,018
6,510
125,744
73,640

36,718
26,247
7,705
2,766
463,231
194,887
3,628
191,259
184,868
6,391
125,920
73,412

32,601
22,285
7,434
2,882
463,040
195,719
3,984
191,735
185,400
6,334
126,041
73,289

37,362
26,818
7,705
2,839
467,180
198,011
3,959
194,052
187,699
6,353
126,157
73,059

34,637
24,357
7,585
2,695
464,869
198,040
3,944
194,096
187,663
6,433
126,278
72,748

33,708
23,975
6,955
2,777
468,494
199,099
4,103
194,996
188,630
6,366
126,502
72,708

35,641
24,508
8,043
3,090
467,813
198,950
4,352
194,599
188,137
6,462
126,703
72,509

7,069
8,257
10,695
16,034
7,946
2,810
5,702
14,648
5,827
6,551
455,893
10,781
108,184

7,420
8,146
10,439
15,938
7,195
2,741
5,728
14,907
5,874
6,574
455,453
10,943
108,521

7,218
7,627
10,206
16,064
6,905
2,700
5,870
14,090
5,904
6,616
452,203
10,993
108,301

7,280
7,511
10,303
15,853
5,655
2,651
5,817
13,942
5,865
6,614
450,752
10,955
104,916

7,124
7,516
10,461
15,511
5,241
2,664
5,716
13,758
5,936
6,611
450,492
11,014
103,712

7,301
7,517
11,158
15,598
6,017
2,658
5,768
13,935
5,899
6,736
454,544
11,022
106,468

6,910
7,200
10,654
15,908
5,462
2,677
5,771
13,220
5,924
6,758
452,187
11,100
108,133

7,011
8,181
10,448
16,255
4,882
2,667
5,763
14,977
5,920
6,766
455,808
11,090
103,549

6,444
8,130
10,218
15,974
6,780
2,682
5,778
13,642
5,933
6,774
455,106
11,067
104,699

6
2
2
4
28
47
49
-10
490
2
342

826,509

828,058

816,019

817,138

802,972

823,804

807,023

828,856

806,124

2,717

187,518
556
140,376
5,235
2,148
21,896
8,206
1,211
7,889
362,502
76,971
73,446
2,977
524
24
285,531
250,511
19,849
239
9,852

188,424
762
142,202
5,120
2,974
21,226
7,676
1,154
7,309
363,114
80,813
77,162
3,041
582
28
282,301
247,821
19,671
235
9,693

173,827
619
134,585
4,924
1,199
18,068
7,255
1,128
6,048
364,230
80,299
76,663
3,000
614
21
283,931
249,319
19,957
246
9,578

171,859
579
129,634
4,523
3,585
18,278
7,701
1,334
6,223
363,890
79,706
76,125
2,939
610
31
284,184
249,676
19,950
266
9,602

162,015
570
123,277
4,740
2,203
17,084
7,232
1,052
5,856
365,612
78,156
74,612
2,923
593
28
287,457
252,442
20,364
281
9,757

170,630
692
127,407
5,270
3,538
19,263
6,731
1,464
6,264
367,193
79,293
75,771
2,893
606
23
287,900
252,226
20,480
290
10,357

159,427
573
120,039
4,535
2,174
17,641
6,602
1,194
6,670
366,814
78,658
75,145
2,887
603
22
288,156
252,093
20,841
299
10,436

181,923
683
133,870
5,631
1,912
24,857
7,338
1,110
6,522
363,746
78,728
75,165
2,858
683
22
285,017
249,149
20,582
295
10,555

161,074
520
121,147
4,590
2,456
17,220
7,297
1,152
6,692
369,200
77,758
74,269
2,854
615
20
291,442
254,161
21,370
310
11,187

1,145

5,079

4,880

4,831

4,690

4,612

4,547

4,486

4,435

4,414

436
10,013
139,215

1,671
3,913
146,354

2,553
7,085
142,208

3,112
10,757
141,836

4,038
11,962
133,101

889
11,955
146,283

1,283
11,957
141,161

518
n.a.
n.a.

321
n.a.
n.a.

353
110
219
24
688
6
682
237
432
108
324
13
179
179
529
515
4
510
506
4
1,059
-1,175
40

973
60
6
50
10
3
44
1,632
1,137
1,090
35
11
495
259
229
7

-2
-435

73,384

69,798

71,352

71,147

71,403

71,514

71,090

70,476

73,882

58

773,069

773,273

761,254

762,600

748,131

768,466

751,732

773,928

751,252

2,398

53,440

54,784

54,765

54,538

54,841

55,338

55,291

54,928

54,872

320

1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
4. Not a measure of equity capital for use in capital adequacy analysis or for
other
analytic uses.
for FRASER

Digitized


Jan. 13

Adjustment
bank,
1981

NOTE. Beginning in the week ending Dec. 9, 1981, shifts of assets and liabilities
to international banking facilities (IBFs) reduced the amounts reported in some
items, especially in loans to foreigners and to a lesser extent in time deposits. Based
on preliminary reports, the large weekly reporting banks shifted $4.7 billion of
assets to their IBFs in the five weeks ending Jan. 13, 1982. Domestic offices net
positions with IBFs are now included in net due from or net due to related institutions. More detail will be available later.

Weekly Reporting Banks
1.27

A19

L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S with Domestic Assets of $1 Billion or More on
December 31, 1977, Assets and Liabilities
Millions of dollars, Wednesday figures
1981
Dec. 30

Jan. 6

Jan. 13

1982
Jan. 20

Jan. 27p

Feb. 3P

Feb. 10p Feb. 17p Feb. 24p

Adjustment
bank.
1981

1 Cash items in process of collection

51,553

50,176

45,225

45,972

41,436

45,270

40,953

56,776

42,377

115

2 Demand deposits due from banks in the United States

7,587
33,606

6,551
33,384

6,206
32,583

6,412
37,899

6,150
34,495

6,158
38.144

5,848
31,761

8,195
34,907

6,081
28,611

159
340

567,776

572,294

567,142

565,050

561,695

571,090

564,562

567,982

568,937

3,347

33,535
5,887
27,648
8.816
16,040
2,792
73,650
3,751
69,899
15.092
52,090
7,284
44,806
2,717

33,974
6,522
27,452
8,605
16.137
2,710
74,812
4,562
70,250
15,295
52,230
7,325
44,905
2,724

33,999
6,580
27,419
8.535
16,181
2,703
73,493
3.496
69,997
15,320
51,987
7,040
44,947
2,690

34,165
6,513
27,652
8,813
16,136
2,703
72,825
3,024
69,801
15,164
51,968
7.063
44,904
2,669

34,681
6,796
27,885
9,039
16,145
2,701
72,834
3,005
69,829
15.080
52,114
7,165
44,949
2,634

34,812
7,197
27.615
9,157
15,785
2,674
73,941
4,478
69,463
15,032
51.793
6,992
44.801
2,637

34,391
6,713
27,678
9.231
15,761
2,686
72,824
3,172
69,651
15,051
51,974
7,036
44,938
2,626

35,185
7,462
27,723
9.121
15,998
2,603
72,650
3,037
69,613
15,073
51,922
6,891
45,030
2,618

34,464
6,702
27,762
9,284
15,936
2,542
72,682
3,035
69,647
14,976
52,051
6,993
45,058
2.620

335

31,671
22,403
7.028
2,239
440,274
185,752
4,144
181,608
174,916
6,692
117,629
65,765

33,300
22,806
7,656
2,839
441,664
186,129
3,846
182,282
175,563
6,719
118,670
66,417

32,587
21,876
7,866
2,845
438,589
184,893
3,998
180,895
174.468
6,428
118,736
66,294

32,444
22,717
7,034
2,693
437,106
185,071
3,487
181.584
175,274
6,311
118,893
66,060

28,878
19,196
6,892
2,790
436,855
185,864
3,843
182,020
175,769
6,252
118,999
65,948

33.013
23,332
6,919
2.763
440,970
188,106
3,814
184,292
178.024
6,268
119,121
65,773

30,351
20,831
6.910
2,610
438,684
188,110
3,796
184,314
177,967
6,348
119,240
65,479

29,578
20,570
6,309
2,699
442,260
189,099
3,968
185,131
178,850
6,281
119,467
65,456

31.850
21,444
7.370
3,035
441,652
189,027
4,223
184,804
178,428
6,376
119,657
65,259

6,861
8,178
10.549
15,658
7,886
2,559
5,569
13,867
5,189
6,166
428,920
10,442
104,943

7,227
8,056
10,292
15,518
7,112
2,497
5,591
14,154
5,234
6,221
430,208
10,602
105,431

7,038
7,561
10,060
15,643
6,852
2.453
5,732
13.326
5.266
6,260
427,064
10,657
105,180

7,120
7,442
10,154
15,431
5,606
2,408
5,679
13,242
5,227
6.262
425.617
10,620
101,820

6,967
7,444
10,303
15.115
5,196
2,419
5,572
13.028
5.293
6,260
425,302
10,680
100.591

7,110
7,450
10,996
15.208
5,966
2,418
5,623
13,199
5,266
6,380
429,324
10,689
103,213

6,742
7,130
10,493
15,502
5.412
2,440
5,627
12.509
5.289
6,400
426.996
10,768
104,739

6,844
8,110
10,282
15,866
4,835
2,442
5,619
14,240
5,283
6,408
430,568
10,757
100,120

6,258
8,032
10,067
15,593
6,731
2,464
5,634
12,928
5,293
6,417
429,942
10,733
101,372

6
1
2
4
26
41
46
28
2,238
3
361

775,907

778,440

766,994

767,774

755,047

774,563

758,631

778,738

758,112

4,325

174,411
543
130,196
4,594
1,946
20,308
8,074
1,209
7.541
339,283
71,105
67,844
2,752
484
24
268,178
235,290
18,136
229
9,443

175,009
734
131,871
4,578
2,691
19,494
7.602
1,153
6,886
341,049
74,586
71,197
2,813
548
28
266,463
234.070
18,005
225
9,284

161,431
598
124,741
4.350
978
16,718
7,188
1,126
5,732
342,206
74,126
70,749
2,772
585
21
268,079
235,527
18,288
235
9.198

159.248
560
119,998
3,942
3.008
16,875
7,622
1,331
5,912
341,908
73.578
70,249
2,719
580
31
268,329
235,814
18,310
256
9,261

150,266
555
114,232
4,128
1,891
15,730
7,155
1,034
5,541
343,635
72,168
68,875
2,702
564
28
271,466
238,453
18,697
271
9,433

158,398
666
118,178
4,658
3,199
17,664
6,666
1.437
5,932
345,104
73.212
69,946
2,673
570
23
271.892
238.261
18,774
280
10,030

148,006
554
111,299
3,891
1,846
16,304
6,544
1,188
6,380
344,631
72.628
69,363
2,674
570
22
272,003
238,022
19,089
288
10.116

169,205
657
124,220
4,998
1,691
23,034
7,282
1,092
6,231
341,580
72.674
69,360
2,641
651
22
268,906
235,086
18,854
285
10,246

150.023
500
112.613
4,050
2,231
15,828
7,233
1,145
6,423
346,870
71,785
68,538
2,643
584
20
275,085
239,918
19.585
300
10,868

1,106

5,079

4,880

4,831

4,690

4,612

4.547

4,486

4,435

4,414

436
9,207
131,178

1,584
3,608
137,927

2,520
6,607
133.593

3.061
9.918
133.295

3,853
10,999
125,328

741
10,965
137.863

1.217
10,970
132,827

436
n.a.
n.a.

275
n.a.
n.a.

18

71,475

67.963

69,413

69,256

69,578

69,600

69.130

68,492

71,850

52

725,990

727,140

715,770

716,686

703,658

722,673

706,780

727,344

706,778

4,001

49,917

51,300

51.224

51.088

51,389

51,890

51.851

51,393

51,334

324

3 All other cash and due from depository institutions ..
4 Total loans and securities
Securities
5 U.S. Treasury securities
6
Trading account
Investment account, by maturity
7
8
One year or less
9
Over one through five years
10
Over five years
11 Other securities
12 Trading account
13
Investment account
14
U.S. government agencies
15
States and political subdivision, by maturity
16
One year or less
17
Over one year
18
Other bonds, corporate stocks and securities . . . .
Loans
19 Federal funds sold1
20 To commercial banks
21 To nonbank brokers and dealers in securities
22 To others
23 Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial paper
26
All other
27
U.S. addressees
28
Non-U.S. addressees
29
Real estate
30 To individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
32
Banks in foreign countries
33
Sales finance, personal finance companies, etc . . .
34
Other financial institutions
35 To nonbank brokers and dealers in securities
36 To others for purchasing and carrying securities2 ..
37
To finance agricultural production
38
All other
39 LESS: Unearned income
40
Loan loss reserve
41 Other loans, net
42 Lease financing receivables
43 All other assets
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69

Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-Ioan notes
All other liabilities for borrowed money 3
Other liabilities and subordinated notes and debentures

70 Total liabilities
71 Residual (total assets minus total liabilities)4

1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreement to repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.




335
107
204
24
625
6
619
223
384
100
284
12
148
148
2,312
486
5
480
476
4
929
775
41

950
47
6
50
10
3
40
2,826
1,021
975
35
11
1,805
1,576
222
7

4. Not a measure of equity capital for use in capital adequacy analysis or for
other analvtic uses.

A20
1.28

DomesticNonfinancialStatistics • March 1982
L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S IN N E W Y O R K CITY Assets and Liabilities
Millions of dollars, Wednesday figures
1981

1982

Dec. 30
1 Cash items in process of collection
2 Demand deposits due from banks in the United
States
3 All other cash and due from depository institutions
4 Total loans and securities1
5
6
7
8
9
10
11
12
13
14
15
16
17
18

Securities
U.S. Treasury securities 2
Trading account 2
Investment account, by maturity
One year or less
Over one through five years
Over five years
Other securities 2
Trading account 2
Investment account
U.S. government agencies
States and political subdivision, by maturity . .
One year or less
Over one year
Other bonds, corporate stocks and securities .

Loans
19 Federal funds sold 3
20
To commercial banks
21
To nonbank brokers and dealers in securities . . .
22
To others
23 Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial paper . .
26
All other
27
U.S. addressees
28
Non-U. S. addressees
29
Real estate
30
T o individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
32
Banks in foreign countries
33
Sales finance, personal finance companies, etc.
34
Other financial institutions
35
To nonbank brokers and dealers in securities
36
To others for purchasing and carrying securities 4
37
To finance agricultural production
38
All other
39 LESS: Unearned income
40
Loan loss reserve
41 Other loans, net
42 Lease financing receivables
43 All other a s s e t ?
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69

Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions . . .
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for
profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations . . .
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money 6
Other liabilities and subordinated notes and debentures

70 Total liabilities
71 Residual (total assets minus total liabilities) 7
1.
2.
3.
4.

Jan. 13

17,269

Jan. 20

Jan. 27^

Feb. 3P

Feb. 10?

Feb. 17^

13,816

12,932

13,040

13,497

16,298

1,361
9,812

1,237
10,882

977
8,137

1,310
9,008

1,038
7,507

964
11,408

1,034
6,602

11,064

135,997

133,843

133,127

133,572

132,793

136,861

133,774

132,509

6,907
1,213
5,093
601

6,864
1,198
5,055

6,831
1,231
4,997
603

6,815
1,215
4,998
602

6,655
1,238
4,835
582

6,617
1,220
4,816
582

6,797

611

6,850
1,198
5,046
607

14,750
2,353
11,552
1,964
9,589
844

14,752
2,348
11,563
1,998
9,565
841

14,637
2,352
11,445
1,956
9,488
840

14,618
2,303
11,480
1,990
9,490
834

14,710
2,274
11,598
2,130
9,468

14,598
2,281
11,486
2,038
9,448
830

14,620
2,254
11,530
2,059
9,471
836

14,612
2,254
11,530
2,030
9,500

8,215
3,825
3,289
1,101
109,585
56,225
1,265
54,960
53,446
1,514
17,648
11,150

6,887
2.252
3,306
1,330
108,829
55,777
1,194
54,582
53,115
1,467
17,667

7,670
2,777
3,457
1,435
107,474
55,254
1,284
53,969
52,550
1,419
17,620
11,122

9,441
4,845
2,967
106,187
55,468
1,042
54,426
53,024
1,402
17,662
11,084

8,528
4,047
2,844
1,638
106,311
55,358
1,163
54,195
52,773
1,422
17,697
11,030

10,620
6,035
2,899
1,685
108,562
56,348
1,010
55,338
53,925
1,414
17,677
11,071

9,568
5,264
2,936
1,368
106,561
55,913
912
55,001
53.519
1,482
17,680
11,053

6,776
2,862
2,420
1,495
107,917
55,736
874
54,862
53,465
1,396
17,700
11,096

2,001
3,467
4,323
4,595
5,090
724
277
4,087
1,374
2,086
106,126
2,258

2,362
3,845
4.253
4.365
4,271
685
276
4,168
1.366
2,124
105,340
2,302

1,964
3,216
4,349
4,436
3,138
670
459
3,741
1,367
2,137
102,683
2,314
41,073

2,147
3,272
4,509
4,340
3,113
666
401
3,778
1,428
2,143
102,740
2,318
41,070

2,179
3,221
5,154
4,332
3,676
649
414
3,840
1,403
2,171
104,989
2,285
43,014

1,883
2,915
4,648
4,328
3,330
617
429
3,764
1,406
2,187
102,968
2,339
43,348

1,979
3,747
4,536
4,434
2,687
641
439
4,923
1,407
2,186
104,324
2,338
40,705

11,160

1,628

1,611

1,181

5,030
585

43,264

44,179

2,033
3,365
4,249
4,485
4,272
683
464
3,927
1,367
2,137
103,970
2,308
43,052

209,961

206,106

201,980

201,094

197,658

207,573

200,593

204,526

52,326
268
34,733
424
500
5,434
6,387
919
3,661
66,460
9,318
8,966

49,434
368
34,184
610
808
4,122
5,934
823
2,584
65,224
9,707
9,341

45,931
313
32,191
552
365
3,883
5,602
861
2,164
65,927
9,648
9,277

45,491
282
30,306
522
942
3,883
6,046
1,103
2,406
65,693
9,540
9,185

43,191
284
29,724
437
532
3,800
5,412
795
2,207
66,930
9,357
9,005

45,316
302
30,858
654
866
3,945
5,051
1,195
2,443
68,349
9,468
9,111

42,606
276
27,574
486
582
4,633
5,010
970
3,075
67,764
9,411
9,026

48,696
326
32,552
619
367
5,746
5,379
848
2,860
65,976
9,448
9,027

256
94

255
109

237
114
4
56,153
48,458
1,961
54
3,408

237

3
57,573
49,596
2,121
56
3,508

234
120
2
58,881
50,277
2,263
57
3,997

236
145
3
58,353
49,624
2,326
59
4,058

237
180
4
56,527
47,868
2,341
60
3,971

2,286

2,286

2,287

2,967
46,189

875
2,989
41,973

57,142
49,056
2,073
25
3,504

55,517
47,727
1,916
25
3,462

252
116
3
56,279
48,506
1,923
40
3,420

2,484

2,387

2,390

2,272

2,291

2,856
42,003

1,280
954
45,330

2,317
1,832
41,905

600
2,902
42,685

1,512
3,021
39,284

2

2

112

n.a.
n.a.

29,678

26,827

26,956

26,648

26,741

27,363

27,076

27,336

193,323

189,049

184,869

184,018

180,680

190,184

183,284

187,216

16,638

17,057

17,111

17,077

16,978

17,389

17,310

17,310

Excludes trading account securities.
Not available due to confidentiality.
Includes securities purchased under agreements to resell.
Other than financial institutions and brokers and dealers.




Jan.6

5. Includes trading account securities.
6. Includes federal funds purchased and securities sold under agreements to
repurchase.
7. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.

Weekly Reporting Banks
1.29

L A R G E WEEKLY REPORTING COMMERCIAL BANKS

A21

Balance Sheet Memoranda

Millions of dollars, Wednesday figures
1982

1981
Dec. 30

Jan. 6

Jan. 13

Jan. 20

Jan. 27P

Feb. 3p

Feb. 10p

Feb. IIP

Feb. 24P

Adjustment
bank,
1981

BANKS WITH ASSETS OF $ 7 5 0 MILLION OR
MORE

1 Total loans (gross) and securities adjusted 1
2 Total loans (gross) adjusted 1
3 Demand deposits adjusted 2

587,893
470,988
108,595

590,267
471,649
110,624

586,262
468,918
106,477

583,266
466,422
100,744

583,499
466,232
98,616

588,926
470,423
99,608

585,174
468,239
96,093

588,723
471,216
94,540

589,292
472,501
96,442

1,529
488
972

4 Time deposits in accounts of $100,000 or
more
5
Negotiable CDs
6
Other time deposits

187,938
137,490
50,448

182,990
132,238
50,752

184,113
133,022
51,090

183,947
132,653
51,293

186,944
135,481
51,462

186,812
135,380
51,432

186,452
134,235
52,217

182,731
130,889
51,842

188,502
135,142
53,360

-965
-1,382
417

2,848
2,210
638

2,888
2,245
643

2,906
2,265
641

2,893
2,251
642

2,863
2,246
616

2,838
2,232
607

2,850
2,242
608

2,826
2,215
611

2,799
2,185
614

10 Total loans (gross) and securities adjusted 1
11 Total loans (gross) adjusted 1
12 Demand deposits adjusted 2

549,866
442,681
100,605

553,717
444,931
102,647

549,754
442,262
98,510

546,703
439,714
93,393

547,085
439,570
91,209

552,295
443,542
92,266

548,677
441,462
88,903

552,259
444,424
87,703

552,945
445,799
89,586

3,231
2,271
935

13 Time deposits in accounts of $100,000 or
more
14 Negotiable CDs
15 Other time deposits

178,259
130,940
47,319

174,953
127,240
47,713

176,103
128,045
48,059

175,965
127,732
48,232

178,871
130,510
48,361

178,724
130,416
48,308

178,260
129,236
49,024

174,602
125,932
48,670

180,186
130,069
50,117

432
25
407

2,771
2,150
621

2,816
2,189
627

2,834
2,207
627

2,819
2,191
628

2,789
2,185
604

2,766
2,171
595

2,776
2,180
596

2,757
2,160
597

2,718
2,119
599

133,630
111,973
29,122

132,719
111,102
30,841

131,821
110,334
27,307

130,267
108,818
26,849

130,170
108,645
25,928

132,220
110,967
27,464

130,219
108,982
23,894

131,262
109,853
26,285

131,747
110,378
26,792

44,768
34,028
10,740

43,005
32,050
10,955

43,708
32,765
10,943

43,527
32,670
10,857

45,028
34,246
10,782

46,178
35,205
10,974

45,612
34,559
11,052

43,718
32,835
10,883

44,440
33,324
11,116

7 Loans sold outright to affiliates 3
Commercial and industrial
8
9
Other
BANKS WITH ASSETS OF $ 1 BILLION OR
MORE

16 Loans sold outright to affiliates 3
17 Commercial and industrial
18 Other
BANKS IN NEW YORK CITY

19 Total loans (gross) and securities adjusted1-4
20 Total loans (gross) adjusted 1
21 Demand deposits adjusted 2
22 Time deposits in accounts of $100,000 or
more
23
Negotiable CDs
24
Other time deposits

1. Exclusive of loans and federal funds transactions with domestic commercial
banks.
2. All demand deposits except U.S. government and domestic banks less cash
items in process of collection.




3. Loans sold are those sold outright to a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company.
4. Excludes trading account securities.

A22
1.291

DomesticNonfinancialStatistics • March 1982
L A R G E W E E K L Y R E P O R T I N G B R A N C H E S A N D A G E N C I E S OF F O R E I G N B A N K S

Assets and Liabilities

Millions of dollars, Wednesday figures
1981

1982

Account
Dec. 30
1
2
3
4
5
6
7
8
9
10

Jan. 6

Jan. 13

Jan. 20

Jan. 27P

Feb. 3P

Feb. l C

Feb.

IIP

Feb. 24P

Cash and due from depository institutions
Total loans and securities
U.S. Treasury securities
Other securities
Federal funds sold1
To commercial banks in U.S
Toothers
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
Non-U.S. addressees
To financial institutions
Commercial banks in U.S
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities ..
All other
Other assets (claims on nonrelated
parties)
Net due from related institutions
Total assets

6,545
51,178
2,196
801
5,070
4,442
628
43,111
20,463

6,421
50,150
2,209
800
5,282
4,926
355
41,860
20,291

6,591
50,055
2,445
826
4,791
4,554
236
41,993
20,108

6,402
48,682
2,435
811
4,205
4,014
191
41,231
19,488

6,327
49,443
2,387
816
5,044
4,758
286
41,196
19,716

6,042
47,651
2,545
817
3,865
3,664
201
40,424
19,362

5,996
48,509
2,680
826
4,212
4,041
171
40,791
19,607

6,510
48,273
2,613
838
4,816
4,622
194
40,006
19,690

6,033
48,835
2,618
827
4,399
4,232
167
40,990
19,685

3,791
16,672
13,971
2,701
17,504
13,683
3,452
370
687
4,456

3,835
16,456
13,902
2,554
16,740
12,991
3,356
394
456
4,372

3,644
16,464
13,886
2,578
16,949
13,230
3,314
404
492
4,444

3,591
15,898
13,395
2,503
16,939
13,089
3,443
406
371
4,432

3,453
16,263
13,645
2,617
16,832
13,114
3,322
396
332
4,316

3,582
15,780
13,591
2,189
16,499
12,746
3,377
376
438
4,125

3,569
16,038
13,939
2,099
16,625
12,621
3,623
382
449
4,109

3,614
16,076
13,957
2,119
16,027
12,194
3,461
371
366
3,923

3,538
16,147
13,919
2,227
16,686
12,880
3,437
369
571
4,047

12,202
12,639
82,564

11,858
12,903
81,332

12,266
12,660
81,572

12,064
13,183
80,331

12,074
12,917
80,760

11,959
12,768
78,421

11,733
12,946
79,184

11,840
11,837
78,461

12,077
12,322
79,267

23 Deposits or credit balances 2
24
Credit balances
25
Demand deposits
26
Individuals, partnerships, and
corporations
27
Other
28 Total time and savings
29
Individuals, partnerships, and
corporations
30
Other
31 Borrowings 3
32
Federal funds purchased 4
33
From commercial banks in U.S
34
From others
35
Other liabilities for borrowed money . . .
36
To commercial banks in U.S
37
Toothers
38 Other liabilities to nonrelated parties
39 Net due to related institutions
40 Total liabilities

25,292
320
2,379

24,061
356
2,459

23,821
317
2,096

23,234
326
1,939

23,135
292
1,972

22,611
268
1,872

22,722
266
1,953

22,664
357
2,139

23,204
314
1,936

895
1,484
22,593

938
1,521
21,246

774
1,322
21,408

767
1,172
20,969

804
1,168
20,871

776
1,096
20,472

766
1,186
20,503

806
1,333
20,167

724
1,212
20,955

18,866
3,727
31,573
5,666
4,568
1,097
25,907
23,242
2,665
12,306
13,393
82,564

17,936
3,310
33,068
8,169
7,410
759
24,899
22,428
2,470
11,921
12,282
81,332

17,926
3,482
32,779
7,659
6,777
882
25,119
22,596
2,524
12,472
12,500
81,572

17,452
3,516
33,041
8,176
7,250
926
24,865
22,395
2,470
12,216
11,840
80,331

17,744
3,127
32,231
7,167
6,265
902
25,064
22,553
2,511
12,237
13,158
80,760

17,425
3,047
32,238
7,351
6,234
1,118
24,886
22,435
2,451
12,069
11,503
78,421

17,335
3,167
33,017
7,979
7,068
911
25,038
22,447
2,590
11,851
11,595
79,184

17,075
3,092
32,326
7,874
6,714
1,160
24,452
21,902
2,550
11,849
11,622
78,461

17,915
3,040
33,824
8,748
7,531
1,217
25,076
22,537
2,539
12,196
10,043
79,267

33,054
30,056

32,233
29,224

32,270
28,999

31,579
28,333

31,570
28,368

31,240
27,879

31,848
28,341

31,457
28,006

31,722
28,277

11
12
13
14
15
16
17
18
19
20
21
22

MEMO

41 Total loans (gross) and securities
adjusted'
42 Total loans (gross) adjusted 5
1.
2.
3.
4.
5.

Includes securities purchased under agreements to resell.
Balances due to other than directly related institutions.
Borrowings from other than directly related institutions.
Includes securities sold under agreements to repurchase.
Excludes loans and federal funds transactions with commercial banks in U.S.




NOTE. Beginning in the week ending Dec. 9, 1981, shifts of assets and liabilities
to international banking facilities (IBFs) reduced the amounts reported in some
items, especially in loans to foreigners and to a lesser extent in time deposits. Based
on preliminary reports, the large weekly reporting branches and agencies shifted
$22.2 billion of assets to their IBFs in the six weeks ending Jan. 13,1982. Domestic
offices net positions with IBFs are now included in net due from or net due to
related institutions. More detail will be available later.

Weekly Reporting Banks
1.30

L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L BANKS

A23

Domestic Classified Commercial and Industrial Loans

Millions of dollars
Net change during

Outstanding
Industry classification

Oct. 28

Nov. 25

Dec. 30

Jan. 27

Feb. 24p

Q3

1982

1981

1981

1982

1981

Q4

Dec.

Jan.

Adjustment
bank 1

Feb.P

1 Durable goods manufacturing....

25,907

25,568

26,864

27,126

28.281

834

756

1,297

245

1.155

17

2 Nondurable goods manufacturing
3
Food, liquor, and tobacco

22,060
4,310

22,189
4,282

21,753
4,190

21,588
4,148

21.904
4,407

2,782
26

-1,647
-241

-437
-92

-176
-43

316
258

11
2

4,859
3,722
5,056
4,113

4,652
4,769
4,624
3,863

4,166
4,861
4,341
4,195

4,162
4,574
4,483
4,220

4.411
4,133
4,743
4,210

156
543
1,700
356

-910
906
-1,408
6

-485
92
-283
332

-6
-287
140
20

249
-441
260
-10

2

21,728

22,940

24,364

24,552

25.804

3,088

3,082

1,424

187

1,253

1,006
634
285
86

-170
390
128
-688

32
5
286
-259

-344
-495
-82
233

4
5
6
7

Textiles, apparel, and leather..
Petroleum refining
Chemicals and rubber
Other nondurable goods

8 Mining (including crude petroleum and natural gas)

2
4

9 Trade
10 Commodity dealers
11 Other wholesale
12 Retail

27,481
1,666
12,636
13,180

28,175
1,901
12,791
13,483

28,005
2,292
12,919
12,795

28,103
2,297
13,224
12,581

27,758
1,802
13,142
12,814

892
158
546
188

13 Transportation, communication,
and other public utilities
14 Transportation
15 Communication
16 Other public utilities

21,716
8,410
3,573
9,734

22,019
8,281
3,701
10,037

23.184
8,619
3,954
10,611

23,416
8,740
4,027
10,648

23,380
8,891
4,076
10,412

1,035
262
-7
780

1,324
160
419
745

1,165
338
253
574

208
100
72
36

-36
151
49
-236

24
22

17 Construction
18 Services
19 All other 2

7,163
25,424
15,920

7,137
25,591
16,057

7,193
26,482
17,070

7,062
26,648
17,273

7,204
27,112
16,983

262
792
642

-53
1,145
1,251

56
891
1,014

-176
62
-6

142
464
-290

45
104
209

167,400

169,675

174,916

175,769

178,428

10,328

6,864

5,242

376

2,659

476

84,629

83,833

85,086

85,201

87,853

2,733

-1,049

1.254

-54

2,652

169

20 Total domestic loans
21 MEMO: Term loans (original maturity more than 1 year) included in domestic loans

1. Adjustment bank amounts represent accumulated adjustments originally made
to offset the cumulative effects of mergers. These adjustment amounts should be
added to outstanding data for any date in the year to establish comparability with
any date in the subsequent year. Changes shown have been adjusted for these
amounts.
2. Includes commercial and industrial loans at a few banks with assets of $1
billion or more that do not classify their loans.




65
20
45

1

NOTE. New series. The 134 large weekly reporting commercial banks with domestic assets of $1 billion or more as of Dec. 31, 1977, are included in this series.
The revised series is on a last-Wednesday-of-the-month basis. Partly estimated
historical data are available from the Banking Section, Division of Research and
Statistics, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.

A24
1.31

DomesticNonfinancialStatistics • March 1982
GROSS D E M A N D DEPOSITS of Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances
Commercial banks
Type of holder
1977
Dec.

1978
Dec.

1980

19792
Dec.
June

Sept.

1981
Dec.

Mar. 3

June 4

Sept.

Dec.

1 All holders—Individuals, partnerships, and
corporations

274.4

294.6

302.2

288.6

302.0

315.5

280.8

277.5

288.9

2
3
4
5
6

25.0
142.9
91.0
2.5
12.9

27.8
152.7
97.4
2.7
14.1

27.1
157.7
99.2
3.1
15.1

27.7
145.3
97.9
3.3
14.4

29.6
151.9
101.8
3.2
15.5

29.8
162.3
102.4
3.3
17.2

30.8
144.3
86.7
3.4
15.6

28.2
148.6
82.1
3.1
15.5

28.0
154.8
86.6
2.9
16.7

Financial business
Nonfinancial business
Consumer
Foreign
Other

n.a.

Weekly reporting banks

1977
Dec.

1978
Dec.

1980

19795
Dec.
June

7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12

Financial business
Nonfinancial business
Consumer
Foreign
Other

Dec.

Mar. 3

June 4

Sept.

Dec.

139.1

147.0

139.3

133.9

140.6

147.4

133.2

131.3

137.5

18.5
76.3
34.6
2.4
7.4

19.8
79.0
38.2
2.5
7.5

20.1
74.1
34.3
3.0
7.8

20.2
69.2
33.9
3.1
7.5

21.2
72.4
36.0
3.1
7.9

21.8
78.3
35.6
3.1
8.6

21.9
69.8
30.6
3.2
7.7

20.7
71.2
28.7
2.9
7.9

21.0
75.2
30.4
2.8
8.0

1. Figures include cash items in process of collection. Estimates of gross deposits
are based on reports supplied by a sample of commercial banks. Types of depositors
in each category are described in the June 1971 BULLETIN, p. 466.
2. Beginning with the March 1979 survey, the demand deposit ownership survey
sample was reduced to 232 banks from 349 banks, and the estimation procedure
was modified slightly. To aid in comparing estimates based on the old and new
reporting sample, the following estimates in billions of dollars for December 1978
have been constructed using the new smaller sample; financial business, 27.0;
nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 15.1.
3. Demand deposit ownership data for March 1981 are subject to greater than
normal errors reflecting unusual reporting difficulties associated with funds shifted
to NOW accounts authorized at year-end 1980. For the household category, the
$15.7 billion decline in demand deposits at all commercial banks between December
1980 and March 1981 has an estimated standard error of $4.8 billion.




Sept.

1981

n.a.

4. Demand deposit ownership survey estimates for June 1981 are not yet available
due to unresolved reporting errors.
5. After the end of 1978 the large weekly reporting bank panel was changed to
170 large commercial banks, each of which had total assets in domestic offices
exceeding $750 million as of Dec. 31, 1977. See "Announcements," p. 408 in the
May 1978 BULLETIN. Beginning in March 1979, demand deposit ownership estimates for these large banks are constructed quarterly on the basis of 97 sample
banks and are not comparable with earlier data. The following estimates in billions
of dollars for December 1978 have been constructed for the new large-bank panel;
financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5;
other, 6.8.

Deposits and Commercial
1.32

Paper

A25

COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Instrument

1977
Dec.

1978
Dec.

1982

1981

19791
Dec.

1980
Dec.
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Commercial paper (seasonally adjusted)
1 All issuers

2
3
4
5
6

Financial companies 2
Dealer-placed paper3
Total
Bank-related
Directly placed paper4
Total
Bank-related
Nonfinancial companies 5

65,051

83,438

112,087

123,597

151,013

157,121

165,379

164,026

164,349

164,036

165,118

8,796
2,132

12,181
3,521

17,161
2,874

19,236
3.561

26,006
5,267

27,813
6,037

30,213
6.161

28,909
5,626

28,745
5,725

28,613
6,036

29,233
6,495

40,574
7,102
15,681

51,647
12,314
19,610

64.748
17,598
30,178

67.888
22,382
36.473

79,571
26,104
45,436

80,769
25,153
48,539

83,311
26,426
51,855

83,053
25,397
52,064

82.290
26,224
53,314

81,702
26,901
53,721

80,504
28,587
55,381

Bankers dollar acceptances (not seasonally adjusted)
7 Total
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others

Basis
14 Imports into United States
15 Exports from United States
16 All other

8
9
10
11
12
13

25,450

33,700

45,321

54,744

63,721

64,577

65,048

66,072

68,749

69,226

10,434
8,915
1,519

8,579
7,653
927

9,865
8,327
1,538

10,564
8,963
1,601

10,505
9,437
1,068

9,959
9,214
745

10,022
9,040
982

10,511
9,522
989

11,253
10,268
985

10,857
9,743
1,115

954
362
13,700

1
664
24.456

704
1,382
33,370

776
1,791
41,614

453
1,459
51,303

0
1,451
53,167

0
1,243
53,783

0
1,428
54,133

0
1,408
56,089

0
1,442
56,926

6,378
5,863
13,209

8,574
7,586
17,540

10,270
9,640
25,411

11,776
12.712
30.257

13,059
13,296
37,365

13,313
13,774
37,490

13,992
13,514
37,542

14,699
13,981
37,391

14,851
14,936
38,962

14,765
15,400
39,061

1. A change in reporting instructions results in offsetting shifts in the dealerplaced and directly placed financial company paper in October 1979.
2. Institutions engaged primarily in activities such as, but not limited to. commercial, savings, and mortgage banking; sales, personal, and mortgage financing;
factoring, finance leasing, and other business lending; insurance underwriting: and
other investment activities.




n a.

3. Includes all financial company paper sold by dealers in the open market.
4. As reported by financial companies that place their paper directly with investors.
5. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.

A26
1.33

DomesticNonfinancialStatistics • March 1982
PRIME RATE C H A R G E D BY BANKS on Short-Term Business Loans
Percent per annum
Rate

Effective date

20.00
20.50
20.00
20.50
20.00
19.50
19.00
18.00

1981—May 19
22
June 3
July
8
Sept. 15
22
Oct. 5
13

1.34

Rate

Effective Date

17
20
24
Dec. 1

17.50
17.00
16.5017.00
16.50
16.00
15.75

1982—Feb. ?
Feb. 18
Feb. 23

16.50
17.00
16.50

1981—Nov.

3
9

Average
rate

Month

1980—Oct
Nov
Dec

13.79
16.06
20.35

1981—Jan
Feb
Mar
Apr
May
June

20.16
19.43
18.05
17.15
19.61
20.03

Month

1981—July
Aug
Sept
Oct
Nov
Dec
1982—Jan
Feb

TERMS OF LENDING A T COMMERCIAL BANKS Survey of Loans Made, November 2-7, 1981
Size of loan (in thousands of dollars)
Item

All
sizes
1,000
25-49

1-24

50-99

100-499

500-999

and over

SHORT-TERM COMMERCIAL AND
INDUSTRIAL LOANS

1
2
3
4
5

Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1

$25,466,901
161,627
1.6
17.23
16.14-18.06

$853,739
115,558
3.0
19.95
18.25-21.55

$639,132
20,039
2.8
19.19
18.25-20.85

$579,473
8,992
3.9
19.65
18.27-21.15

$2,158,438
12,122
3.4
19.13
18.25-20.22

$814,291
1,275
3.0
18.64
17.50-19.65

$20,421,829
3,641
1.2
16.73
15.99-17.30

35.5
48.1
15.9

27.9
31.3
10.1

48.2
35.9
15.3

56.5
35.8
17.1

57.0
45.9
19.9

72.1
71.9
35.2

31.1
48.8
15.0

$205,534
319
37.1
18.52
17.50-19.75

$1,226,234
391
41.8
17.55
16.72-18.90

Percentage of amount of loans
6 With floating rate
7 Made under commitment
8 With no stated maturity
LONG-TERM COMMERCIAL AND
INDUSTRIAL LOANS

9
10
11
12
13

Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1

$2,438,209
27,160
37.6
18.94
17.50-19.56

$317,491
23,639
29.4
19.60
18.00-20.50

$688,950
2.811
34.0
21.22
18.00-20.50

56.3
54.1

48.0
36.3

33.1
27.2

Percentage of amount of loans
14 With floating rate
15 Made under commitment

66.6
71.2

85.6
69.5

CONSTRUCTION AND
LAND DEVELOPMENT LOANS

16
17
18
19
20

Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1

21
22
23
24

Percentage of amount of loans
With floating rate
Secured by real estate
Made under commitment
With no stated maturity

$1,420,394
23,437
9.9
19.46
18.54-20.75

$155,847
12,668
7.6
19.86
19.00-21.00

$192,683
5.497
9.9
19.60
18.77-19.90

$187,702
2,616
5.7
20.43
18.50-21.74

$425,106
2,406
11.5
20.03
19.56-20.82

$459,056
250
11.1
18.34
17.12-19.90

55.3
82.4
38.5
10.2

17.6
95.9
16.4
3.6

21.2
98.5
11.6
2.3

45.2
98.9
16.8
4.3

48.5
78.9
28.2
4.3

92.8
67.5
75.6
23.7

45.8
5.0
49.2

79.6
1.2
19.1

55.2
1.6
43.2

63.4
2.8
33.8

57.3
3.7
39.0

12.6
9.8
77.7

Type of construction
25 l-to4-family
26 Multifamily
27 Nonresidential

All
sizes
28
29
30
31
32

Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1

33
34
35
36
37

By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Other

250
25^(9

50-99

100-249

and over
$263,546
380
4.9
18.93
18.00-20.15

$1,260,648
64,345
5.8
18.76
17.72-19.56

$156,504
41,247
5.8
18.52
17.72-19.44

$179,965
12,442
7.3
18.79
17.72-19.54

$197,569
5,909
5.5
18.59
17.72-19.36

$162,025
2,448
5.7
18.40
17.72-19.06

$301,038
1.919
5.6
19.04
18.10-20.12

18.50
18.66
18.88
18.11
18.87

18.56
18.23
18.67
18.00
18.68

18.19
19.50
19.04
17.94
19.13

18.35
18.77
18.74
17.98
19.31

18.41
18.05
18.47

18.142

19.10

19.20

1 9 . 1 12

1. Interest rate range that covers the middle 50 percent of the total dollar amount
of loans made.
2. Fewer than 10 sample loans.




10-24

1-9

2

()

18.28

()
(2)
19.03

NOTE. For more detail, see the Board's E.2(111) statistical release,

(2)
()
18.63

Securities Markets
1.35

All

INTEREST R A T E S Money and Capital Markets
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1981
Instrument

1979

1980

1982

1982, week ending

1981
Nov.

Dec.

Jan.

Feb.

Jan 29

Feb. 5

Feb. 12

Feb. 19

Feb. 26

MONEY MARKET RATES

1 Federal funds 1 , 2
Commercial paper 3 , 4
2
1-month
3
3-month
4
6-month
Finance paper, directly placed 3,4
5
1-month
6
3-month
7
6-month
Bankers acceptances 4,5
8
3-month
9
6-month
Certificates of deposit, secondary market 6
10
1-month
11
3-month
12
6-month
13 Eurodollar deposits, 3-month 2
U.S. Treasury bills4
Secondary market 7
14
3-month
15
6-month
16
1-year
Auction average 8
3-month
17
18
6-month
19

11.19

13.36

16.38

13.31

12.37

13.22

14.78

13.98

14.77

15.19

15.61

13.86

10.86
10.97
10.91

12.76
12.66
12.29

15.69
15.32
14.76

12.35
12.16
11.96

12.16
12.12
12.14

12.90
13.09
13.35

14.62
14.53
14.27

13.64
13.83
13.87

14.85
14.70
14.49

15.04
14.92
14.60

15.28
15.15
14.72

13.54
13.55
13.43

10.78
10.47
10.25

12.44
11.49
11.28

15.30
14.08
13.73

12.13
11.80
11.72

11.89
11.31
11.24

12.67
12.56
12.56

14.41
13.59
13.58

13.43
13.11
13.11

14.54
13.60
13.56

14.90
13.84
13.80

15.02
13.97
13.97

13.41
13.08
13.12

11.04
n.a.

12.78
n.a.

15.32
14.66

12.00
11.84

12.13
12.27

13.06
13.31

14.47
14.09

13.68
13.57

14.63
14.22

14.88
14.48

14.96
14.48

13.59
13.35

11.03
11.22
11.44
11.96

12.91
13.07
12.99
14.00

15.91
15.91
15.77
16.79

12.45
12.48
12.65
13.33

12.27
12.49
13.07
13.24

13.03
13.51
14.25
14.29

14.78
15.00
15.12
15.75

13.80
14.24
14.58
15.10

14.88
15.11
15.19
15.24

15.14
15.40
15.50
15.86

15.52
15.66
15.69
16.53

13.81
14.03
14.29
15.30

10.07
10.06
9.75

11.43
11.37
10.89

14.03
13.80
13.14

10.86
11.30
11.20

10.85
11.52
11.57

12.28
12.83
12.77

13.48
13.61
13.11

12.79
12.96
12.78

13.68
13.72
13.19

14.12
14.01
13.43

14.06
14.04
13.37

12.31
12.84
12.56

10.041
10.017
9.817

11.506
11.374
10.748

14.077
13.811
13.159

11.269
11.530
14.077

10.926
11.471
11.504

12.412
12.930
13.143

13.780
13.709
13.180

13.364
13.530
13.143

13.850
13.846

14.099
13.933

14.740
14.360

12.430
12.695
13.180

10.67
10.12

12.05
11.77

14.78
14.56

12.41
12.88

12.85
13.29

14.32
14.57

14.73
14.82

14.85
14.93

11.55
11.48
11.43
11.46
11.39
11.30

14.44
14.24
14.06
13.91
13.72
13.44

13.11
13.38
13.42
13.39
13.56
13.35

13.66
13.60
13.62
13.72
13.73
13.45

14.64
14.65
14.67
14.59
14.57
14.22

14.73
14.54
14.46
14.43
14.48
14.22

14.84
14.73
14.66
14.63
14.67
14.39

15.11
15.10
15 05
15.05
14.91
14.87
14.84
14.95
14.68

15.03
15.04

9.71
9.52
9.48
9.44
9.33
9.29

14.37
14.55
14.55
14.57
14.52
14.48
14.42
14.37
14.09

14.88
14.58
14.42
14.39
14.44
14.18

14.08
14.32
14 30
14.26
14.02
13.97
13.92
13.96
13.71

8.74

10.81

12.87

12.68

12.88

13.73

13.63

13.57

13.83

14.05

13.58

13.13

5.92
6.73
6.52

7.85
9.01
8.59

10.43
11.76
11.33

10.98
12.69
11.89

11.70
13.30
12.91r

12.30
13.95
13.28

12.20
13.83
12.97

12.20
13.80
13.15

12.20
13.90
13.13

12.20
13.80
13.09

12.20
13.80
12.96

12.20
13.80
12.70

10.12
9.63
9.94
10.20
10.69

12.75
11.94
12.50
12.89
13.67

15.06
14.17
14.75
15.29
16.04

15.35
14.22
14.97
15.82
16.39

15.38
14.23
15.00
15.75
16.55

16.05
15.18
15.75
16.19
17.10

16.13
15.27
15.72
16.35
17.18

16.14
15.27
15.84
16.27
17.17

16.15
15.34
15.83
16.27
17.18

16.24
15.49
15.80
16.40
17.28

16.23
15.34
15.77
16.51
17.29

15.92
14.92
15.49
16.26
16.98

10.03
10.02

12.74
12.70

15.56
15.56

15.56
15.49

15.20
15.18

15.68
15.88

15.93
15.97

15.68
15.59

15.97

16.56
16.34

16.00

15 30
15.57

9.07
5.46

10.57
5.25

n.a.
n.a.

12.76
5.54

12.83
5.57

13.19
5.95

13.20
6.06

13.13
5.98

13.12
5.95

13.32
6.05

13.23
6.10

13.14
6.12

CAPITAL MARKET RATES

20
21
??
23
24
25
26
27
28

U.S. Treasury notes and bonds 9
Constant maturities 10
1-year
2-year
2-'/2-year11
3-year
5-year
7-year
10-year
20-year
30-year

29

Composite 12
Over 10 years (long-term)

State and local notes and bonds
Moody's series 13
30
Aaa
31
Baa
32
Bond Buyer series 14

33
34
35
36
37
38
39
40
41

Corporate bonds
Seasoned issues15
All industries
Aaa
Aa
A
Baa
Aaa utility bonds 16
Recently offered issues
MEMO: Dividend/price ratio
Preferred stocks
Common stocks

17

1. Weekly and monthly figures are averages of all calendar days, where the
rate for a weekend or holiday is taken to be the rate prevailing on the preceding
business day. The daily rate is the average of the rates on a given day weighted
by the volume of transactions at these rates.
2. Weekly figures are statement week averages—that is, averages for the week
ending Wednesday.
3. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150179 days for finance paper.
4. Yields are quoted on a bank-discount basis, rather than an investment yield
basis (which would give a higher figure).
5. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
6. Unweighted average of offered rates quoted by at least five dealers early in
the day.
7. Unweighted average of closing bid rates quoted by at least five dealers.
8. Rates are recorded in the week in which bills are issued.
9. Yields are based on closing bid prices quoted by at least five dealers.
10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.




11. Each weekly figure is calculated on a biweekly basis and is the average of
five business days ending on the Monday following the calendar week. The biweekly
rate is used to determine the maximum interest rate payable in the following twoweek period on small saver certificates. (See table 1.16.)
12. Unweighted averages of yields (to maturity or call) for all outstanding notes
and bonds neither due nor callable in less than 10 years, including several very low
yielding "flower" bonds.
13. General obligations only, based on figures for Thursday, from Moody's
Investors Service.
14. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. Issues included are long-term (20 years
or more). New-issue yields are based on quotations on date of offering; those on
recently offered issues (included only for first 4 weeks after termination of underwriter price restrictions), on Friday close-of-business quotations.
17. Standard and Poor's corporate series. Preferred stock ratio based on a sample
of ten issues: four public utilities, four industrials, one financial, and one transportation. Common stock ratios on the 500 stocks in the price index.

A28
1.36

DomesticNonfinancialStatistics • March 1982
STOCK MARKET

Selected Statistics
1982

1981
Indicator

1979

1980

1981
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3 Transportation
4
Utility
5
Finance
6 Standard & Poor's Corporation (1941-43 = 10)1
7 American Stock Exchange
(Aug. 31, 1973 = 100)
Volume of trading
(thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange

55.67
61.82
45.20
36.46
58.65
107.94

68.06
78.64
60.52
37.35
64.28
118.71

74.02
85.44
72.61
38.90
73.52
128.05

74.98
86.64
74.42
38.90
74.97
129.13

75.24
86.72
73.27
40.22
73.76
129.63

68.37
78.07
63.67
38.17
69.38
118.27

69.40
78.94
65.65
38.87
72.58
119.84

71.49
80.86
67.68
40.73
76.47
122.92

71.81
81.70
68.27
40.22
74.74
123.79

67.91
76.85
62.04
39.30
70.99
117.41

66.16
74.78
59.09
38.32
70.50
114.50

186.56

300.94

343.50

364.33

364.60

313.60

308.81

321.0

321.84

296.49

275.10

32,233
4,182

44,867
6,377

47,237
5,346

43,930
4,374

44,489
5,137

46,042
5,556

46,233
4,233

50,791
5,257

43,596
4,992

48,723
4,497

51,169
4,400

Customer financing (end-of-period balances, in millions of dollars)
10 Regulated margin credit at
brokers-dealers2
3

11 Margin stock
12 Convertible bonds
Free credit balances at brokers4
14 Margin-account
15 Cash-account

11,619

14,721

14,321

15,134

14,545

13,973

13,866

14,044

14,321

13,441r

11,450
167
2

14,500
219
2

14,060
259
2

14,870
263
1

14,270
274
1

13,710
263

13,600
263
3

13,780
261
3

14,060
259
2

13,190r
259
2

1,105
4,060

2,105
6,070

3,515
7,150

2,670
6,470

2,645
6,640

2,940
6,555

2,990
6,100

3,290
6,865

3,515
7,150

3,455
6,580

n a.

Margin-account debt at brokers (percentage distribution, end of period)
16 Total
17
18
19
20
21
22

By equity class (in percent)5
Under 40
40-49
50-59
60-69
70-79
80 or more

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

16.0
29.0
27.0
14.0
8.0
7.0

14.0
30.0
25.0
14.0
9.0
8.0

37.0
21.0
20.0
10.0
6.0
6.0

25.0
29.0
22.0
11.0
7.0
6.0

38.5
24.0
15.0
10.0
6.0
6.0

47.0
22.0
13.0
8.0
5.0
5.0

32.0
28.0
18.0
10.0
6.0
6.0

30.0
25.0
21.0
11.0
6.0
7.0

100.0
37.0
24.0 r
17.0 r
10.0
6.0
6.0

100.0
37.0
24.0
16.0
10.0
7.0
6.0

n.a.

Special miscellaneous-account balances at brokers (end of period)
23 Total balances (millions of dollars)*
Distribution by equity status
(percent)
24 Net credit status
Debt status, equity of
25 60 percent or more
26
Less than 60 percent

16,150

21,690

25,870

24,460

44.2

47.8

58.0

47.0
8.8

44.4
7.7

31.0

11.0

24,760

25,234

24,962

25,409

25,870

26,080

53.8

53.5

55.0

55.0

57.0

58.0

58.0

37.9
8.3

37.0
9.5

33.0
12.0

35.0
10.0

33.0
10.0

31.0

31.0

11.0

t
n.a.
1

\

11.0

Margin requirements (percent of market value and effective date) 7

27 Margin stocks
28 Convertible bonds
29 Short sales

Mar. 11, 1968

June 8, 1968

May 6, 1970

Dec. 6, 1971

Nov. 24, 1972

70
50
70

80
60
80

65
50
65

55
50
55

65
50
65

1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Margin credit includes all credit extended to purchase or carry stocks or related
eguity instruments and secured at least in part by stock. Credit extended is endot-month data for member firms of the New York Stock Exchange.
In addition to assigning a current loan value to margin stock generally, Regulations T and U permit special loan values for convertible bonds and stock acquired
through exercise of subscription rights.
3. A distribution of this total by equity class is shown on lines 17-22.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.




Jan. 3, 1974
50
50
50

5. Each customer's equity in his collateral (market value of collateral less net
debit balance) is expressed as a percentage of current collateral values.
6. Balances that may be used by customers as the margin deposit required for
additional purchases. Balances may arise as transfers based on loan values of other
collateral in the customer's margin account or deposits of cash (usually sales proceeds) occur.
7. Regulations G, T, and U of the Federal Reserve Board of Governors, prescribed in accordance with the Securities Exchange Act of 1934, limit the amount
of credit to purchase and carry margin stocks that may be extended on securities
as collateral by prescribing a maximum loan value, which is a specified percentage
of the market value of the collateral at the time the credit is extended. Margin
requirements are the difference between the market value (100 percent) and the
maximum loan value. The term "margin stocks" is defined in the corresponding
regulation.

Financial Institutions
1.37

S E L E C T E D F I N A N C I A L INSTITUTIONS
Millions of dollars, end of period

Selected Assets and Liabilities

1981
Account

1979

A29

1982

1980
Apr. T

May r

June r

July r

Aug. r

Sept.'

Oct. T

Nov.'

Dec.

Jan.?

Savings and loan associations
1 Assets

578,962

629,829 639,770 645,586 647,704 649,807

653,022 655,658

659,073

660,326

663,844

667,118

2 Mortgages
3 Cash and investment securities1
4 Other

475,688
46,341
56,933

502,812
57,572
69,445

509,942 512,183 515,256 511,990
57,242
59,418 57,980 57,817
72,586 73,985 74,468 75,000

518,172 518,778 519,248
58,932
59,530 61,517
75,918 77,350
78,308

519,146
61,369
79,811

518,350
62,756
82,738

517,457
63,812
85,849

5 Liabilities and net worth

578,962

629,829

639,770 645,586 647,704 649,807

653,022 655,658 659,073

660,326

663,844 667,118

470,004
55,232
40,441
14,791
9,582
11,506

510,959
64,491
47,045
16,309
8,120
12,227

516,782 518,351 518,359 514,805
67,818 70,153 74,875 79,704
49,607
51,064 53,836 57,188
18,211
19,089 21,039 22,516
7,816
7.973
7,985
7,741
15,085
17,243
14,933
16,556

513,438 515,649 519,288
83,456 87,477 86,108
61,857 62,000
60,025
23,431 25,620
24,108
7,354
7,040
6,757
18,275
15,307
17,506

519,777
86,255
61,922
24,333
6,451
19,101

524,374
89,097
62,794
26,303
6,369
15,612

526,173
89 140
62,899
26,241
6,219
18,069

12 Net worth 2

32,638

33,319

32,269

31,866

31,552

31,001

30,499

30,185

29,414

28,742

28,392

27,517

13 MEMO: Mortgage loan commitments
outstanding 3

16,007

16,102

18,573

18,761

18,037

17,235

16,689

16,012

15,733

15,758

15,225

15,615

6
7
8
9
10
11

Savings capital
Borrowed money
FHLBB
Other
Loans in process
Other

Mutual savings banks 4
163,405

171,564

172,837

173,776

174,387

174,578

174,761

175,234

175,693

175,258

175,612

98,908
9,253

99,865
11,733

99,798
12,756

99,790
13,375

99,993
14,403

100,095
14,359

99,987
14,560

99,944
14,868

99,903
14,725

99,879
15,073

100,015
14,740

7,658
2,930
37,086
3,156
4,412

8,949
2,390
39,282
4,334
5,011

9,262
2,314
39,247
4,172
5,288

9,296
2,328
39,111
4,513
5,364

9,230
2,337
38,418
4,473
5,534

9,361
2,291
38,374
4,629
5,469

9,369
2,326
38,180
4,791
5,547

9,594
2,323
38,118
4,810
5,577

9,765
2,394
38,108
5,118
5,681

9,508
2,271
37,874
5,039
5,615

9,861
2,274
37,674
5,415
5,632

22 Liabilities

163,405

171,564

172,837

173,776

174,387

174,578

174,761

175,234

175,693

175,258

175,612

23
24
25
26
27
28
29
30

146,006
144,070
61,123
82,947
1,936
5,873
11,525

154,805
151,416
53,971
97,445
2,086
6,695
11,368

153,692
151,429
52,331
99,098
2,264
8,103
11,042

153,891
151,658
51,212
100,447
2,232
8,922
10,923

154,926
152,603
51,594
101,009
2,323
8,634
10,827

153,757
151,394
50,593
100,800
28,494
10,156
10,665

153,120
150,753
49,003
101,750
27,073
11,125
10,516

153,412
151,072
49,254
101,818
25,769
11,458
10,364

154,066
151,975
48,238
103,737
24,806
11,513
10,114

153,809
151,787
48,456
126,889
2,023
11,434
10,015

154,913
152,834
49,409
126,334
2,079
10,731
9,969

3,182

1,476

1,614

1,709

1,577

1,401

1,333

1,218

1,140

1,207

1,293

14 Assets
15
16
17
18
19
20
21

Loans
Mortgage
Other
Securities
U.S. government 5
State and local government
Corporate and other 6
Cash
Other assets

Deposits
Regular 7
Ordinary savings
Time and other
Other
Other liabilities
General reserve accounts
MEMO: Mortgage loan commitments outstanding 8

n. a.

Life insurance companies
31 Assets
32
33
34

35
36
37
38
39
40
41
42

Securities
Government
United States 9
State and local
Foreign 10
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets

432,282

479,210 493,185

497,276 500,316 503,994

506,585

509,478 515,079

519,281

521,354

0,338
4,888
6,428
9,022
222,332
178,371
39,757
118,421
13,007
34,825
27,563

21,378 22,603
5,345
6,502
6,701
6,809
9,332
9,292
238,113 245,841
190,747 198,397
47,366 47,444
131,080 133,896
16,464
15,033
41,411 43,772
31,702 30,609

22,948 23,415 23,691
6,787
7,359
7,119
6,815
6,876
6,865
9,346
9,420
9,467
247,437 248,737 250,186
199,818 201,402 203,016
47,619 47,335
41,170
134,492 135,318 135,928
16,738
16,966
17,429
44,292 44,970 45,591
31,369 30,910 31,169

23,949
24,280
24,621
7,544
7,670
7,846
6,904
7,033
7,129
9,501
9,577
9,646
250,371 250,315 253,976
204,501 205,908 208,004
45,870 44,407
45,972
136,516 136,982 137,736
17,626
17,801
18,382
46,252 47,042
47,731
31,971 33,058 32,633

25,200
8,321
7,148
9,731
255,632
209,194
46,438
138,433
18,629
48,275
33,112

25,310
8,578
6,968
9,764
254,978
208,587
46,391
139,046
19,157
48,741
34,122

n. a.

Credit unions
43

Total assets/liabilities and
capital

65,854

71,709

74,442

75,278

75,781

76,043

75,656

76,145

76,123

76,830

77,682

78,012

44

Federal
State
Loans outstanding
Federal
State
Savings
Federal (shares)
State (shares and deposits)

35,934
29,920
53,125
28,698
24,426
56,232
35,530
25,702

39,801
31,908
47,774
25,627
22,147
64,399
36,348
28,051

40,626
33,816
49.186
26.410
22,776
67,160
36,882
30,278

41,105
34,173
49,697
26,744
22,953
67,740
37,241
30,499

41,443
34,338
50,271
27,133
23,138
68,317
37,618
30,699

41,678
34,365
50,724
27,378
23,346
67,690
37,176
30,514

41,394
34,262
51,207
27,701
23,506
66,943
36,713
30,230

41,682
34,463
51,407
27,871
23,536
67,512
36,928
30,584

41,727
34,396
51,029
27,686
23,343
67,625
37,015
30,610

42,025
34,805
50,631
27,508
23,123
67,981
37,261
30,720

42,382
35,300
50,448
27,458
22,990
68,871
37,574
31,297

42,512
35,500
49,949
27,204
22,745
69,432
37,875
31,557

45
46
47
48
49
50
51

For notes see bottom of page A30.




A30

DomesticNonfinancialStatistics • March 1982

1.38

F E D E R A L FISCAL A N D FINANCING O P E R A T I O N S
Millions of dollars
Calendar year
Type of account or operation

Fiscal
year
1979

Fiscal
year
1980

Fiscal
year
1981

1980
H2

1981
HI

1981
H2

Nov.

1982
Dec.

Jan.

U.S. budget
1 Receipts'
2 Outlays 1 - 2
3 Surplus, or deficit ( - )
Trust funds
4
5
Federal funds 3

463,302
490,997
-27,694
18,335
-46,069

517,112
576,675
-59,563
8,791
-67,752

599,272
657,204
-57,932
7,168
-65,099

260,569'
309,389'
-48,821
-2,551
-46,306

317,304'
333,115 r
-15,811
5,797
-21,608

301,777'
358,558'
-56,780
-8,085
-48,697

44,018'
54,660'
-10,642
-2,352
-8,290

Off-budget entities (surplus, or deficit
(-))
6 Federal Financing Bank outlays
7 Other 4 - 5

-13,261
793

-14,549
303

-20,769
-236

-7,552
376

-11,046
-900

-8,728
-1,752

-1,189
-691

-727
-320

-1,241
11

-40,162

-73,808

-78,936

-55,998

-27,757

-67,260

-12,522

-20,516

8,109

33,641

70,515

79,329

54,764

33,213

54,081

10,972

14,274

9,783

-408
6,929

-355
3,648

-1,878
1,485

-6,730
7,964

2,873
-8,328

-1,111
14,290

8,129
-6,579

-3,889
10,131

-13,371
-4,521

24,176
6,489
17,687

20,990
4,102
16,888

18,670
3,520
15,150

12,305
3,062
9,243

16,389
2,923
13,466

12,046
4,301
7,745

7,796
3,475
4,321

12,046
4,301
7,745

24,710
8,285
16,425

U.S. budget plus off-budget, including
Federal Financing Bank
8 Surplus, or deficit ( - )
Source or financing
Borrowing from the public
9
10 Cash and monetary assets (decrease, or
increase (—))
11 Other 7

56,825'
76,293'
-19,468
-7,675
-11,793

55,269
45,930
9,339
10,799
-1,460

MEMO:

12 Treasury operating balance (level, end of
period)
13 Federal Reserve Banks
14 Tax and loan accounts

1. The Budget of the U.S. Government, Fiscal Year 1983, has reclassified supplemental medical insurance premiums and voluntary hospital insurance premiums,
previously included in other social insurance receipts, as offsetting receipts in the
health function.
2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was reclassified from an off-budget agency to an on-budget agency in the Department of
Labor.
3. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
4. Includes Postal Service Fund; Rural Electrification and Telephone Revolving
Fund; and Rural Telephone Bank.
5. Other off-budget includes petroleum acquisition and transportation, strategic
petroleum reserve effective November 1981.

6. Includes U.S. Treasury operating cash accounts; special drawing rights; gold
tranche drawing rights; loans to International Monetary Fund; and other cash and
monetary assets.
7. Includes accrued interest payable to the public; allocations of special drawing
rights; deposit funds; miscellaneous liability (including checks outstanding) and
asset accounts; seigniorage; increment on gold; net gain/loss for U.S. currency
valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on
the sale of gold.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government," Treasury Bulletin, and the Budget of the United States Government,
Fiscal Year 1983.

NOTES TO TABLE 1.37
1. Holdings of stock of the Federal Home Loan Banks are included in "other
assets."
2. Includes net undistributed income, which is accrued by most, but not all,
associations.
3. Excludes figures for loans in process, which are shown as a liability.
4. The NAMSB reports that, effective April 1979, balance sheet data are not
strictly comparable with previous months. Beginning April 1979, data are reported
on a net-of-valuation-reserves basis. Before that date, data were reported on a
gross-of-valuation-reserves basis.
5. Beginning April 1979, includes obligations of U.S. government agencies. Before that date, this item was included in "Corporate and other."
6. Includes securities of foreign governments and international organizations
and, before April 1979, nonguaranteed issues of U.S. government agencies.
7. Excludes checking, club, and school accounts.
8. Commitments outstanding (including loans in process) of banks in New York
State as reported to the Savings Banks Association of the state of New York.
9. Direct and guaranteed obligations. Excludes federal agency issues not guaranteed, which are shown in the table under "Business" securities.




10. Issues of foreign governments and their subdivisions and bonds of the International Bank for Reconstruction and Development.
NOTE. Savings and loan associations: Estimates by the FHLBB for all associations
in the United States. Data are based on monthly reports of federally insured
associations and annual reports of other associations. Even when revised, data for
current and preceding year are subject to further revision.
Mutual savings banks: Estimates of National Association of Mutual Savings
Banks for all savings banks in the United States.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. Adjustments for interest due and accrued and for differences between market and book values are not made on each item separately but
are included, in total, in "other assets."
Credit unions: Estimates by the National Credit Union Administration for a
group of federal and state-chartered credit unions that account for about 30 percent
of credit union assets. Figures are preliminary and revised annually to incorporate
recent benchmark data.

Federal Finance
1.39

A31

U.S. B U D G E T RECEIPTS A N D O U T L A Y S
Millions of dollars
Calendar year
Source or type

Fiscal
year
1979

Fiscal
year
1980

Fiscal
year
1981

H2

1981

1981

1980
HI

H2

Nov.

Dec.

Jan.

RECEIPTS

1 All sources'

12
13

Individual income taxes, net
Withheld
Presidential Election Campaign F u n d . . .
Non withheld
Refunds
Corporation income taxes
Gross receipts
Refunds
Social insurance taxes and contributions.
net
Payroll employment taxes and
contributions 2
Self-employment taxes and
contributions 3
Unemployment insurance
Other net receipts1-4

14
IS
16
17

Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5

7

3
4
6
7
8
9
10
11

463,302

517,112

599,272

260,569'

317,304

301,777'

44,018'

56,825

55,269

217,841
195,295
36
56,215
33,705

244,069
223,763
39
63,746
43,479

285,917
256,332
41
76,844
47,299

131,962
120,924
4
14,592
3,559

142,889
126,101
36
59,907
43,155

147,035
134,199
5
17,391
4,559

21,775
21,387
0
846
458

25,770
24,590
0
1,602
423

32,646
20,810
0
12,000
163

71,448
5,771

72,380
7,780

73,733
12,596

28,579
4,518

44,048
6,565

31,056
6,847

1,877
1,133

11,087
867

3,212
738

138,939

157.803

182,720

75,679'

101,316r

91,592'

15,496'

14,059

14,575

115,041

133,042

156,953

66,831

83,851

82,984

13,610

13,504

13,085

5,034
15,387
3,477

5,723
15,336
3,702

6,041
16,129
3,598

0
221
335

530
604
357

18,745
7,439
5,411
9,252

24,329
7,174
6,389
12,748

40,839
8,083
6,787
13,790

15,332
3,717
3,499
6,318

21,945
3,926
3,259
6,487

22,097
4,661
3,742
8,441

3,334
729
598
1,341

3,633
823
642
1,679

3,087
696
615
1,176

490,997

576,675

657,204

309,389'

333,115'

358,558'

54,660

76,293

45,930

117,681
6,091
5,041
6,856
12,091
6,238

135,856
10,733
5,722
6,313
13,812
4,762

159,765
11,130
6,359
10,277
13,525
5,572

72,457
5,430
3,205
3,997
7,722
1,892

80,005
5,999
3,314
5,677
6,476
3,101

87,421
4,655
3,388
4,394
7,296
5,181

14,205
745
592
173
955
1,637

16,258
830
613
399
1,289
2,681

14,131
759
496
383
933
2,701

2,579
17,459
9,542

7,788
21,120
10,068

3,946
23,381
9,394

3,163
11,547
5,370

2,047'
11,991
4,621

1,825
10,753
4,269

-243
1,559
707

1,051
1,871
688

849
1,465
591

29,685
46,962
160,159

30,767
55,220
193,100

31,402
65,982
225,099

15,221
29,680
107,912

15,928
33,113
113,490

13,878
35,322
129,269

2,274
5,874
18,462

2,245
5,839
33,175

2,160
5,711
7,370

19,928
4,153
4,093
8,372
52,566
-18,488

21,183
4,570
4,505
8,584
64,504
-21,933

22,988
4,698
4,614
6,856
82,537
-30,320

11,731
2,299
2,432
4,191
35,909
-14,769

10,531
2,344
2,692
3,015
41,178
-12,432

12,880
2,290
2,311
3,043
47,667
-17,281

854
371
339
259
7,869
-1,973

3,217
352
384
28
13,081
-7,710

763
340
210
1,451
6,634
-1,017

188
6,742
l,919 r

6,240
9,205

2,02c

244
6,355
2,009'

0
1,563
323'

OUTLAYS

18 All types
19
70
21
77
73
24

1,6

National defense
International affairs
General science, space, and technology . . .
Energy
Natural resources and environment
Agriculture

7,5
76
27
28

Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, social
services
79 Health 1
30 Income security6
31 Veterans benefits and services
37 Administration of justice
33 General government
34 General-purpose fiscal assistance
35
36 Undistributed offsetting receipts 7

1. The Budget of the U.S. Government, Fiscal Year 1983 has reclassified supplemental medical insurance premiums and voluntary hospital insurance premiums,
previously included in other social insurance receipts, as offsetting receipts in the
health function.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Supplementary medical insurance premiums, federal employee retirement
contributions, and Civil Service retirement and disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re-




classified from an off-budget agency to an on-budget agency in the Department of
Labor.
7. Consists of interest received by trust funds, rents and royalties on the Outer
Continental Shelf, and U.S. government contributions for employee retirement.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S. Government, Fiscal Year 1983.

A32
1.40

DomesticNonfinancialStatistics • March 1982
F E D E R A L D E B T S U B J E C T TO S T A T U T O R Y LIMITATION
Billions of dollars
1979

1981

1980

Item
Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31

June 30

Dec. 31

Sept. 30

1 Federal debt outstanding

852.2

870.4

884.4

914.3

936.7

970.9

977.4

1,003.9

1,034.7

2 Public debt securities
3
Held by public
4
Held by agencies

845.1
658.0
187.1

863.5
677.1
186.3

877.6
682.7
194.9

907.7
710.0
197.7

930.2
737.7
192.5

964.5
773.7
190.9

971.2
771.3
199.9

997.9
789.8
208.1

1,028.7
825.5
203.2

7.1
5.6
1.5

7.0
5.5
1.5

6.8
5.3
1.5

6.6
5.1
1.5

6.5
5.0
1.5

6.4
4.9
1.5

6.2
4.7
1.5

6.1
4.6
1.5

6.0
4.6
1.4

5 Agency securities
Held by public
6
7
Held by agencies
8 Debt subject to statutory limit

846.2

864.5

878.7

908.7

931.2

965.5

972.2

998.8

1,039.3

Public debt securities
10 Other debt 1

844.5
1.7

862.8
1.7

877.0
1.7

907.1
1.6

929.6
1.6

963.9
1.6

970.6
1.6

997.2
1.6

1,037.7
1.6

11 MEMO: Statutory debt limit

879.0

879.0

925.0

925.0

935.1

985.0

985.0

999.8

1,079.8

9

1. Includes guaranteed debt of government agencies, specified participation certificates, notes to international lending organizations, and District of Columbia
stadium bonds.

1.41

G R O S S P U B L I C D E B T O F U.S. T R E A S U R Y
Billions of dollars, end of period

NOTE. Data from Treasury Bulletin (U.S. Treasury Department),

Types and Ownership

1981
Type and holder

1977

1978

Oct.
1 Total gross public debt
7
3
4

5
6
7
8
9
10
11
17.
13
14

By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues3
Government
Public
Savings bonds and notes
Government account series4

1982

1980

1979

Nov.

Dec.

789.2

845.1

930.2

1,005.0

1,013.3

1,028.7

1,038.4

1,048.2

715.2
459.9
161.1
251.8
47.0
255.3
2.2
13.9
22.2
21.0
1.2
77.0
139.8

782.4
487.5
161.7
265.8
60.0
294.8
2.2
24.3
29.6
28.0
1.6
80.9
157.5

844.0
530.7
172.6
283.4
74.7
313.2
2.2
24.6
28.8
23.6
5.3
79.9
177.5

928.9
623.2
216.1
321.6
85.4
305.7

999.5
689.6
229.1
362.6
97.9
309.9

1,011.9
704.8
233.9
370.8
100.1
307.1

1,027.3
720.3
245.0
375.3
99.9
307.0

1,032.7
726.5
250.6
374.4
101.6
306.1

1,042.2
737.5
254.0
382.1
101.4
304.7

23.8
24.0
17.6
6.4
72.5
185.1

23.1
20.5
15.5
5.0
68.0
198.1

23.0
20.3
15.3
5.0
68.0
195.5

23.0
19.0
14.9
4.1
68.1
196.7

22.7
18.9
14.8
4.1
67.8
196.4

22.7
18.4
14.3
4.1
67.6
195.7

5.7

3.7

6.8

1.2

1.3

5.6

1.4

1.4

16
17
18
19
20
21
22
23

154.8
102.8
461.3
101.4
5.9
15.1
20.5
55.2

170.0
109.6
508.6
93.2
5.0
15.7
19.6
64.4

187.1
117.5
540.5
96.4
4.7
16.7
22.9
69.9

192.5
121.3
616.4
116.0
5.4
20.1
25.7
78.8

204.9
122.4
677.2
111.3
5.5
19.2
38.6
88.3

202.1
126.5
684.6
110.0
5.2
19.4
38.3
87.5

203.3
131.0
694.5
109.4
5.2
19.1
37.8
85.6

24
75
26
27

Individuals
Savings bonds
Other securities
Foreign and international 6
Other miscellaneous investors7

76.7
28.6
109.6
49.7

80.7
30.3
137.8
58.9

79.9
36.2
124.4
90.1

72.5
56.7
127.7
106.9

68.0
73.0
135.3
138.0

68.1
73.6
138.3
144.3

68.0'
75.6
141.4
152.3

1. Includes (not shown separately): Securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. These nonmarketable bonds, also known as Investment Series B Bonds, may
be exchanged (or converted) at the owner's option for IV2 percent, 5-year marketable Treasury notes. Convertible bonds that have been so exchanged are removed from this category and recorded in the notes category (line 5).
3. Nonmarketable dollar-denominated and foreign currency-denominated series
held by foreigners.
4. Held almost entirely by U.S. government agencies and trust funds.




Feb.

718.9

By holder5
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Mutual savings banks
Insurance companies
Other companies
State and local governments

15 Non-interest-bearing debt

Jan.

n a.

6.0

n a.

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. Consists of investments of foreign balances and international accounts in the
United States.
7. Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, certain government deposit accounts, and
government sponsored agencies.
NOTE. Gross public debt excludes guaranteed agency securities.
Data by type of security from Monthly Statement of the Public Debt of the United
States (U.S. Treasury Department); data by holder from Treasury Bulletin.

Federal Finance
1.42

U.S. G O V E R N M E N T M A R K E T A B L E SECURITIES

A33

Ownership, by maturity

Par value; millions of dollars, end of period
1981
Type of holder

1979

1981

1980

1979
Nov.

1980

Dec.

Nov.

Dec.

1 to 5 years

All maturities
1 AH holders

530,731

623,186

704,819

720,293

89,578

197,409

227,886

228,550

2 U.S. government agencies and trust funds
3 Federal Reserve Banks

11,047
117,458

9,564
121,328

8,745
126,539

8,669
130,954

2,555
8,469

1,990
35,835

1,906
36,410

1,906
38,223

402,226
69,076
3,204
11,496
8,433
3,209
15,735
291,072

492,294
77,868
3,917
11,930
7,758
4,225
21.058
365,539

569,534
76,348
3,847
12,538
5,497
3,913
24,263
444,001

580,671
74,618
3,971
12,090
4,214
4,122
18,991
462,663

133,173
38,346
1,668
4,518
2,844
1.763
3,487
80,546

159,585
44,482
1,925
4,504
2,203
2,289
4,595
99,577

189,570
39,741
1,814
5,527
1,212
2,302
4,518
134,455

188,422
39,021
1,870
5,596
1,146
2,260
4,278
134,251

4 Private investors
5
Commercial banks
Mutual savings banks
6
7
Insurance companies
8
Nonfinancial corporations
Savings and loan associations
9
10 State and local governments
11 All others

5 to 10 years

Total, within 1 year
12 AH holders
13 U.S. government agencies and trust funds
14 Federal Reserve Banks
15 Private investors
16 Commercial banks
17 Mutual savings banks
18 Insurance companies
19 Nonfinancial corporations
20
Savings and loan associations
21 State and local governments
22 All others

255,252

297,385

328,572

340,082

50,440

56,037

60,112

63,483

1,629
63,219

830
56,858

648
61.761

647
64,113

871
12,977

1,404
13,458

824
11,673

779
11,854

190,403
20,171
836
2,016
4,933
1,301
5,607
155,539

239.697
25,197
1,246
1,940
4,281
1,646
7,750
197,636

266.163
27,708
1,439
2,132
2,436
1,509
8.789
222.150

275,322
29,480
1,569
2,201
2,421
1,731
7,536
230,383

36,592
8,086
459
2,815
308
69
1,540
24,314

41,175
5,793
455
3,037
357
216
2,030
29,287

47,615
4,505
229
2,464
298
32
2,724
37,365

50,851
4,496
238
2,507
344
98
2,365
40,804

10 to 20 years

Bills, within 1 year
23 All holders
24 U.S. government agencies and trust funds
25 Federal Reserve Banks
26 Private investors
27 Commercial banks
28
Mutual savings banks
29
Insurance companies
30
Nonfinancial corporations
31
Savings and loan associations
32
State and local governments
33 All others

172,644

216,104

233,905

245,015

27,588

36,854

43,062

44,744

0
45,337

1
43,971

1
47,661

»

49,679

4,520
3,272

3,686
5,919

4,027
6,580

3,996
6,692

127,306
5,938
262
473
2,793
219
3,100
114,522

172,132
9,856
394
672
2,363
818
5,413
152,616

186,243
8,083
340
673
1,059
203
6,124
169,760

195,335
9,667
423
760
1,173
363
5,126
177,824

19,796
993
127
1,305
218
58
1,762
15,332

27,250
1,071
181
1,718
431
52
3,597
20,200

32,455
1,324
197
1,548
801
37
4,724
23,824

34,055
873
151
1,119
131
16
2,824
28,940

Over 20 years

Other, within 1 year
34 All holders

82,608

81,281

94,667

95,068

33,254

35,500

45,187

43,434

35 U.S. government agencies and trust funds.
36 Federal Reserve Banks

1,629
17,882

829
12,888

647
14,101

647
14,433

1,472
9,520

1,656
9,258

1,340
10,115

1,340
10,073

37 Private investors
38 Commercial banks
39
Mutual savings banks
40
Insurance companies
41
Nonfinancial corporations
42
Savings and loan associations
43 State and local governments
44
All others

63,097
14,233
574
1,543
2,140
1,081
2,508
41,017

67,565
15,341
852
1,268
1,918
828
2,337
45,020

79,920
19.624
1.099
1.459
1,377
1,306
2,665
52,389

79,987
19,814
1,146
1,442
1,248
1,368
2,410
52,560

22,262
1,470
113
842
130
19
3,339
16,340

24,587
1,325
110
730
476
21
3,086
18,838

33,731
2,198
168
866
750
34
3,509
26,208

32,020
749
144
666
172
17
1,988
28,285

NOTE. Direct public issues only. Based on Treasury Survey of Ownership from
Treasury Bulletin (U.S. Treasury Department).
Data complete for U.S. government agencies and trust funds and Federal Reserve
Banks, but data for other groups include only holdings of those institutions that
report. The following figures show, for each category, the number and proportion
reporting as of Dec. 31,1981: (1) 5,317 commercialbanks, 452 mutual savings banks.




and 723 insurance companies, each about 80 percent; (2) 407 nonfinancial corporations and 469 savings and loan associations, each about 50 percent; and (3)
489 state and local governments, about 40 percent.
"All others," a residual, includes holdings of all those not reporting in the
Treasury Survey, including investor groups not listed separately.

A34
1.43

DomesticNonfinancialStatistics • March 1982
U.S. G O V E R N M E N T SECURITIES D E A L E R S

Transactions

Par value; averages of daily figures, in millions of dollars
1982

1981
Item

1

Immediate delivery1
U.S. government securities ..
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years

2
3
4
5
6
1
8
9
10
11
12
13
14
15
16
17
18

By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 2
Federal agency securities . . .
Certificates of deposit
Bankers acceptances
Commercial paper
Futures transactions 3
Treasury bills
Treasury coupons
Federal agency securities . . .
Forward transactions 4
U.S. government securities .
Federal agency securities . . .

1978

Nov.

Dec.

Jan.

Jan. 13

Jan. 20

Jan. 27

Feb. 3

Feb. 10

10,285

13,183

18,331

35,034

27,425

28,274

29,817

24,662

28,935

28,320

25,220

6,173
392
1,889
965
867

7,915
454
2,417
1,121
1,276

11,413
421
3,330
1,464
1,704

18,862
1,137
7,713
3,534
3,789

16,599
986
5,354
2,265
2,222

13,998
680
4,749
2,578
2,080

18,028
722
4,177
4,373
2,517

15,806
505
4,099
2,208
2,045

18,671
523
5,742
1,858
91

16,602
613
6,403
2,200
2,502

13,135
514
4,777
2,712
4,082

1,135

1,448

1,484

2,040

1,908

1,371

1,619

1,545

1,587

1,450

1,257

3,838
5,312
1,894
1.292

5,170
6,564
2,723
1,764

7,610
9,237
3,258
2,472

16,519
16,475
4,383
6,380
2.643
7.512

12,316
13,201
2,803
4,781
2,042
6,782

13,650
13,066
2,768
4,249
1.911
7,573

15,417
12,781
2,602
4,759
2,210
6,834

11,534
11,583
2,500
3,609
1,697
7,852

13,903
13,445
3,272
4,458
1,688
7,329

14,347
12,523
2,754
4,361
2,212
8,131

12,472
11,491
2,947
3,209
1,480
6,627

4,905
2,629
260

5.024
1,525
218

5,153
1,193
194

5,107
1,115
163

5,255
1,037
172

5,884
1,161
226

5,391
1,112
271

3,555
1,311
161

569
1,921

602
1,269

591
1,273

205
1,354

503
1,368

988
1,286

1,027
1,362

731
1,504

n a.

n a.

I

I

n a.

1. Before 1981, data for immediate transactions include forward transactions.
2. Includes, among others, all other dealers and brokers in commodities and
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
3. Futures contracts are standardized agreements arranged on an organized exchange in which parties commit to purchase or sell securities for delivery at a future
date.
4. Forward transactions are agreements arranged in the over-the-counter market
in which securities are purchased (sold) for delivery after 5 business days from the

1.44

1981 and 1982, week ending Wednesday

1980

1979

U.S. G O V E R N M E N T SECURITIES D E A L E R S

date of the transaction for government securities (Treasury bills, notes, and bonds)
or after 30 days for mortgage-backed agency issues.
NOTE. Averages for transactions are based on number of trading days in the
period.
Transactions are market purchases and sales of U.S. government securities dealers reporting to the Federal Reserve Bank of New York. The figures exclude
allotments of, and exchanges for, new U.S. government securities, redemptions of
called or matured securities, purchases or sales of securities under repurchase
agreement, reverse repurchase (resale), or similar contracts.

Positions and Financing

Averages of daily figures, in millions of dollars
1982

1981
Item

1978

1979

1981 and 1982. week ending Wednesday

1980
Nov.

Dec?

Jan.P

Dec. 30

Jan. 6

Jan. 13

Jan. 20

Jan. 27

Positions

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Net immediate 1
U.S. government securities
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
Federal agency securities .
Certificates of deposit
Bankers acceptances
Commercial paper
Future positions
Treasury bills
Treasury coupons
Federal agency securities .
Forwards positions
U.S. government securities
Federal agency securities .

2,656
2.452
260
-92
40
-4
606
2,775

1
t
1
n.a.
1
t1

3,223
3.813
-325
-455
160
30
1,471
2,794

A
1

4,306
4,103
-1,062
434
166
665
797
3,115

i

1

n.a.

n.a.

1
1t

1
t1

8,592
4,920
-3,611
3,779
241
3,264
2,809
4,396
2,211
3,273

4,111
2,308
-3,915
3,148
-80
2,650
3,721
5,086
2,587
3,254

5,457
3,507
-2,620
2,867
-349
1,993
3,016
3,876
2,233
2,577

5,423
3,536
-3,048
3,105
-380
2,210
3,762
5,837
2,368
3,293

9,523
7,242
-2,999
3,456
-496
2,320
3,638
5,154
2,398
2,823

5.934
3.732
-2,703
2,708
261
1,937
3,282
4,334
2,324
2,612

3,142
1.728
-2,528
2,254
-174
1,863
3,113
3,362
2,365
2,624

4,852
2,895
-2,466
3,058
-815
1,916
2,514
3,139
1,987
2,289

-7,318
-3,872
-197

-5,209
-3,626
-379

-6,565
-2,726
-64

-5,506
-3,134
-469

-6,152
-2,966
-437

-6,068
-2,592
-143

-6,871
-2,643
-46

-6,966
-2,642
63

-443
-1,045

-642
-1,241

-461
-1,226

-513
-1.131

-397
-1,156

-117
-1,305

-546
-1,404

-626
-1,091

Financing2
Reverse repurchase agreements 3
Overnight and continuing . . .
Term agreements
Repurchase agreements 4
18 Overnight and continuing . . .
19 Term agreements
16
17

For notes see opposite page.




20.711
44,981

25,185
51,003

25,006
47,632

26,474
53,624

27,118
46,898

23,946
47,494

26,195
47,583

43,324
41,525

50,681
43,358

49,809
38,804

51,740
49,607

54,309
38,990

50,296
38,753

50,245
37,806

Federal Finance
1.45

A35

F E D E R A L A N D F E D E R A L L Y S P O N S O R E D CREDIT A G E N C I E S Debt Outstanding
Millions of dollars, end of period

1980

1979

Agency

July
1 Federal and federally sponsored agencies'

Aug.

Sept.

137,063

163,290

193,229

213,690

218,362

223,393

226,010

226,269

2 Federal agencies
3
Defense Department 2
4 Export-Import Bank 3 , 4
5 Federal Housing Administration 5
6
Government National Mortgage Association
participation certificates"
7 Postal Service 7
8 Tennessee Valley Authority
9
United States Railway Association 7

23,488
968
8,711
588

24,715
738
9,191
537

28,606
610
11,250
477

29,978
536
12,401
443

30,088
526
12,385
449

30,870
516
12,855
432

31,069
514
12,845
427

31,156
490
12,829
419

3,141
2,364
7,460
356

2.979
1,837
8,997
436

2,817
1,770
11,190
492

2,715
1,538
12,130
215

2,715
1,538
12,260
215

2,715
1,538
12,599
215

2,715
1,538
12,830
200

2,715
1,538
12,965
200

10 Federally sponsored agencies 1
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation .
13 Federal National Mortgage Association . . . .
14 Federal Land Banks
15 Federal Intermediate Credit Banks
16 Banks for Cooperatives
17 Farm Credit Banks 1
18 Student Loan Marketing Association 8
19 Other

113,575
27,563
2,262
41,080
20,360
11,469
4,843
5,081
915

138,575
33,330
2,771
48,486
16,006
2,676
584
33,216
1,505

164,623
41,258
2,536
55,185
12,365

183,712
52,431
2,408
55,362
10,317
1,388
220
57,784
3,800
2

188,274
55,161
2,408
56,372
10,317
1,388
220
58,306
4,100
2

192,523
58,276
2,308
56,688
10,317
1,388
220
59,024
4,300

195,113
57,854

2

194,941
57,990
2,308
57,805
9,717
1,388
220
60,911
4,600
2

51,298

67,383

87,460

102,853

103,597

107,309

108,171

109,495

6,898
2,114
915
5,635
356

8,353
1,587
1,505
7,272
436

10,654
1,520
2,720
9,465
492

11,933
1,288
3,800
10,405
215

11,933
1,288
4,100
10,535
215

12,409
1,288
4,300
10,874
215

12,409
1,288
4,600
11,105
200

12,409
1,288
4,600
11,240
200

23,825
4,604
6,951

32,050
6,484
9,696

39,431
9,196
13,982

47,396
11,604

47,171
11,861
16,494

48,821
12,343
17,059

48,571
12,674
17,324

49,029
12,924
17,805

2

1

1,821

584
48,153
2,720

1

2,6

58,533
9,717
1,388
220
60,191
4,600
2

MEMO:

20 Federal Financing Bank debt 1,9

21
22
23
24
25

Lending to federal and federally sponsored
agencies
Export-Import Bank 4
Postal Service 7
Student Loan Marketing Association 8
Tennessee Valley Authority
United States Railway Association 7

Other Lending10
26 Farmers Home Administration
27 Rural Electrification Administration
28 Other

1. In September 1977 the Farm Credit Banks issued their first consolidated bonds,
and in January 1979 thev began issuing these bonds on a regular basis to replace
the financing activities of the Federal Land Banks, the Federal Intermediate Credit
Banks, and the Banks for Cooperatives. Line 17 represents those consolidated
bonds outstanding, as well as any discount notes that have been issued. Lines 1
and 10 reflect the addition of this item.
2. Consists of mortgages assumed by the Defense Department between 1957 and
1963 under family housing and homeowners assistance programs.
3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
5. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the securities market.
6. Certificates of participation issued prior to fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department

NOTES T O T A B L E 1.44
1. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on
a commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some repurchase agreements are sufficiently long, however, to suggest that the securities
involved are not available for trading purposes. Securities owned, and hence dealer
positions, do not include securities to resell (reverse RPs). Before 1981, data for
immediate positions include forward positions.
2. Figures cover financing involving U.S. government and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.




16,212

of Housing and Urban Development; Small Business Administration; and the
Veterans Administration.
7. Off-budget.
8. Unlike other federally sponsored agencies, the Student Loan Marketing Association may borrow from the Federal Financing Bank (FFB) since its obligations
are guaranteed by the Department of Health, Education, and Welfare.
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB incurs
debt solely for the purpose of lending to other agencies, its debt is not included in
the main portion of the table in order to avoid double counting.
10. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any particular agency being generally small. The Farmers Home Administration item consists
exclusively of agency assets, while the Rural Electrification Administration entry
contains both agency assets and guaranteed loans.

3. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities obtained
have been used as collateral on borrowings, i.e., matched agreements.
4. Includes both repurchase agreements undertaken to Finance positions and
"matched book" repurchase agreements.
NOTE. Data for positions are averages of daily figures, in terms of par value,
based on the number of trading days in the period. Positions are shown net and
are on a commitment basis. Data for financing are based on Wednesday figures,
in terms of actual money borrowed or lent.

A36
1.46

DomesticNonfinancialStatistics • March 1982
N E W SECURITY ISSUES of State and Local Governments
Millions of dollars
1981

Type of issue or issuer,
or use

1978

1979

1980
June

1 All issues, new and refunding1

July

Aug.

Sept.

Oct.

Nov.

48,512

43,365

48,367

4,886

3,184

3,078

3,874

3,977

5,137

17,854
n.a.
30,658
n.a.

12,109
53
31,256
67

14,100
38
34,267
57

1,389
1
3,497
4

1,066
5
2,118
1

961
8
2,117
4

567
2
3,307
10

730
2
3,247
5

1,273
3
3,864
2

Type of issuer
6 State
7 Special district and statutory authority
8 Municipalities, counties, townships, school districts

6,632
24,156
17,718

4,314
23,434
15.617

5,304
26,972
16,090

585
2,711
1,591

353
1,728
1,103

446
1,688
943

92
2,722
1,060

439
2,404
1,133

518
3,326
1,291

9 Issues for new capital, total

37,629

41,505

46,736

4,812

3,174

2,426

3,868

3,890

5,109

Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes

5,003
3,460
9,026
10,494
3,526
6,120

5.130
2,441
8,594
15,968
3,836
6,120

4,572
2,621
8,149
19,958
3,974
5,536

641
161
767
1,380
757
1,106

255
537
881
712
364
425

272
113
543
807
292
399

162
214
1,626
498
849
519

195
496
695
951
921
632

568
284
742
1,850
539
1,126

2
3
4
5

10
11
12
13
14
15

Type of issue
General obligation
U.S. government loans2
Revenue
U.S. government loans2

1. Par amounts of long-term issues based on date of sale.
2. Consists of tax-exempt issues guaranteed by the Farmers Home Administration.

1.47

SOURCE. Public Securities Association.

N E W S E C U R I T Y ISSUES of Corporations
Millions of dollars
Type of issue or issuer,
or use

1981
1979

1980r

1981
June'

1

July r

Aug/

Sept. r

Oct/

Nov/

Dec.

1 All issues

51,533

73,694

69,093

9,452

3,842

3,097

4,696

4,368

8,518

5,717

2 Bonds

40,208

53,206

44,593

5,518

2,186

1,616

2,797

2,845

6,724

3,844

Type of offering
3 Public
4 Private placement

25,814
14,394

41,587
11,619

37,604
6.989

4,604
914

1,926
260

905
711

2,198
599

2,582
263

6,560
164

3,526
317

9,678
3.948
3,119
8,153
4,219
11,094

15,409
6,693
3,329
9,557
6,683
11,534

12.325
5.229
2,054
8.963
4.280
11.743

1,312
566
584
847
470
1,738

507
189
120
322
767
281

308
390
95
360
115
348

452
201
63
1,012
471
598

21
617
51
1,008
83
1,065

2,054
949
130
802
326
2,463

954
850
82
582
106
1,269

11,325

20,489

24,500

3,934

1,656

1,481

1,899

1,523

1,794

1,873

3,574
7,751

3,631
16,858

1,796
22.704

187
3.747

67
1,589

14
1,467

186
1,713

141
1,382

59
1,735

80
1,793

1,679
2,623
255
5,171
303
12,931

4,839
5,245
549
6,230
567
3,059

4,786
7,424
735
5.416
1.772
4.368

382
1,024
18
843
1,036
632

335
340
29
308
73
571

160
661
91
248
12
310

117
487
87
514
369
325

193
449
23
438
7
412

407
564
15
405
85
318

206
444
23
534
89
577

5
6
7
8
9
10

Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

11 Stocks
Type
12 Preferred
13 Common
14
15
16
17
18
19

Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

1. Figures, which represent gross proceeds of issues maturing in more than one
year, sold for cash in the United States, are principal amount or number of units
multiplied by offering price. Excludes offerings of less than $100,000, secondary
offerings, undefined or exempted issues as defined in the Securities Act of




1933, employee stock plans, investment companies other than closed-end, intracorporate transactions, and sales to foreigners.
SOURCE. Securities and Exchange Commission.

Corporate Finance
1.48

O P E N - E N D I N V E S T M E N T COMPANIES
Millions of dollars

Item

1980

A37

Net Sales and Asset Position

1982

1981

1981r
July

June

Aug.

Sept.

Oct.

Nov.

Dec.'

Jan.

INVESTMENT COMPANIES1

1 Sales of own shares 2
2 Redemptions of own shares 3
3 Net sales
4
5
6

Assets 4
Cash position 5
Other

15,266
12,012
3,254

20,596
15,866
4,730

1,910
1,512
398

1,639
1,297
342

1,457
1,422
35

1,449
1,457
-8

1,768
593
1,175

1,729
1,125
604

2,140
1,769
371

3,032
1,475
1,557

58,400
5,321
53,079

55,207
5,277
49,930

58,887
5,199
53,688

57,494
5,109
52,385

54,221
5,058
49,163

51,659
5,409
46,250

54,335
5,799
48,536

57,408
6,269
51,139

55,207
5,277
49,930

54,347
5,424
48,923

5. Also includes all U.S. government securities and other short-term debt securities.

1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment
of capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes share redemption resulting from conversions from one fund to another in the same group.
4. Market value at end of period, less current liabilities.

1.49

NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.

C O R P O R A T E PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1980
Account

1978

1979

Q1
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits

2
3
4
5
6

7 Inventory valuation
8 Capital consumption adjustment

Q2

03

Q4

Q1

Q2

Q3

185.5
223.3
82.9
140.3
44.6
95.7

196.8
255.3
87.6
167.7
50.1
117.6

182.7
245.5
82.3
163.2
56.0
107.2

200.2
277.1
94.2
182.9
53.9
129.0

169.3
217.9
71.5
146.4
55.7
90.7

177.9
237.6
78.5
159.1
56.7
102.4

183.3
249.5
85.2
164.3
57.7
106.6

203.0
257.0
87.7
169.3
59.6
109.7

190.3
229.0
76.4
152.6
62.0
90.6

195.7
234.4
78.1
156.3
64.8
91.5

-24.3
-13.5

-42.6
-15.9

-45.6
-17.2

-61.4
-15.4

-31.1
-17.6

-41.7
-17.9

-48.4
-17.8

-39.2
-14.7

-24.0
-14.7

-25.3
-13.4

SOURCE. Survey of Current Business (U.S. Department of Commerce).




1981

1980

A38
1.50

DomesticNonfinancialStatistics • March 1982
NONFINANCIAL CORPORATIONS

Current Assets and Liabilities

Billions of dollars, except for ratio
1980

Account

1975

1976

1977

1978

1981

1979
Q3

Q4

Q1

Q2

Q3

1 Current assets

759.0

826.8

902.1

1,030.0

1,200.9

1,254.9

1,281.6

1,321.2

1,317.4

1,349.2

2
3
4
5
6

82.1
19.0
272.1
315.9
69.9

88.2
23.4
292.8
342.4
80.1

95.8
17.6
324.7
374.8
89.2

104.5
16.3
383.8
426.9
98.5

116.1
15.6
456.8
501.7
110.8

113.4
16.4
478.7
524.5
121.9

121.0
17.3
491.2
525.4
126.7

120.5
17.0
507.3
542.8
133.6

118.5
17.7
507.4
540.0
133.7

118.3
16.0
519.7
557.2
138.1

7 Current liabilities

451.6

494.7

549.4

665.5

809.1

850.5

877.2

910.9

908.1

951.1

8 Notes and accounts payable
9 Other

264.2
187.4

281.9
212.8

313.2
236.2

373.7
291.7

456.3
352.8

477.2
373.4

498.3
378.9

504.0
406.9

500.8
407.2

529.1
422.0

307.4

332.2

352.7

364.6

391.8

404.3

404.4

410.3

409.3

398.1

1.672

1.642

1.548

1.484

1.475

1.461

1.450

1.451

1.419

Cash
U.S. government securities
Notes and accounts receivable
Inventories
Other

10 Net working capital
11 MEMO: Current ratio

1

1.681

1. Ratio of total current assets to total current liabilities.

All data in this table reflect the most current benchmarks. Complete data are
available upon request from the Flow of Funds Section, Division of Research and
Statistics.

NOTE. For a description of this series, see "Working Capital of Nonfinancial
C o r p o r a t i o n s " in t h e J u l y 1978 BULLETIN, p p . 5 3 3 - 3 7 .

SOURCE. Federal Trade Commission.

1.51

T O T A L N O N F A R M BUSINESS E X P E N D I T U R E S on New Plant and Equipment
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1980

Industry

1 Total nonfarm business
2
3

4
6

7
8

9
10
11

Manufacturing
Durable goods industries
Nondurable goods industries
Nonmanufacturing
Mining
Transportation
Railroad
Air
Other
Public utilities
Electric
Gas and other
Trade and services
Communication and other 2

1980

1981 R

1982

Q4

Q1

Q2

Q3

Q4

Q11

Q21

295.63

321.49

345.11

299.58

312.24

316.73

328.25

327.83

330.34

336.77

58.91
56.90

61.84
64.95

67.24
69.58

59.77
58.86

61.24
63.27

63.10
62.40

62.58
67.53

60.78
66.14

62.95
66.28

64.79
68.72

13.51

16.86

18.33

15.28

16.20

16.80

17.55

16.81

17.26

17.20

4.25
4.01
3.82

4.24
3.81
4.00

4.55
4.15
4.83

4.54
3.77
3.39

4.23
3.85
3.66

4.38
3.29
4.04

4.18
3.34
4.09

4.18
4.82
4.12

4.39
3.23
4.52

4.37
2.97
4.71

28.12
7.32
81.79
36.99

29.74
8.65
86.33
41.06

31.77
8.43
90.48
45.75

27.54
7.41
82.91
36.11

27.69
8.36
83.43
40.32

29.32
8.53
85.88
39.02

30.54
9.01
87.55
41.89

31.14
8.60
88.33
42.92

30.86
8.46
89.46
42.93

31.59
8.04
89.92
44.45

1. Anticipated by business.
2. "Other" consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services.




1981

19821

SOURCE. Survey of Current Business (U.S. Dept. of Commerce).

Corporate Finance
1.52

D O M E S T I C F I N A N C E COMPANIES

A39

Assets and Liabilities

Billions of dollars, end of period
1981
Account

1975

1976

1977

1978

1979

1980
Q2

Q1

Q3

Q4

ASSETS

Accounts receivable, gross
Consumer
Business
Total
LESS: Reserves for unearned income and losses....
Accounts receivable, net
Cash and bank deposits
Securities
All other

36.0
39.3
75.3
9.4
65.9
2.9
1.0
11.8

38.6
44.7
83.4
10.5
72.9
2.6
1.1
12.6

44.0
55.2
99.2
12.7
86.5
2.6
.9
14.3

52.6
63.3
116.0
15.6
100.4
3.5
1.3
17.3

65.7
70.3
136.0
20.0
116.0

73.6
72.3
145.9
23.3
122.6

76.1
72.7
148.7
24.3
124.5

79.0
78.2
157.2
25.7
131.4

84.5
76.9
161.3
27.7
133.6

85.5
81.0
166.5
28.9
138.1

24.9'

27.5

30.8

31.6

34.5

34.2

81.6

89.2

104.3

122.4

140.9

150.1

155.3

163.0

168.1

172.3

10 Bank loans
11 Commercial paper

8.0
22.2

6.3
23.7

5.9
29.6

6.5
34.5

8.5
43.3

13.2
43.4

13.1
44.2

14.4
49.0

14.7
51.2

15.4
51.2

12
13
14

4.5
27.6
6.8

5.4
32.3
8.1

6.2
36.0
11.5

8.1
43.6
12.6

8.2
46.7
14.2

7.5
52.4
14.3

8.2
51.6
17.3

8.5
52.6
17.0

11.9
50.7
17.1

9.6
54.8
17.8

1
2
3
4
5
6
7
8

9 Total assets
LIABILITIES

Short-term, n.e.c
Long-term, n.e.c
Other

15 Capital, surplus, and undivided profits

12.5

13.4

15.1

17.2

19.9

19.4

20.9

21.5

22.4

23.6

16 Total liabilities and capital

81.6

89.2

104.3

122.4

140.9

150.1

155.3

163.0

168.1

172.3

1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined.
NOTE. Components may not add to totals due to rounding.

1.53

D O M E S T I C F I N A N C E COMPANIES Business Credit
Millions of dollars, seasonally adjusted except as noted

Type

Accounts
receivable
outstanding
Dec. 31,
1981'

Changes in accounts
receivable

Extensions

Repayments

1981

1981

1981

Oct.

Nov.

Dec.

Oct.

Nov.

Dec.

Oct.

Nov.

Dec.

1 Total

81,022

418

1,395

552

17,393

20,029

16,192

16,975

18,634

15,640

Retail automotive (commercial vehicles)
Wholesale automotive
Retail paper on business, industrial, and farm e q u i p m e n t . . . .
Loans on commercial accounts receivable and factored commercial accounts receivable
6 All other business credit

11,401
13,103
27.959

-41
184
76

188
534
510

-5
-48
387

877
4.804
1,352

1,081
5,275
2,091

898
3,408
1,701

918
4,620
1,276

893
4,741
1.581

903
3,456
1,314

8,695
19.864

-21
220

83
80

-91
309

8,061
2,299

9,120
2.462

7,378
2.807

8,082
2,079

9,037
2.382

7,469
2,498

2
3
4
5

1. Not seasonally adjusted.




A40
1.54

DomesticNonfinancialStatistics • March 1982
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1981
Item

1979

1980

1982

1981
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Terms and yields in primary and secondary markets
PRIMARY MARKETS

1
2
3
4
5
6

Conventional mortgages on new homes
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Contract rate (percent per annum)

Yield (percent per annum)
1 FHLBB series5
8 HUD series4

74.4
53.3
73.9
28.5
1.66
10.48

83.4
59.2
73.2
28.2
2.09
12.25

90.4
65.2
74.8
27.7
2.67
14.16

95.2
67.7
73.9
28.3
2.73
14.13

98.1
70.3
74.7
27.2
2.98
14.60

89.1
64.8
74.1
26.6
2.75
14.69

89.2
63.5
73.0
27.4
2.86
15.04

84.5
62.7
77.3
23.4
2.52
15.68

88.7
64.4
75.3
27.7
2.87
15.23

102.6
73.3
75.5
27.4
2.55
14.66

10.77
11.15

12.65
13.95

14.74
16.52

14.72
16.70

15.27
17.50

15.29
18.30

15.65
18.05

16.38
16.95

15.87
17.00

15.25
17.30

10.87
10.22

13.42
12.55

16.29
15.29

16.76
15.76

17.96
16.67

18.55
17.06

17.43
16.54

15.98
15.10

16.43
15.51

17.38
16.19

11.17
11.77

14.11
14.43

16.70
16.64

16.65
16.44

17.63
17.59

18.99
19.14

18.13
18.61

16.64
17.20

16.92
16.95

17.80
17.33

SECONDARY MARKETS

9
10
11
12

Yield (percent per annum)
FHA mortgages (HUD series)5
GNMA securities"
FNMA auctions7
Government-underwritten loans
Conventional loans

Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION

Mortgage holdings (end of period)
13 Total
14 FHA/VA-insured
15 Conventional

46,050
33.673
14.377

55,104
37,364
17.724

58.675
39,342
19.334

57,979
39.108
18.870

58,722
39,368
19,354

59.682
39.792
19,890

60,489
40,043
20,445

60,949
40,056
20,885

61,412
39,997
21,435

61,721
39,937
21,435

Mortgage transactions (during period)
16 Purchases
17 Sales

10,812
0

8.099
0

6,112
2

627
0

944
0

1,125
0

1,000
0

594
0

655
0

430
0

10,179
6,409

8,083
3,278

9,331
3,577

1,662
4,039

1,394
4,399

811
3,997

533
3,447

560
3.354

1,272
3,577

703
3,285

8,860.4
3,920.9

8.605.4
4.002.0

2,487.2
1.478.0

331.9
290.4

689.5
336.6

145.9
64.1

66.3
37.3

79.0
34.4

59.2
27.0

41.5
30.8

4.495.3
2,343.6

3,639.2
1,748.5

2,524.7
1.392.3

306.6
238.2

862.2
304.3

120.7
67.9

43.2
27.5

147.7
63.1

84.4
48.0

31.7
11.5

Mortgage holdings (end of period f
24 Total
25
FHA/VA
26
Conventional

3,543
1,995
1,549

4,362
2,116
2,246

5,245
2.236
3.010

5.250
2.233
3,017

5,294
2,238
3,056

5.431
2.264
3,167

5,469
2,267
3,202

5,283
2,232
3,051

5,255
2,227
3,028

5,240
2,209
3,032

Mortgage transactions (during period)
27 Purchases
28 Sales

5.717
4.544

3,723
2,527

3.789
3.531

242
238

101
44

337
249

290
244

416
596

1,140
1,158

1,628
162

Mortgage commitments10
29 Contracted (during period)
30 Outstanding (end of period)

5,542
797

3,859
447

6.974
3.518

866
824

386
1,028

365
982

1,834
2,863

2,011
4,451

203
3,518

328
5,033

s

Mortgage commitments
18 Contracted (during period)
19 Outstanding (end of period)
Auction of 4-month commitments to buy
Government-underwritten loans
Offered
Accepted
Conventional loans
22
Offered
23
Accepted
20
21

FEDERAL HOME LOAN MORTGAGE CORPORATION

1. Weighted averages based on sample surveys of mortgages originated by major
institutional lender groups. Compiled by the Federal Home Loan Bank Board in
cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower
or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages,
rounded to the nearest 5 basis points; from Department of Housing and Urban
Development.
5. Average gross yields on 30-year, minimum-downpayment. Federal Housing
Administration-insured first mortgages for immediate delivery in the private secondary market. Any gaps in data are due to periods of adjustment to changes in
maximum permissible contract rates.
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities.




assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying
the prevailing ceiling rate. Monthly figures are unweighted averages of Monday
quotations for the month.
7. Average gross yields (before deduction of 38 basis points for mortgage servicing) on accepted bids in Federal National Mortgage Association's auctions of
4-month commitments to purchase home mortgages, assuming prepayment in 12
years for 30-year mortgages. No adjustments are made for FNMA commitment
fees or stock related requirements. Monthly figures are unweighted averages for
auctions conducted within the month.
8. Includes some multifamily and nonprofit hospital loan commitments in addition to 1- to 4-family loan commitments accepted in FNMA's free market auction
system, and through the FNMA-GNMA tandem plans.
9. Includes participation as well as whole loans.
10. Includes conventional and government-underwritten loans.

Real Estate Debt
1.55

A41

MORTGAGE DEBT OUTSTANDING
Millions of dollars, end of period
1980

Type of holder, and type of property

1979

1980

1981

1981
Q4

Q1

Q2

Q3

Q4'

1,326,916

1,446,074 r

1,543,771 r

1,446,074'

1,467,370'

1,497,061'

1,523,522'

1,543,771

878,938
128,850
236,451
82,677

960,344R
137,163'
256,549'
92,018'

1,018,472'
144,267'
279,096'
101,936'

960,344'
137,163'
256,549'
92,018'

972,556'
138,544'
261,809'
94,461'

990,862'
140,100'
268,587'
97,512'

1,007,529'
141,675'
274,250'
100,068'

1,018,472
144,267
279,096
101,936

938,567
245,187
149,460
11,180
75,957
8,590
98,908
64,706
17,180
16,963
59

996,789
263,030
160,326
12,924
81,081
8,699
99,866
65,332
17,347
17,127
60

1,044,496'
286,626
172,549
14,905
90,717
8,455
100,000
65,420
17,370
17,150
60

996,789
263,030
160,326
12,924
81,081
8,699
99,866
65,332
17,347
17,127
60

1,006,836
266,734
161,758
13,282
83,133
8,561
99,719
65,236
17,321
17,102
60

1,023,340
273,225
164,873
13,800
86,091
8,461
99,993
65,415
17,369
17,149
60

1,036,687
281,126
169,378
14,478
88,836
8,434
100,200
65,551
17,405
17,184
60

1,044,496
286,626
172,549
14,905
90,717
8,455
100,000
65,420
17,370
17,150
60

20

Savings and loan associations
1- to 4-family
Multifamily
Commercial

475,688
394,345
37,579
43,764

502,812
419,446
38,113
45,253

517,637
432,693
38,253
46,691

502,812
419,446
38,113
45,253

507,152
423,269
38,189
45,694

514,803
430,324
38,044
46,435

518,379
433,313
38,308
46,758

517,637
432,693
38,253
46,691

21
22
23
24
25

Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm

118,784
16,193
19,274
71,137
12,180

131,081
17,943
19,514
80,666
12,958

140,233'
17,966'
20,101'
88,991'
13,175'

131,081
17,943
19,514
80,666
12,958

133,231
17,847
19,579
82,839
12,966

135,319
17,646
19,603
85,038
13,032

136,982
17,512
19,592
86,742
13,136

140,233
17,966
20,101
88,991
13,175

97,084
3,852
763
3,089

114,300
4,642
704
3,938

126,186
4,765
765
4,000

114,300
4,642
704
3,938

116,243
4,826
696
4,130

119,124'
4,972
698
4,274

121,772'
4,382
696
3,686

126,186
4,765
765
4,000

33
34

Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm

1,274
417
71
174
612

3,492
916
610
411
1,555

2,235'
914'
473'
506 R
342'

3,492
916
610
411
1,555

2,837
1,321
528
479
509

2,662'
1,151'
464'
357'
690'

1,562'
500'
242'
325'
495'

2,235
914
473
506
342

35
36
37

Federal Housing and Veterans Administration
1- to 4-family
Multifamily

5,555
1,955
3,600

5,640
2,051
3,589

6,073
2,293
3,780

5,640
2,051
3,589

5,799
2,135
3,664

5,895
2,172
3,723

6,005
2,240
3,765

6,073
2,293
3,780

38
39
40

Federal National Mortgage Association
1- to 4-family
Multifamily

51,091
45,488
5,603

57,327
51,775
5,552

61,412
55,986
5,426

57,327
51,775
5,552

57,362
51,842
5,520

57,657
52,181
5,476

59,682
54,227
5,455

61,412
55,986
5,426

41
42
43

Federal Land Banks
1- to 4-family
Farm

31,277
1,552
29,725

38,131
2,099
36,032

46,446
2,788
43,658

38,131
2,099
36,032

40,258
2,228
38,030

42,681
2,401
40,280

44,708
2,605
42,103

46,446
2,788
43,658

44
45
46

Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily

4,035
3,059
976

5,068
3,873
1,195

5,255'
4,018'
1,237'

5,068
3,873
1,195

5,161
3,953
1,208

5,257
4,025
1,232

5,433
4,166
1,267

5,255
4,018
1,237

119,278
76,401
74,546
1,855

142,258
93,874
91,602
2,272

162,273'
105,790
102,750
3,040

142,258
93,874
91,602
2,272

147,246
97,184
94,810
2,374

1

All holders

2 1- to 4-family
3 Multifamily
4 Commercial
5
6 Major financial institutions
7
Commercial.banks 1
R
1- to 4-family
9
Multifamily
10
Commercial
11
Farm
12 Mutual savings banks
13
1- to 4-family
14
Multifamily
15
Commercial
16
Farm
17

18
19

26 Federal and related agencies
27 Government National Mortgage Association
28
1- to 4-family
29
Multifamily
30
31
32

47 Mortgage pools or trusts 2
48 Government National Mortgage Association
49
1- to 4-family
50
Multifamily

152,308'
100,558
98,057
2,501

158,140'
103,750
101,068
2,682

162,273
105,790
102,750
3,040

52
53

Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily

15,180
12,149
3,031

16,854
13,471
3,383

19,843'
15,888'
3,955

16,854
13,471
3,383

17,067
13,641
3,426

17,565
14,115
3,450

17,936
14,401
3,535

19,843
15,888
3,955

54
55
56
57
58

Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm

27,697
14,884
2,163
4,328
6,322

31,530
16,683
2,612
5,271
6,964

36,640'
18,378'
3,426'
6,161'
8,675'

31,530
16,683
2,612
5,271
6,964

32,995
16,640
2,853
5,382
8,120

34,185'
17,165'
3,097'
5,750'
8,173'

36,454'
18,407'
3,488'
6,040'
8,519'

36,640
18,378
3,426
6,161
8,675

171,987
99,421
23,249
24,128
25,189

192,727'
114,123R
26,114R
26,740R
25,750'

192,727'
114,123'
26,114'
26,740'
25,750'

197,045'
117,180'
26,470'
27,180'
26,215'

202,289'
120,639'
27,067'
27,767'
26,816'

206,923'
123,465'
27,772'
28,365'
27,321'

210,816
126,064
28,301
28,880
27,571

51

59 Individual and others 3
60
1- to 4-family
61
Multifamily
62 Commercial
63 Farm

1. Includes loans held by nondeposit trust companies but not bank trust departments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Other holders include mortgage companies, real estate investment trusts, state
and local credit agencies, state and local retirement funds, noninsured pension
funds, credit unions, and U.S. agencies for which amounts are small or separate
data are not readily available.




210,816'
126,064'
28,301'
28,880'
27,571'

NOTE. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve in conjunction with the
Federal Home Loan Bank Board and the Department of Commerce. Separation
of nonfarm mortgage debt by type of property, if not reported directly, and interpolations and extrapolations when required, are estimated mainly by the Federal
Reserve. Multifamily debt refers to loans on structures of five or more units.

A42
1.56

DomesticNonfinancialStatistics • March 1982
C O N S U M E R INSTALLMENT CREDIT 1 Total Outstanding, and Net ChangeA
Millions of dollars
1981
Holder, and type of credit

1978

1979

1982

1980
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Amounts outstanding (end of period)
1 Total

273,645

312,024

313,472

320,656

324,161

328,187

328,652

329,053

333,375

330,135

By major holder
Commercial banks
Finance companies
Credit unions
Retailers 2
Savings and loans
Gasoline companies . . .
Mutual savings banks . .

136,016
54,298
44,334
25,987
7,097
3,220
2.693

154,177
68,318
46,517
28,119
8,424
3,729
2,740

147,013
76,756
44,041
28,448
9,911
4,468
2,835

145,382
83,924
46,096
26,396
10,959
5,078
2,821

146,006
86,152
46,605
26,477
11,125
5,004
2,792

147,060
88,698
46,791
26,594
11,236
5,007
2,801

146,889
89,583
46,416
26,922
11,348
4,713
2,781

146,687
89,956
46,092
27,510
11,529
4,487
2,792

149,300
89,818
45,954
29,551
11,598
4,403
2,751

148,162
88,925
45,907
28,179
11,668
4,541
2,753

By major type of credit
9 Automobile
10
Commercial b a n k s . . .
11
Indirect paper
12
Direct loans
13
Credit unions
14
Finance companies . .

101,647
60,510
33.850
26,660
21,200
19.937

116,362
67,367
38,338
29,029
22,244
26,751

116,838
61,536
35,233
26,303
21,060
34,242

121,476
59,908
34,505
25,403
22,044
39,525

123,481
59,747
34,599
25,148
22,286
41,448

125,703
59,451
34,616
24,835
22,375
43,877

126,344
59,242
34,651
24,591
22,196
44,906

126,385
59,125
34,781
24,344
22,041
45,219

126,431
59,181
35,097
24,084
21,975
45,275

125,525
58,849
35,029
23,820
21,953
44,723

15 Revolving
16
Commercial b a n k s . . .
17
Retailers
18
Gasoline companies .

48,309
24,341
20,748
3,220

56,937
29,862
23,346
3,729

58,352
29,765
24,119
4,468

56,764
29,290
22,396
5,078

57,280
29,778
22,498
5,004

58,318
30,686
22.625
5,007

58,451
30,763
22,975
4,713

58,923
30,876
23,560
4,487

63,049
33,110
25,536
4,403

61,433
32,643
24,249
4,541

19 Mobile home
20
Commercial b a n k s . . .
21
Finance companies . .
22
Savings and loans . . .
23
Credit unions

15,235
9,545
3,152
2,067
471

16,838
10,647
3,390
2,307
494

17,322
10,371
3,745
2,737
469

17,760
10,168
4,076
3,026
490

17,959
10,213
4,178
3,072
496

18,124
10,241
4,282
3,103
498

18,300
10,288
4,384
3,134
494

18,380
10,267
4,439
3,184
490

18,486
10,300
4,494
3,203
489

18,397
10,206
4,481
3,222
48 8

24 Other
25
Commercial b a n k s . . .
26
Finance companies . .
27
Credit unions
28
Retailers
29
Savings and loans . . .
30
Mutual savings banks

108,454
41,620
31,209
22,663
5,239
5,030
2,693

121,887
46,301
38,177
23,779
4,773
6,117
2,740

120,960
45,341
38,769
22,512
4,329
7,174
2,835

124,656
46,016
40,323
23,563
4,000
7,933
2,821

125,441
46,268
40,526
23,823
3,979
8,053
2,792

126,042
46,682
40,539
23,918
3,969
8,133
2,801

125,557
46,596
40,293
23,726
3,947
8,214
2,781

125,365
46,419
40,298
23,561
3,950
8,345
2,792

125,409
46,709
40,049
23,490
4,015
8,395
2,751

124,780
46,464
39,721
23,466
3,930
8,446
2,753

2
3
4
5
6
7
8

Net change (during period) 3
31 Total

43,079

38,381

1,448

1,551

2,428

2,975

1,002

600

-33

443

By major holder
Commercial banks
Finance companies . . . .
Credit unions
Retailers 2
Savings and loans
Gasoline companies . . .
Mutual savings banks . .

23,641
9,430
6,729
2,497
7
257
518

18,161
14,020
2,185
2,132
1,327
509
47

-7,163
8,438
-2,475
329
1,485
739
95

29
948
532
265
-175
4
-52

-246
2,383
245
-13
42
33
-16

427
2,682
-134
11
71
-62
-20

-76
1,204
-209
104
32
-42
-11

433
462
-224
-126
121
-81
15

1,160
-414
-369
-338
57
-98
-31

10
-597
689
27
172
39
103

By major type of credit
39 Automobile
40
Commercial b a n k s . . .
41
Indirect paper
42
Direct loans
43
Credit unions
44
Finance companies . .

18,736
10,933
6,471
4,462
3,101
4,702

14,715
6,857
4,488
2,369
1,044
6,814

477
-5,830
-3,104
-2,726
-1,184
7,491

1,056
47
196
-149
263
746

1,859
-347
-42
-305
106
2,100

2,079
-404
-79
-325
-82
2,565

1,024
-226
16
-242
-98
1,348

564
220
371
-151
-77
421

68
236
413
-177
-200
32

-121
103
232
-129
345
-569

45 Revolving
46
Commercial b a n k s . . .
47
Retailers
48
Gasoline companies .

9,035
5,967
2,811
257

8,628
5,521
2,598
509

1,415
-97
773
739

116
-205
317
4

177
126
18
33

571
593
40
-62

324
182
184
-42

21
198
-96
-81

59
467
-310
-98

-196
-276
41
39

49 Mobile home
50
Commercial b a n k s . . .
51
Finance companies . .
52
Savings and loans . . .
53
Credit unions

286
419
74
-276
69

1,603
1,102
238
240
23

483
-276
355
430
-25

59
12
81
-44
10

156
24
93
37
2

157
30
102
26
-1

122
28
74
23
-3

75
-9
42
45
-3

143
81
49
15
-2

-26
-74
6
30
12

54 Other
55
Commercial b a n k s . . .
56
Finance companies . .
57
Credit unions
58
Retailers
59
Savings and loans . . .
60
Mutual savings banks

15,022
6,322
4,654
3,559
-314
283
518

13,435
4,681
6,968
1,118
-466
1,087
47

-927
-960
592
-1,266
-444
1,056
95

320
175
121
259
-52
-131
-52

236
-49
190
137
-31
5
-16

168
208
15
-51
-29
45
-20

-468
-60
-218
-108
-80
9
-11

-60
24
-1
-144
-30
76
15

-303
376
-495
-167
-28
42
-31

786
257
-34
332
-14
142
103

32
33
34
35
36
37
38

1. The Board's series cover most short- and intermediate-term credit extended
to individuals through regular business channels, usually to finance the purchase
of consumer goods and services or to refinance debts incurred for such purposes,
and scheduled to be repaid (or with the option of repayment) in two or more
installments.
2. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.




3. Net change equals extensions minus liquidations (repayments, charge-offs and
other credit); figures for all months are seasonally adjusted.
NOTE: Total consumer noninstallment credit outstanding—credit scheduled to
be repaid in a lump sum, including single-payment loans, charge accounts, and
service credit—amounted to $71.3 billion at the end of 1979, $72.2 billion at the
end of 1980, and $78.4 billion at the end of 1981.
A These data have been revised from January 1980 through December 1981.

Consumer Debt
1.57

A43

C O N S U M E R I N S T A L L M E N T C R E D I T Extensions and Liquidations A
Millions of dollars; monthly data are seasonally adjusted.
1982

1981
Holder, and type of credit

107R

1980
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Extensions
297,668

324,777

306,076

28,290

28,323

29,406

26,836

27,370

26,656

26,888

142,433
50,505
38,111
44,571
3,724
16,017
2,307

154,733
61,518
34,926
47,676
5,901
18,005
2,018

134,960
60,801
29,594
49,942
6,621
22,253
1,905

11,973
5,439
3,299
4,826
383
2,252
118

11,458
6,385
2,913
4,616
537
2,284
130

12,384
7,158
2,558
4,568
573
2,035
130

11,610
5,327
2,621
4,559
553
2,021
145

12,430
5,287
2,571
4,279
668
1,963
172

13,264
4,089
2,517
4,142
588
1,931
125

11,775
4,433
3,326
4,385
716
2,000
253

By major type of credit
9 Automobile
10 Commercial banks
11
Indirect paper
Direct loans
1?
13 Credit unions
14 Finance companies

87,981
52,969
29,342
23,627
18,539
16,473

93.901
53,554
29,623
23,931
17,397
22,950

83,454
41,109
22,558
18,551
15,294
27,051

8,059
3,755
2,268
1,487
1,663
2,641

8,396
3,280
1,951
1,329
1,537
3,579

9,000
3,218
1,932
1,286
1,337
4,445

7,490
3,263
1,966
1,297
1,308
2,919

8,073
3,979
2,516
1,463
1,342
2,752

7,352
3,978
2,489
1,489
1,345
2,029

7,474
3,696
2,293
1,403
1,702
2,076

15 Revolving
16 Commercial banks
17 Retailers
18 Gasoline companies

105,125
51,333
37,775
16,017

120,174
61,048
41,121
18,005

128,068
61,593
44,222
22,253

11,706
5,073
4,381
2,252

11,663
5,227
4,152
2,284

12,263
6,124
4,104
2,035

11,753
5,578
4,154
2,021

11,379
5,584
3,832
1,963

11,592
5,961
3,700
1,931

11,070
5,135
3,935
2,000

5,412
3,697
886
609
220

6,471
4,542
797
948
184

5,093
2,937
898
1,146
113

445
276
116
30
23

520
281
120
105
14

532
291
134
95
12

475
254
123
89
9

479
235
108
127
9

508
308
106
86
8

434
188
99
122
25

99,150
34,434
33,146
19,352
6,796
3,115
2,307

104,231
35,589
37,771
17,345
6,555
4,953
2,018

89,461
29,321
32,852
14,187
5,720
5,476
1,905

8,080
2,869
2,682
1,613
445
353
118

7,744
2,670
2,686
1,362
464
432
130

7,611
2,751
2,579
1,209
464
478
130

7,118
2,515
2,285
1,304
405
464
145

7,439
2,632
2,427
1,220
447
541
172

7,204
3,017
1,954
1,164
442
502
125

7,910
2,756
2,258
1,599
450
594
253

1 Total
7
3
4
6
7
8

By major holder
Commercial banks
Finance companies
Credit unions
Retailers 1
Savings and loans
Gasoline companies
Mutual savings banks

19 Mobile home
70 Commercial banks
Finance companies
71
22 Savings and loans
23 Credit unions
74 Other
75 Commercial banks
76
Finance companies
71 Credit unions
78 Retailers
7.9 Savings and loans
30 Mutual savings banks

Liquidations
254,589

286,396

304,628

26,739

25,895

26,431

25,834

26,770

26,689

26,445

118,792
41,075
31,382
42,074
3,717
15,760
1,789

136,572
47,498
32,741
45,544
4,574
17,496
1,971

142,123
52,363
32,069
49,613
5,136
21,514
1,810

11,944
4,491
2,767
4,561
558
2,248
170

11,704
4,002
2,668
4,629
495
2,251
146

11,957
4,476
2,692
4,557
502
2,097
150

11,686
4,123
2,830
4,455
521
2,063
156

11,997
4,825
2,795
4,405
547
2,044
157

12,104
4,503
2,886
4,480
531
2,029
156

11,765
5,030
2,637
4,358
544
1,961
150

69,245
42,036
22,871
19,165
15,438
11,771

79,186
46,697
25,135
21,562
16,353
16,136

82,977
46,939
25,662
21,277
16,478
19,560

7,003
3,708
2,072
1,636
1,400
1,895

6,537
3,627
1,993
1,634
1,431
1,479

6,921
3,622
2,011
1,611
1,419
1,880

6,466
3,489
1,950
1,539
1,406
1,571

7,509
3,759
2,145
1,614
1,419
2,331

7,284
3,742
2.076
1,666
1,545
1,997

7,595
3,593
2,061
1,532
1,357
2,645

45 Revolving
46 Commercial banks
Retailers
47
48 Gasoline companies

96,090
45,366
34,964
15,760

111,546
55,527
38,523
17,496

126,653
61,690
43,449
21,514

11,590
5,278
4,064
2,248

11,486
5,101
4,134
2,251

11,692
5,531
4,064
2,097

11,429
5,396
3,970
2,063

11,358
5,386
3,928
2,044

11,533
5,494
4,010
2,029

11,266
5,411
3,894
1,961

49 Mobile home
50 Commercial banks
51
Finance companies
57 Savings and loans
53 Credit unions

5,126
3,278
812
885
151

4,868
3,440
559
708
161

4,610
3,213
543
716
138

386
264
35
74
13

364
257
27
68
12

375
261
32
69
13

353
226
49
66
12

404
244
66
82
12

365
227
57
71
10

460
262
93
92
13

84,128
28,112
28,492
15,793
7,110
2,832
1,789

90,796
30,908
30,803
16,227
7,021
3,866
1,971

90,388
30,281
32,260
15,453
6,164
4,420
1,810

7,760
2,694
2,561
1,354
497
484
170

7,508
2,719
2,496
1,225
495
427
146

7,443
2,543
2,564
1,260
493
433
150

7,586
2,575
2,503
1,412
485
455
156

7,499
2,608
2,428
1,364
477
465
157

7,507
2,641
2,449
1,331
470
460
156

7,124
2,499
2,292
1,267
464
452
150

31 Total
37
33
34
35
36
37
38

By major holder
Commercial banks
Finance companies
Credit unions
Retailers 1
Savings and loans
Gasoline companies
Mutual savings banks
By major type of credit

39
40
41
47
43
44

54
55
56
57
58
59
60

Commercial banks
Indirect paper
Direct loans
Credit unions
Finance companies

Commercial banks
Finance companies
Credit unions
Retailers
Savings and loans
Mutual savings banks

1. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.




A These data have been revised from January 1980 through December 1981.

A44
1.58

DomesticNonfinancialStatistics • March 1982
F U N D S R A I S E D IN U . S . C R E D I T M A R K E T S
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1979
Transaction category, sector

1976

1977

1978

1979

1980

1980

1981

1981
HI

H2

HI

H2

HI

H2

Nonfinancial sectors
1 Total funds raised
2 Excluding equities
By sector

and

273.6
262.8

336.6
333.5

395.6
396.3

387.0
394.0

371.9
357.0

393.0
399.9

385.0
394.7

389.0
393.3

339.0
330.1

404.9
383.8

423.5
422.0

362.5
377.9

69.0
69.1
-.1
204.6
10.8
193.8
185.0
10.5
174.5
123.7
15.7
22.8

56.8
57.6
-.9
-279.9
3.1
276.7
266.0
2.7
263.2
172.2
21.9
21.0

53.7
55.1
-1.4
342.0
-.6
342.6
308.7
-.1
308.8
193.7
26.1
20.1

37.4
38.8
-1.4
349.6
-7.1
356.7
328.6
-7.8
336.4
200.1
21.8
21.2

79.2
79.8
-.6
292.7
15.0
277.8
263.4
12.9
250.6
179.4
26.9
30.4

87.3
87.7
-.4
305.7
-6.9
312.6
274.9
-6.9
281.8
150.0
25.3
25.1

30.0
32.3
-2.3
355.0
-9.8
364.7
341.0
-9.6
350.6
203.0
20.9
21.7

44.7
45.2
-.5
344.3
-4.3
348.6
316.1
-6.1
322.2
197.2
22.7
20.7

66.5
67.2
-.6
272.5
8.9
263.6
241.3
6.9
234.4
177.0
21.6
35.3

91.9
92.4
-.6
313.0
21.0
292.0
285.6
18.8
266.8
181.9
32.1
25.6

85.7
86.3
-.5
337.8
1.5
336.3
301.9
.9
301.0
171.7
28.7
27.7

88.9
89.2
-.4
273.6
-15.4
289.0
248.0
-14.7
262.7
128.3
21.9
22.4

instrument

3 U.S. government
4
Treasury securities
5
Agency issues and mortgages
6 All other nonfinancial sectors
7
Corporate equities
8
Debt instruments
y
Private domestic nonfinancial sectors
10
Corporate equities
Debt instruments
li
12
Debt capital instruments
13
State and local obligations
14
Corporate bonds
15
16
17
18
19
20
21
22
23

Home mortgages
Multifamily residential
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other

64.0
3.9
11.6
5.7
50.7
25.4
4.4
4.0
16.9

96.3
7.4
18.5
7.1
91.0
40.2
26.7
2.9
21.3

108.5
9.4
22.1
7.5
115.1
47.6
37.1
5.2
25.1

113.7
7.8
24.4
11.3
136.3
46.3
49.2
11.1
29.7

81.7
8.5
22.4
9.5
71.1
2.3
37.3
6.6
24.9

60.0
7.2
22.6
9.8
131.8
26.4
53.0
19.0
33.4

117.6
8.0
23.4
11.6
147.6
50.9
55.5
8.0
33.1

109.8
7.6
25.4
11.0
125.0
41.6
42.8
14.2
26.4

76.5
8.2
24.8
10.6
57.4
-5.1
13.5
24.8
24.1

87.0
8.8
19.9
8.4
84.9
9.7
61.2
-11.6
25.6

73.4
6.4
26.7
8.9
129.3
29.1
45.0
17.6
37.6

46.7
8.0
18.6
10.8
134.4
23.8
61.0
20.5
29.1

24
25
26
27
28
29

By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate

185.0
15.2
89.6
10.2
5.7
64.3

266.0
17.3
139.1
12.3
12.7
84.6

308.7
20.9
164.3
15.0
15.3
93.2

328.6
18.4
170.6
20.8
14.0
104.8

263.4
25.3
101.7
14.5
15.8
106.1

274.9
22.5
106.7
17.2
15.1
113.5

341.0
17.9
179.1
21.2
13.5
109.3

316.1
18.9
162.1
20.4
14.5
100.2

241.3
19.7
94.2
17.9
11.0
98.4

285.6
30.9
109.1
11.1
20.6
113.8

301.9
26.1
123.4
22.7
17.0
112.7

248.0
18.9
90.1
11.6
13.2
114.2

19.6
.3
19.3
8.6
5.6
1.9
3.3

13.9
.4
13.5
5.1
3.1
2.4
3.0

33.2
-.5
33.8
4.2
19.1
6.6
3.9

21.0
.8
20.3
3.9
2.3
11.2
3.0

29.3
2.1
27.2
.8
11.5
10.1
4.7

30.8

14.0
-.2
14.1
2.8
2.1
6.1
3.1

28.1
1.7
26.4
4.9
2.4
16.3
2.8

31.2
1.9
29.2
2.0
6.1
15.7
5.4

27.4
2.2
25.2
-.4
17.0
4.5
4.0

35.9
.6
35.3
3.3
6.1
20.6
5.3

25.7
-.7
26.3
7.2
6.8
7.1
5.1

Foreign
Corporate equities
Debt instruments
Bonds
Bank loans n.e.c
Open market paper
U.S. government loans

30
31
32
33
34
35
36

*

30.8
5.3
6.5
13.9
5.2

Financial sectors
37 Total funds raised
By

38 U.S. government related
39
Sponsored credit agency securities
40
Mortgage pool securities
41
Loans from U.S. government
42 Private financial sectors
43
Corporate equities
44
Debt instruments
45
Corporate bonds
46
Mortgages
4/
Bank loans n.e.c
Open market paper and RPs
48
Loans from Federal Home Loan Banks
49
Bv

23.4

51.4

76.8

84.3

66.7

86.9

87.8

80.8

59.8

73.5

90.8

83.0

15.1
3.3
12.2
-.4
8.2
-.2
8.4
9.8
2.1
-3.7
2.2
-2.0

21.9
7.0
16.1
-1.2
29.5
2.6
26.9
10.1
3.1
-.3
9.6
4.3

36.7
23.1
13.6
0
40.1
1.8
38.3
7.5
.9
2.8
14.6
12.5

48.2
24.3
24.0
0
36.0
2.5
33.6
7.8
-1.2
-.4
18.2
9.2

43.0
24.4
18.6
0
23.7
6.2
17.5
7.1
-.9
-.5
4.6
7.1

43.1
29.6
13.5
0
43.8
8.9
34.9
-.9
-3.1
2.7
20.0
16.2

43.7
21.2
22.5
0
44.1
3.6
40.6
8.2
.3
-1.4
25.4
8.2

52.8
27.3
25.5
0
28.0
1.4
26.6
7.5
-2.6
.6
10.9
10.1

44.7
25.1
19.6
0
15.2
7.1
8.1
10.1
-5.8
-.8
4.6

41.3
23.7
17.6
0
32.2
5.2
27.0
4.2
4.0
-.9
10.1
9.6

38.7
24.0
14.7
0
52.1
10.4
41.8
-1.7
-2.9
4.6
23.7
18.0

47.6
35.2
12.4
0
35.4
7.4
28.0
-.1
-3.3
.7
16.3
14.5

2.9
12.2
8.2
2.3
5.4
.1
.9
4.3
-2.2
-2.4

5.8
16.1
29.5
1.1
2.0
9.9
1.4
16.9
-2.3
.4

23.1
13.6
40.1
1.3
7.2
14.3
.8
18.1
-1.1
-.5

24.3
24.0
36.0
1.6
6.5
11.4
.9
16.8
-.4
-.6

24.4
18.6
23.7
.5
6.9
6.9
.9
5.8
-1.7
4.4

29.6
13.5
43.8
.4
8.3
13.6
.9
13.7
-.7
-7.6

21.2
22.5
44.1
1.3
8.0
11.1
.9
22.7
-.6
.7

27.3
25.5
28.0
1.8
4.9
11.7
.9
10.9
-.2
-1.9

25.1
19.6
15.2
.8
5.8
-1.4
.9
5.2
-1.4
5.3

23.7
17.6
32.2
.3
8.0
15.2
.9
6.3
-2.0
3.4

24.0
14.7
52.1
.2
6.9
17.0
.9
18.6
-.8
9.3

35.4
12.4
35.4
.5
9.6
10.3
.9
8.7
-.5
5.9

instrument

*

sector

50 Sponsored credit agencies
51 Mortgage pools
52 Private financial sectors
53
Commercial banks
54
Bank affiliates
Savings and loan associations
55
56
Other insurance companies
57
Finance companies
58
REITs
59
Open-end investment companies

All sectors
60 Total funds raised, by instrument

297.0

388.0

472.5

471.3

438.6

479.9

472.8

469.7

398.8

478.4

514.4

445.5

61 Investment company shares
62 Other corporate equities
63 Debt instruments
64
U.S. government securities
65
State and local obligations
66
Corporate and foreign bonds
67
Mortgages
68
Consumer credit
Bank loans n.e.c
69
Open market paper and RPs
/U
n
Other loans

-2.4
13.1
286.4
84.6
15.7
41.2
87.2
25.4
6.2
8.1
17.8

.4
5.3
382.3
79.9
21.9
36.1
132.3
40.2
29.5
15.0
27.4

-.5
1.7
471.3
90.5
26.1
31.8
148.3
47.6
59.0
26.4
41.5

-.6
-4.0
475.8
85.7
21.8
32.8
155.9
46.3
51.0
40.5
41.9

4.4
16.8
417.5
122.3
26.9
38.4
121.1
2.3
48.4
21.4
36.7

7.6
-5.6
478.0
130.6
25.3
29.4
96.5
26.4
62.1
52.9
54.8

.7
-6.9
479.0
73.8
20.9
32.6
160.6
50.9
56.2
39.5
44.4

-1.9
-1.0
472.6
97.6
22.7
33.0
151.1
41.6
45.8
41.5
39.3

5.3
10.7
382.9
111.3
21.6
47.4
114.2
-5.1
19.6
39.7
34.1

3.4
22.8
452.1
133.2
32.1
29.5
128.0
9.7
77.2
3.1
39.3

9.3
2.6
502.5
124.5
28.7
29.3
112.4
29.1
55.8
61.9
60.8

5.9
-13.9
453.5
136.6
21.9
29.5
80.6
23.8
68.5
43.9
48.7




Flow of Funds
1.59

A45

D I R E C T A N D I N D I R E C T S O U R C E S OF F U N D S TO C R E D I T M A R K E T S
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates
1980

1979
Transaction category, or sector

1977

1976

1978

1979

1980

1981

1981
HI

H2

HI

H2

HI

H2

1 Total funds advanced in credit markets to nonfinancial
sectors

262.8

333.5

396.3

394.0

357.0

399.9

394.7

393.3

330.1

383.8

422.0

377.9

By public agencies and foreign
2 Total net advances
3
U.S. government securities
4
Residential mortgages
5
FHLB advances to savings and loans
6
Other loans and securities

49.8
23.1
12.3
-2.0
16.4

79.2
34.9
20.0
4.3
20.1

101.9
36.1
25.7
12.5
27.6

74.0
-6.2
36.7
9.2
34.3

92.1
15.6
31.1
7.1
38.2

90.0
16.1
22.1
16.2
35.6

49.6
-27.1
35.7
8.2
32.8

98.5
14.7
37.8
10.1
35.8

102.9
23.2
33.3
4.6
41.7

81.3
8.0
28.9
9.6
34.8

101.2
21.6
20.8
18.0
40.8

78.8
10.6
23.3
14.5
30.3

7.9
16.8
9.8
15.2
15.1

10.0
22.4
7.1
39.6
21.9

17.1
39.9
7.0
38.0
36.7

19.0
53.4
7.7
-6.1
48.2

23.7
43.8
4.5
20.0
43.0

24.9
44.4
9.2
11.5
43.1

19.8
47.8
-.9
-17.2
43.7

18.3
58.9
16.2
5.1
52.8

25.4
42.4
12.1
23.0
44.7

22.1
45.2
-3.1
17.0
41.3

29.9
40.4
-7.1
38.0
38.7

19.9
48.4
25.4
-14.9
47.6

228.1
61.5
15.7
30.5
55.5
62.9
-2.0

276.2
45.1
21.9
22.2
83.7
107.7
4.3

331.0
54.3
26.1
22.4
92.1
148.6
12.5

368.2
91.9
21.8
24.0
84.6
155.1
9.2

307.9
106.7
26.9
26.2
59.1
96.2
7.1

353.1
114.4
25.3
25.7
45.0
158.9
16.2

388.9
101.0
20.9
24.0
89.8
161.4
8.2

347.6
82.9
22.7
24.0
79.5
148.7
10.1

271.9
88.1
21.6
32.5
51.2
83.1
4.6

343.8
125.3
32.1
19.9
66.9
109.3
9.6

359.5
102.9
28.7
24.5
58.9
162.5
18.0

346.7
126.0
21.9
26.8
31.2
155.3
14.5

191.4
59.6
70.5
49.7
11.6

260.9
87.6
82.0
67.8
23.4

302.4
128.7
73.5
75.0
25.2

292.5
121.1
55.9
66.4
49.0

270.3
99.7
58.4
79.8
32.4

309.6
103.3
27.9
83.8
94.5

316.9
130.3
59.6
72.3
54.8

268.0
112.0
52.2
60.5
43.3

246.1
58.5
35.5
89.2
62.8

294.4
140.9
81.3
70.3
1.9

321.0
101.9
42.0
79.3
97.7

298.2
104.8
13.9
88.3
91.2

191.4
124.4
8.4
58.5
-4.7
-.1
34.3
29.0

260.9
138.9
26.9
95.1
1.2
4.3
50.1
39.5

302.4
140.8
38.3
123.2
6.3
6.8
62.2
48.0

292.5
143.2
33.6
115.7
25.6
.4
47.8
41.9

270.3
171.1
17.5
81.6
-22.3
-2.6
64.1
42.4

309.6
188.6
34.9
86.1
6.6
.6
72.2
6.7

316.9
135.1
40.6
141.2
45.6
5.0
52.3
38.4

268.0
151.2
26.6
90.3
5.6
-4.2
43.4
45.4

246.1
158.7
8.1
79.4
-22.8
-2.3
70.0
34.5

294.4
183.6
27.0
83.8
-21.9
-2.8
58.1
50.4

321.0
203.4
41.8
75.8
-6.6
10.3
62.7
9.3

298.2
173.8
28.0
96.3
19.7
-9.1
81.7
4.0

45.1
16.4
3.3
11.8
1.9
11.7

42.2
24.1
-.8
-3.8
9.6
13.2

67.0
35.6
1.4
-2.9
16.5
16.4

109.3
62.8
1.4
10.3
11.4
23.5

55.1
32.6
3.1
3.6
-3.8
19.7

78.4
48.2
14.1
-9.1
5.0
20.1

112.5
71.0
2.6
4.6
11.4
22.9

106.1
54.5
.2
16.0
11.4
24.0

33.9
19.3
-1.8
4.8
-4.5
16.0

76.4
45.8
7.9
2.3
-3.1
23.3

80.3
37.2
20.5
-5.0
5.8
21.8

76.5
59.3
7.7
-13.2
4.3
18.5

133.4
7.3
10.4
123.7
-12.0
2.3
1.7

148.5
8.3
17.2
93.5
.2
25.8
2.2
1.3

152.1
9.3
16.3
63.5
6.9
46.6
7.5
2.0

152.6
7.9
19.2
61.7
34.4
21.2
6.6
1.5

182.3
10.3
4.2
80.9
29.2
50.3
6.5
.9

195.7
8.7
15.5
37.4
107.5
27.6
.7
-1.6

149.3
9.0
16.6
66.5
30.2
3.3
18.5
5.2

155.9
6.9
21.9
56.9
38.6
39.1
-5.3
-2.3

167.6
8.5
-1.5
66.7
61.9
26.3
5.3
.4

197.1
12.1
9.9
95.2
-3.4
74.2
7.8
1.3

209.4
4.8
29.6
13.7
104.1
48.3
7.7
1.2

181.9
12.6
1.3
61.2
110.8
6.8
-6.3
-4.5

7
8
9
10
11

Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
Agency borrowing not included in line 1

Private domestic funds advanced
12 Total net advances
13 U.S. government securities
14 State and local obligations
15 Corporate and foreign bonds
16 Residential mortgages
17 Other mortgages and loans
18 LESS: Federal Home Loan Bank advances
Private financial intermediation
19 Credit market funds advanced by private financial
institutions
20 Commercial banking
21 Savings institutions
22 Insurance and pension funds
23 Other finance
24 Sources of funds
25
Private domestic deposits
26 Credit market borrowing
27 Other sources
Foreign funds
28
29
Treasury balances
30
Insurance and pension reserves
Other, net
31
Private domestic nonfinancial investors
32 Direct lending in credit markets
33 U.S. government securities
34 State and local obligations
35 Corporate and foreign bonds
36 Commercial paper
37 Other
38 Deposits and currency
39 Currency
40 Checkable deposits
41
Small time and savings accounts
42 Money market fund shares
43 Large time deposits
44
Security RPs
45
Foreign deposits
46 Total of credit market instruments, deposits and
currency

*

178.5

190.7

219.1

261.9

237.5

274.1

261.8

262.0

201.5

273.4

289.7

258.5

Public support rate (in percent)
Private financial intermediation (in percent)
Total foreign funds

19.0
83.9
10.5

23.7
94.4
40.8

25.7
91.3
44.3

18.8
79.4
19.5

25.8
87.8
-2.3

22.5
87.7
18.1

12.6
81.5
28.4

25.0
77.1
10.7

31.2
90.5
.2

21.2
85.6
-4.8

24.0
89.3
31.4

20.8
86.0
4.8

MEMO: Corporate equities not included above
50 Total net issues
51
Mutual fund shares
52 Other equities

10.6
-2.4
13.1

5.7
.4
5.3

1.2
-.5
1.7

-4.6
-.6
-4.0

21.1
4.4
16.8

2.0
7.6
-5.6

-6.2

.7
-6.9

-2.9
-1.9
-1.0

16.0
5.3
10.7

26.3
3.4
22.8

11.9
9.3
2.6

-8.0
5.9
-13.9

53 Acquisitions by financial institutions
54 Other net purchases

12.5
-1.9

7.4
-1.6

4.5
-3.4

10.6
-15.1

17.7
3.4

21.7
-19.8

7.1
-13.4

14.0
-16.9

10.5
5.5

24.9
1.4

26.4
-14.5

17.0
-25.0

47
48
49

NOTES BY LINE NUMBER.

1.
2.
6.
11.
12.
17.
25.
26.
28.
29.

Line 2 of table 1.58.
Sum of lines 3-6 or 7-10.
Includes farm and commercial mortgages.
Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum
of lines 27, 32, and 38 less lines 40 and 46.
Includes farm and commercial mortgages.
Line 38 less lines 40 and 46.
Excludes equity issues and investment company shares. Includes line 18.
Foreign deposits at commercial banks, bank borrowings from foreign branches,
and liabilities of foreign banking agencies to foreign affiliates.
Demand deposits at commercial banks.




30. Excludes net investment of these reserves in corporate equities.
31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 12 less line 19 plus line 26.
33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes
mortgages.
39. Mainly an offset to line 9.
46. Lines 32 plus 38, or line 12 less line 27 plus 39 and 45.
47. Line 2/line 1.
48. Line 19/line 12.
49. Sum of lines 10 and 28.
50. 52. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types quarterly, and annually
for flows and for amounts outstanding, may be obtained from Flow of Funds
Section, Division of Research and Statistics, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.

A46
2.10

Domestic Nonfinancial Statistics • March 1982
N O N F I N A N C I A L BUSINESS ACTIVITY

Selected Measures

1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1981
Measure

1979

1980

1982

1981'
May

June

July

Aug.

Sept.

Oct.

Nov.'

Dec.

Jan.

Feb.

1 Industrial production1

152.5

147.0

151.0

152.7

152.9

153.9

153.6

151.6

149.1

146.3

143.2

139.6

141.8

Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials

150.0
147.2
150.8
142.2
160.5
156.4

146.7
145.3
145.4
145.2
151.9
147.6

150.6
149.5
147.8
151.8
154.4
151.6

152.3
151.3
150.7
152.1
156.1
153.4

152.7
151.4
150.3
153.0
154.9
154.0

153.0
152.1
150.7
154.1
156.2
155.3

152.6
151.5
149.6
154.0
156.8
155.2

151.0
150.0
147.8
152.9
154.6
152.5

149.4
148.9
146.5
152.1
151.4
148.5

147.5
147.2
144.0
151.5
148.7
144.6

145.8
145.8
141.4
151.8
145.9
139.1

142.3
142.3
138.6
147.5
141.9
135.6

144.3
144.2
140.9
148.8
144.4
138.1

153.6

146.7

150.4

152.8

152.4

153.2

153.2

151.1

148.2

145.0

141.7

137.6

140.1

85.7
87.4

79.1
80.0

78.5
79.9

80.0
81.2

79.6
81.3

79.8
81.9

79.6
81.7

78.3
80.0

76.6
77.7

74.8
75.5

72.9
72.5

70.6
70.5

71.8
71.7

2
3
4
5
6
7

Industry groupings
8 Manufacturing
Capacity utilization (percent)1-2
9
Manufacturing
10 Industrial materials industries . . . .
11 Construction contracts (1972 =
100)3

185.6

161.8

160.0

170.0

153.0

156.0

159.0

157.0

142.0

172.0

n.a.

12 Nonagricultural employment, total 4 .
13 Goods-producing, total
14
Manufacturing, total
15
Manufacturing, productionworker
16 Service-producing
17 Personal income, total
18 Wages and salary disbursements ..
19
Manufacturing
20 Disposable personal income5

136.5
113.5
108.2

137.6
110.3
104.4

139.1
110.2
104.2

139.1
110.3
105.0

139.2
110.8
105.0

139.6
111.3
105.6

139.7
111.3
105.4

139.9
111.2
105.4

139.6
110.1
104.1

139.1
109.1
102.9

138.5'
107.7'
101.5'

138.0'
106.2'
100.4'

138.2
106.4
100.2

105.3
149.1
308.5
289.5
248.6
299.6

99.4
152.6
342.9
314.7
261.5
332.5

98.5
155.0
381.5
347.3
288.9
379.6

99.6
155.0
375.8
343.6
289.2
362.3

99.6
154.8
378.5
345.2
289.9
364.4

100.1
155.2
384.0
347.8
292.1
369.7

99.9
155.2
387.8
351.4
294.3
372.9

99.8
155.6
390.9
353.7'
294.9
375.5 r

98.1
155.7
392.8'
355.4
293.7
379.6

96.4
155.6
395.6
357.8
292.0
381.9

94.5'
155.3'
395.4'
356.2'
288.8'
381.7

93.2'
155.5'
396.0'
357.1'
287.1'
383.5

93.2
155.7
n.a.
n.a.
n.a.
n.a.

21 Retail sales6

281.6

303.8

332.5

326.7

333.9

333.8

338.5

338.9

331.1

333.3

334.1

329.2

334.5

Prices7
22
Consumer
23
Producer finished goods

217.4

246.8
247.0'

272.4
269.8

269.0
269.6

271.3
270.5

274.4
271.8

276.5
271.5'

279.3
272.6

279.9
274.2

280.7
275.3'

281.5
276.1

282.5
277.3

n.a.
276.9

n.a.

1. The industrial production and capacity utilization series have been revised
back to January 1979.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, and Department of Commerce.
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 in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).

2.11

n.a.

6. Based on Bureau of Census data published in Survey of Current Business.
1. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and
6, and indexes for series mentioned in notes 3 and 7 may also be found in the
Survey of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.

OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION
Seasonally adjusted
1981

1981

1981

Series
Q1

Q2

Q3

Q4'

Output (1967 = 100)

Q1

Q2

151.3
157.5
148.1

152.4
156.5
150.2

152.5
155.8
150.7

144.9
143.5
145.6

189.4
193.8
187.1

190.9
195.0
188.7

4 Materials

154.2

153.4

154.3

144.1

187.6

189.0

150.9
117.5
179.2
186.7
114.8
151.4
232.7
130.9

152.3
112.8
178.4
185.9
114.5
151.0
231.6
125.1

152.8
114.2
175.8
182.8
115.5
152.2
224.9
131.6

140.2
99.5
164.4
169.7
106.8
148.1
206.2
127.8

191.8
141.5
207.3
217.1
140.1
159.7
274.1
153.5

192.9
141.7
209.2
219.4
140.6
160.7
277.5
154.3'




Q4

Capacity (percent of 1967 output)

1 Manufacturing
2 Primary processing
3 Advanced processing

5 Durable goods
6
Metal materials
7 Nondurable goods
8 Textile, paper, and chemical
9
Textile
10
Paper
11
Chemical
12 Energy materials

Q3

192.4
196.3
190.4

Q2

Q1

Q3

Q4'

Utilization rate (percent)

193.9
197.5
192.0

79.9
81.3
79.1

79.8
80.3
79.6

79.3
79.4
79.2

74.7
72.7
75.9

190.3'

191.5'

82.2

81.2

81.1

75.2

194.2
141.9
211.2
221.7
141.0
161.9
281.0
155.0

195.3
142.1
213.1
223.9
141.6
162.8
284.4
155.8'

78.7
83.0
86.5
86.0
81.9
94.8
84.9
85.3

78.9
79.6
85.3
84.8
81.4
93.9
83.5
81.1

78.7
80.5
83.3
82.5
81.8
94.1
80.0
84.9

71.8
70.0
77.3
75.8
75.4
91.0
72.5
82.0

Labor Market
2.11

A47

Continued
c

.

Previous cycle1
High

Low

Latest cycle2
High

Low

1982

1981
Feb.

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Capacity utilization rate (percent)
13 Manufacturing

88.0

69.0

87.2

74.9

79.8

79.8

79.6

78.3

76.6

74.8

72.9

70.6

71.8

14
15

93.8
85.5

68.2
69.4

90.1
86.2

71.0
77.2

81.5
79.0

80.1
79.8

79.9
79.4

78.2
78.3

75.7
77.0

72.7
75.8

69.6
74.7

67.0
72.7

67.9
73.9

16 Materials
17 Durable goods
18
Metal materials

92.6
91.5
98.3

69.4
63.6
68.6

88.8
88.4
96.0

73.8
68.2
59.6

82.3
78.5
83.2

81.9
79.3
79.5

81.6
79.4
83.0

80.0
77.3
79.1

77.7
74.7
73.9

75.5
72.2
70.8

72.5
68.5
65.3

70.5
65.9
63.9

71.7
67.2
63.8

19
20
21
22
23

Nondurable goods
Textile, paper, and chemical....
Textile
Paper
Chemical

94.5
95.1
92.6
99.4
95.5

67.2
65.3
57.9
72.4
64.2

91.6
92.2
90.6
97.7
91.3

77.5
75.3
80.9
89.3
70.7

86.8
86.3
82.2
94.5
85.3

83.9
83.2
82.0
92.9
81.2

83.0
82.3
82.3
93.6
79.7

82.9
82.1
81.3
95.7
79.2

80.3
79.1
78.8
92.1
76.2

77.3
75.9
75.5
92.3
72.4

74.3
72.5
72.0
88.6
69.0

72.0
69.7
68.8
88.5
65.8

73.4
71.1
71.0
89.7
66.9

24

Energy materials

94.6

84.8

88.3

82.7

85.8

86.2

85.6

83.0

82.5

82.2

81.3

82.0

82.5

Primary processing
Advanced processing

1. Monthly high 1973; monthly low 1975.
2. Preliminary; monthly highs December 1978 through January 1980; monthly
lows July 1980 through October 1980.

2.12

LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1981
Category

1979

1980

1982

1981
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.'

Feb.

HOUSEHOLD SURVEY DATA

1 Noninstitutional population1

166,952

169,848

172,272

172,559

172,758

172,967

173,154

173,330

173,494

173,657

2 Labor force (including Armed Forces) 1 . . .
3 Civilian labor force
Employment
4
Nonagricultural industries 2
5
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor force) .
8 Not in labor force

107,050
104,962

109,042
106,940

111,812
108,670

110,978
108,818

110,659
108,494

111,170
109,012

111,430
109,272

111,348
109,184

111,038
108,879

111,333
109,165

95,477
3,347

95,938
3,364

97,030
3,368

97,436
3,404

96,900
3,358

96,965
3,378

96,800
3,372

94,404
3,209

96,170'
3,411

96,217
3,373

6,137
5.8
59,902

7,637
7.1
60,806

8,273
7.6
60,460

7,978
7.3
61,581

8,236
7.6
62,099

8,669
8.0
61,797

9,100
8.3
61,724

9,571
8.8
61,982

9,298
8.5
62,456

9,575
8.8
62,324

89,823

90,564

91,548

91,901

92,033

91,832

91,522

91,113'

90,839'

90,936

21,040
958
4,463
5,136
20,192
4,975
17,112
15,947

20,300
1,020
4,399
5,143
20,386
5,168
17,901
16,249

20,264
1,104
4,307
5,152
20,736
5,330
18,598
16,056

20,505
1,151
4,275
5,170
20,862
5,354
18,667
15,917

20,496
1,162
4,272
5,186
20,872
5,366
18,774
15,905

20,241
1,162
4,259
5,168
20,916
5,360
18,788
15,938

20,017
1,172
4,229
5,147
20,838
5,355
18,838
15,926

19,736'
1,175'
4,193'
5,122'
20,735'
5,366'
18,856'
15,930'

19,528'
1,168'
4,068'
5,120'
20,843'
5,361'
18,849'
15,902'

19,482
1,161
4,146
5,114
20,905
5,362
18,902
15,864

ESTABLISHMENT SURVEY DATA

9 Nonagricultural payroll employment3
10
11
12
13
14
15
16
17

Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government

1. Persons 16 years of age and over. Monthly figures, which are based on sample
data, relate to the calendar week that contains the 12th day; annual data are
averages of monthly figures. By definition, seasonality does not exist in population
figures. Based on data from Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.




3. Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family workers, and members of the Armed Forces. Data are adjusted to the March 1979
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).

A48
2.13

Domestic Nonfinancial Statistics • March 1982
INDUSTRIAL PRODUCTION

Indexes and Gross Value

Monthly data are seasonally adjusted.

Grouping

1967
proportion

1981

1981
age'

Jan.

Feb.

Mar.

Apr.

May

July

June

1982
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.?

Index (1967 = 100)
MAJOR MARKET

1 Total index

100.00

151.0

151.4

151.8

152.1

151.9

152.7

152.9

153.9

153.6

151.6

149.1

146.3

143.2

139.6

60.71
47.82
27.68
20.14
12.89
39.29

150.6
149.5
147.8
151.8
154.4
151.6

149.9
147.8
146.9
149.1
157.5
153.8

150.2
148.2
147.8
148.7
157.7
154.3

150.7
149.0
148.3
150.0
157.1
154.4

151.3
149.9
148.9
151.4
156.3
152.9

152.3
151.3
150.7
152.1
156.1
153.4

152.2
151.4
150.3
153.0
154.9
154.0

153.0
152.1
150.7
154.1
156.2
155.3

152.6
151.5
149.6
154.0
156.8
155.2

151.0
150.0
147.8
152.9
154.6
152.5

149.4
148.9
146.5
152.1
151.4
148.5

147.5
147.2
144.0
151.5
148.7
144.6

145.8
145.8
141.4
151.8
145.9
139.1

142.3
142.3
138.6
147.5
141.9
135.6

7.89
2.83
2.03
1.90
80
5.06
1.40
1.33
1.07
2.59

140.5
137.9
111.2
103.4
205.6
142.0
119.6
121.2
158.0
147.4

140.1
130.4
102.7
93.3
200.8
145.6
132.2
134.1
156.2
148.4

141.2
133.9
108.5
101.1
198.4
145.2
125.8
128.2
160.4
149.5

143.6
139.2
116.1
107.8
197.5
146.1
129.1
131.2
160.2
149.4

144.3
142.9
120.2
113.2
200.8
145.0
121.2
122.6
165.2
149.7

147.3
151.8
129.1
120.0
209.5
144.8
121.4
122.3
163.1
149.9

147.9
153.1
131.4
122.2
208.0
145.0
120.0
121.4
166.3
149.8

146.5
147.6
123.0
118.1
210.0
145.8
123.6
124.8
163.2
150.7

142.5
137.6
107.8
104.0
213.1
145.3
126.8
128.9
160.1
149.2

140.4
139.1
110.0
103.3
212.9
141.1
119.0
121.4
158.6
145.8

136.3
132.8
101.7
92.5
211.8
138.2
116.7
118.7
152.6
143.9

129.7
121.7
88.9
81.1
205.0
134.1
107.7
108.7
146.9
143.2

123.2
119.2
87.5
78.1
199.7
125.4
85.7
86.6
144.4
139.1

118.9
107.5
71.6
61.3
198.5
125.3
99.2
100.1
135.8
135.1

19.79
4.29
15.50

150.8
119.7
159.4

149.6
121.2
157.5

150.5
120.9
158.6

150.1
118.9
158.8

150.7
120.6
159.0

152.1
122.1
160.3

151.2
120.9
159.6

152.3
122.8
160.5

152.5
121.9
161.0

150.8
119 3
159.5

150.5
117 8
159.6

149.7
116 1
159.0

148.7
112 6
158.7

157.7

8.33
7.17

150.3
169.9

149.3
167.0

150.5
168.1

150.5
168.4

150.2
169.3

151.3
170.8

149.6
171.3

150.5
172.2

150.6
173.0

149.5
171.1

150.7
169.9

150.4
169.1

151.1
167.4

148.9
167.8

2.63

222.8

213.0

219.3

220.0

224.1

225.1

224.4

226.8

227.7

227.5

223.0

220.3

216.1

217.4

1.92

127.9

127.9

129.0

128.7

127.4

127.7

129.2

127.6

128.9

127.7

126.9

125.7

126.6

127.0

2.62
1.45

147.7
166.3

149.4
167.5

145.4
161.3

143.7
161.1

144.9
162.9

147.9
168.9

148.9
170.4

150.0
172.6

150.4
169.7

146.4
162.8

148.2
166.2

149.4
167.4

148.5
166.4

147.9

12.63
6.77
1.44
3.85
1.47

181.1
166.4
286.1
127.9
149.7

177.7
161.5
264.0
127.7
149.1

177.5
163.4
270.4
128.4
149.9

179.3
164.6
276.6
128.6
149.3

181.0
165.9
281.7
128.5
149.9

182.0
167.0
286.4
128.4
150.8

183.6
169.0
289.7
130.6
151.2

184.8
169.4
290.3
130.8
151.6

184.8
170.2
293.0
130.8
152.7

182.7
168.9
293.6
129.3
150.4

180.5
166.9
295.6
125.7
148.4

179.0
165.1
293.8
123.6
147.1

178.4
163.7
294.1
121.7
145.4

172.4
158.6
289.1
117.1
139.2

5.86
3.26
1.93
67

198.0
258.6
125.4
112.1

196.6
249.3
133.1
122.9

193.7
250.4
124.8
116.4

196.2
252.7
127.8
118.5

198.6
254.5
131.5
119.7

199.4
258.0
130.0
113.9

200.4
259.9
129.7
114.9

202.5
263.7
128.4
118.0

200.9
264.3
124.6
111.8

198.5
264.2
121.0
102.1

196.2
259.8
120.6
104.6

195.0
260.6
116.6
101.7

195.5
261.3
117.5
99.8

188.4
255.0
109.0
92.9

36 Defense and space

7.51

102.7

100.9

100.5

100.7

101.5

102.0

101.7

102.6

102.8

103.0

104.5

105.3

107.0

105.5

Intermediate products
37 Construction supplies
38 Business supplies
39 Commercial energy products .

6.42
6.47
1.14

141.9
166.8
176.4

148.4
166.6
175.5

148.9
166.4
174.0

149.0
165.1
174.7

147.9
164.7
175.2

146.5
165.6
179.0

143.4
166.2
177.7

144.3
168.0
180.0

144.0
169.5
176.6

139.7
169.4
174.2

135.2
167.5
174.3

130.1
167.1
177.0

127.2
164.5
177.4

122.3
161.4
177.1

20.35
4.58
5.44
10.34
5.57

149.1
114.5
191.2
142.4
112.0

150.0
114.7
189.7
144.7
116.6

150.6
114.3
188.9
146.6
118.6

152.2
118.4
191.1
146.7
118.3

151.8
119.7
192.8
144.3
113.8

152.8
121.1
194.0
145.1
114.3

152.4
123.1
193.2
143.9
112.8

153.6
123.2
193.8
145.9
114.5

154.3
121.8
194.7
147.4
117.4

150.4
114.5
192.7
144.1
113.1

145.6
107.6
190.3
138.9
106.5

141.0
102.8
188.7
132.9
101.6

134.1
92.9
183.3
126.5
94.7

129.2
84.9
178.7
122.7
93.2

45 Nondurable goods materials....
46
Textile, paper, and chemical
materials
47
Textile materials
48
Paper materials
49
Chemical materials
50 Containers, nondurable
51
Nondurable materials n.e.c...

10.47

174.6

180.2

179.9

177.5

179.3

179.0

176.9

176.5

175.4

175.5

170.6

164.7

158.7

154.2

7.62
1.85
1.62
4.15
1.70
1.14

181.4
113.0
150.8
224.0
169.2
137.4

187.6
114.8
150.5
234.7
173.0
141.0

187.3
115.1
151.0
233.8
172.3
141.8

185.1
114.4
152.6
229.5
168.7
139.6

186.8
115.1
152.2
232.4
172.0
139.7

187.3
114.9
150.9
233.9
167.8
140.5

183.7
113.4
149.8
228.4
171.4
139.6

183.5
115.5
150.0
227.1
171.7
136.6

182.4
116.0
151.5
224.1
169.4
137.8

182.5
114.9
155.1
223.4
170.9
136.2

176.4
111.6
149.6
215.9
166.7
137.1

169.9
106.9
150.2
205.8
163.5
131.9

162.7
102.0
144.6
196.9
160.9
128.7

157.0
97.6
144.7
188.4
158.4
129.0

52 Energy materials
Primary energy
53
54
Converted fuel materials . . . .

8.48
4.65
3.82

129.0
115.0
145.9

130.2
115.8
147.8

131.6
118.2
148.0

130.9
116.9
148.1

123.1
104.2
146.1

123.0
104.4
145.5

129.3
113.7
148.2

133.3
120.3
149.2

132.6
120.9
146.9

128.9
117.4
142.9

128.3
116.4
142.8

128.1
115.6
143.4

127.0
115.9
140.5

128.1
116.1
142.7

9.35
12.23
3.76
8.48

131.7
137.4
156.4
129.0

134.4
138.5
157.3
130.2

134.1
138.5
154.0
131.6

133.6
137.7
153.1
130.9

133.8
132.6
154.1
123.1

134.4
133.5
157.3
123.0

133.9
138.0
157.6
129.3

135.2
141.2
159.1
133.3

134.5
140.5
158.4
132.6

131.1
136.8
154.8
128.9

128.8
136.9
156.1
128.3

125.9
137.2
157.8
128.1

119.5 116.5
136.3 136.9
157.3 156.7
127.0 128.1

2 Products
3
Final products
4
Consumer goods
5
Equipment
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and utility vehicles ..
11
Autos
12
Auto parts and allied goods
13 Home goods
14
Appliances, A/C, and T V . .
15
Appliances and TV
16
Carpeting and furniture....
17
Miscellaneous home goods.
18 Nondurable consumer goods . . .
19 Clothing
20
Consumer staples
21
Consumer foods and
tobacco
22
Nonfood staples
23
Consumer chemical
products
24
Consumer paper
products
25
Consumer energy
products
26
Residential utilities....
Equipment
2/ Business
28
Industrial
29
Building and mining
30
Manufacturing
31
Power
32
33
34
35

Commercial transit, farm . . . .
Commercial
Transit
Farm

Materials
40 Durable goods materials
41
Durable consumer parts
42
Equipment parts
43
Durable materials n.e.c
44
Basic metal materials

Supplementary groups
55 Home goods and clothing
56 Energy, total
57
Products
58
Materials




146.5

Output
2.13

A49

Continued

Grouping

SIC

code

1967
proportion

1981
avg. r
Feb.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec

Jan.?

Feb.

Index (1967 = 100)
MAJOR INDUSTRY

1 Mining and utilities.
Mining
2
3
Utilities
Electric
4
5 Manufacturing
6
Nondurable
Durable
7

12.05
6.36
5.69
3.88
87.95
35.97
51.98

154.9
142.2
169.1
190.9
150.4
164.7
140.5

153.3
140.4
167.6
189.3
151.1
165.6
141.0

154.1
143.1
166.4
187.1
151.2
166.2
140.8

154.8
143.2
167.8
188.9
151.6
165.3
142.1

150.5
135.2
167.6
188.6
152.0
165.9
142.5

152.1
135.4
170.7
192.9
152.8
166.4
143.5

156.3
141.7
172.7
195.6
152.4
165.8
143.2

159.1
146.5
173.1
196.2
153.2
167.1
143.6

158.2
146.0
171.9
194.2
153.2
167.3
143.4

155.8
145.0
167.8
188.3
151.1
165.9
140.9

156.1
145.3
168.1
189.4
148.0
162.8
137.8

155.4
143.3
168.9
190.9
145.0
160.3
134.4

154.2
142.5
167.3
188.8
141.7
156.9
131.2

155.6
143.8
168.8
190.4
137.6
153.5
126.6

154.0
142.0
167.4
188.7
140.1
155.8
129.2

118.0
147.9
151.5
112.5

154.3
147.1

8
9
10
11

Mining
Metal
Coal
Oil and gas extraction . . .
Stone and earth minerals.

10
11.12
13
14

.51
.69
4.40
.75

123.1
141.3
146.8
129.4

125.5
147.5
141.4
138.4

134.1
159.0
142.2
140.0

131.1
151.2
144.1
138.8

123.1
75.9
146.1
133.7

125.0
77.0
146.2
132.2

123.5
122.9
148.2
132.7

123.6
170.0
147.7
133.3

124.1
167.4
148.2
128.2

121.5
161.9
148.8
123.4

119.8
166.9
148.9
122.0

115.4
160.8
148.4
116.7

109.4
145.5
150.5
115.7

12
13
14
15
16

Nondurable manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products

20
21
22
23
26

8.75
.67
2.68
3.31
3.21

152.1
122.9
135.7
120.3
155.1

151.9
123.5
138.4
123.8
156.5

152.5
125.4
139.3
121.6
156.0

152.4
125.7
136.2
120.2
157.6

151.9
122.2
138.9
121.6
157.0

152.2
122.3
138.8
122.6
155.9

151.3
120.9
138.3
121.1
153.4

151.6
121.3
139.4
122.6
154.9

151.9
123.8
140.7
122.6
156.7

150.7
122.4
136.3
122.5
158.6

151.4
124.3
132.5
117.8
153.3

153.0
119.6
126.1
113.8
152.6

152.4 150.2
121.7
122.8 117.0
112.5
146.8 146.9

17
18
19
20
21

Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products .
Leather and products

27
28
29
30
31

4.72 144.2 143.9 144.8
7.74 215.4 218.9 219.8
1.79 129.7 133.1 131.5
2.24 274.0 264.0 270.2
69.3 68.9
.86
68.3

142.7
218.5
130.3
269.5
68.8

141.6
219.8
130.0
275.2
68.9

141.3 143.1
220.6 218.4
129.8 129.3
280.3 285.1
69.8
68.4

144.4
221.5
128.7
285.3
70.1

146.1
219.2
130.4
286.7
69.6

145.9
216.3
129.1
282.2
69.7

145.6
208.8
128.3
276.0
71.2

143.4
204.6
128.0
264.1
70.8

144.9
197.9
128.4
246.9
65.6

146.0
192.7
123.0
237.3
63.7

147.1

86.3

148.5

120.1

Durable manufactures
22 Ordnance, private and
government
23 Lumber and products
24 Furniture and fixtures
25 Clay, glass, stone products

19.91
24
25
32

3.64
1.64
1.37
2.74

81.1
119.0
157.2
147.9

78.6
127.4
150.0
156.8

78.4
126.2
154.3
156.4

78.5
125.6
155.6
154.6

79.8
126.3
158.7
154.3

80.9
126.2
158.9
151.7

80.9
122.5
162.4
148.1

80.6
122.9
164.9
148.7

81.8
119.1
163.3
148.2

82.3
113.2
159.9
147.3

82.5
109.6
157.2
143.4

84.3
104.7
153.7
135.9

85.5 84.7
103.8 95.5
149.4 142.5
132.0 128.2

26
27
28
29
30

33
331.2
34
35
36

6.57
4.21
5.93
9.15
8.05

107.9
99.8
136.4
171.2
178.4

114.1
108.7
135.8
167.3
177.6

114.5
108.4
137.6
168.3
174.9

114.9
108.0
139.2
169.2
177.4

110.6
103.4
139.5
169.7
178.8

111.9
105.6
138.4
172.1
179.9

107.4
98.5
139.3
174.1
180.1

109.4
99.7
140.1
176.7
180.9

113.1
105.1
140.0
176.4
182.6

108.6
99.2
136.8
173.9
180.0

102.3
92.2
133.8
169.7
179.6

96.6
87.2
130.2
167.9
175.7

89.5 87.2
79.2 78.3
126.1 119.7
166.7 161.2
170.7 168.5

122.1
163.5
171.3

37
371

9.27
4.50

116.1
122.3

117.4
120.0

116.1
119.9

119.5
127.1

121.3
130.7

123.7
136.4

123.4
137.5

119.8
130.5

115.4
123.1

114.2
120.4

110.6
113.8

106.1
105.5

103.7
100.4

96.5
90.2

101.2
97.3

372-9
38
39

4.77
2.11
1.51

110.2
170.3
154.7

114.9
173.9
152.9

112.6
171.1
154.9

112.3
170.0
155.4

112.4
170.0
157.3

111.8
170.6
157.0

110.2
171.3
158.8

109.7
172.1
159.4

108.2
172.3
158.6

108.5
169.7
154.2

107.5
168.6
151.5

106.8
167.1
151.7

106.7 102.5
166.4 162.1
147.9 142.9

104.9
164.6
144.6

Primary metals
Iron and steel
Fabricated metal products.
Nonelectrical machinery...
Electrical machinery

31 Transportation equipment
32 Motor vehicles and parts
33
Aerospace and miscellaneous
transportation equipment
34 Instruments
35 Miscellaneous manufactures . . . .

86.8

Gross value (billions of 1972 dollars, annual rates)
MAJOR MARKET

36 Products, total

507.41

612.3

619.2

621.4

616.5

611.5

605.0

597.6

592.2 574.0

585.7

37 Final
38 Consumer goods
39 Equipment
40 Intermediate

390.91
277.51
113.41
116.61

474.0 471.6 472.8 476.4 476.3 482.4 480.5
317.9 316.8 318.8 320.5 320.0 32.4.3 322.1
156.1 154.8 154.0 155.9 156.3 158.1 158.5
138.2 141.2 141.7 141.7 139.9 139.8 138.7

481.9
324.0
157.9
139.5

476.4
319.3
157.1
140.1

473.0
317.7
155.3
138.4

470.1
314.3
155.8
134.9

465.2
310.5
154.7
132.4

461.6
306.7
154.9
130.6

455.9
303.0
152.8
129.8

612.9

614.5

618.0

1. 1972 dollar value.
NOTE. Published groupings include some series and subtotals not shown separately. For description and historical data, see Industrial Production—1976 Revision
(Board of Governors of the Federal Reserve System: Washington, D.C.), December 1977.




616.2

622.2

446.7
296.6
150.1
127.3

A50
2.14

Domestic Nonfinancial Statistics • March 1982
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1981
Item

1979

1980

1982

1981
June

July

Aug.

Sept.

Oct.'

Nov.'

Dec.'

Jan.

Private residential real estate activity (thousands of units)
NEW UNITS

1 Permits authorized
2
1-family
3
2-or-more-family

1,552
981
571

1,191
710
481

969'
558
412'

Started
1-family
2-or-more-family

1,745
1,194
551

1,292
852
440

1,140
639
501

896
515
382

1,855
1,286
569

1,502
957
545

1,264
818
446

13 Mobile homes shipped

277

222

241

256'

267'

238'

Merchant builder activity in 1-family
units
14 Number sold
15 Number for sale, end of period 1

709
402

545 r
342'

436'
278

417'
318

408
312

364
308

4
5

6

7 Under construction, end of period 1
1-family
8
9 2-or-more-family
10 Completed
11
1-family
12 2-or-more-family

963
567
396

913
528
385

865
494
371

850
453
397

722
398
324

723
401
322

789
454
335

836
456
380

1,085'
706'
379'

1,046'
705'
341'

1,040'
696'
344'

946'
614'
332'

899'
623'
276'

854'
507
347

860
554
306

899
559
340

894
588
306

691'
385
305

853'
482
371

822
462
361

788
438
349

762
423
340

726
407
318

709
399
311

705
401
303

n a.

1,324
864
460

1,226
804
422

1,197
776
421

1,251
713
538

1,016
650
366

1,132
672
460

232'

208

207

206

335'
304'

359
291

390
282

457
272

1,377
877
500

353
277

Price (thousands of dollars)2
Median
16 Units sold

62.8 r

64.7 r

68.9'

68.8'

69.5'

72.6'

65.8

69.6

71.3

68.6

68.0

17

71.9

76.4'

83.1'

84.7

82.6'

87.0'

81.3'

82.5

85.3

83.3

81.3

Units sold
EXISTING UNITS ( 1 - f a m i l y )

18 Number sold
Price of units sold (thous. of dollars)2
19 Median
20 Average

3,701

2,881

2,350'

2.680'

2,450'

2.240'

2,070'

1,930

1,900

1,940

1,820

55.5
64.0

62.1
72.7

66.1'
78.0

66.7'
79.9

67.5
79.6

68.1
80.5

67.1
79.1

66.0
76.6

65.9
77.5

66.6
78.6

66.8
80 .3

Value of new construction 3 (millions of dollars)
CONSTRUCTION

21 Total put in place

230,781

230,273

236,312

233,998

233,862

229,844

230,892

229,857

231,587

234,395

230,956

22 Private
Residential
23
24
Nonresidential, total
Buildings
25
Industrial
26
Commercial
Other
27
Public utilities and other
28

181,690
99,032
82,658

174,896
87,260
87,636

182,816
85,720
97,096

181,811
85,971
95,840

182,288
82,916
99,372

180,576
80,535
100,041

178,649
78,503
100,146

178,245
78,202
100,043

179,179
78,056
101,123

181,323
79,643
101,680

180,055
77,864
102,191

14,953
24,919
7,427
35,359

13,839
29,940
8,654
35,203

16.839
33,308
9.358
37.591

16,243
32,442
9,735
37,420

17,182
34,028
9,241
38.921

18,295
33,721
9,367
38,658

18,344
33,412
9,402
38,988

18,558
33,046
9,553
38,886

18,373
34,506
9,193
39,051

17,736
35,921
9,019
39,004

17,213
36,8 89
9,779
38,310

49,088
1,648
11,998
4,586
30,856

55,371
1,880
13,784
5,089
34,618

53,496
1,956
13,143
5,268
33,129

52,186
2,254
13,338
4,912
31,682

51,574
2,091
13,203
5,233'
31.047'

49,268
2,105
12,227
4,717
30,219

52,243
2,065
12,537
4,910'
32,731

51,611
2,116
11,515
6,978
31,002

52,408
1,960
12,478
4,868
33,102

53,072
1,919
11,642
4,908
34,603

50,901
2,1 08
12,167
5,273
31,353

29 Public
Military
30
31
Highway
Conservation and development
32
Other
33

1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly comparable
with data in prior periods due to changes by the Bureau of the Census in its
estimating techniques. For a description of these changes see Construction Reports
(C-30-76-5), issued by the Bureau in July 1976.




NOTE. Census Bureau estimates for all series except (a) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing Institute
and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing
units, which are published by the National Association of Realtors. All back and
current figures are available from originating agency. Permit authorizations are
those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978.

Prices
2.15

A51

C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
12 months to

1 month to

3 months (at annual rate) to

Item
1981
Jan.

1982

1981

1981
1982
Jan.
Mar.

June

Sept.

Dec.

Sept.

Nov.

Oct.

Jan.

Dec.

Index
level
Jan.
1982
(1967
= 100) ]

CONSUMER PRICES 2
1 All items

11.7

8.4

9.6

8.1

12.8

5.4

1.1

.4

.5

.4

.3

282.5

2 Commodities
Food
3
4
Commodities less food
Durable
5
6
Nondurable
7 Services
8
Rent
9
Services less rent

10.3
10.2
10.5
9.8
11.2
13.7
9.1
14.3

5.5
4.6
5.8
5.6
6.1
12.6
8.4
13.1

8.8
5.3
10.2
1.3
26.7
10.9
7.0
11.5

3.2
2.2
3.8
9.7
-1.4
14.8
7.7
15.8

8.5
7.7
9.0
10.8
4.6
19.2
10.2
20.4

3.6
1.7
4.3
1.2
3.8
7.8
9.0
7.6

.7
.7
.8
.7
.6
1.5
.8
1.6

.4
.3
.4
-.1
.8
.5
.8
.4

.2
.1
.2
.1
.5
.9
.7
1.0

.3
.1
.4
.3
-.3
.5
.7
.4

.1
.7
-.1
.2
.2
.5
.6
.5

258.8
281.0
245.9
233.4
260.2
323.9
217.8
344.2

12.0
11.4
14.8

9.2
9.3
9.4

10.5
6.4
2.9

9.3
11.6
16.9

13.9
15.0
21.5

6.2
5.6
.3

1.2
1.1
1.7

.5
.5
-.3

.6
.4
.2

.4
.5
.2

.2
.3
-.1

281.4
268.5
367.5

11.3
11.3
8.3
12.7
11.1
10.8

6.3
5.8
2.2
7.3
8.4
6.2

12.8
13.2
5.1
16.5
11.6
13.8

7.1
6.4
3.5
7.6
10.0
8.0

3.4
2.8
1.6
3.2
5.7
5.2

5.2
4.0
-3.7
7.2
9.7
2.8

.2
.2
-.5
.5
.2
.2

.5
.4
-.3
.6
1.0
.0

.5
.4
-.6
.9
.8
.4

.3
.2
.0
.3
.6
.3

.4
.5
1.1
.2
.4
.3

277.4
277.7
256.4
284.4
276.1
316.6

18.0
11.1

6.9
-10.4

34.3
-15.6

16.1
6.4

1.1
-18.2

-5.6
-25.5

.5
-3.8

-.8
-2.3

-.8
-2.2

.1
-2.8

-1.1
4.4

481.1
242.5

Other groupings
10 All items less food
11 All items less food and energy
12 Homeownership
PRODUCER PRICES

13 Finished goods
14
Consumer
Foods
IS
Excluding foods
16
17
Capital equipment
18 Intermediate materials 3
Crude materials
19
Nonfood
Food
20

1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers.




3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.

A52
2.16

Domestic Nonfinancial Statistics • March 1982
G R O S S N A T I O N A L P R O D U C T A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1980
Account

1979

1980

1981

1981
Q4

Q1

Q2

Q3

Q4

GROSS NATIONAL PRODUCT

2,413.9

2,626.1

2,924.8

2,730.6

2,853.0

2,885.8

2,965.0

2,995.3

1,510.9
212.3
602.2
696.3

1,672.8
211.9
675.7
785.2

1,857.8
232.1
743.0
882.7

1,751.0
223.3
703.5
824.2

1,810.1
238.3
726.0
845.8

1.829.1
227.3
735.3
866.5

1.883.9
236.2
751.3
896.4

1,908.4
226.8
759.3
922.2

415.8
398.3
279.7
96.3
183.4
118.6
113.9

395.3
401.2
296.0
108.8
187.1
105.3
100.3

450.7
433.7
328.3
125.4
202.9
105.4
99.9

397.7
415.1
302.1
111.5
190.7
113.0
107.6

437.1
432.7
315.9
117.2
198.7
116.7
111.4

458.6
435.3
324.6
123.1
201.5
110.7
105.4

463.0
435.6
335.1
128.3
206.8
100.5
94.9

443.9
431.3
337.5
133.0
204.5
93.8
88.1

17.5
13.4

-5.9
-4.7

17.0
14.6

-17.4
-14.0

4.5
6.8

23.3
21.5

27.5
23.1

12.6
7.1

15 Net exports of goods and services
16 Exports
17
Imports

13.4
281.3
267.9

23.3
339.8
316.5

25.0
365.6
340.6

23.3
346.1
322.7

29.2
367.4
338.2

20.8
368.2
347.5

29.3
368.0
338.7

20.8
358.9
338.2

18 Government purchases of goods and services
19 Federal
20
State and local

473.8
167.9
305.9

534.7
198.9
335.8

591.3
203.3
361.0

558.6
212.0
346.6

576.5
221.6
354.9

577.4
219.5
357.9

588.9
226.4
362.5

622.2
253.6
368.6

2,396.4
1,055.9
451.2
604.7
1,097.2
260.8

2,632.0
1,130.4
458.6
671.9
1,229.6
266.0

2,907.8
1,272.5
507.4
765.1
1,371.1
281.1

2,748.0
1,169.0
476.7
692.2
1,285.3
276.4

2,848.5
1,247.5
501.4
746.1
1,317.1
288.4

2,862.5
1,257.0
516.9
740.1
1,344.7
284.1

2,937.6
1,298.3
525.2
773.0
1.390.5
276.3

2,982.6
1,287.4
486.2
801.2
1,432.2
275.7

17.5
11.5
6.0

-5.9
-4.0
-1.8

17.0
7.9
9.1

-17.4
.7
-18.1

4.5
-4.2
8.6

23.3
18.5
4.8

27.5
18.6
8.9

12.6
-1.3
14.0

1,483.0

1,480.7

1,510.1

1,485.6

1,516.4

1,510.4

1,515.8

1,497.6

31 Total

1,963.3

2,121.4

2,346.3

2,204.8

2,291.1

2,320.9

2,377.6

2,395.5

32 Compensation of employees
33
Wages and salaries
34
Government and government enterprises
35
Other
36
Supplement to wages and salaries
37
Employer contributions for social insurance
38
Other labor income

1,460.9
1.235.9
235.9
1,000.0
225.0
106.4
118.6

1,596.5
1,343.6
253.6
1,090.0
252.9
115.8
137.1

1,771.5
1,482.6
273.9
1,208.7
288.8
134.7
154.2

1,661.8
1,397.3
263.3
1,134.0
264.5
121.0
143.5

1,722.4
1,442.9
267.1
1,175.7
279.5
131.5
148.0

1,752.0
1,467.0
270.5
1,196.4
285.1
133.2
151.8

1,790.7
1.498.7
274.7
1,224.0
292.0
135.6
156.3

1,820.9
1,522.0
283.2
1,238.8
298.9
138.4
160.5

131.6
100.7
30.8

130.6
107.2
23.4

134.6
112.4
22.3

134.0
111.6
22.5

132.1
113.2
18.9

134.1
112.5
21.7

137.1
112.4
24.7

135.2
111.5
23.8

1 Total
2
3
4
5

By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services

6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
Nonfarm
13
14

Change in business inventories
Nonfarm

By major type of product
21 Final sales, total
22
Goods
23
Durable
24
Nondurable
25
Services
26
Structures
27 Change in business inventories
28
Durable goods
29
Nondurable goods
30 MEMO: Total GNP in 1972 dollars
NATIONAL INCOME

39 Proprietors' income 1
40
Business and professional 1
41
Farm 1
42 Rental income of persons 2
43 Corporate profits'
44
Profits before tax 3
45
Inventory valuation adjustment
46
Capital consumption adjustment
47 Net interest
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustments.




30.5

31.8

33.6

32.4

32.7

33.3

33.9

34.5

196.8
255.4
-42.6
-15.9

182.7
245.5
-45.7
-17.2

191.5
232.9
-27.5
-13.9

183.3
249.5
-48.4
-17.8

203.0
257.0
-39.2
-14.7

190.3
229.0
-24.0
-14.7

195.7
234.4
-25.3
-13.4

n.a.
n.a.
-21.5
-12.8

143.4

179.8

215.0

193.3

200.8

211.0

220.2

228.0

3. For after-tax profits, dividends, and the like, see table 1.49.
SOURCE. Survey of Current Business (Department of Commerce).

National Income Accounts
2.17

A53

PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1981

1980
Account

1979

1980

1981
Q4

Q3

Q2

Q1

Q4

PERSONAL INCOME AND SAVING

1 Total personal income

1,943.8

2,160.2

2,404.0

2,256.2

2,319.8

2,368.5

2,441.7

2,485.9

2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises

1,236.1
437.9
333.4
303.0
259.2
236.1

1,343.7
465.4
350.7
328.9
295.7
253.6

1,482.6
512.7
387.3
361.0
335.0
273.9

1,397.8
484.0
364.0
340.6
310.0
263.3

1,442.9
501.3
377.4
351.9
322.5
267.1

1,467.0
508.1
386.7
357.8
330.5
270.5

1,498.5
520.2
393.9
365.3
338.5
274.5

1,522.1
521.0
391.0
369.1
348.7
283.3

118.6
131.6
100.8
30.8
30.5
48.6
209.6
249.4
131.8

137.1
130.6
107.2
23.4
31.8
54.4
256.3
294.2
153.8

154.2
134.6
112.4
22.3
33.6
61.3
308.6
333.2
180.4

143.5
134.0
111.6
22.5
32.4
56.1
269.7
313.9
165.3

148.0
132.1
113.2
18.9
32.7
58.0
288.7
319.6
169.8

151.8
134.1
112.5
21.7
33.3
60.2
300.9
324.2
172.0

156.3
137.1
112.4
24.7
33.9
63.0
315.7
342.2
188.5

160.5
135.2
111.5
23.8
34.5
64.1
329.0
347.0
191.4

80.6

87.9

104.2

91.2

102.3

103.1

105.0

106.5

1,943.8

2,160.2

2,404.0

2,256.2

2,319.8

2,368.5

2.441.7

2,485.9

8
9
10
11
12
13
14
15
16
17

Other labor income
Proprietors'income 1
Business and professional 1
Farm 1
Rental income of persons 2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits
LESS: Personal contributions for social insurance

18 EQUALS: Personal income

302.0

338.5

388.1

359.2

372.0

382.9

399.8

398.0

20 EQUALS: Disposable personal income

1,641.7

1,821.7

2,015.8

1,897.0

1.947.8

1,985.6

2,042.0

2,087.9

21

1,555.5

1,720.4

1,908.5

1,799.4

1,858.9

1,879.0

1,935.1

1,961.2

86.2

101.3

107.3

97.6

88.9

106.6

106.9

126.7

6,588
4,135
4,493
5.2

6,503
4,108
4,473
5.6

6,568
4,170
4,525
5.3

6,499
4,142
4,488
5.1

6,619
4,191
4,511
4.6

6,581
4,162
4,517
5.4

6,585
4,184
4,535
5.2

6,492
4,149
4,539
6.1

19

LESS: Personal tax and nontax payments

LESS: Personal outlays

22 EQUALS: Personal saving
MEMO:

Per capita (1972 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
GROSS SAVING

27 Gross saving
28
29
30
31

Gross private saving
Personal saving
Undistributed corporate profits 1
Corporate inventory valuation adjustment

Capital consumption
allowances
32 Corporate
33 Noncorporate
34 Wage accruals less disbursements
35 Government surplus, or deficit ( - ) , national income and product
accounts
Federal
State and local

36
37

412.0

401.9

454.9

406.7

442.6

465.3

469.4

n.a.

398.9
86.2
59.1
-42.6

432.9
101.3
44.3
-45.7

479.7
107.3
50.7
-27.5

436.4
97.6
40.4
-48.4

451.1
88.9
55.7
-39.2

475.3
106.6
52.0
-24.0

486.2
106.9
52.8
-25.3

n.a.
126.7
n.a.
-21.5

155.4
98.2
.0

175.4
111.8
.0

197.7
123.9
.0

183.2
115.8
.5

187.5
119.0
.0

194.6
122.1
0

201.1
125.4
.0

207.7
129.1
.0

11.9
-14.8
26.7

-32.1
-61.2
29.1

-25.9
-62.5
36.6

-30.8
-67.9
37.1

-9.7
-46.6
36.9

-11.2
-47.2
36.1

-17.9
-55.7
37.8

n.a.
n.a.
n.a.

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

39 Gross investment

414.1

401.2

454.1

400.1

446.0

458.3

469.6

442.7

40 Gross private domestic
41 Net foreign

415.8
-1.7

395.3
5.9

450.7
3.5

397.7
2.3

437.1
8.8

458.6
-.2

463.0
6.5

443.9
-1.3

2.2

-.7

-.8

-6.6

3.4

-6.9

.2

n.a.

38 Capital grants received by the United States, net

42 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




SOURCE. Survey of Current Business (Department of Commerce).

A54
3.10

International Statistics • March 1982
U.S. I N T E R N A T I O N A L T R A N S A C T I O N S Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted.1
1980
Item credits or debits

1979

1978

Q4

Q3

f1 Balance on current account

1981

1980
Q2

Q1

Q3P

-14,075

1,414

3,723

4,975
1,149

1,390
3,244

3,263
3,546

1,142
2,438

2,100
886

-33,759
142,054
-175,813
738
21,400
2,613

-27,346
184,473
-211,819
-1,947
33,462
2,839

-25,342
223,966
-249,308
-2,515
32,762
5,874

-2,902
56,252
-59,154
-455
8,154
1,681

-5,570
57,149
-62,719
-715
8,257
1,762

-4,677
61,098
-65,775
-568
9,053
982

-6,910
60,477
-67,387
-698
8,733
1,535

-7,042
58,037
-65,079
-72
9,490
1,618

-1,884
-3,183

-2,057
-3,536

-2,397
-4,659

-591
-912

-720
-1,624

-550
-977

-553
-965

-602
-1,292

11 Change in U.S. government assets, other than official reserve assets, net (increase, - )

-4,644

-3,767

-5,165

-1,427

-1,094

-1,395

-1,485

-1,242

12 Change in U.S. official reserve assets (increase, - )
13 Gold
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies

732
-65
1,249
4,231
-4,683

-1,132
-65
-1,136
-189
257

-8,155
0
-16
-1,667
-6,472

-1,109
0
-261
-294
-554

-4,279
0
1,285
-1,240
-4,324

-4,529
0
-1,441
-707
-2,381

-905
0
-23
-780
-102

-4
0
-225
-647
868

17 Change in U.S. private assets abroad (increase, - ) 3
18 Bank-reported claims
19 Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net 3

-57,158
-33,667
-3,853
-3,582
-16,056

-57,739
-26,213
-3,026
-4,552
-23,948

-71,456
-46,947
-2,653
-3,310
-18,546

-16,766
-12,440
343
-818
-3,851

-22,622
-13,139
-2,005
-356
-7,122

-16,473
-11,241
-3,192
-488
-1,552

-19,581
-15,627
2,470
1,479
-4,945

-16,758
-14,808
n.a.
-517
-1,433

22 Change in foreign official assets in the 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. banks
27
Other foreign official assets 5

33,561
23,555
666
2,359
5,551
1,4530

-13,757
-22,435
463
-133
7,213
1,135

15,492
9,683
2,187
636
-159
3,145

7,686
3,769
549
80
1,823
1,465

7,712
6,911
587
205
-460
469

5,503
7,242
454
-112
-2,910
829

-2,779
-2,069
536
177
-2,070
647

-5,847
-4,632
545
-162
-2,572
974

28 Change in foreign private assets in the United States
(increase, + ) 3
29 U.S. bank-reported liabilities
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33 Foreign direct investments in the United States, net 3 . . . .

30,187
16,141
1,717
2,178
2,254
7,896

52,703
32,607
2,065
4,820
1,334
11,877

34,769
10,743
5,109
2,679
5,384
10,853

3,965
916
373
-254
241
2,689

16,157
7,737
3,228
893
2,240
2,059

1,637
-3,889
-820
1,405
1,454
2,487

15,667
7,916
-293
733
3,472
3,839

20,903
16,720
n.a.
-523
758
3,948

0
11,398

1,139
21,140

1,152
29,640

0
2,676
-3,291

0
2,736
2,139

1,093
10,901
-340

0
7,941
1,222

0
848
-2,592

11,398

21,140

29,640

5,967

597

11,241

6,719

3,440

3
4
5
6
7
8
9
10

Merchandise trade balance 2
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net 3
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)

34 Allocation of SDRs
35 Discrepancy
36
37 Statistical discrepancy in recorded data before seasonal
adjustment
MEMO:

Changes in official assets
U.S. official reserve assets (increase,
Foreign official assets in the United States
(increase, + )
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)

38
39

732

-1,132

-8,155

-1,109

-4,279

-4,529

-905

-4

31,202

-13,624

14,856

7,606

7,507

5,615

-2,956

-5,685

-1,137

5,543

12,744

4,115

1,024

5,446

2,676

3,028

236

305

635

125

211

192

214

120

1. Seasonal factors are no longer calculated for lines 12 through 41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing; military exports
are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings of incorporated affiliates.




4. Primarily associated with military sales contracts and other transactions arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(U.S. Department of Commerce).

Trade and Reserve and Official Assets
3.11

A55

U.S. FOREIGN T R A D E
Millions of dollars; monthly data are seasonally adjusted.
1982

1981'
Item

1979

1980

1981r
July

1

EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments

2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded
warehouses
3 Trade balance

181,860

220,626

233,677

19,289

19,163

19,551

Dec.

Jan.

19,153

18,885

18,737

209,458

244,871

260,982

20,114

23,242

21,274

23,077

22,508

19,746

22,829

-27,598

-24,245

-27,305

-825

-4,212

-1,723

-3,914

-3,355

-861

-4,092

not covered in Census statistics, and (b) the exclusion of military sales (which are
combined with other military transactions and reported separately in the "service
account" in table 3.10, line 6). On the import side, additions are made for gold,
ship purchases, imports of electricity from Canada and other transactions; military
payments are excluded and shown separately as indicated above.

NOTE. The data through 1981 in this table are reported by the Bureau of Census
data on a free-alongside-ship (f.a.s.) value basis—that is, value at the port of export.
Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in the Census
basis trade data; this adjustment has been made for all data shown in the table.
Beginning with 1982 data, the value of imports are on a customs valuation basis.
The Census basis data differ from merchandise trade data shown in table 3.10,
U.S. International Transactions Summary, for reasons of coverage and timing. On
the export side, the largest adjustments are: (a) the addition of exports to Canada

3.12

19,031

Nov.

Oct.

Sept.

Aug.

SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(U.S. Department of Commerce, Bureau of the Census).

U.S. R E S E R V E ASSETS
Millions of dollars, end of period
1982

1981
Type

1978

1979

1980
Aug.

1 Total1
2 Gold stock, including Exchange Stabilization Fund 1
23

Nov.

Oct.

Sept.

Jan.

Dec.

Feb.

18,650

18,956

26,756

29,265

29,716

30,248

31,002

30,075

30,098

30,060

11,671

11,172

11,160

11,154

11,152

11,152

11,152

11,151

11,151

11,150

1,558

2,724

2,610

3,739

3,896

3,949

4,109

4,095

4,176

4,359

3

Special drawing rights '

4

Reserve position in International Monetary Fund 2

1,047

1,253

2,852

4,341

4,618

4,736

5,009

5,055

5,237

5,275

5

Foreign currencies 4 ' 5

4,374

3,807

10,134

10,031

10,050

10,411

10,732

9,774

9.534

9,276

3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus net transactions in SDRs.
4. Beginning November 1978, valued at current market exchange rates.
5. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies, if any.

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
3.22.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position
in the IMF also are valued on this basis beginning July 1974.

3.13

FOREIGN OFFICIAL ASSETS H E L D A T F E D E R A L RESERVE BANKS
Millions of dollars, end of period
1981
Assets

1978

1979

Aug.
1 Deposits
Assets held in custody
2 U.S. Treasury securities 1
3 Earmarked gold 2

Sept.

Oct.

Nov.

Dec.

Jan.

Feb/

367

429

411

255

419

547

534

505

333

416

117,126
15,463

95,075
15,169

102,417
14,965

102,197
14,833

101,068
14,813

101,068
14,811

103,894
14,802

104,680
14,804

104,631
14.802

103,557
14,791

1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. The value of earmarked gold increased because of the changes in par value
of the U.S. dollar in May 1972 and in October 1973.




1982

1980

NOTE. Excludes deposits and U.S. Treasury securities held for international and
regional organizations. Earmarked gold is gold held for foreign and international
accounts and is not included in the gold stock of the United States,

A56
3.14

International Statistics • March 1982
F O R E I G N B R A N C H E S O F U.S. B A N K S
Millions of dollars, end of period

Balance Sheet Data

1981
June

July

Aug.

Sept.

Oct.

Nov.

Dec.P

All foreign countries
1 Total, all currencies
2 Claims on United States
3
Parent bank
4
Other
5 Claims on foreigners
6
Other branches of parent bank
7
Banks
8
Public borrowers 2
9
Nonbank foreigners
10 Other assets
11 Total payable in U.S. dollars
12 Claims on United States
13
Parent bank
14
Other
15 Claims on foreigners
16
Other branches of parent bank
17
Banks
18
Public borrowers 2
19
Nonbank foreigners
20 Other assets

306,795

364,409

401,135

422,946

433,238

433,242

450,234

444,654

462,811

462,633

17,340
12,811
4,529

32.302
25.929
6,373

28,460
20,202
8,258

35,217
24,311
10,906

43,074
30,994
12,080

41,533
29,782
11,751

46,369
32,249
14,120

41,554
26,833
14,721

44,561
26,540
18,021

62,135
41,647
20,488

278,135
70,338
103,111
23,737
80,949

317,330
79,662
123,420
26.097
88,151

354,960
77,019
146,448
28,033
103,460

368,644
79,814
154,682
27,872
106,276

370.938
82.128
154,760
28,728
105.322

372,378
83,171
152.286
29,270
107,651

384,407
84,627
159,637
29,927
110,216

383,463
83,597
156,833
30,211
112,822

397,728
89,280
161,412
30,170
116,866

380,481
88,591
151,457
28,192
112,241

11,320

14.777

17,715

19,085

19,226

19,331

19,458

19,637

20,522

20,017

224,940

267,713

291,798

320,308

330,758

328,784

343,067

336,817

348,946

350,564

16,382
12,625
3,757

31.171
25.632
5,539

27,191
19,896
7,295

37,403
24,041
9,922

41.873
30,742
11.131

40,250
29,490
10,760

45,116
31,991
13,125

40,370
26,639
13,731

43,271
26,347
16,924

60,538
41,104
19,434

203,498
55,408
78,686
19,567
49,837

229,120
61,525
96,261
21.629
49,705

255,391
58,541
117,342
23,491
56,017

275,185
62,696
128,048
23,554
60,887

277.354
64,725
127.469
24.333
60.827

276,935
65,477
124,504
24,410
62,544

286,367
66,279
131,524
24,709
63,855

284,590
65,859
127,944
25,199
65,588

293,592
69,949
131,478
25,110
67,055

278,367
70,286
122,695
22,848
62,538

5,060

7,422

9,216

11,160

11.531

11,599

11.584

11,857

12,083

11,659

United Kingdom
21 Total, all currencies
22 Claims on United States
23
Parent bank
24
Other
25 Claims on foreigners
26
Other branches of parent bank
27
Banks
28
Public borrowers 2
29
Nonbank foreigners
30 Other assets
31 Total payable in U.S. dollars
32 Claims on United States
33
Parent bank
34
Other
35 Claims on foreigners
36
Other branches of parent bank
38
39

Public borrowers 2
Nonbank foreigners

40 Other assets

106,593

130,873

144,717

149,704

148,774

150,161

154,096

153,615

161,531

157,229

5,370
4,448
922

11,117
9,338
1,779

7,509
5,275
2,234

9,650
7,098
2,552

9.130
6.167
2.963

9,995
7,189
2,806

11,167
7,842
3,325

9,668
6,351
3,317

9,315
5,162
4,153

10,534
6,596
3,938

98,137
27,830
45,013
4,522
20,772

115.123
34.291
51.343
4,919
24,570

131,142
34,760
58,741
6,688
30,953

134.092
35,914
60,261
6,811
31,106

133,626
37,035
59,639
6.822
30.130

134,034
38,035
58,362
6,665
30,972

137,056
39,117
58,986
7,112
31,841

137,879
38.799
59,307
7,305
32,468

145,899
41,467
63,044
7,463
33,906

140,166
42,123
56,848
7,490
33,705

3,086

4.633

6,066

5,962

6.018

6,132

5,873

6,068

6,327

6,529

75,860

94,287

99,699

104,959

107,961

109,008

113,014

112,064

117,454

115,188

5,113
4,386
727

10.746
9,297
1,449

7,116
5,229
1,887

9,160
7,059
2,101

8.628
6.110
2.518

9,552
7,128
2,424

10,703
7,779
2,924

9,201
6,299
2,902

8,811
5,110
3,701

9,960
6,435
3,525

69,416
22,838
31,482
3,317
11,779

81.294
28.928
36.760
3,319
12.287

89,723
28,268
42,073
4,911
14,471

96,230
29,725
45,631
5,123
15,751

95,832
30,789
44,488
5,176
15.379

95,887
31,710
42,957
5,006
16,214

98,611
32,845
43,605
5,281
16,880

98,934
32.698
43,345
5,485
17,406

104,741
34,905
46,463
5,500
17,873

101,136
36,322
41,106
5,595
18,113

1,331

2,247

2,860

3,464

3,501

3,569

3,700

3,929

3,902

4,092

Bahamas and Caymans

41 Total, all currencies
42 Claims on United States
43
Parent bank
44
Other
45 Claims on foreigners
46
Other branches of parent bank
47
Banks
48
Public borrowers 2
49
Nonbank foreigners
50 Other assets
51 Total payable in U.S. dollars

91,735

108,977

123,837

135,081

145,290

142,087

147,904

142,687

148,557

149,050

9,635
6,429
3,206

19,124
15,196
3,928

17,751
12,631
5,120

21,812
14,477
7,335

29.808
21,654
8.154

27,131
19,303
7,828

29,896
20,372
9,524

26,741
16.717
10,024

29,908
17,665
12,243

46,246
31,330
14,916

79,774
12,904
33,677
11,514
21,679

86,718
9,689
43.189
12.905
20.935

101,926
13,342
54,861
12,577
21,146

108,477
13,569
59,705
12,038
23,165

110,584
13,788
60,748
12,471
23,577

109,888
13,909
59,316
12,610
24,053

113,048
13,174
62,946
12,431
24,497

110,781
13,066
60,220
12,637
24,858

113,487
13,983
61,337
12,730
25,437

98,313
12,962
55,338
9,995
20,018

2,326

3,135

4,160

4,792

4.898

5,068

4,960

5,165

5,162

4,491

85,417

102,368

117,654

129,438

139,514

136,054

142,053

136,854

142,632

143,686

1. In May 1978 the exemption level for branches required to report was increased,
which reduced the number of reporting branches.
2. In May 1978 a broader category of claims on foreign public borrowers, in-




eluding corporations that are majority owned by foreign governments, replaced
the previous, more narrowly defined claims on foreign official institutions.

Overseas Branches
3.14

A57

Continued

1981
T '.L'l',,.

1978'

1979

1980
June

July

Aug.

Sept.

Oct.

Nov.

Dec.P

All foreign countries
52 Total, all currencies
53 To United States
54
Parent bank
55
Other banks in United States
56
Nonbanks
57 To foreigners
Other branches of parent bank
58
59
Banks
60
Official institutions
61
Nonbank foreigners
62 Other liabilities
63 Total payable in U.S. dollars
64 To United States
65
Parent bank
66
Other banks in United States
67 Nonbanks
68 To foreigners
69
Other branches of parent bank
70
Banks
71
Official institutions
72
Nonbank foreigners
73 Other liabilities

306,795

364,409

401,135

422,946

433,238

433,242

450,234

444,654

462,811

462,633

58,012
28,654
12,169
17,189

66,689
24,533
13,968
28,188

91,079
39,286
14,473
37,275

109,322
44,327
16,136
48,859

118,093
43,069
17,578
57,446

116,190
44,010
15,686
56,494

124,096
48,592
17,657
57,847

120,039
45,909
16,464 r
57,666'

128,081
49,385
17,110
61,586

137,618
56,160
19,315
62,143

238,912
67,496
97,711
31,936
41,769

283,510
77,640
122,922
35,668
47,280

295,411
75,773
132,116
32,473
55,049

298,169
79,033
131,854
26,316
60,966

299,240
81,387
129,290
25,682
62,881

300,081
80,991
125,563
28,209
65,318

306,785
83,336
127,794
28,715
66,940

305,040
82,038
128,536
27,685
66,781

315,969
87,821
132,013
24,541
71,594

305,426
86,368
124,900
25,840
68,318

9,871

14,210

14,690

15,455

15,905

16,971

19,353

19,575

18,761

19,589

230,810

273,857

303,281

332,284

343,947

341,596

355,030

349,602

360,972

364,093

55,811
27,519
11,915
16,377

64,530
23,403
13,771
27,356

88,157
37,528
14,203
36,426

106,740
42,822
15,945
47,973

115,481
41,620
17,391
56,470

113,526
42,481
15,529
55,516

121,130
46,766
17,479
56,885

117,362
44,170
16,313'
56,879'

125,118
47,456
17,011
60,651

134,601
54,275
19,001
61,325

169,927
53,396
63,000
26,404
27,127

201,514
60,551
80,691
29,048
31,224

206,883
58,172
87,497
24,697
36,517

215,931
62,292
89,909
20,853
42,877

218,178
64,884
88,554
20,108
44,632

217,239
64,338
83,842
22,056
47,003

221,090
66,256
84,670
22,836
47,328

219,818
65,160
84,552
21,948
48,158

224,505
69,554
84,691
18,911
51,349

217,463
69,164
79,596
20,288
48,415

5,072

7,813

8,241

9,613

10,288

10,831

12,810

12,422

11,349

12,029

United Kingdom
74 Total, all currencies
75 To United States
76
Parent bank
77
Other banks in United States
78
Nonbanks
79 To foreigners
80
Other branches of parent bank
81 Banks
82 Official institutions
83 Nonbank foreigners
84 Other liabilities
85 Total payable in U.S. dollars
86 To United States
Parent bank
87
88
Other banks in United States
89
Nonbanks
90 To foreigners
91
Other branches of parent bank
92 Banks
93
Official institutions
94
Nonbank foreigners
95 Other liabilities

106,593

130,873

144,717

149,704

148,774

150,161

154,096

153,615

161,531

157,229

9,730
1,887
4,189
3,654

20,986
3,104
7,693
10,189

21,785
4,225
5,716
11,844

29,598
4,371
6,172
19,055

30,383
4,138
5,864
20,381

31,408
4,189
5,646
21,573

34,143
5,370
6,396
22,377

32,960
3,542
6,054
23,364

36,316
4,045
7,102
25,169

38,033
5,455
7,502
25,076

93,202
12,786
39,917
20,963
19,536

104,032
12,567
47,620
24,202
19,643

117,438
15,384
56,262
21,412
24,380

115,099
14,996
55,923
17,197
26,983

113,560
15,103
54,351
16,352
27,754

113,191
15,255
51,532
17,866
28,538

113,862
15,121
51,830
18,687
28,224

114,415
15,544
53,634
17,442
27,795

118,401
16,090
56,239
15,089
30,983

112,244
16,534
51,336
16,517
27,857

3,661

5,855

5,494

5,007

4,831

5,562

6,091

6,240

6,814

6,952

77,030

95,449

103,440

113,427

113,247

114,191

117,920

117,346

122,362

120,277

9,328
1,836
4,101
3,391

20,552
3,054
7,651
9,847

21,080
4,078
5,626
11,376

28,858
4,277
6,094
18,487

29,606
4,054
5,768
19,784

30,661
4,132
5,594
20,935

33,464
5,309
6,317
21,838

32,408
3,484
5,976
22,948

35,706
3,956
7,061
24,689

37,343
5,361
7,249
24,733

66,216
9,635
25,287
17,091
14,203

72,397
8,446
29,424
20,192
14,335

79,636
10,474
35,388
17,024
16,750

81,544
10,289
36,701
14,000
20,554

80,400
10,566
35,789
13,133
20,912

79,988
10,943
32,914
14,244
21,887

80,638
10,747
33,010
15,514
21,367

81,260
11,121
34,312
14,415
21,412

82,766
11,457
35,141
12,133
24,035

79,023
12,037
32,298
13,612
21,076

1,486

2,500

2,724

3,025

3,241

3,542

3,818

3,678

3,890

3,911

142,687

148,557

149,050

80,161
36,066
8,971
35,124

85,703
39,260
10,609
35,834

64,462
23,307
24,712
3,381
13,062

60,023
20,641
23,218
3,498
12,666

Bahamas and Caymans
91,735

108,977

123,837

135,081

145,290

142,087

147,904

97 To United States
Parent bank
98
99
Other banks in United States
100 Nonbanks

39,431
20,482
6,073
12,876

37,719
15,267
5,204
17,248

59,666
28,181
7,379
24,106

69,407
32,160
8,822
28,425

77,197
31,034
10,517
35,646

73,924
31,265
8,938
33,721

77,533
33,282
9,964
34,287

101 To foreigners
102 Other branches of parent bank
103 Banks
104 Official institutions
105 Nonbank foreigners

50,447
16,094
23,104
4,208
7,041

68,598
20,875
33,631
4,866
9,226

61,218
17,040
29,895
4,361
9,922

62,470
19,484
28,326
3,685
10,975

64,491
20,989
28,056
3,934
11,512

64,565
20,315
27,538
4,605
12,107

66,627
22,393
27,983
4,028
12,223

1,857

2,660

2,953

3,204

3,602

3,598

3,744

3,901

3,934

3,324

87,014

103,460

119,657

131,120

141,241

137,754

143,507

138,094

144,034

145,226

% Total, all currencies

106 Other liabilities
107 Total payable in U.S. dollars




75,991
33,387
9,349'
33,255'
672,795
20,521
25,396
4,078
12,800

A58
3.15

International Statistics • March 1982
S E L E C T E D U.S. LIABILITIES TO F O R E I G N OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1982

1981
Item

1979

1 Total1
2
3
4
5
6
7
8
9
10
11
12

By type
Liabilities reported by banks in the United States 2 .
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities5
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6

1980
June r

July'

Aug/

Sept/

Oct/

Nov.?

Dec.''

JanP

149,697

164,578r

167,088

167,007

162,396

161,587

159,798

164,672

169,585

167,860

30,540
47,666

30,381
56,243

25,251
57,719

25,956
55,659

22,940
52,921

22,865
50,179

20,928
48,867

23,424
49,644

26,316
52,389

23,861
52,306

37,590
17,387
16,514

41,455
14,654
21,845'

46,605
13,202
24,311

47,402
12,802
25,188

48,934
12,402
25,199

50,311
12,402
25,830

51,943
12,191
25,869

54,076
11,791
25,737

53,289
11,791
25,800

54,130
11,791
25,772

85,633
1,898
6,291
52,978
2,412
485

81,592
1,562
5,688
70,784 r
4,123
829

71,130
1,248
6,103
83,142
3,190
2,275

70,576
664
5,584
85,847
2,645
1,691

65,960
1,603
5,968
84,643
2,839
1,383

64,409
1,366
5,429
87,332
2,090
961

61,086
1,073
5,088
89,190
2,149
1,212

63,097
2,247
5,049
91,300
1,792
1,187

65,241
2,403
6,927
91,924
1,849
1,241

62,757
2,377
5,977
94,268
1,649
832

1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial
paper, negotiable time certificates of deposit, and borrowings under repurchase
agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds
and notes payable in foreign currencies.

3.16

5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the Treasury
Department by banks (including Federal Reserve Banks) and securities dealers in
the United States.

LIABILITIES T O A N D CLAIMS ON F O R E I G N E R S Reported by Banks in the United States
Payable in Foreign Currencies
Millions of dollars, end of period
1981
Item

1978

1979

1980
Mar.

1 Banks' own liabilities
2 Banks' own claims1
3
Deposits
4
Other claims
5 Claims of banks' domestic customers 2
1. Includes claims of banks' domestic customers through March 1978.
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
their domestic customers.




2,406
3,671
1,795
1,876
358

1,918
2,419
994
1,425
580

3,748
4,206
2,507
1,699
962

3,298
4,257
1,779
2,478
444

June
3,031
3,699 rr
2,050
1,649'
347

Sept.'
2,878
4,078
2,409
1,669
248

Dec.P
3,667
5,331
3,592
1,738
972

NOTE. Data on claims exclude foreign currencies held by U.S. monetary authorities.

Nonbank-Reported
3.17

LIABILITIES TO F O R E I G N E R S
Payable in U.S. dollars
Millions of dollars, end of period

Data

Reported by Banks in the United States

1982

1981
Holder and type of liability

1

All foreigners

2 Banks' own liabilities
3
Demand deposits
4
Time deposits'
5
Other 2
6
Own foreign offices 3
7 Banks' custody liabilities4
8
U.S. Treasury bills and certificates5 ..
9
Other negotiable and readily transferable instruments 6
10 Other
11 Nonmonetary international and regional
organizations7
12 Banks' own liabilities
13 Demand deposits
14 Time deposits'
15 Other 2
16 Banks' custody liabilities4
17 U.S. Treasury bills and certificates . . .
18 Other negotiable and readily transferable Instruments 6
19 Other

1978

A59

1979

1980
June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.P

166,842

187,521

205,297'

208,928'

213,796'

208,046'

216,113

198,717'

208,263'

242,228

247,363

78,661
19,218
12,427
9,705
37,311

117,196
23,303
13,623
16,453
63,817

124,791'
23,462
15,076
17,583'
68,670

128,003'
23,177'
16,641
14,088'
74,097'

132,022'
21,413'
16,457
13,435'
80,717

130,981'
22,073'
17,250
11,242
80,416

142,213
23,592
17,313
13,608
87,699

124,261'
19,061
17,465
11,225
76,511'

132,556'
21,127'
18,068'
14,129'
79,232'

162,133
19,698
29,311
17,406
95,718

167,962
18,030
30,371
15,264
104,297

88,181
68,202

70,325
48,573

80,506
57,595

80,925'
59,745

81,774
57,550

77,065
54,846

73,900
52,368

74,456
51,281

75,707'
52,005'

80,095
55,312

79,402
55,131

17,472
2,507

19,396
2,356

20,079
2,832

17,096'
4,084

17,865
6,359

17,999
4,220

17,295
4,238

18,257
4,919

18,259'
5,442

18,814
5,970

18,787
5,484

2,607

2,356

2,344'

1,777

1,798

1,650

1,826

1,981

2,317

2,721

2,141

906
330
84
492

714
260
151
303

444 r
146
85
212'

357
224
75
58

363
222
75
65

436
233
59
145

398
249
60
89

303
185
58
60

555
388
74
93

638
262
58
318

365
130
86
148

1,701
201

1,643
102

1,900
254

1,420
289

1,435
247

1,214
84

1,428
96

1,678
184

1,762
142

2,083
541

1,775
217

1,499
1

1,538
2

1,646
0

1,132
0

1,188
0

1,130
0

1,332
0

1,494
0

1,621
0

1,542
0

1,558
0

20 Official institutions*

90,742

78,206

86,624

82,970'

81,616'

75,860'

73,044

69,796

73,068'

78,706

76,167

21 Banks' own liabilities
22 Demand deposits
23 Time deposits'
24 Other 2

12,165
3,390
2,560
6,215

18,292
4,671
3,050
10,571

17,826
3,771
3,612
10,443

15,815
3,975
2,563
9,277

14,479'
3,134
2,090
9,255'

13,482
3,714
2,021
7,747

13,951
2,697
1,981
9,273

11,869
2,668
1,692
7,509

14,212'
2,459
1,908'
9,846'

16,687
2,612
4,180
9,895

14,474
2,400
3,668
8,405

25 Banks' custody liabilities4
26
U.S. Treasury bills and certificates 5 ..
27 Other negotiable and readily transferable instruments 6
28
Other

78,577
67,415

59,914
47,666

68,798
56,243

67,155'
57,719

67,136
55,659

62,378'
52,921

59,093
50,179

57,927
48,867

58,856
49,644

62,019
52,389

61,693
52,306

10,992
170

12,196
52

12,501
54

9,356'
80'

9,396
2,081

9,402'
55

8,659
255

9,013
46

9,161
51

9,582
47

9,360
27

29 Banks9

57,423

88,316

96,415

101,512'

107,895'

107,446'

117,630

102,986'

108,486'

134,860

144,730

30 Banks' own liabilities
Unaffiliated foreign banks
31
32
Demand deposits
33
Time deposits'
34
Other 2

52,626
15,315
11,257
1,429
2,629

83,299
19,482
13,285
1,667
4,530

90,456
21,786
14,188
1,703
5,895

93,305'
19,208
13,630'
1,728
3,850'

98,974'
18,257'
12,929
1,573
3,755'

98,350
17,933
13,255
1,686
2,993

108,618
20,919
15,199
1,880
3,840

92,786'
16,275
11,346
1,631
3,298

97,651'
18,418'
12,908'
1,837'
3,673'

123,145
27,427
11,613
9,156
6,658

132,817
28,521
10,766
11,402
6,353

Own foreign offices 3

37,311

63,817

68,670

74,097'

80,717

80,416

87,699

76,511'

79,232'

95,718

104,297

4,797
300

5,017
422

5,959
623

8,207'
1,170

8,921
1,069

9,097'
1,217

9,012
1,439

10,200
1,574

10,835'
1,584

11,715
1,683

11,913
1,853

2,425
2,072

2,415
2,179

2,748
2,588

3,178
3,859'

3,732
4,119

4,017'
3,862

3,889
3,684

4,091
4,535

4,169
5,082'

4,421

5,611

4,888
5,172

40 Other foreigners

16,070

18,642

19,914

22,669'

22,489'

23,089'

23,613

23,955

24,392'

25,941

24,326

Banks' own liabilities
42
Demand deposits
43 Time deposits
44
Other 2

12,964
4,242
8,353
368

14,891
5,087
8,755
1,048

16,065
5,356
9,676
1,033

18,526'
5,347'
12,275
903

18,206'
5,127'
12,719
360

18,714'
4,872'
13,483
358

19,246
5,447
13,393
406

19,303
4,862
14,084
358

20,139'
5,373'
14,249'
517'

21,663
5,212
15,916
535

20,305
4,734
15,214
358

3,106
285

3,751
382

3,849
474

4,143'
568

4,283
575

4,376
624

4,367
654

4,652
656

4,253
635'

4,278
698

4,020
755

2,557
264

3,247
123

3,185
190

3,430'
144

3,548
159

3,450
302

3,414
300

3,659
337

3,309'
309'

3,268
312

2,981
284

11,007

10,984

10,745

10,250'

10,091

9,939'

9,459

9,424

9,975

10,542

10,435

35

Banks' custody liabilities4
U.S. Treasury bills and certificates . . .
38
Other negotiable and6 readily transferable instruments
39
Other
36
37

41

45 Banks' custody liabilities4
46
U.S. Treasury bills and certificates . . .
47
Other negotiable and readily transferable instruments 6
48 Other
49 MEMO: Negotiable time certificates of
deposit in custody for foreigners . . .

1. Excludes negotiable time certificates of deposit, which are included in "Other
negotiable and readily transferable instruments." Data for time deposits before
April 1978 represent short-term only.
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign subsidiaries consolidated in "Consolidated Report of Condition" filed with bank regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due to head office or parent foreign bank, and foreign
branches, agencies or wholly owned subsidiaries of head office or parent foreign
bank.
4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks.




5. Includes nonmarketable certificates of indebtedness and Treasury bills issued
to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."

A60
3.17

International Statistics • March 1982
Continued
1981
Area and country

1978

1979

1982

1980
June
r

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.P

1 Total

166,842

187,521

205,297

208,928'

213,796'

208,046'

216,113

198,717'

208,263'

242,228

247,363

2 Foreign countries

164,235

185,164

202,953

207,151'

211,999'

206,396'

214,287

196,736'

205,946'

239,507

245,223

85,172
513
2,550
1,946
346
9,214
17,283
826
7,739
2,402
1,271
330
870
3,121
18,225
157
14,272
254
3,440
82
330

90,952
413
2,375
1,092
398
10,433
12,935
635
7,782
2,337
1,267
557
1,259
2,005
17,954
120
24,700
266
4,070
52
302

90,897
523
4,019
497
455
12,125
9,973
670
7,572
2,441
1,344
374
1,500
1,737
16,689
242
22,680
681
6,939
68
370

86,788'
540
5,056
415
305
11,515
9,631
507
4,620
2,133
1,743
454
1,199
2,180
15,842'
194
24,428
312
5,323
41
351

85,447'
610
4,759
431'
296'
11,058
9,072
533
6,140'
1,792
1,289
448
1,340'
1,864
16,325'
356
23,236'
408
5,177
33'
280

81,547
612
4,240
239
220
9,235
7,301
492
6,374
1,751
1,228
460
1,409
1,667
16,426
208
24,194
343
4,804
34
310

85,087
590
4,852
163
198
7,637
8,410
578
6,264
2,240
1,008
486
1,189
2,102
16,983
234
26,335
366
5,010
28
414

77,662'
583
3,644
232
187
7,125
6,555
496
5,687
2,173
1,449
424
975
1,609
17,114'
252
23,985
265
4,472
42
396

82,292'
595'
3,989
306
196
7,385
7,211
428
5,656
2,351
1,642
358
954
1,508
18,937'
197
24,258
380
5,384
72
486

90,667
587
4,122
333
296
8,487
7,665
463
7,290
2,779
1,457
354
916
1,545
18,878
518
28,280
375
5,781
49
493

89,695
718
3,969
512
157
8,075
6,908
467
7,101
2,773
1,244
300
1,008
1,272
18,939
336
30,900
215
4,427
106
268

3 Europe
4
Austria
Belgium-Luxembourg
6
Denmark
7 Finland
8 France
9
Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20
Yugoslavia
21
Other Western Europe 1
22
U.S.S.R
23 Other Eastern Europe 2
24 Canada

6,969

7,379

10,031

10,267'

9,260'

10,119

8,934

10,091

10,261

11,621

25 Latin America and Caribbean
26 Argentina
27
Bahamas
28 Bermuda
29 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala 3
36 Jamaica 3
37 Mexico
38 Netherlands Antilles
39
Panama
40
Peru
41 Uruguay
42 Venezuela
43 Other Latin America and Caribbean .

31,638
1,484
6,752
428
1,125
5,974
398
1,756
13
322
416
52
3,467
308
2,967
363
231
3,821
1,760

49,686
1,582
15,255
430
1,005
11,138
468
2,617
13
425
414
76
4,185
499
4,483
383
202
4,192
2,318

53,170
2,132
16,381
670
1,216
12,766
460
3,077
6
371
367
97
4,547
413
4,718
403
254
3,170
2,123

56,155'
1,991
17,760
698
1,412
12,836'
508
2,827
7
463
399
80
5,351
497
4,615
450
322
3,548
2,393'

64,014'
1,980
24,484'
646
1,172'
14,024
566
2,784
7
392
412
122
5,532
487
5,004
363
243
3,671
2,125

63,791
2,043
24,209
700
1,282
13,239
538
2,708
7
355
399
290
6,352
692
4,619
398
266
3,621
2,073

66,363
1,979
25,168
806
1,301
14,456
491
2,527
8
394
476
92
6,021
697
4,964
380
259
3,982
2,362

59,338'
1,929
20,962'
721
1,265
10,472
538
2,759
6
403
419
147
5,717
2,771
4,599
369
249
4,044
1,969

61,266'
2,012
22,900'
624
1,283'
9,516'
505'
2,776'
7
516
444
96
6,029'
2,896'
4,904
473
266
3,971'
2,049

84,176
2,445
34,380
770
1,541
17,460
664
2,993
9
434
479
87
7,065
3,073
4,852
691
367
4,246
2,620

89,068
2,754
42,479
668
1,594
17,814
765
2,838
7
357
487
120
4,755
3,042
3,482
589
480
4,515
2,324

44 Asia
China
45
Mainland
46
Taiwan
47
Hong Kong
48
India
49
Indonesia
50
Israel
51 Japan
52
53 Philippines
54 Thailand
55 Middle-East oil-exporting countries 4 .
56 Other Asia

36,492

33,005

42,420

47,352'

48,113'

46,192

48,722

46,844

48,625

49,789

50,677

67
502
1,256
790
449
688
21,927
795
644
427
7,534
1,414

49
1,393
1,672
527
504
707
8,907
993
795
277
15,300
1,879

49
1,662
2,548
416
730
883
16,281
1,528
919
464
14,453
2,487

102
1,936
3,151
408
582
478
19,563
1,329'
1,049
422
15,203'
3,129

84
2,006'
3,451'
398'
1,309
387
19,475
1,252
992
436
14,921'
3.402'

74
2,177
3,956
455
732
482
19,757
1,319
868
371
12,396
3,607

76
2,188
4,062
491
809
412
20,747
1,434
832
392
13,293
3,985

85
2,182
4,158
433
1,269
418
20,204
1,291
691
274
12,196
3,643

200
2,140
4,090
514
985
475
19,988'
1,322
736
409
13,603
4,163'

153
2,082
3,951
385
640
587
20,557
2,013
876
534
13,160
4,852

183
2,221
3,957
511
1,230
543
20,076
2,156
757
371
13,610
5,063

57 Africa
58 Egypt
59 Morocco
60
South Africa
61 Zaire
62
Oil-exporting countries 5
63 Other Africa

2,886
404
32
168
43
1,525
715

3,239
475
33
184
110
1,635
804

5,187
485
33
288
57
3,540
783

3,907
289
41
253
181
2,388
755

3,177'
293
77
257
84
1,715
752'

3,201
355
59
296
41
1,703
746

2,561
433
43
244
76
1,040
725

2,535
343
28
282
44
1,165
672

2,381
328
37
202
56
830
929

3,195
354
32
420
134
1,395
860

3,060
569
36
251
33
1,206
965

64 Other countries
65
Australia
66
All other

1,076
838
239

904
684
220

1,247
950
297

2,683
2,398
285

1,987
1,770
217

1,792
1,568
224

1,434
1,174
260

1,423
1,212
211

1,291
1,065
226

1,419
1,223
196

1,102
852
250

67 Nonmonetary international and regional
organizations
International
Latin American regional
Other regional 6

2,607
1,485
808
314

2,356
1,238
806
313

2,344r
l,157 r
890
296

1,777
747
722
307

1,798
699
765
333

1,650
524
747
379

1,826
631
750
445

1,981
945
724
312

2,317
1,128
797
391

2,721
1,661
710
350

2,141
1,065
17
1,059

68
69
70

1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.




9,873'

6. Asian, African, Middle Eastern, and European regional organizations, except
the Bank for International Settlements, which is included in "Other Western
Europe."

Nonbank-Reported
3.18

Data

A61

B A N K S ' O W N C L A I M S O N F O R E I G N E R S Reported by Banks in the United States
Payable in U . S . Dollars
Millions of dollars, end of period
1981
Area and country

1982

1980

1979

1978

June

July

Aug.

Sept.

Oct.

Nov.

Jan.P

Dec.

1 Total

115,545

133,943

172,592

196,947r

196,885 r

198,903'

210,104'

196,637'

208,059

248,850

253,315

2 Foreign countries

115,488

133,906

172,514

196,900'

196,825'

198,852'

210,049'

196,593'

208,019

248,794

253,263

24,201
140
1,200
254
305
3,735
845
164
1,523
677
299
171
1,120
537
1,283
300
10,147
363
122
360
657

28,388
284
1,339
147
202
3,322
1,179
154
1,631
514
276
330
1,051
542
1,165
149
13,795
611
175
268
1,254

32,108
236
1,621
127
460
2,958
948
256
3,364
575
227
331
993
783
1,446
145
14,917
853
179
281
1,410

36,978'
166
2,395 '
125
365
3,209
1,099
249
3,879
667
172
353
1,769
794
1,690
147
16,675
988
182
302
1,752

35,198
157
2,087
132
343
2,861
1,259
292
3,923
497
167
389
1,726
730
1,871
137
15,454
992
160
245
1.776

35,065
185
2,373
166
352
3,074
1,144
214
3,997
581
249
350
1,801
672
1,708
159
14,832
948
200
252
1,809

40,876
436
2,625
158
346
3,351
1,267
287
4,016
569
300
328
1,711
930
1,948
144
19,380
932
185
232
1.733

34,373'
138
1,758'
186
397
2,563
841
235
4,322
564
230
353
1,627
871
1,471
153
15,755'
954
148
203
1,605'

39,304
179
2,023
207
527
3,252
979
255
4,559
567
281
390
1,693
1,333
1,961
144
17,895
1,016
197
248
1,596

48,470
151
2,780
186
549
4,089
937
333
5,208
685
384
530
2,091
1,202
2,209
421
23,184
1,224
209
367
1,730

51,312
214
2,822
226
555
4,661
1,080
373
5,451
729
384
584
2,166
1,291
1,842
462
24,761
1,206
231
455
1,816

3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia
21
Other Western Europe 1
22
U.S.S.R
23 Other Eastern Europe 2

5,152

4,143

4,810

7,022'

7,661

6,353

7,962

7,343'

6,922

8,595

9,505

25 Latin America and Caribbean
26 Argentina
27
Bahamas
28
Bermuda
29 Brazil
30
British West Indies
31
Chile
32 Colombia
33 Cuba
34
Ecuador
35 Guatemala 3
36 Jamaica 3
37 Mexico
38 Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
Venezuela
42
43 Other Latin America and Caribbean .

57,565
2,281
21,555
184
6,251
9,694
970
1,012
0
705
94
40
5,479
273
3,098
918
52
3,474
1,485

67,993
4,389
18,918
496
7,713
9,818
1,441
1,614
4
1,025
134
47
9,099
248
6,041
652
105
4,657
1,593

92,992
5,689
29,419
218
10,496
15,663
1,951
1,752
3
1,190
137
36
12,595
821
4,974
890
137
5,438
1,583

103,374'
5,822
34,755
404
10,014
18,317'
2,070'
1,533
3
1,285
105'
38
14,066
874
6,210
818
94
5,295
1,671'

105,327'
5.742
35,577'
411
9.781
18.001
2,203
1.480
7
1,307
95
39
15,560
933
6,029
803
102
5,436
1,821

108,731'
5.702
36,709'
340
10,214
17,846
2,321
1,429
14
1,318
115
40
17.391
894
6.167
796
107
5,529
1,800

111,607'
5,771
38,057'
490
9,861
19,016'
2,514
1,487
3
1,298
119
68
17,245
869
6,669'
788
142
5,325
1,885

107,833'
5,887'
36,631'
335
10,374
17,108'
2,567
1,529
4
1.282
127'
40'
17,148
928
5,791
796'
166
5,273'
1,848'

112,913
6,044
39,432
255
10,823
17,745
2,649
1,598
3
1,328
123
45
18,500
951
5,645
705
148
5,129
1,790

137,013
7,541
42,802
326
16,882
21,350
3,673
2,027
3
1,531
124
62
22,367
1,056
6.743
1,213
157
7,082
2,075

141,439
8,613
43,782
375
17,314
21,064
4,150
2,113
7
1,696
118
177
22,952
941
6,741
1,435
256
7,223
2,481

44 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries 4 .
Other Asia

25,362

30,730

39,078

46,027

44,999

44,934

45,537'

43.190'

44,963

49,793

45,728

4
1,499
1,479
54
143
888
12,646
2,282
680
758
3,125
1,804

35
1,821
1,804
92
131
990
16,911
3,793
737
933
1,548
1,934

195
2,469
2,247
142
245
1,172
21,361
5,697
989
876
1,432
2,252

205
2,471
3,328
132
257
1,309
25,995
6,678
1,192
663'
1,615'
2,181

188
2,380
3,208
106
271
1.178
25.954
6.426
1,194
546
1,288
2,261

186
2,543
3,347
135
254
1,108
25,352
6,479
1,402
527
1,473
2,129

153
2,476
3,716
144
363
1,086
25,273'
6,486
1,530
549
1,394
2,367

148
2,349'
3,784'
176
267
1,200
22,790'
6,567'
1,448
559
1,381
2,520

199
2,262
3,921
179
329
1,325
23,785
6,733
1,621
546
1,569
2,495

107
2,461
4,113
132
346
1,586
26,771
7,291
1,818
564
1,597
3,008

85
2,630
4,096
148
315
1,318
24,051
6,520
1,764
526
1,611
2,663

2,221
107
82
860
164
452
556

1,797
114
103
445
144
391
600

2,377
151
223
370
94
805
734

2,420'
155
71
658
98
672
767'

2,518
128
88
688
100
726
789

2,715
148
204
787
87
713
777

2,957
145
273
917
102
689
831

2,796'
147
269
848'
102'
534
896

2,803
137
243
904
100
531
888

3,546
238
284
1,011
112
657
1,244

3,817
259
273
948
98
773
1,467

988
877
111

855
673
182

1,150
859
290

1,078
939
139

1,121
988
133

1,054
952
102

1,110
959
152

1,059
962
97

1,114
989
125

1,379
1,197
182

1,462
1,279
183

56

36

78

48

60

51

55

43

40

56

52

24 Canada

45
46
47
48
49
50
51
52
53
54
55
56

57 Africa
58 Egypt
59 Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries 5
63 Other
64 Other countries
65
Australia
All other
66
67 Nonmonetary international and regional
organizations 6

1. Includes the Bank for International Settlements. Beginning April 1978. also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in "Other
Western Europe."
NOTE. Data for period prior to April 1978 include claims of banks' domestic
customers on foreigners.

A62
3.19

International Statistics • March 1982
B A N K S ' OWN A N D D O M E S T I C CUSTOMERS' CLAIMS O N F O R E I G N E R S Reported by Banks in the
United States
Payable in U.S. Dollars
Millions of dollars, end of period
1982

1981
Type of claim

1978

1979

1980
June

July

Aug.

Sept.

196,885'
24,026'
80,698'
54,200'
11,278
42,922'
37,961'

198,903'
24,414
80,398'
55,364
11,678
43,686
38,727

210,104'
25,021
88,214
58,487'
12,685
45,803'
38,382

Nov.

Oct.

Dec.

1 Total

126,787

154,030

198,698

230,776'

2
3
4
5
6
7
8

115,545
10,346
41,605
40,483
5,428
35,054
23,111

133,943
15,937
47,428
40,927
6,274
34,654
29,650

172,592
20,882
65,084
50,168
8,254
41,914
36,459

196,947'
22,909'
79,827'
55,165'
11,163'
44,002'
39,046'

11,243
480

20,088
955

26,106
885

33,829'
763'

35,600'
992

37,264
1,355

5,396

13,100

15,574

23,559'

25,193'

25,786

5,366

6,032

9,648

9,507

9,415'

10,123

15,030

18,021

22,714

27,457

27,640'

29,636

13,648'

22,241'

Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices 1
Unaffiliated foreign banks
Deposits
Other
All other foreigners

9 Claims of banks' domestic customers 2 ..
11 Negotiable and readily transferable

Jan.P

286,114

245,705'
196,637'
25,436'
78,855
54,957'
12,407'
42,550'
37,389'

208,059
26,391
84,881
57,648
12,828
44,820
39,139

248,850
30,912
96,415
72,576
21,041
51,535
48,948

253,315
32,346
95,096
75,505
23,002
52,503
50,368

12 Outstanding collections and other
13 MEMO: Customer liability on

Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 5 ,

24,141

33,102

34,240'

36,093'

39,758'

41,367

38,699

n.a.

4. Data for March 1978 and for period before that are outstanding collections
only.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of deposit denominated in U.S. dollars issued by banks abroad. For description of changes in data reported by nonbanks, see July 1979 BULLETIN, p. 550.

1. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due from head office or parent foreign bank, and foreign
branches, agencies, or wholly owned subsidiaries of head office or parent foreign
bank.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the account of their
domestic customers.
3. Principally negotiable time certificates of deposit and bankers acceptances.

3.20

37,410'

NOTE. Beginning April 1978, data for banks' own claims are given on a monthly
basis, but the data for claims of banks' own domestic customers are available on
a quarterly basis only.

B A N K S ' O W N CLAIMS O N U N A F F I L I A T E D F O R E I G N E R S Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1978

1979

1980

Dec.

Dec.

Dec.

1981

Maturity ; by borrower and area
Mar.

June

Sept

Dec.P

1

73,635

86,181

106,748'

107,276

116,886'

121,561'

151,955

By borrower
2 Maturity of 1 year or less1
3 Foreign public borrowers
4
All other foreigners
5 Maturity of over 1 year1
6
Foreign public borrowers
7
All other foreigners

58,345
4,633
53,712
15,289
5,395
9,894

65,152
7,233
57,919
21,030
8,371
12,659

82,555'
9,974'
72,581'
24,193
10,152
14,041

83,471
10,734
72,737
23,805
10,250
13,555

91,447'
11,713'
79,734'
25,439'
11,022'
14,416'

94,053'
12,950'
81,104'
27,508'
12,367'
15,141'

114,059
15,071
98,988
37,897
15,607
22,290

15,169
2,670
20,895
17,545
1,4%
569

15,235
1,777
24,928
21,641
1,077
493

18,715'
2,723
32,034
26,686'
1,757
640

18,681
2,743
31,329
28,363
1,624
730

20,815'
3,291'
33,292'
31,485'
1,768'
797'

22,727'
3,799
35,207'
29,222'
2,324
774

27,145
4,273
47,576
31,653
2,474
938

3,142
1,426
8,464
1,407
637
214

4,160
1,317
12,814
1,911
655
173

5,118
1,448
15,075
1,865
507
179

5,585
1,180
14,841
1,530
531
138

6,283'
1,317'
15,448
1,680
551
159

6,405'
1,347
17,471'
1,565'
548
172

8,080
1,729
25,187
1,749
893
260

8
9
10
11
V.
13

By area
Maturity of 1 year or less1
Europe
Canada
Latin America and Caribbean

Africa
All other 2
Maturity of over 1 year1
14 Europe
15 Canada
16 Latin America and Caribbean
17
18 Africa
19 All other 2
1. Remaining time to maturity.
2. Includes nonmonetary international and regional organizations.




Bank-Reported, Data
3.21

A63

CLAIMS O N F O R E I G N C O U N T R I E S Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks'
Billions of dollars, end of period
1979
Area or country

1977

1980

1981

19782
Sept.

Dec.

Mar.

June

Sept.

Dec.

Mar.

June

Sept.P

240.0

266.2

294.0

303.8

308.5

328.7

339.1

351.9

370.9

382.2

398.2

116.4
8.4
11.0
9.6
6.5
3.5
1.9
3.6
46.5
6.4
18.8

124.7
9.0
12.2
11.3
6.7
4.4
2.1
5.3
47.3
6.0
20.6

135.7
10.7
12.0
12.8
6.1
4.7
2.3
5.0
53.7
6.0
22.3

138.4
11.1
11.7
12.2
6.4
4.8
2.4
4.7
56.4
6.3
22.4

141.2
10.8
12.0
11.4
6.2
4.3
2.4
4.3
57.6
6.9
25.4

154.2
13.1
14.1
12.7
6.9
4.5
2.7
3.3
64.4
7.2
25.5

158.8
13.6
13.9
12.9
7.2
4.4
2.8
3.4
66.7
7.7
26.1

162.1
13.0
14.1
12.1
8.2
4.4
2.9
5.0
67.4
8.4
26.5

168.4
13.5
14.5
13.2
7.7
4.6
3.2
5.1
68.2
8.8
29.6

168.3
14.2
14.7
12.1
8.4
4.1
3.1
5.2
66.7
10.8
28.9

171.8
14.0
16.0
12.7
8.6
3.7
3.4
5.1
68.6
11.5
28.2

13 Other developed 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

18.6
1.3
1.6
1.2
2.2
1.9
.6
3.6
1.5
.9
2.4
1.4

19.4
1.7
2.0
1.2
2.3
2.1
.6
3.5
1.5
1.3
2.0
1.4

19.7
2.0
2.0
1.2
2.3
2.3
.7
3.3
1.4
1.5
1.7
1.3

19.9
2.0
2.2
1.2
2.4
2.3
.7
3.5
1.4
1.4
1.3
1.3

18.8
1.7
2.1
1.1
2.4
2.4
.6
3.5
1.4
1.4
1.1
1.2

20.3
1.8
2.2
1.3
2.5
2.4
.6
3.9
1.4
1.6
1.5
1.2

20.6
1.8
2.2
1.2
2.6
2.4
.7
4.2
1.3
1.7
1.2
1.2

21.7
1.9
2.3
1.4
2.8
2.6
.6
4.4
1.5
1.7
1.1
1.3

23.5
1.8
2.4
1.4
2.7
2.8
.6
5.6
1.5
1.8
1.5
1.4

24.8
2.1
2.3
1.3
3.0
2.8
.8
5.7
1.4
1.8
1.9
1.7

26.3
2.1
2.5
1.4
2.9
3.0
1.0
5.8
1.5
1.9
2.5
1.9

25 OPEC countries 3
26 Ecuador
27 Venezuela
28
Indonesia
29
Middle East countries
30
African countries

17.6
1.1
5.5
2.2
6.9
1.9

22.7
1.6
7.2
2.0
9.5
2.5

23.4
1.6
7.9
1.9
9.2
2.8

22.9
1.7
8.7
1.9
8.0
2.6

21.8
1.8
7.9
1.9
7.8
2.5

20.9
1.8
7.9
1.9
6.9
2.5

21.4
1.9
8.5
1.9
6.7
2.4

22.7
2.1
9.1
1.8
6.9
2.8

21.7
2.0
8.3
2.1
6.7
2.6

22.2
2.0
8.7
2.1
6.8
2.6

23.4
2.1
9.2
2.5
7.1
2.6

31 Non-OPEC developing countries

48.7

52.6

58.9

62.9

63.7

67.6

72.8

77.2

81.8

84.6

89.8

2.9
12.7
.9
1.3
11.9
1.9
2.6

3.0
14.9
1.6
1.4
10.8
1.7
3.6

4.1
15.1
2.2
1.7
11.4
1.4
3.6

5.0
15.2
2.5
2.2
12.0
1.5
3.7

5.5
15.0
2.5
2.1
12.1
1.3
3.6

5.6
15.3
2.7
2.2
13.6
1.4
3.6

7.6
15.8
3.2
2.4
14.4
1.5
3.9

7.9
16.2
3.7
2.6
15.9
1.8
3.9

9.4
16.8
4.0
2.4
17.0
1.8
4.7

8.5
17.3
4.7
2.5
18.2
1.7
3.8

9.2
17.6
5.5
2.5
20.0
1.8
4.2

1 Total
2 G-10 countries and Switzerland
Belgium-Luxembourg
3
4
France
5
Germany
6
Italy
Netherlands
7
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12 Japan

32
33
34
35
36
37
38

Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America

39
40
41
42
43
44
45
46
47

Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia

.0
3.1
.3
.9
3.9
.7
2.5
1.1
.4

.0
2.9
.2
1.0
3.9
.6
2.8
1.2
.2

.1
3.5
.2
1.0
5.3
.7
3.7
1.6
.4

.1
3.4
.2
1.3
5.4
.9
4.2
1.5
.5

.1
3.6
.2
.9
6.4
.8
4.4
1.4
.5

.1
3.8
.2
1.2
7.1
.9
4.6
1.5
.5

.1
4.1
.2
1.1
7.3
.9
4.8
1.5
.5

.2
4.2
.3
1.5
7.1
1.0
5.1
1.6
.6

.2
4.4
.3
1.3
7.7
1.0
4.8
1.6
.5

.2
4.6
.3
1.8
8.7
1.4
5.1
1.5
.7

.2
5.1
.3
1.5
8.5
1.4
5.6
1.4
.8

48
49
50
51

Africa
Egypt
Morocco
Zaire
Other Africa 4

.3
.5
.3
.7

.4
.6
.2
1.4

.6
.5
.2
1.6

.6
.6
.2
1.7

.7
.5
.2
1.7

.8
.5
.2
1.9

.6
.6
.2
2.1

.8
.7
.2
2.1

.8
.6
.2
2.2

.7
.5
.2
2.1

1.0
.7
.2
2.2

52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other

6.3
1.6
1.1
3.7

6.9
1.3
1.5
4.1

7.2
.9
1.8
4.6

7.3
.7
1.8
4.8

7.3
.6
1.9
4.9

7.2
.5
2.1
4.5

7.3
.5
2.1
4.7

7.4
.4
2.3
4.6

7.7
.4
2.4
4.8

7.7
.5
2.5
4.8

7.7
.4
2.5
4.8

26.1
9.9
.6
3.7
.7
3.1
.2
3.7
3.7
.5

31.0
10.4
.7
7.4
.8
3.0
.1
4.2
3.9
.5

38.6
13.0
.7
9.5
1.1
3.4
.2
5.5
4.9
.4

40.4
13.7
.8
9.4
1.2
4.3
.2
6.0
4.5
.4

42.6
13.9
.6
11.3
.9
4.9
.2
5.7
4.7
.4

44.3
13.7
.6
9.8
1.2
5.6
.2
6.9
5.9
.4

44.6
13.2
.6
10.1
1.3
5.6
.2
7.5
5.6
.4

47.0
13.7
.6
10.6
2.1
5.4
.2
8.1
5.9
.3

53.1
15.2
.7
11.7
2.3
6.5
.2
8.4
7.3
.9

59.0
17.7
.7
12.4
2.4
6.9
.2
10.3
8.1
.3

60.9
20.8
.9
11.7
2.2
6.7
.2
10.3
8.0
.1

5.3

9.1

10.6

11.7

13.1

14.3

13.7

14.0

14.9

15.7

18.2

56 Offshore banking centers
57
Bahamas
58 Bermuda
59 Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 5
62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
66 Miscellaneous and unallocated 7

1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.13 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.17 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches). However,
see also footnote 2.
2. Beginning with data for June 1978, the claims of the U.S. offices
in this tame include only banks' own claims payable in dollars. For earlier dates




the claims of the U.S. offices also include customer claims and foreign currency
claims (amounting in June 1978 to $10 billion).
3. In addition to the Organization of Petroleum Exporting Countries shown
individually, this group includes other members of OPEC (Algeria. Gabon. Iran,
Iraa. Kuwait. Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as
well as Bahrain and Oman (not formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.

A64
3.22

International Statistics • March 1982
LIABILITIES T O U N A F F I L I A T E D F O R E I G N E R S Reported by Nonbanking Business Enterprises in the
United States'
Millions of dollars, end of period
1980
Type, and area or country

1978

1979

1981

1980
Sept.

Dec.

Mar.

June

Sept.?

1 Total

14,956

17,170

21,644

18,778

21,644

21,681

21,163'

21,178

2 Payable in dollars
3 Payable in foreign currencies 2

11,527
3,429

14,095
3.075

17,935
3,709

15,441
3,337

17,935
3,709

18,156
3,525

17,915'
3,247'

18,186
2,992

By type
4 Financial liabilities
5
Payable in dollars
b
Payable in foreign currencies

6,368
3,853
2,515

7,477
5,207
2,270

11,122
8,350
2,772

8,441
5,954
2,487

11.122
8,350
2,772

11,492
8,860
2,633

11,386
9,053
2,333

10,921
8,739
2,182

7 Commercial liabilities
8 Trade payables
9
Advance receipts and other liabilities

8,588
4,001
4,587

9,693
4,421
5,272

10.521
4,708
5,814

10,337
4,377
5,960

10,521
4,708
5,814

10,188
4,781
5,407

9,777'
4,377'
5,401'

10,257
4,268
5,989

7,674
914

8,888
805

9,585
936

9,487
850

9,585
936

9,296
892

8,862'
915'

9,447
810

3,971
293
173
366
391
248
2,167

4,655
345
175
497
829
170
2,460

6,314
484
327
582
663
354
3,769

5,321
432
360
557
781
224
2,836

6,314
484
327
582
663
354
3,769

6,011
553
324
498
544
315
3,665

5,926
527
362
477
700
321
3,419

6,073
440
607
430
583
335
3,526

10
11

12
13
14
15
lb
17
18

Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

19

Canada

20
21
22
23
24
25
2b

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

27
28
29

Asia
Japan
Middle East oil-exporting countries 3

30
31

Africa
Oil-exporting countries 4

32
33
34
35
36
37
38
39

All other

247

532

958

642

958

1,090

978

977

1.357
478
4
10
194
102
49

1.483
375
81
18
514
121
72

3,103
964
1
23
1,452
99
81

1.734
407
1
20
708
108
74

3,103
964
1
23
1,452
99
81

3,483
1,217
1
19
1,458
97
85

3,592
1,272
1
20
1,534
98
91

3,032
1,019
0
20
1,296
107
90

784
717
32

799
726
31

723
644
38

712
618
37

723
644
38

880
766
51

861
741
29

805
687
30

5
2

4
1

11
1

11
1

11
1

6
1

5
0

3
1

5

4

15

21

15

23

24

29

3,047
97
321
523
246
302
824

3.636
137
467
545
227
310
1,077

4,197
90
582
679
219
493
1,017

4,074
109
501
686
276
452
1,047

4,197
90
582
679
219
493
1,017

3,814
83
563
639
246
385
880

5

Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

3,892'
72
558'
617'
225
375
950'

3,912
78
575
579
235
563
888

40

Canada

667

868

806

591

806

749

652'

742

41
42
43
44
45
46
47

Latin America
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

997
25
97
74
53
106
303

1.323
69
32
203
21
257
301

1,244
8
73
111
35
326
307

1,361
8
114
156
12
324
293

1,244
8
73
111
35
326
307

1,287
1
111
84
16
421
253

1,149'
4
72
54
34
319'
290

1,064
3
113
61
11
345
249

48
49
50

Asia
Japan
Middle East oil-exporting countries 3

2,931
448
1,523

2,905
494
1,017

3,005
802
894

2,909
502
944

3,005
802
894

3,071
810
955

2,787'
867
837'

3,197
111
880

51
52

Africa
Oil-exporting countries 4

743
312

728
384

814
514

1,006
633

814
514

828
519

676'
392

751
351

203

233

456

396

456

440

622

593

53

All other

5

1. For a description of the changes in the International Statistics tables, see July
1979 BULLETIN, p. 550.
2. Before December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.




3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.

Nonbank-Reported Data
3.23

CLAIMS ON U N A F F I L I A T E D F O R E I G N E R S
United States 1
Millions of dollars, end of period

Reported by Nonbanking Business Enterprises in the

1980
Type, and area or country

A65

1981

1980

1979

1978

Sept.

Dec.

Mar.

June

Sept./"

1 Total

28,004

31,286

34,489

32,048

34,489

37,661

35,258'

33,809

2 Payable in dollars
3 Payable in foreign currencies 2

25,001
3,003

28,094
3,193

31,563
2,926

28,712
3,336

31,563
2,926

34,663
2,999

32,334 r
2,924 r

30,828
2,981

By type
4 Financial claims
5
Deposits
Payable in dollars
6
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies

16,644
11,201
10,133
1,068
5,443
3,874
1,569

18,431
12,797
11,881
916
5,634
3,808
1,826

19,812
13,978
13,203
775
5,834
4,152
1,683

18,633
12,574
11,361
1,213
6,059
4,404
1,655

19,812
13,978
13,203
775
5,834
4,152
1,683

22,203
16,474
15,679
795
5,729
4,082
1,646

20,133
14,487
13,761
725
5,646
3,992
1,655

18,949
13,239
12,508
732
5,710
4,009
1,701

11 Commercial claims
12 Trade receivables
13 Advance payments and other claims

11,360
10,802
559

12,855
12,161
694

14,677
13,957
720

13,415
12,714
702

14,677
13,957
720

15,458
14,657
801

15,125'
14,295'
830

14,860
14,001
859

14
15

10,994
366

12,405
450

14,208
468

12,947
469

14,208
468

14,901
557

14,581'
544'

14,311
549

5,225
48
178
510
103
98
4,031

6,163
32
177
409
53
73
5,107

6,094
195
334
230
32
59
4,967

5,692
17
409
168
30
41
4,646

6,094
195
334
230
32
59
4,967

6,098
170
411
213
42
90
4,900

5,212
174
377
139
34
96
4,046

4,628
26
348
320
48
67
3,476

16
17
18
19
20
21
22

Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

23

Canada

4,549

4,984

5,057

4,948

5,057

6,611

6,168

6,018

24
25
26
27
28
29
30

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

5,714
3,001
80
151
1,291
162
157

6,282
2,757
30
163
2,007
157
143

7,682
3,424
135
96
2,681
208
137

6,812
2,845
65
116
2,342
192
128

7,682
3,424
135
96
2,681
208
137

8,552
3,947
13
22
3,398
168
131

7,882
3,231
33
20
3,396
162
143

7,313
3,128
15
66
3,010
273
143

31
32
33

Asia
Japan
Middle East oil-exporting countries 3

920
305
18

706
199
16

710
177
20

853
331
20

710
177
20

691
191
17

618
107
19

653
120
29

34
35

Africa
Oil-exporting countries 4

181
10

253
49

238
26

260
29

238
26

214
27

216
39

222
41

36

All other 5

55

44

32

68

32

36

37

116

3,983
144
609
399
267
198
824

4,909
202
727
589
298
272
901

5,511
233
1,129
591
318
351
932

4,709
230
710
571
289
339
994

5,511
233
1,129
591
318
351
932

5,822
277
918
597
347
461
1,187

37
38
39
40
41
42
43

Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

5,467'
235
783'
572'
308
474
1,067

5,403
219
762
579
307
402
1,025

44

Canada

1,094

849

899

934

899

1,037

991'

993

45
46
47
48
49
50
51

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

2,546
109
215
628
9
505
291

2,853
21
197
645
16
698
343

3,791
21
148
861
34
1,090
407

3,389
53
81
712
17
992
388

3,791
21
148
861
34
1,090
407

3,832
15
170
799
15
1,051
436

3,793'
29
192
823
34
1,113'
420'

3,684
18
241
708
13
969
438

3,112
1,006
716

3,450
1,175
766

3,507
1.045
821

3,443
1,135
837

3,507
1,045
821

3,763
1,294
925

3,767'
1,218'
934'

3,628
1,097
823

52
53
54

Japan
Middle East oil-exporting countries 3

55
56

Africa
Oil-exporting countries 4

447
136

554
133

651
151

669
135

651
151

678
143

703'
137

703
149

57

All other 5

178

240

318

272

318

327

404'

449

1. For a description of the changes in the International Statistics tables, see July
1979 BULLETIN, p. 550.
2. Prior to December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.




3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.

A66
3.24

International Statistics • March 1982
F O R E I G N T R A N S A C T I O N S IN S E C U R I T I E S
Millions of dollars
1982

Transactions, and area or country

1979

1980

1981

1982

1981
Jan.Jan.P

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.?

U.S corporate securities
STOCKS

1 Foreign purchases
2 Foreign sales
3 Net purchases, or sales ( — ) . . . .
4 Foreign countries
5
6
7
8
9
10
11
12
13
14
15
16
17

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean .
Middle East 1
Other Asia
Africa
Other countries
Nonmonetary international and
regional organizations
BONDS

22,783
21,104

40,290'
34,870'

1,679

5,419

r

5,717

1,662

5,401'

5,692

237
137
-215
-71
-519
964
552
-19
688
211
-14
7

3,108'
490
169'
-328
308
2,523
887
148
1,206
16
-1
38

3,592
889
-28
37
269
2,210
750
-30
1,140
279
7
-46

231

11
3
40
168
-45
-13
51
40
0
-1

18

24

5

8,888'
7,648'

15,425
9,964

17,208
12,180

946
778

17

40,558
34,842

4,419'
3,424'

3,458'
3,258'

268

995'

200'

263

990'

192'

537'
48'
13
54'
0
372'
104
126
33
187
4
-1

121'
49 r
-28
-41
-19
148'
77
-126
105
37
-1
-21

2,016
1,748

~2

5

3,152
3,206

2,847
2,322

2,839
2,792

-54

525

-49

531

74
29
-28
-28
1
85
-39
-51
-36
20
0
-17

8

1,894
820

2,689
2,494

2,940
2,740

47

195

200

268

53

207

199

263

38
10
-48
-3
-68
132
44
-81
497
29
0
4

46
21
6
13
-97
86
-47
7
164
-117
0
-2

109
-7
-4
28
0
96
7
54
46
-7
1
-3

176
5
-6
-73
75
171
8
-36
-24
74
0
1

231
-2
3
40
168
-45
-13
51
40
0
-1

-5

-5

-6

-12

0

5

1,171
894

1,306
1,051

1,166
1,203

1,099
1,303

1,192
1,038

946
778

2,016
1,748

11

2

18 Foreign purchases

1,939'
1,450'

19 Foreign sales

1,240'

5,461

5,028

168

489'

1,074

277

255

-36

-204

153

168

20 Net purchases, or sales ( - )

1,376

5,526

4,961

154

473

1,067

278

243

-27

-212

157

154

21 Foreign countries

671
56
59
-202
-118
814
80
109
424
88
1
1

1,576
129
212'
-65
54
1,257
135
185
3,499
117
5
10

1,335
11
850
60
98
178
-6
132
3,465
44
-1
-7

144
15
83
2
19
3
29
17
-89
53
0
0

179
10
151
0
20
4
-6
12
359
-71
0
1

122
-5
68
0
22
11
23
21
853
49
0
0

176
-9
105
-2
22
45
2
-5
81
24
0
0

5
4
64
-2
-23
-53
-12
7
252
-9
0

-106
5
43
3
7
-164
-35
-12
84
43
0
0

-112
4
67
9
10
-174
-29
4
-72
-1

139
7
52
3
-3
55
-2
22
-62
60
0
-2

144
15
83
2
19
3
29
17
-89
53
0
0

-136'

-65

66

14

7

-1

12

-10

9

191
794
603

-30
588
617

-70
625
695

-154
1,553
1,706

-1,946
2,296
4,242

22
23
24
25
26
27
28
29
30
31
32
33
34

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean .
Middle East 1
Other Asia
Africa
Other countries
Nonmonetary
international and
regional organizations

16'

- 1

- 1

-2

-4

14

Foreign securities
35 Stocks, net purchases, or sales ( - ) . .
36
Foreign purchases
37
Foreign sales

-817
4,617
5,434

-2,142'
7,888'
10,029'

38 Bonds, net purchases, or sales ( - ) . .
39
Foreign purchases
40
Foreign sales

-3,999'
12,662
16,660'

41 Net purchases, or sales ( - ) , of stocks
and bonds
42
43
44
45
46
47
48
49

Foreign countries
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
Nonmonetary international and
regional organizations

2

9,198
9,196

159
521
362

-1,013
17,073
18,086

-5,218
17,823
23,041

1,222
1,243

-4,816'

-3,155'

-5,215

-4,066'
-1,785'
-2,601
343
15
-63
25

-4,031'
-1,959
80
-1,147
24
78

-4,459
637
-3,745
170
287
53
92

— 750

876

756

-1,108'

1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).




-21

-128'
891
1,019'
-483'
1,510'
1,993'

106'
891
785'

51
835
784

-418'
1,768

-32
1,078
1,110

2,186'

-611'

110
143
-80
67

- 2

-15
-4
28

-611'

-50'
-507
-13'
-109'
- 6

74'

-622'
145'
-858
-24
140'
- 2

-23
311

62
-55
-74
62
131
-3

1

-260'
1,023
1,282'
-68'

-183

-2,015

-82'

-356
-45
-250
50
-113

-1,427
-453
-879

74'
-326

1

177
- 6

-3
14

1
0

173

- 6

-148

1

57
-588

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.

Investment Transactions and Discount Rates
3.25

M A R K E T A B L E U.S. T R E A S U R Y B O N D S A N D NOTES

A67

Foreign Holdings and Transactions

Millions of dollars
1982
Country or area

1979

1980

1981

1981
Jan.Jan.

July

June

Sept.

Aug.

Nov.

Oct.

Dec.

Jan.?

Holdings (end of period) 1
1 Estimated total2

51,484

57,549

70,343

64,232'

64,638'

66,437'

67,008'

68,489'

70,512'

70,343

71,629

46,055

52,961

64,672

59,289

59,658

61,579

62,369

64,067

66,035

64,672

65,992

24,964
60
14,056
1,466
647
1,868
6,376
491
0
232

24,468
77
12,327
1,884
595
1,485
7,323
777
0
449

23,976
543
11,861
1,955
643
846
6,709
1,419
0
520

25,000
173
12,585
1,781
582
1,600
6,976
1,304
0
484

24,573
163
13,226
1,756
606
763
6,709
1,350
0
501

25,090
370
13,524
1,760
623
848
6,630
1,334
0
514

24,334
372
12,830
1,756
646
876
6,469
1,385
0
528

24,531
384
13,029
1,784
661
861
6,446
1,367
0
547

24,952
329
13,226
1,889
645
833
6,693
1,337
0
508

23,976
543
11,861
1,955
643
846
6,709
1,419
0
520

24,373
614
11,901
1,998
644
904
6,800
1,514
-2
540

466
103

999
292

736
286

666
287

724
287

818
313

854
294

788
289

761
306

736
286

721
286

200
163
19,805
11,175
591
-3

285
421
26,112
9,479
919
14

319
131
38,806
10,780
631
2

217
162
31,997
9,778
1,139
3

260
177
32,716
9,786
1,139
6

321
184
34,008
9,890
1,140
8

313
246
35,506
10,102
1,140
8

317
182
37,052
10,094
1,141
8

289
165
38,774
10,732
1,037
3

319
131
38,806
10,780
631
2

321
113
39,836
10,844
519
3

21 Nonmonetary international and regional organizations

5,429

4,588

5,671

4,943

4,980'

4,858'

4,639'

4,422'

4,477

5,671

5,637

22
23

5,388
37

4,548
36

5,637
1

4,942
1

4,977'
1

4,856'
1

4,636'
1

4,419'
1

4,476
1

5,670
1

5,636
1

2 Foreign countries

2

3 Europe 2
4
Belgium-Luxembourg
Germany 2
5
6
Netherlands
Sweden
7
8
Switzerland2
9
United Kingdom
10 Other Western Europe
11 Eastern Europe
12 Canada
13 Latin America and Caribbean
14 Venezuela
15 Other Latin America and
Caribbean
16 Netherlands Antilles
17 Asia
18 Japan
19 Africa
20 All other

International
Latin American regional

Transactions (net purchases, or sales ( - ) during period)
24 Total

2

25 Foreign countries 2
26
Official institutions
27 Other foreign 2
28 Nonmonetary international and regional organizations
MEMO: Oil-exporting countries
29 Middle East 3
30 Africa 4

6,537

6,066

12,794

1,286

1,266

405

1,799

571

1,480

2,024

-169

1,286

6,238
1,697
4,543

6,906
3,865
3,040

11,710
11,833
-124

1,320
841
478

1,121
980
141

369
798
-429

1,920
1,532
388

791
1,376
-585

1,698
1,633
65

1,968
2,123
-165

-1,363
-787
-576

1,320
841
478

300

-843

1,085

-33

145

36

-120

-220

-217

56

1,194

-33

-1,014
-100

7,672
327

11,156
-289

1,019
-112

565

659

1,204

1,354

1,442

0

0

0

0

0

1,250
-102

17
-407

1,019
-112

1. Estimated official and private holdings of marketable U.S. Treasury securities
with an original maturity of more than 1 year. Data are based on a benchmark
survey of holdings as of Jan. 31,1971, and monthly transactions reports. Excludes
nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.

3.26

2. Beginning December 1978, includes U.S. Treasury notes publicly issued to
private foreign residents denominated in foreign currencies.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.

DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on Feb. 28, 1982

Rate on Feb. 28, 1982
Country

Country
Percent
Argentina
Austria ..
Belgium..
Brazil
Canada ..
Denmark.

187.55
6.75
14.0
49.0
14.83

11.00

Month
effective
Jan.
Mar.
Jan.
Mar.
Feb.
Oct.

1982
1980
1982
1981
1982
1980

Percent
France 1
Germany, Fed. Rep. of
Italy
Japan
Netherlands
Norway

1. As from February 1981, the rate at which the Bank of France discounts
Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either




Rate on Feb. 28, 1982
Country

17.5
7.5
19.0
5.5
8.5
9.0

Month
effective
Oct.
May
Mar.
Dec.
Jan.
Nov.

1981
1980
1981
1981
1982
1979

Percent
Sweden
Switzerland
United Kingdom'
Venezuela

11.0
6.0

14.0

discounts or makes advances against eligible commercial paper and/or
government
commercial
banks
or
brokers.
For
countries
with
more than one rate applicable to such discounts or advances, the rate
shown is the one at which it is understood the central bank transacts the
largest proportion of its credit operations.

A68
3.27

International Statistics • March 1982
F O R E I G N S H O R T - T E R M INTEREST R A T E S
Percent per annum, averages of daily figures
1981
Country, or type

1979

1980

Aug.
1
2
3
4
5
6
7
8
9
10

1982

1981
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Eurodollars
United Kingdom
Canada
Germany
Switzerland

11.96
13.60
11.91
6.64
2.04

14.00
16.59
13.12
9.45
5.79

16.79
13.86
18.34
12.05
9.15

18.79
14.02
21.84
12.87
9.05

17.80
14.60
20.42
12.48
10.56

16.34
16.27
18.84
11.72
10.85

13.33
15.03
16.53
11.05
9.88

13.24
15.31
15.97
10.72
9.76

14.29
15.14
15.01
10.43
8.53

15.75
14.47
15.25
10.22
8.29

Netherlands
France
Italy
Belgium
Japan

9.33
9.44
11.85
10.48
6.10

10.60
12.18
17.50
14.06
11.45

11.52
15.28
19.98
15.28
7.58

13.54
17.40
20.94
16.00
7.22

12.%
17.65
21.07
16.00
7.26

12.57
16.47
21.00
15.83
7.13

11.70
15.35
21.12
15.28
7.15

11.03
15.30
21.24
15.48
6.75

10.49
15.07
21.38
15.09
6.41

10.06
14.58
21.34
14.89
6.38

NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.

3.28

FOREIGN EXCHANGE RATES
Currency units per dollar
1981
Country/currency

1979

1980

Sept.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40

Argentina/peso
Australia/dollar 1
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
Chile/peso
China, P.R./yuan
Colombia/peso
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Indonesia/rupiah
Iran/rial
Ireland/pound 1
Israel/shekel
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar 1
Norway/krone
Peru/sol
Philippines/peso
Portugal/escudo
Singapore/dollar
South Africa/rand/ 1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Thailand/baht
United Kingdom/pound 1
Venzuela/bolivar

1982

1981
Oct.

Nov.

Dec.

Jan.

Feb.

n.a.
111.77
13.387
29.342
n.a.
1.1603
n.a.
n.a.
n.a.
5.2622
3.8886
4.2566
1.8342
n.a.
n.a.
8.1555
n.a.
n.a.
204.65
n.a.
831.10
219.02
2.1721
22.816
2.0072
102.23
5.0650
n.a.
n.a.
48.953
n.a.
118.72
n.a.
67.158
15.570
4.2892
1.6643
n.a.
212.24
n.a.

n.a.
111.57
12.945
29.237
n.a.
1.1693
n.a.
n.a.
n.a.
5.6345
3.7206
4.2250
1.8175
n.a.
n.a.
7.8866
n.a.
n.a.
213.53
n.a.
856.20
226.63
2.1767
22.968
1.9875
98.65
4.9381
n.a.
n.a.
50.082
n.a.
122.72
n.a.
71.758
16.167
4.2309
1.6772
n.a.
227.74
n.a.

n.a.
114.57
15.948
37.194
92.374
1.1990
n.a.
1.7031
n.a.
7.1350
4.3128
5.4396
2.2631
n.a.
5.5678
8.6807
n.a.
79.324
161.32
n.a.
1138.60
220.63
2.3048
24.547
2.4998
86.848
5.7430
n.a.
7.8113
61.739
2.1053
114.77
n.a.
92.396
18.967
5.0659
1.9674
21.731
202.43
4.2781

5457.50
114.86
16.527
38.526
105.07
1.2008
39.100
1.7542
55.877
7.3835
4.5000
5.6326
2.3522
57.721
6.0259
9.1152
632.00
80.955
155.04
13.174
1187.60
229.48
2.3516
25.089
2.6109
82.644
5.9610
441.43
7.9699
65.502
2.1442
105.56
686.70
%.129
19.986
5.4303
2.0223
23.050
181.46
4.2990

5967.00
114.32
15.788
37.660
110.96
1.2029
39.100
1.7576
56.444
7.2348
4.4250
5.6314
2.2543
56.706
5.9869
9.1348
632.00
80.95
157.5
13.738
1194.30
231.52
2.2989
25.400
2.4913
82.355
5.9195
455.10
8.0298
64.700
2.0977
104.61
683.81
%.023
20.674
5.5492
1.8844
23.050
184.07
4.2944

6425.20
114.55
15.621
37.420
117.71
1.1872
39.100
1.7409
57.175
7.1720
4.3442
5.6240
2.2292
56.297
5.6681
9.1350
632.00
80.606
158.95
14.537
1191.60
223.13
2.2562
25.722
2.4442
83.104
5.8164
469.83
8.0868
64.375
2.0610
103.82
688.56
95.398
20.826
5.4894
1.7859
23.050
190.25
4.2961

7417.10
113.39
15.852
38.296
121.98
1.1851
39.100
1.7405
57.129
7.3210
4.3666
5.7141
2.2579
57.231
5.6329
9.1304
632.36
79.000
157.30
15.363
1206.40
218.95
2.2477
26.071
2.4734
82.784
5.7801
487.73
8.1446
65.348
2.0530
103.10
694.68
96.97
20.259
5.5411
1.8152
23.050
190.33
4.2958

9910.00
111.41
16.066
39.027
130.14
1.1926
39.100
1.7713
59.409
7.4977
4.4033
5.8298
2.2938
58.811
5.7959
9.1525
645.7
n.a.
153.97
16.163
1228.20
224.80
2.2575
26.469
2.5145
81.399
5.8623
515.21
8.2132
66.492
2.0607
103.46
705.17
98.357
20.228
5.6206
1.8442
23.050
188.60
4.2960

10256.00
108.50
16.587
41.144
137.97
1.2140
39.100
1.8200
60.129
7.7950
4.5058
6.0176
2.3660
60.973
5.8857
9.2144
645.89
n.a.
148.86
17.488
1263.20
235.31
2.3662
31.736
2.5947
79.325
5.9697
534.47
8.2530
69.067
2.1095
101.95
710.05
100.70
20.611
5.7579
1.8909
23.050
184.70
4.2960

88.09

87.39

102.94

107.98

106.34

104.53

105.21

106.96

110.36

MEMO:

United States/dollar 2

1. Value in U.S. cents.
2. Index of weighted-average exchange value of U.S. dollar against currencies of other G-10 countries plus Switzerland. March 1973 = 100.
Weights are 1972-76 global trade of each of the 10 countries. Series




revised as of August 1978. For description and back data, see "Index of
the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on page
7 0 0 of t h e A u g u s t 1978 BULLETIN.

NOTE. Averages of certified noon buying rates in New York for cable transfers.

69

Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR

PRESENTATION

Symbols and Abbreviations
c
e
p
r
*

Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when more
than half of figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000 when
the smallest unit given is millions)

0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs

Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable

General Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct

STATISTICAL

obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.

RELEASES

List Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases

SPECIAL

Issue
June 1981

Page
A78

TABLES

Published Irregularly, with Latest Bulletin Reference
Commercial bank assets and
Commercial bank assets and
Assets and liabilities of U.S.
Commercial bank assets and
Commercial bank assets and
Commercial bank assets and




liabilities, September 30, 1980
liabilities, December 31, 1980
branches and agencies of foreign banks, September 30, 1981
liabilities, March 31, 1981
liabilities, June 30, 1981
liabilities, September 30, 1981

February
April
January
July
October
January

1981
1981
1982
1981
1981
1982

A68
A72
A76
A72
A74
A70

70

Federal Reserve Board of Governors
Chairman

PAUL A . VOLCKER,

HENRY C . WALLICH
J. CHARLES PARTEE

OFFICE OF BOARD

OFFICE OF STAFF DIRECTOR
MONETARY AND FINANCIAL

MEMBERS

JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant

to the
to the

Board
Board

STEPHEN H . AXILROD, Staff

Director

ANTHONY F. COLE, Special Assistant to the Board
WILLIAM R. MALONI, Special Assistant to the Board
FRANK O'BRIEN, JR., Special Assistant to the Board
JAMES L. STULL, Manager, Operations Review Program

EDWARD C. ETTIN, Deputy Staff

LEGAL

DIVISION

DIVISION

MICHAEL BRADFIELD, General

Counsel

ROBERT E. MANNION, Deputy General Counsel
J. VIRGIL MATTINGLY, JR., Associate General Counsel
GILBERT T. SCHWARTZ, Associate General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel

OFFICE OF THE

SECRETARY

WILLIAM W . W I L E S ,

Secretary

MURRAY ALTMANN, Assistant
STANLEY J. SIGEL, Assistant

FOR
POLICY

Director

to the Board
to the Board

NORMAND R.V. BERNARD, Special Assistant

OF RESEARCH

JAMES L . K I C H L I N E ,

AND

STATISTICS

Director

JOSEPH S. ZEISEL, Deputy
Director
MICHAEL J. PRELL, Associate
Director

JARED J. ENZLER, Senior Deputy Associate
Director
DONALD L. KOHN, Senior Deputy Associate
Director
ELEANOR J. STOCKWELL, Senior Deputy Associate
Director
J. CORTLAND G. PERET, Deputy Associate
Director
HELMUT F. WENDEL, Deputy Associate
Director
MARTHA BETHEA, Assistant

Director

JOE M. CLEAVER, Assistant

Director

BARBARA R. LOWREY, Associate
Secretary
JAMES MCAFEE, Associate
Secretary
*THEODORE E. DOWNING, JR., Assistant
Secretary

ROBERT M . FISHER, Assistant

DIVISION OF
CONSUMER
AND COMMUNITY
AFFAIRS

PETER A. TINSLEY, Assistant
Director
LEVON H. GARABEDIAN, Assistant Director

Director

DAVID E. LINDSEY, Assistant
Director
LAWRENCE SLIFMAN, Assistant
Director
FREDERICK M. STRUBLE, Assistant
Director
STEPHEN P. TAYLOR, Assistant

JANET O . H A R T ,

Director

(Administration)

Director

GRIFFITH L. GARWOOD, Deputy

Director

JERAULD C. KLUCKMAN, Associate
G L E N N E . L O N E Y , Assistant

DIVISION

OF INTERNATIONAL

Director

DIVISION OF BANKING
SUPERVISION AND REGULATION

EDWIN M . TRUMAN,

Director

ROBERT F. GEMMILL, Associate
CHARLES J. SIEGMAN, Associate

FREDERICK R. DAHL, Associate
Director
DON E. KLINE, Associate
Director
WILLIAM TAYLOR, Associate

Director

JACK M. EGERTSON, Assistant

Director

LAURA M. HOMER, Securities




Director
Director
Director
Director

Credit Officer

Director
Director

LARRY J. PROMISEL, Senior Deputy Associate
Director
DALE W. HENDERSON, Deputy Associate
Director
SAMUEL PIZER, staff ADVISER

RALPH W . SMITH, JR., Assistant
Director

ROBERT A . JACOBSEN, Assistant
ROBERT S. PLOTKIN, Assistant
THOMAS A . SIDMAN, Assistant
SAMUEL H . TALLEY, Assistant

FINANCE

Director

Director

DOLORES S. SMITH, Assistant

JOHN E . R Y A N ,

to the Board

Director

71

and Official Staff
NANCY H . TEETERS

LYLE E .

GRAMLEY

EMMETT J. RICE

OFFICE

OF

OFFICE OF STAFF DIRECTOR

STAFF DIRECTOR

FOR

MANAGEMENT

JOHN M. DENKLER, Staff Director
EDWARD T. MULRENIN, Assistant Staff Director
JOSEPH W. DANIELS, SR., Director of Equal
Employment
Opportunity

FEDERAL

OF DATA

PROCESSING

CHARLES L . H A M P T O N ,

Director

BRUCE M. BEARDSLEY, Deputy
ULYESS D . BLACK, Associate

Director
Director

GLENN L. CUMMINS, Assistant
NEAL H. HILLERMAN, Assistant

Director
Director

C . WILLIAM SCHLEICHER, J R . , Assistant
ROBERT J. ZEMEL, Assistant
Director

DIVISION

OF

DIVISION

DAVID L . SHANNON,

OFFICE OF THE

Director

CONTROLLER

OF SUPPORT

Controller

SERVICES

DONALD E . ANDERSON,
Director
ROBERT E . FRAZIER, Associate
Director
WALTER W . K R E I M A N N , Associate
Director

*On loan from the Federal Reserve Bank of Chicago.
tOn loan from the Federal Reserve Bank of New York.




Director

RESERVE

OPERATIONS

C L Y D E H . FARNSWORTH, J R . ,
LORIN S . M E E D E R , Associate
WALTER A L T H A U S E N , Assistant
CHARLES W . B E N N E T T , Assistant
RICHARD B . G R E E N , Assistant

Director
Director
Director
Director
Director

EARL G. HAMILTON, Assistant

Director

DAVID L. ROBINSON, Assistant
P . D . RING,
Adviser
I H O W A R D F . C R U M B , Acting

Director

JOHN KAKALEC,
Controller
GEORGE E . LIVINGSTON, Assistant

DIVISION

Director

Director

CHARLES W . W O O D , Assistant

OF FEDERAL

FOR
ACTIVITIES

ELLIOTT C . M C E N T E E , Assistant

PERSONNEL

JOHN R. WEIS, Assistant

BANK

THEODORE E. ALLISON, Staff

BANK
DIVISION

RESERVE

Director

Director
Adviser

155

Federal Reserve Bulletin • March 1982

FOMC and Advisory Councils
FEDERAL

OPEN MARKET

COMMITTEE

PAUL A . VOLCKER,

A N T H O N Y M . SOLOMON, Vice

Chairman

E D W A R D G . BOEHNE
ROBERT H . BOYKIN
E . GERALD CORRIGAN

NANCY M. STEELE, Deputy Assistant
MICHAEL BRADFIELD, General

Secretary

Secretary

Counsel

JAMES H. OLTMAN, Deputy General Counsel
ROBERT E. MANNION, Assistant General Counsel
JAMES L . KICHLINE,

EMMETT J. RICE
N A N C Y H . TEETERS
HENRY C . WALLICH

L Y L E E . GRAMLEY
SILAS K E E H N
J. CHARLES PARTEE

STEPHEN H . AXILROD, Staff
Director
MURRAY A L T M A N N ,
Secretary
NORMAND R . V . BERNARD, Assistant

Economist

Chairman

JOSEPH E . B U R N S , Associate
Economist
RICHARD G . D A V I S , Associate
Economist
E D W A R D C . E T T I N , Associate
Economist
D O N A L D J. M U L L I N E A U X , Associate
Economist
MICHAEL J. PRELL, Associate
Economist
KARL L . SCHELD, Associate
Economist
E D W I N M . T R U M A N , Associate
Economist
JOSEPH S . ZEISEL, Associate
Economist

PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account
SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account

FEDERAL ADVISORY

COUNCIL
DONALD C. PLATTEN, Second District, President
ROBERT M. SURDAM, Seventh District, Vice President
R O N A L D TERRY, E i g h t h D i s t r i c t
CLARENCE G . FRAME, N i n t h D i s t r i c t
GORDON E . WELLS, T e n t h D i s t r i c t

WILLIAM S . EDGERLY, F i r s t D i s t r i c t
JOHN H . WALTHER, T h i r d D i s t r i c t
JOHN G . M C C O Y , F o u r t h D i s t r i c t
VINCENT C . BURKE, J R . , F i f t h D i s t r i c t
ROBERT STRICKLAND, S i x t h D i s t r i c t

T. C. FROST, JR., Eleventh District
JOSEPH J. PINOLA, T w e l f t h D i s t r i c t
HERBERT V . PROCHNOW,
WILLIAM J. KORSVIK, Associate

CONSUMER

ADVISORY

Secretary
Secretary

COUNCIL

CHARLOTTE H. SCOTT, Charlottesville, Virginia, Chairman
MARGARET REILLY-PETRONE, Upper Montclair, New Jersey, Vice Chairman
ARTHUR F. BOUTON, Little Rock, Arkansas

SHIRLEY T . HOSOI, LOS A n g e l e s , C a l i f o r n i a

JULIA H . B O Y D , A l e x a n d r i a , V i r g i n i a
ELLEN BROADMAN, W a s h i n g t o n , D . C .

GEORGE S . IRVIN, D e n v e r , C o l o r a d o
HARRY N . JACKSON, M i n n e a p o l i s , M i n n e s o t a

GERALD R. CHRISTENSEN, Salt Lake City, Utah
JOSEPH N. CUGINI, Westerly, Rhode Island

F . THOMAS JUSTER, A n n A r b o r , M i c h i g a n

RICHARD S . D ' A G O S T I N O , P h i l a d e l p h i a , P e n n s y l v a n i a
SUSAN PIERSON D E W I T T , S p r i n g f i e l d , I l l i n o i s
JOANNE S . FAULKNER, N e w H a v e n , C o n n e c t i c u t
MEREDITH FERNSTROM, N e w Y o r k , N e w Y o r k
ALLEN J. FISHBEIN, W a s h i n g t o n , D . C .

S T A N L . MULARZ, C h i c a g o , I l l i n o i s

ROBERT J. MCEWEN, S. J., Chestnut Hill, Massachusetts
WILLIAM J. O ' C O N N O R , B u f f a l o , N e w Y o r k
WILLARD P . OGBURN, B o s t o n , M a s s a c h u s e t t s
JANET J. RATHE, P o r t l a n d , O r e g o n
R E N E REIXACH, R o c h e s t e r , N e w

York

E. C. A. FORSBERG, SR., Atlanta, Georgia

PETER D . SCHELLIE, W a s h i n g t o n ,

LUTHER R . GATLING, N e w Y o r k , N e w Y o r k
VERNARD W . H E N L E Y , R i c h m o n d , V i r g i n i a
JUAN J. HINOJOSA, M c A l l e n , T e x a s

N A N C Y Z . SPILLMAN, LOS A n g e l e s , C a l i f o r n i a




D.C.

CLINTON W A R N E , C l e v e l a n d , O h i o
FREDERICK T . WEIMER, C h i c a g o , I l l i n o i s

73

Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK,
branch, or facility
Zip

Chairman
Deputy Chairman

President
First Vice President

BOSTON*

02106

Robert P. Henderson
Thomas I. Atkins

Frank E. Morris
James A. Mcintosh

N E W YORK*

10045

Robert H. Knight, Esq.
Boris Yavitz
Frederick D. Berkeley, III

Anthony M. Solomon
Thomas M. Timlen

Buffalo

14240

John T. Keane

PHILADELPHIA

19105

Jean A. Crockett
Robert M. Landis, Esq.

Edward G. Boehne
Richard L. Smoot

CLEVELAND*

44101

J. L. Jackson
William H. Knoell
Clifford R. Meyer
Milton G. Hulme, Jr.

Willis J. Winn
Walter H. MacDonald

Steven Muller
Paul E. Reichardt
Edward H. Covell
Naomi G. Albanese

Robert P. Black
Jimmie R. Monhollon

Cincinnati
Pittsburgh

45201
15230

RICHMOND*

23219

Baltimore
21203
Charlotte
28230
Culpeper
Communications
and Records Center
22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
N e w Orleans

30301
35202
32231
33152
37203
70161

CHICAGO*

60690

Detroit

48231

ST. LOUIS

63166

Little Rock
Louisville
Memphis

72203
40232
38101

MINNEAPOLIS

55480

Helena
K A N S A S CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio

59601
64198
80217
73125
68102
75222
79999
77001
78295

S A N FRANCISCO

94120

Los Angeles
Portland
Salt Lake City
Seattle

90051
97208
84130
98124

Vice President
in charge of branch

Robert E. Showalter
Harold J. Swart

Robert D. McTeer, Jr.
Stuart P. Fishburne
Albert D. Tinkelenberg

William A. Fickling, Jr.
John H. Weitnauer, Jr.
William H. Martin, III
Copeland D. Newbern
David H. Rush
Cecelia Adkins
Leslie B. Lampton

William F. Ford
Robert P. Forrestal

John Sagan
Stanton R. Cook
Russell G. Mawby

Silas Keehn
Daniel M. Doyle

Armand C. Stalnaker
W. L. Hadley Griffin
Richard V. Warner
James F. Thompson
Donald B. Weis

Lawrence K. Roos
Donald W. Moriarty, Jr.

William G. Phillips
John B. Davis, Jr.
Ernest B. Corrick

E. Gerald Corrigan
Thomas E. Gainor

Paul H. Henson
Doris M. Drury
Caleb B. Hurtt
Christine H. Anthony
Robert G. Lueder

Roger Guffey
Henry R. Czerwinski

Gerald D. Hines
John V. James
A. J. L o s e e
Jerome L. Howard
Pat Legan

Robert H. Boy kin
William H. Wallace

Caroline L. Ahmanson
Alan C. Furth
Bruce M. Schwaegler
John C. Hampton
Wendell J. Ashton
John W. Ellis

John J. Balles
John B. Williams

Hiram J. Honea
Charles D. East
F. J. Craven, Jr.
Jeffrey J. Wells
James D. Hawkins

William C. Conrad

John F. Breen
Donald L. Henry
Robert E. Matthews

Betty J. Lindstrom

Wayne W. Martin
William G. Evans
Robert D. Hamilton

Joel L. K o o n c e , Jr.
J. Z. R o w e
Thomas H. Robertson

Richard C. Dunn
Angelo S. Carella
A. Grant Holman
Gerald R. Kelly

* Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.




74

Federal Reserve Board Publications
Copies are available from PUBLICATIONS SERVICES,
Room MP-510, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551. When a charge is indicated, remittance should accompany
request and be made

THE FEDERAL RESERVE
TIONS. 1 9 7 4 . 125 p p .
A N N U A L REPORT.

SYSTEM—PURPOSES

AND

FUNC-

BANKING A N D MONETARY STATISTICS. 1 9 1 4 - 1 9 4 1 .

(Reprint

of Part I only) 1976. 682 pp. $5.00.
AND MONETARY

Each volume $1.00; 10 or more to one address, $.85
each.
OPEN MARKET POLICIES A N D OPERATING

FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or
$2.00 each in the United States, its possessions, Canada,
and Mexico; 10 or more of same issue to one address,
$18.00 per year or $1.75 each. Elsewhere, $24.00 per
year or $2.50 each.

BANKING

payable to the order of the Board of Governors of the Federal
Reserve System. Remittance from foreign residents should
be drawn on a U.S. bank. Stamps and coupons are not
accepted.

STATISTICS,

PROCEDURES—

STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to
one address, $1.75 each.
REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT M E C H A NISM. Vol. 1. 1 9 7 1 . 2 7 6 p p . Vol. 2. 1 9 7 1 . 173 p p . Vol. 3.

1972. 220 pp. Each volume $3.00; 10 or more to one
address, $2.50 each.
THE ECONOMETRICS OF PRICE DETERMINATION

1941-1970.

1976.

1,168 pp. $15.00.
A N N U A L STATISTICAL DIGEST

1971-75. 1976. 339 pp. $5.00 per copy.
1972-76. 1977. 377 pp. $10.00 per copy.
1973-77. 1978. 361 pp. $12.00 per copy.
1974-78. 1980. 305 pp. $10.00 per copy.
1970-79. 1981. 587 pp. $20.00 per copy.
1980.
1981. 241 pp. $10.00 per copy.
FEDERAL RESERVE CHART BOOK. Issued four times a year in
February, May, August, and November. Subscription
includes one issue of Historical Chart Book. $7.00 per
year or $2.00 each in the United States, its possessions,
Canada, and Mexico. Elsewhere, $10.00 per year or
$3.00 each.
HISTORICAL CHART BOOK. Issued annually in Sept. Subscription to Federal Reserve Chart Book includes one issue.
$1.25 each in the United States, its possessions, Canada,
and Mexico; 10 or more to one address, $1.00 each.
Elsewhere, $1.50 each.
SELECTED INTEREST A N D EXCHANGE R A T E S — W E E K L Y S E -

RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in
the United States, its possessions, Canada, and Mexico;
10 or more of same issue to one address, $13.50 per year
or $.35 each. Elsewhere, $20.00 per year or $.50 each.
THE FEDERAL RESERVE ACT, as amended through December
1976, with an appendix containing provisions of certain
other statutes affecting the Federal Reserve System. 307
pp. $2.50.
REGULATIONS OF THE BOARD OF GOVERNORS OF THE F E D ERAL RESERVE SYSTEM.
BANK CREDIT-CARD A N D CHECK-CREDIT PLANS. 1 9 6 8 . 102

pp. $1.00 each; 10 or more to one address, $.85 each.
REPORT OF THE JOINT TREASURY-FEDERAL RESERVE S T U D Y
OF THE U . S . GOVERNMENT SECURITIES MARKET. 1 9 6 9 .

48 pp. $.25 each; 10 or more to one address, $.20 each.
JOINT TREASURY-FEDERAL RESERVE S T U D Y OF THE GOVERNMENT SECURITIES MARKET; S T A F F S T U D I E S — P A R T

CONFER-

ENCE, October 30-31, 1970, Washington, D.C. 1972. 397
pp. Cloth ed. $5.00 each; 10 or more to one address,
$4.50 each. Paper ed. $4.00 each; 10 or more to one
address, $3.60 each.
FEDERAL RESERVE S T A F F S T U D Y : W A Y S TO MODERATE
FLUCTUATIONS IN HOUSING CONSTRUCTION. 1 9 7 2 . 4 8 7

pp. $4.00 each; 10 or more to one address, $3.60 each.
LENDING FUNCTIONS OF THE FEDERAL RESERVE

BANKS.

1973. 271 pp. $3.50 each; 10 or more to one address,
$3.00 each.
IMPROVING THE MONETARY AGGREGATES: REPORT OF THE
ADVISORY COMMITTEE ON MONETARY STATISTICS.

1976. 43 pp. $1.00 each; 10 or more to one address, $.85
each.
A N N U A L PERCENTAGE RATE TABLES ( T r u t h i n

Lending—

Regulation Z) Vol. I (Regular Transactions). 1969. 100
pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each
volume $1.00; 10 or more of same volume to one
address, $.85 each.
FEDERAL RESERVE MEASURES OF CAPACITY A N D CAPACITY

UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one
address, $1.50 each.
THE B A N K HOLDING COMPANY MOVEMENT TO 1 9 7 8 :

A

COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to
one address, $2.25 each.
IMPROVING THE MONETARY AGGREGATES: S T A F F PAPERS.

1978. 170 pp. $4.00 each; 10 or more to one address,
$3.75 each.
1977 CONSUMER CREDIT SURVEY. 1 9 7 8 . 1 1 9 p p . $ 2 . 0 0 e a c h .
FLOW OF F U N D S ACCOUNTS. 1 9 4 9 - 1 9 7 8 . 1 9 7 9 . 171 p p . $ 1 . 7 5

each; 10 or more to one address, $1.50 each.
INTRODUCTION TO F L O W OF F U N D S . 1 9 8 0 . 6 8 p p . $ 1 . 5 0 e a c h ;

10 or more to one address, $1.25 each.
PUBLIC POLICY A N D CAPITAL FORMATION.

1981. 326

pp.

FEDERAL

RE-

$13.50 each.
N E W MONETARY CONTROL PROCEDURES:
SERVE S T A F F S T U D Y , 1 9 8 1 .

1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40

SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES:
REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL

e a c h . PART 2 , 1 9 7 1 . 153 p p . a n d PART 3 , 1 9 7 3 . 131 p p .

ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each.




75

FEDERAL RESERVE REGULATORY SERVICE. L o o s e l e a f ; u p d a t -

ed at least monthly. (Requests must be prepaid.)
Consumer and Community Affairs Handbook. $60.00 per
year.
Monetary Policy and Reserve Requirements Handbook.
$60.00 per year.

Securities Credit Transactions Handbook. $60.00 per year.
Federal Reserve Regulatory Service. 2 vols. (Contains all
three Handbooks plus substantial additional material.)
$175.00 per year.

Only Printed

in the

Studies and papers on economic and financial subjects
that are of general interest. Requests to obtain single copies
of the full text or to be added to the mailing list for the series
may be sent to Publications
Services.
PERFORMANCE A N D CHARACTERISTICS OF E D G E CORPORA-

TIONS, by James V. Houpt. Feb. 1981. 56 pp.
BANKING STRUCTURE A N D PERFORMANCE AT THE STATE

Rates for subscribers outside the United States are as
follows and include additional air mail costs:
Federal Reserve Regulatory Service, $225.00 per year.
Each Handbook, $75.00 per year.
WELCOME TO THE FEDERAL RESERVE, D e c e m b e r

STAFF STUDIES.- Summaries
Bulletin

1980.

LEVEL DURING THE 1970s, by Stephen A. Rhoades. Mar.
1981. 26 pp.
FEDERAL RESERVE DECISIONS ON B A N K MERGERS A N D A C -

QUISITIONS DURING THE 1970S, by Stephen A. Rhoades.
Aug. 1981. 16 pp.
THE U S E OF CONTINGENCIES A N D COMMITMENTS BY COM-

MERCIAL BANKS, by Benjamin Wolkowitz et al. Jan.
1982. 186 pp.
CONSUMER EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use.
copies available without charge.

Multiple

Alice in Debitland
Consumer Handbook to Credit Protection Laws
Dealing with Inflation: Obstacles and Opportunities
The Equal Credit Opportunity Act and . . . Age
The Equal Credit Opportunity Act and . . . Credit Rights in
Housing
The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide
Incidental Credit
The Equal Credit Opportunity Act and . . . Women
Fair Credit Billing
Federal Reserve Glossary
Guide to Federal Reserve Regulations
How to File A Consumer Credit Complaint
If You Borrow To Buy Stock
If You Use A Credit Card
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Monetary Control Act of 1980
Truth in Leasing
U.S. Currency
What Truth in Lending Means to You




MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON
COMPETITION A N D PERFORMANCE IN BANKING MAR-

KETS, by Timothy J. Curry and John T. Rose. Jan. 1982.
9 pp.

REPRINTS
Most of the articles reprinted do not exceed 12 pages.
Revision of Bank Credit Series. 12/71.
Rates on Consumer Installment Loans. 9/73.
Industrial Electric Power Use. 1/76.
Revised Series for Member Bank Deposits and Aggregate
Reserves. 4/76.
Federal Reserve Operations in Payment Mechanisms: A
Summary. 6/76.
Perspectives on Personal Saving. 8/80.
The Impact of Rising Oil Prices on the Major Foreign
Industrial Countries. 10/80.
Federal Reserve and the Payments System: Upgrading Electronic Capabilities for the 1980s. 2/81.
U.S. International Transactions in 1980. 4/81.
Bank Lending in Developing Countries. 9/81.

76

Index to Statistical Tables
References are to pages A3 through A68 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers, 10, 25, 27
Agricultural loans, commercial banks, 18, 19, 20, 26
Assets and liabilities (See also Foreigners)
Banks, by classes, 17, 18-21
Domestic finance companies, 39
Federal Reserve Banks, 11
Foreign banks, U.S. branches and agencies, 22
Nonfinancial corporations, 38
Savings institutions, 29
Automobiles
Consumer installment credit, 42, 43
Production, 48, 49
BANKERS balances, 17, 18-20
(See also Foreigners)
Banks for Cooperatives, 35
Bonds (See also U.S. government securities)
New issues, 36
Yields, 3
Branch banks, 15, 21, 22, 56
Business activity, nonfinancial, 46
Business expenditures on new plant and equipment, 38
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 17
Federal Reserve Banks, 11
Central banks, 67
Certificates of deposit, 21, 27
Commercial and industrial loans
Commercial banks, 15, 17, 22, 26
Weekly reporting banks, 18-22, 23
Commercial banks
Assets and liabilities, 3, 15, 17, 18-21
Business loans, 26
Commercial and industrial loans, 15, 17, 22, 23, 26
Consumer loans held, by type, 42, 43
Loans sold outright, 21
Nondeposit funds, 16
Number, 17
Real estate mortgages held, by holder and property, 41
Commercial paper, 3, 25, 27, 39
Condition statements (See Assets and liabilities)
Construction, 46, 50
Consumer installment credit, 42, 43
Consumer prices, 46, 51
Consumption expenditures, 52, 53
Corporations
Profits and their distribution, 37
Security issues, 36, 66
Cost of living (See Consumer prices)
Credit unions, 29, 42, 43
Currency and coin, 5, 17
Currency in circulation, 4, 13
Customer credit, stock market, 28

DEBITS to deposit accounts, 12
Debt (See specific types of debt or securities)
Demand deposits
Adjusted, commercial banks, 12, 14
Banks, by classes, 17, 18-21




Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 24
Subject to reserve requirements, 14
Turnover, 12
Depository institutions
Reserve requirements, 8
Reserves, 3, 4, 5, 14
Deposits (See also specific types)
Banks, by classes, 3, 17, 18-21, 29
Federal Reserve Banks, 4, 11
Subject to reserve requirements, 14
Turnover, 12
Discount rates at Reserve Banks and at foreign central
banks (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 37
EMPLOYMENT, 46, 47
Eurodollars, 27
FARM mortgage loans, 41
Federal agency obligations, 4, 10, 11, 12, 34
Federal credit agencies, 35
Federal finance
Debt subject to statutory limitation and types and
ownership of gross debt, 32
Receipts and outlays, 31
Treasury operating balance, 30
Federal Financing Bank, 30, 35
Federal funds, 3, 6, 18, 19, 20, 27, 30
Federal Home Loan Banks, 35
Federal Home Loan Mortgage Corporation, 35, 40, 41
Federal Housing Administration, 35, 40, 41
Federal Intermediate Credit Banks, 35
Federal Land Banks, 35, 41
Federal National Mortgage Association, 35, 40, 41
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 4, 11, 12, 32, 33
Federal Reserve credit, 4, 5, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 35
Finance companies
Assets and liabilities, 39
Business credit, 39
Loans, 18, 19, 20, 42, 43
Paper, 25, 27
Financial institutions
Loans to, 18, 19, 20
Selected assets and liabilities, 29
Float, 4
Flow of funds, 44, 45
Foreign banks, assets and liabilities of U.S. branches and
agencies, 22
Foreign currency operations, 11
Foreign deposits in U.S. banks, 4, 11, 18, 19, 20
Foreign exchange rates, 68
Foreign trade, 55
Foreigners
Claims on, 56, 58, 61, 62, 63, 65
Liabilities to, 21, 55, 56-60, 64, 66, 67

77

GOLD
Certificates, 11
Stock, 4, 55
Government National Mortgage Association, 35, 40, 41
Gross national product, 52, 53
HOUSING, new and existing units, 50
INCOME, personal and national, 46, 52, 53
Industrial production, 46, 48
Installment loans, 42, 43
Insurance companies, 29, 32, 33, 41
Interbank loans and deposits, 17
Interest rates
Bonds, 3
Business loans of banks, 26
Federal Reserve Banks, 3, 7
Foreign central banks and foreign countries, 67
Money and capital markets, 3, 27
Mortgages, 3, 40
Prime rate, commercial banks, 26
Time and savings deposits, 9
International capital transactions of United States, 56-67
International organizations, 58, 59-62, 64-67
Inventories, 52
Investment companies, issues and assets, 37
Investments (See also specific types)
Banks, by classes, 17, 29
Commercial banks, 3, 15, 17, 18-20
Federal Reserve Banks, 11, 12
Savings institutions, 29, 41
LABOR force, 47
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 17, 18—21
Commercial banks, 3, 15, 17, 18-21, 22, 26
Federal Reserve Banks, 3, 4, 5, 7, 11, 12
Insured or guaranteed by United States, 40, 41
Savings institutions, 29, 41
MANUFACTURING
Capacity utilization, 46
Production, 46, 49
Margin requirements, 28
Member banks
Borrowing at Federal Reserve Banks, 5, 11
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Reserves and related items, 14
Mining production, 49
Mobile home shipments, 50
Monetary aggregates, 3, 14
Money and capital market rates (See Interest
rates)
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds (See Investment companies)
Mutual savings banks, 3, 9, 18-20, 29, 32, 33, 41
NATIONAL defense outlays, 31
National income, 52
OPEN market transactions, 10
PERSONAL income, 53
Prices
Consumer and producer, 46, 51
Stock market, 28
Prime rate, commercial banks, 26
Production, 46, 48
Profits, corporate, 37




REAL estate loans
Banks, by classes, 18-20, 41
Rates, terms, yields, and activity, 3, 40
Savings institutions, 27
Type of holder and property mortgaged, 41
Repurchase agreements and federal funds, 6, 18, 19, 20
Reserve requirements, 8
Reserves
Commercial banks, 17
Depository institutions, 3, 4, 5, 14
Federal Reserve Banks, 11
Member banks, 14
U.S. reserve assets, 55
Residential mortgage loans, 40
Retail credit and retail sales, 42, 43, 46
SAVING
Flow of funds, 44, 45
National income accounts, 53
Savings and loan assns., 3, 9, 29, 33, 41, 44
Savings deposits (See Time deposits)
Securities (See also U.S. government securities)
Federal and federally sponsored credit agencies, 35
Foreign transactions, 66
New issues, 36
Prices, 28
Special drawing rights, 4, 11, 54, 55
State and local governments
Deposits, 18, 19, 20
Holdings of U.S. government securities, 32, 33
New security issues, 36
Ownership of securities issued by, 18, 19, 20, 29
Yields of securities, 3
Stock market, 28
Stocks (See also Securities)
N e w issues, 36
Prices, 28
TAX receipts, federal, 31
Time deposits, 3, 9, 12, 14, 17, 18-21
Trade, foreign, 55
Treasury currency, Treasury cash, 4
Treasury deposits, 4, 11, 30
Treasury operating balance, 30
UNEMPLOYMENT, 47
U.S. balance of payments, 54
U.S. government balances
Commercial bank holdings, 18, 19, 20
Member bank holdings, 14
Treasury deposits at Reserve Banks, 4, 11, 30
U.S. government securities
Bank holdings, 17, 18-20, 32, 33
Dealer transactions, positions, and financing, 34
Federal Reserve Bank holdings, 4, 11, 12, 32, 33
Foreign and international holdings and transactions, 11,
32, 67
Open market transactions, 10
Outstanding, by type and ownership, 32, 33
Rates, 3, 27
Savings institutions, 29
Utilities, production, 49
VETERANS Administration, 40, 41
WEEKLY reporting banks, 18-23
Wholesale (producer) prices, 46, 51
YIELDS (See Interest rates)

78

The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories

A

_

0)

LEGEND

Boundaries of Federal Reserve Districts

®

Federal Reserve Bank Cities

Boundaries of Federal Reserve Branch
Territories

•

Federal Reserve Branch Cities
Federal Reserve Bank Facility

^

Board of Governors of the Federal Reserve
System




79

Publications of Interest
FEDERAL RESERVE
PUBLICATIONS

CONSUMER

CREDIT

The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to use Truth in Lending
information to compare credit costs.
The Board also publishes the Consumer Handbook
to Credit Protection Laws, a complete guide to con-

sumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair deal.
Protections offered by the Electronic Fund Transfer
Act are explained in Alice in Debitland. This booklet
offers tips for those using the new "paperless" systems for transferring money.
Copies of consumer publications are available free
of charge from Publications Services, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551. Multiple copies for classroom use are also
available free of charge.

LE4BMO

LE4SING

LE4SMG

LE4SMG

TRUTH IN LE4SING

^^Alice
Debitland




What
Thithln
Lending
Means
To You

The
Equal Credit
Opportunity
Act and
Credit Rights
In Housing

If
You
Borrow
To Buy
Stock—
The
Equal
Credit
Opportunity
Act
and...

YOU USE A
CREDIT
CARD

L

Fair
Credit
Billing

WOMEN