Full text of Federal Reserve Bulletin : March 1993

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VOLUME 79 •

NUMBER 3 •

MARCH 1993

FEDERAL RESERVE

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

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




Table of Contents
167 MONETARY POLICY REPORT
TO THE CONGRESS
Although the economy and the financial markets continue to face difficult adjustments,
economic growth in 1993 most likely will
proceed at a moderate pace. The growth of
output probably will be supported by further
gains in productivity, the ultimate source of
increased real income and improved living
standards over the long run. In addition,
increases in employment are expected to be
large enough to bring further gradual declines
in the unemployment rate over the course of
1993. Inflation is expected to remain subdued,
boding well for sustained expansion in 1993
and beyond.
188 THE HERFINDAHL-HIRSCHMAN INDEX
The Herfindahl-Hirschman index is a statistical measure of concentration that is used by
the Department of Justice and the Federal
Reserve in the analysis of the competitive
effects of horizontal mergers. It is useful in
analyzing horizontal mergers because such
mergers affect market concentration, and economic theory and considerable empirical evidence suggest that, other things equal, the
concentration of firms in a market is an important element of market structure and a determinant of competition.

193 STATEMENT TO THE CONGRESS
Alan Greenspan, Chairman, Board of Governors, identifies the major tendencies visible in
the economy and says that several economic
indicators are distinctly encouraging and that
the Federal Reserve will seek to foster financial conditions to encourage maximum sustainable growth in the economy, before the
Joint Economic Committee, January 27,1993.
(Chairman Greenspan presented identical testimony before the Senate Committee on the
Budget on January 28, 1993.)
197 ANNOUNCEMENTS
Statement by Chairman Greenspan regarding
the announcement that E. Gerald Corrigan
plans to step down as President of the Federal
Reserve Bank of New York.
Appointment of new members to the Consumer Advisory Council.
Issuance of final rule to carry out provisions
of sections 202(d) and 210 of the Federal
Deposit Insurance Corporation Improvement
Act of 1991 that affect bank holding companies and foreign banking organizations with
operations in the United States.
Issuance of final rule to implement portions of
the Foreign Bank Supervision Enhancement
Act of 1991.
Decision on MSA designations.

190 INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION
Industrial production rose 0.3 percent in
December, compared with an upward-revised
gain of 0.7 percent in October and a rise of
0.4 percent in November. Total industrial
capacity utilization edged up in December, to
79.3 percent, the highest rate since November 1991.




Approval of an alternative method to adjust
the 10 percent revenue test for ineligible securities held by section 20 subsidiaries.
Proposal to amend Regulations H, K, and Y
to implement a uniform multiagency criminal
referral form.
Preliminary figures available on operating
income of the Federal Reserve Banks.

Revised Lists of Marginable OTC Stocks and
of Foreign Margin Stocks now available.
203 LEGAL DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and
pending cases.

A69 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
A72 INDEX TO STATISTICAL TABLES
A74 BOARD OF GOVERNORS AND STAFF
A76 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS

A1 FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
January 29, 1993.
A3 GUIDE TO TABULAR PRESENTATION
A4 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics




A78 FEDERAL RESERVE BOARD
PUBLICATIONS
A80 MAPS OF THE FEDERAL RESERVE
SYSTEM
A82 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES

Monetary Policy Report to the Congress
Report submitted to the Congress on February 19,
1993, pursuant to the Full Employment and Balanced Growth Act of 19781

with which the economy had to contend. Indeed,
the performance of the U.S. economy stands in
sharp contrast to that of a number of major foreign
industrial economies that appear still to be laboring
to regain forward momentum.
Employment has grown since the middle of last
MONETARY POLICY AND THE ECONOMIC
year,
but at only a gradual pace. Hiring has been
OUTLOOK FOR 1993
damped by the ability of firms to meet their output
Last July, when the Federal Reserve Board preobjectives through hefty increases in productivity.
sented its semiannual monetary policy report to the
The unemployment rate, which had risen in the first
Congress, there was considerable uncertainty about
half of 1992 in conjunction with a surge in the
the prospects for the economy in the second half of
share of the working-age population in the labor
1992. After a promising start at the beginning of
force, turned down thereafter as labor force particithe year, growth of the economy had slowed once
pation fell back. The unemployment rate in January
again in the spring, and various structural adjustof this year was 7.1 percent, more than half a
ments that had been impeding the pace of the
percentage point below the peak rate of last
expansion retained considerable force. However,
summer.
with drag from the structural adjustments expected
Price developments remained favorable in the
to diminish gradually over time and with the econsecond half of 1992, and the rise in the consumer
omy continuing to benefit from the substantial easprice index over the four quarters of the year
ing of money market conditions that the System
amounted to about 3 percent, matching the low rate
had implemented over the years, the most likely
achieved in the previous year. Consumer energy
prospect for the economy was thought to be one of
prices turned back up in 1992, but the prices of
moderate growth in the second half of the year.
other goods and services that enter into the CPI
In the event, economic growth did indeed progenerally rose less rapidly than they had in 1991.
ceed at an improved pace in the second half of
Although the CPI spurted Vi percent this past
1992, although the pickup did not start to become
month, the underlying trends in labor costs and
evident in the incoming economic data until well
prices remain encouraging. The success to date in
into the autumn. Fueled by strong increases in
keeping inflation in check, while restoring growth,
household and business spending, real gross
has had highly salutary effects on financial markets
domestic product rose at an annual rate of 3.6 perand on the process of financial reconstruction, the
cent in the second half of the year. The increase
continuing progress of which is essential to the
over the four quarters of the year amounted to
achievement of renewed and sustainable prosperity.
2.9 percent. This was the largest gain in output
The hesitant pace of the economy evident in
since 1988, and, while far from robust by the
incoming information throughout much of last year,
standards of past cyclical upswings in activity, it
along with notable weakness in the monetary and
was a much stronger performance than many
credit aggregates and steady gains against inflation,
analysts—inside and outside government—had
prompted the Federal Reserve to ease monetary
thought likely, given the extraordinary headwinds
conditions three times, bringing short-term rates
down another full percentage point over the year.
The discount rate was reduced to 3 percent, and
1. The charts for the report are available on requestfromPubli- short-term rates generally are now at their lowest
cations Services, Board of Governors of the Federal Reserve Syslevels since the early 1960s.
tem, Washington, DC 20551.




168

Federal Reserve Bulletin • March 1993

Long-term rates also fell, on balance. Declines
were limited at times, however, by concerns about
prospective federal budget deficits and about the
possibility that inflation might begin to move
higher as the expansion proceeded. Notable
decreases in long rates were registered in late 1992
and early 1993, as inflation remained subdued and
as statements by Administration officials suggested
that they would seek only limited near-term fiscal
stimulus and that proposals to make substantial
cuts in the federal budget deficit over time were
under serious consideration. The trade-weighted
foreign exchange value of the dollar in terms of the
other Group of Ten currencies appreciated on
balance over the course of 1992 and rose further
during the first weeks of 1993. The dollar benefited from the improved performance of the U.S.
economy relative to conditions in other industrial
countries.
Growth of the monetary aggregates slowed last
year despite an acceleration in nominal spending
and income. For the year, M2 advanced 1.9 percent, below the 2lA percent lower end of its target
range. M3 also came in under its 1 percent to
5 percent target range, growing only 0.5 percent.
The Federal Reserve did not make greater efforts to
boost growth to within these ranges because, as the
year went on, it became increasingly clear that
slow growth of the broad money aggregates did not
indicate that financial market conditions were
impeding the expansion of spending and income.
In fact, growth of nominal GDP exceeded that of
M2 by 31/2 percentage points last year and that of
M3 by 43/4 percentage points. Not only did data on
spending itself show a firming trend over the year,
but narrow money (Ml) and reserves were expanding rapidly—suggesting to some that liquidity
was quite ample—and the growth of debt, while
restrained, was considerably in excess of that of the
broader monetary aggregates.
Nominal GDP growth last year, which picked up
to 5.4 percent from 3.5 percent in 1991, was fueled
by spending that was financed largely outside
banks and other depositories, whose liabilities constitute the lion's share of the monetary aggregates.
Spurred in part by advances in equity prices and by
declines in longer-term interest rates, businesses
and households strengthened their balance sheets
by raising funds in bond, mortgage, and equity
markets and repaying bank loans and other short-




term debt. This shift in the focus of financing
efforts toward the capital markets, a process that
has been in progress for the last couple of years,
has helped to redress financial distortions that
accompanied the buildup of debt and the rapid rise
in some asset prices in the 1980s.
The low level of credit demanded from depositories has meant that these institutions have not
needed to seek large volumes of deposits. As a
consequence, rates paid on deposits have been adjusted downward rapidly as short-term market rates
have declined. Savers, reacting to the lower deposit
rates and to attractive returns on bonds and equity,
have shifted funds from M2 deposits into the capital markets. One method savers have used to capture these higher capital market yields has been the
purchase of bond and stock mutual funds, which
ate not included in the monetary aggregates and
which together experienced record inflows in 1992.
Moreover, consumer loan rates have fallen by less
than deposit rates, and households appear to be
using M2 assets to repay consumer debt or restrain
its growth. The combination of rate incentives,
desires to strengthen balance sheets, and the greater
availability at low transaction cost of a broadened
array of savings vehicles beyond traditional deposits appear to have distorted, at least for a time, the
traditional relationship between levels of M2 and
M3 assets and given levels of spending.
Although growth of M2 and M3 was very weak
last year, M l accelerated to 14.3 percent, the second fastest annual increase recorded in the official
series, which begins with 1959. This pickup owed
in part to the expansion of spending, but it mainly
reflected the tendency for rates on liquid deposits
to adjust downward less rapidly than those on time
deposits. In response, savers shifted substantial
volumes of funds from maturing time deposits to
NOW accounts. In addition, businesses boosted
their demand deposits substantially. To support
this growth in transactions deposits, the Federal
Reserve added substantial volumes of reserves in
1992. Total reserves increased 20 percent last year,
and the monetary base, which includes currency
outstanding as well as reserves, increased 10.5 percent, the highest rate ever registered in the official
series.
Decisions to strengthen balance sheets had a
smaller but significant effect on debt growth. The
debt of nonfinancial sectors is estimated to have

Monetary Policy Report to the Congress

expanded 4.6 percent, only slightly faster than in
1991 and just above the lower end of its monitoring
range. With debt growing less rapidly than income
and with declines in market interest rates allowing
higher-cost debt to be rolled over at lower rates,
households and businesses made substantial further
progress in reducing debt-service burdens.

Monetary

Objectives for

1993

The aim of the Federal Open Market Committee in
1993 is to promote financial conditions that will
help to maintain the greater momentum that the
economy developed in 1992 and to consolidate the
trend toward lower inflation. The objectives for the
monetary aggregates in 1993 were set with that aim
in mind.
At its July 1992 meeting, the Committee had
provisionally chosen the same ranges for 1993 as it
was confirming for 1992—2Vi percent to 6V2 percent for M2 and 1 percent to 5 percent for M3, with
a monitoring range for the nonfinancial debt aggregate of 4Vi percent to 8V2 percent. At that time, the
Committee noted that the extent and duration of
deviations of money growth from historical relationships remained highly uncertain and that the
actual setting, in February, of 1993 ranges consistent with the basic policy objectives would need to
be made in light of additional experience and
analysis.
At its February meeting, in reviewing the ranges
provisionally chosen for 1993, the Committee
noted that nominal spending had accelerated considerably in 1992 despite the quite-sluggish growth
of M2 and M3 throughout the year. The Committee
viewed this development as underscoring the
importance that special, and historically anomalous, forces have had in restraining the growth of
broad money relative to spending. Although the
intensity of some of these forces might diminish in
1993, as borrowers and lenders achieve more comfortable balance sheet positions, the forces are
unlikely to disappear. For example, the substantial
volume of liquid securities on banks' balance
sheets suggested that banks will not become
vigorous bidders for deposits in 1993 even if, as
expected, lending picks up. In addition, the yield
curve, although it had begun to flatten a bit early in
the new year, is likely to continue to provide savers




169

an incentive to shift funds out of monetary assets
and into capital markets—a process facilitated by
the growing availability of mutual funds at banks
and thrift institutions.
Given that these and other forces tending to
channel funds around depository institutions and
hence to raise velocity (the ratio of nominal GDP
to money) seem likely to persist in 1993, a downward adjustment of the money ranges is appropriate to take account of the expected atypical behavior of velocity: Money growth lower than normally
expected would be sufficient to support substantial
growth in income. With this in mind, the Committee made a technical downward adjustment in the
target growth ranges for M2 and M3, reducing the
upper and lower ends of each range by V2 percentage point (table 1).
The strength of the influences depressing money
growth relative to income remains somewhat
uncertain, however. If they persist in 1993 to the
same extent as in 1992, growth of M2 and M3 in
the lower portions of their reduced target ranges
would be consistent with substantial further growth
of nominal spending. Alternatively, the upper ends
of the target ranges would accommodate ample
provision of liquidity to support further economic
expansion, even if the growth of money and income
were to begin coming into more normal alignment
and the recent high rate of increase in velocity were
to slow. The Committee will continue to examine
money growth as the year unfolds for evidence on
developing economic and financial conditions. As
in the past, the Federal Reserve will also be guided
by a careful assessment of a wide variety of other
financial and economic indicators. The Committee's primary concern, as in 1992, will remain
fostering financial conditions conducive to sustained economic expansion and a noninflationary
environment.

1. Ranges for growth of monetary and debt aggregates1
Percent

1. Change from average for fourth quarter of preceding year to average
for fourth quarter of year indicated. Ranges for monetary aggregates are
targets; range for debt is a monitoring range.
2. Domestic nonfinancial sector.

170

Federal Reserve Bulletin • March 1993

For debt growth, which has been less damped by
special forces than has the expansion of the broader
monetary aggregates, last year's range was retained
for 1993. Federal debt growth again is likely to be
substantial. Growth of the debt of nonfederal sectors is expected to accelerate somewhat as borrowers' balance sheets continue to improve, as intermediaries become more willing to lend, and as the
economy expands. Nevertheless, the growth of
nonfederal debt is expected to remain below that of
nominal GDP, a development the Committee sees
as contributing to building the sound financial
foundation crucial to a sustained economic
expansion.
Economic

Projections

for

1993

Although the economy and the financial markets
continue to face difficult adjustments, the governors and Bank presidents think that the most likely
prospect for 1993 is that economic growth will
proceed at a moderate pace. The growth of output
probably will be supported by further gains in
productivity, the ultimate source of increased real
income and improved living standards over the
long run. In addition, increases in employment are
expected to be large enough to bring further gradual declines in the unemployment rate over the
course of 1993. Inflation is expected to remain
subdued, boding well for sustained expansion in
1993 and beyond.
The governors' and Bank presidents' forecasts of
real GDP growth over the four quarters of 1993
span a range of 2Vi percent to 4 percent, with the
central tendency of the forecasts in a range of
3 percent to VA percent (table 2). In considering
the possible outcomes for 1993, the governors and

2.

Bank presidents cited the degree of momentum that
appears to have developed in the economy in the
latter part of 1992 and early 1993. The various
balance sheet problems that apparently retarded
growth of the economy during the early phases of
the current expansion, while by no means fully
resolved, seem to be receding. In addition, such
sectors as residential construction, business investment, and consumer durables clearly are benefiting
from the declines that have occurred in interest
rates.
However, impediments to more rapid expansion
are still present. Government spending for defense
appears likely to continue to decline for some time
to come. More broadly, balance sheet repair and
business restructuring, which have exerted major
restraint on economic activity in recent years, are
still in process, despite the apparent improvement
in business finances in 1992. Indeed, the new
year has brought additional announcements of business restructurings in a variety of industries, both
defense-related and other. These changes are leading to an economy that is more productive and
competitive, but at the cost of some dislocation and
disruption in the short run. The magnitude of structural changes like these is a special uncertainty in
the economic outlook for the remainder of the year.
With regard to the external sector, many foreign
industrial countries are experiencing prolonged
economic weakness. Under the circumstances, the
growth of U.S. exports, while remaining positive,
may well fall short of the growth of imports again
in 1993, exerting a drag on real GDP in contrast to
the substantial impetus in the period up to early
1991.
Despite the job cutbacks at some large companies, other firms, especially smaller ones, are add-

Economic projections for 1993

1. All urban consumers.




2. Percentage of civilian labor force.

Monetary Policy Report to the Congress

ing to payrolls, albeit cautiously, and total employment has been rising modestly. The governors and
Bank presidents expect this pattern to persist, with
net gains in employment during 1993 likely to
be sufficient to bring the unemployment rate down
somewhat further over the year. The central tendency of the unemployment rate forecasts for the
fourth quarter of 1993 extends from 63A percent to
7 percent; the remaining forecasts of the System
officials range down to about 6V2 percent.
The governors' and Bank presidents' forecasts of
the rise in the consumer price index over the four
quarters of 1993 extend from a low of 2Vi percent
to a high of 3 percent. Within that range, a large
majority of the forecasts are clustered in the span
of 1V2 percent to 2% percent. The considerable
progress that has been made in bringing down
inflation during the past decade is providing one of
the essential underpinnings for the sustained
growth of real living standards over the long run.
However, achieving a satisfactory economic performance in 1993—and in the years thereafter—
will depend on initiatives in many types of policy
other than monetary policy. In coming months, the
Congress and the new Administration will be grappling with a host of issues, including those related
to fiscal policy, regulatory policy, and foreign trade
policy. Farsighted approaches are needed in all
those areas if the economy is to perform at its full
potential over the long haul. In framing regulatory
policy and foreign trade policy, the Congress and
the Administration will need to keep an eye on
potential costs and rigidities that could sap the
vigor of a market economy. With regard to fiscal
policy, credible action to reduce the prospective
size of future federal budget deficits could yield a
very direct and meaningful payoff in the form of
lower long-term interest rates than otherwise would
prevail. Such action would encourage capital investment and would go far toward relieving anxieties that many of the nation's citizens still have
about longer-run economic prospects.

THE PERFORMANCE
OF THE ECONOMY IN 1992
The economy began to exhibit renewed firmness in
1992, overcoming a host of impediments that have
been working to retard the growth of activity. With




171

the strengthening of growth in the second half, to a
3.6 percent rate, the rise in real GDP over the year
cumulated to 2.9 percent, the strongest gain since
1988. Employment also picked up in 1992, but
rather slowly; the unemployment rate continued to
move up in the first half of the year, but thereafter
followed a course of gradual decline. Inflation continued to trend lower in 1992, with most broad
price indexes showing increases that were among
the smallest since the mid-1960s.
The growth of household and business expenditures picked up appreciably in 1992. Households,
for their part, began to spend more freely on motor
vehicles and other goods, and their purchases of
homes also strengthened, spurring additional gains
in residential construction. Businesses began investing more heavily in new equipment; much of
the gain went for computers and other electronic
equipment embodying new technologies. Business
outlays for nonresidential construction declined, on
net, over the year, but by a much smaller amount
than in 1991. In total, the final purchases of households and businesses rose about 4 l A percent in real
terms in 1992, after declining in each of the two
previous years; the 1992 gain matched that of 1988
and otherwise was the largest in eight years. By
contrast, governments at all levels continued to be
burdened by huge budget deficits in 1992, and for a
second year their combined purchases of goods and
services changed little in real terms. In addition,
export growth was slowed by weakness of activity
in several foreign industrial economies; despite
improvement in the second half, the rise in real
exports of goods and services over the year,
3V2 percent, was only about half as large as the
annual gains in 1990 and 1991. Meanwhile, the
faster growth of domestic spending pushed up the
growth in imports of goods and services to 9lA percent in 1992.
Further progress was made in reducing inflation
last year. The consumer price index excluding food
and energy—a measure widely used in gauging the
underlying trend of inflation—increased about
3V2 percent over the four quarters of 1992; this was
a full percentage point less than the increase during
1991. The total CPI rose about 3 percent over the
four quarters of 1992, the same as in the previous
year; energy prices, which had fallen sharply in
1991, turned up slightly this past year, while
increases in food prices were quite small for the

172

Federal Reserve Bulletin • March 1993

second year in a row. Except for 1986, when the
CPI was pulled down by a collapse of world oil
prices, the increases of the past two years are the
smallest in a quarter century.

The Household

Sector

The financial condition of households improved in
1992. Income growth picked up a little in the
aggregate, the strains on household balance sheets
eased a bit, and the spirits of consumers brightened
markedly toward year-end. Growth in consumer
spending followed a stop-and-go pattern through
midsummer, but the gains thereafter were steadier
and fairly sizable overall. Spending for residential
investment also advanced over the year, by a considerable amount in total.
The aggregate wealth of households appears to
have increased further during 1992. With stock
prices increasing, the value of households' financial assets rose moderately, and the value of residential real estate also moved up, on average. On
the liability side, households remained cautious in
taking on new debt in 1992, and the burden of
carrying debt continued to ease, owing both to slow
growth in the volume of debt outstanding and to
the further reductions in interest rates, which facilitated the ongoing substitution of new, lower-cost
debt for old, higher-cost obligations. The incidence
of households experiencing loan-repayment difficulties diminished over the year.
Income growth picked up moderately in 1992.
Wages and salaries rose about 4lA percent in
nominal terms, after a gain of only 2lA percent in
1991. In addition, proprietors' incomes benefited
from the strengthening of economic activity, and,
with corporate profits on the rise, the dividends
paid to shareholders more than reversed their
decline of the previous year. Transfer payments,
which had soared as the economy softened in
1990 and 1991, continued to grow rapidly in 1992.
By contrast, interest income trended sharply lower,
as the rates of return on household deposits and
other financial assets fell further. Total after-tax
income got a temporary boost in 1992 from an
adjustment of federal tax withholdings that took
effect at the start of March. With inflation low,
real disposable personal income increased nearly
2V2 percent over the year—not a large gain by




past cyclical standards, but nonetheless the biggest
since 1988.
Real personal consumption expenditures rose
about 3lA percent over the four quarters of 1992,
after essentially no gain over the two previous
years. For a considerable part of 1992, the
increases in spending were interspersed with
stretches of sluggishness. A surge in consumer
expenditures early in the year was followed by
listlessness during the spring, and a second jump in
spending around midyear was followed by still
another bout of slow growth during the summer.
However, the last few months of the year brought
fairly sizable advances, boosting the growth of
consumption expenditures to a rate of more than
4 percent in the fourth quarter.
Consumer expenditures for motor vehicles increased about 9 percent over the four quarters of
1992. More than half the gain came in the fourth
quarter, when sales of new vehicles were boosted
by special promotional incentives and, apparently,
by a growing perception among consumers that
better economic conditions lay ahead. At the start
of 1993, after some of the more highly publicized
promotional programs had ended, sales of cars and
light trucks fell sharply for a brief time, but they
since appear to have regained strength. More than
likely, some fundamental support for sales is coming from the replacement needs of persons who had
put off buying new vehicles during the recession
and the early phases of the recovery.
Spending picked up during the second half of
1992 for many items other than motor vehicles,
with notable gains in categories in which an element of discretion typically enters into households'
purchasing decisions. Real outlays for furniture
and household equipment rose at an annual rate of
nearly 15 percent in the second half of 1992, and
real expenditures for apparel climbed at nearly a
10 percent rate. In total, spending for consumer
durables other than motor vehicles grew about
9 percent in real terms over the four quarters of
1992, after declining in each of the two previous
years. Real outlays for nondurables, which also had
fallen in both 1990 and 1991, rose almost 3 percent
in the latest year. Real expenditures for services
increased about 2 percent during 1992, slightly
faster than in other recent years.
The personal saving rate—the share of disposable income not used for consumption or other

Monetary Policy Report to the Congress

outlays—rose moderately in the first half of the
year, when concerns of households about the
prospects for the economy apparently led them to
adopt more cautious attitudes toward spending. The
rate then turned down in the second half of the year
as consumers began to spend more freely. The
fourth-quarter rate was slightly below the average
for 1992, but it was well within the range of
quarterly observations seen over the past several
years.
Real outlays for residential investment rose
15 percent during 1992, climbing to a fourthquarter level nearly 25 percent above their recession low of early 1991. Most of the 1992 rise
in residential investment came in the form of
increased construction of single-family housing
units, which benefited from the further net reduction in mortgage interest rates over the course of
the year. Outlays for home improvements, which
make up about one-fifth of total residential investment, also increased in 1992, after declining in
each of the three previous years; repair of the
damage caused by Hurricane Andrew accounted
for part of that gain. By contrast, multifamily housing remained depressed; high vacancy rates and
unfavorable demographic trends continued to be
big obstacles to new construction activity in that
portion of the market.
As with consumer spending, the gains in singlefamily housing activity tended to come in intermittent bursts through much of 1992. Sales of new
homes surged early in the year, weakened in the
spring, surged again during the summer, and then
fell back just a touch in the fourth quarter; on net,
the increase over the year amounted to 12 percent.
Mortgage interest rates, although lower than in
1991, exhibited some mild swings during 1992,
and these swings appear to have contributed to the
fluctuations in home sales. Proposals early in the
year for a tax credit for first-time homebuyers also
may have affected the timing of purchases to some
degree.
Construction activity in the single-family sector
also had its ups and downs in 1992, influenced by
unusual weather patterns as well as by the fluctuations in sales. Nonetheless, the trend over the year
as a whole was decidedly upward, and the average
level of starts in the fourth quarter was about
20 percent above that of a year earlier. In January,
single-family starts fell back somewhat; volatility




173

in the monthly data on starts is not unusual at this
time of year, however.
Despite the large gains seen in 1992, starts in the
single-family sector have retraced only part of the
decline that took place in the late 1980s and early
1990s. Strong impetus for recovery has come from
declines in mortgage interest rates, which have
been considerably lower this past year than they
were in 1986, when single-family starts were at
their most recent annual peak. However, a number
of other developments have continued to retard the
recovery of housing activity. Uncertainties about
job prospects no doubt have deterred some buyers
from taking advantage of the lower rates on home
mortgages. More broadly, recent demographic
trends have been less favorable to growth in the
demand for single-family housing than were the
trends of the mid-1980s. The declines in house
prices in a number of regions in recent years—and
the more general lack of any real price appreciation
to speak of—also may have affected demand to
some extent; certainly, housing is no longer viewed
by potential buyers as the sure-fire, high-yield investment that it was once thought to be.
Builders, for their part, have remained a little
cautious, as have the lenders who finance new
construction. In many cases, houses are being
started only when a buyer is lined up; eagerness to
build in anticipation of future sales is not widely
apparent.
In the multifamily sector, the number of units
started in 1992 was about 75 percent below the
peak rates of the mid-1980s; the sector accounted
for only 6 percent of total residential investment
this past year. The overbuilding that occurred in the
multifamily sector in the mid-1980s led to high
vacancy rates that have stymied activity ever since.
In that regard, little progress was made in reducing
vacancy rates for multifamily rental units in 1992,
despite the greatly diminished level of new construction. The speed at which the excess supply of
space can be worked off is being limited by
declines in the population of young adults, as well
as by the slow rate of depreciation of these longlived structures.
The Business

Sector

The past year brought moderate increases in activity in the business sector of the economy. Produc-

174

Federal Reserve Bulletin • March 1993

tion, sales, and orders rose, on net, over the year,
and business profits continued to swing back up
from the recession lows of 1991. Many businesses
continued to undertake major structural changes
designed to cut costs and enhance efficiency. The
changes were manifest both through reorganization
of existing operations and through investment in
new technologies. Businesses also continued to
shore up their finances, trimming away debt and
building equity. Financial pressures persisted in
the business sector in 1992, but, in general,
they seemed to become less acute as the year
progressed.
Industrial output rose nearly 3 percent from
December 1991 to December 1992. Production fell
in the first month of 1992 but then picked up, rising
about Vi percent per month from February through
May. During the summer, the expansion of activity
seemed to be losing momentum; orders and shipments fell slightly, on net, from May to August,
factory inventories backed up a little, and industrial
production essentially flattened out over a fourmonth stretch. However, orders and shipments
began moving up once again in September, and
they increased considerably in the fourth quarter.
Industrial production also picked up once again in
the fourth quarter, and a further gain, amounting to
0.4 percent, was recorded in January of this year.
Business profits, which had taken a turn for the
better late in 1991, improved further during 1992.
The operating profits earned by nonfinancial corporations from their domestic operations rose 18 percent from the final quarter of 1991 to the third
quarter of 1992, and a further gain seems implicit
in the available data for the fourth quarter. (An
actual estimate of fourth-quarter profits will not be
published by the Commerce Department until late
March.) Profits of these firms have been lifted, in
part, by increases in the volume of output since the
end of the recession. In addition, tight control over
costs has led to increases in profits per unit of
output. Unit labor costs of nonfinancial corporations have risen only slightly since the start of the
current economic expansion, and their net interest
costs have declined sharply, owing to lower interest
rates and restraint in the use of debt. The domestic
profits of financial corporations were strong in the
first half of 1992 but were severely depressed in the
third quarter by the unprecedented losses that insurance companies suffered in the wake of Hurricane




Andrew; in the absence of the hurricane, profits in
the financial sector would have increased in the
third quarter.
The economic condition of smaller companies
also seemed to improve somewhat in 1992. The
past year's estimated rise in the profits of nonfarm
proprietors was the largest annual gain since the
mid-1980s; increases had been relatively small over
the three previous years.
The net income of farm proprietors turned back
up in 1992 after a moderate decline in 1991. Farm
output rose to a record high in 1992, with strong
gains for both crops and livestock. Prices, meanwhile, lagged year-earlier levels through much of
1992, but most of that slippage in farm prices
already had taken place by the start of the year; the
average level of farm prices in December 1992
actually was about the same as that a year earlier.
Farm production expenses edged down for a second year as farm operators, like their nonfarm
counterparts, continued to maintain tight control
over costs.
Business investment in fixed capital rose about
8 percent in real terms during 1992, more than
reversing the decline of the previous year. Spending for equipment increased in each quarter of
1992, and the gains cumulated to nearly 12 percent
by the fourth quarter; with spare capacity still
extensive in most industries in 1992, much of the
gain in equipment spending over the year probably
was a result of the desire of businesses to modernize their operations. Meanwhile, nonresidential
construction spending, which had plunged 14 percent in 1991, fell by a much smaller amount in
1992—IV2 percent according to the estimate in the
most recent GDP report.
Spending for computers was at the forefront of
the rise in equipment outlays in 1992. In terms of
annual averages, the nominal outlays for office and
computing equipment rose about 17 percent; the
gains in real terms were much greater still, as
technological advances and competitive market
conditions combined to continue driving down the
price of real, effective computing power. Businesses also boosted their outlays for telecommunications equipment, especially in the second half of
1992. Spending for motor vehicles strengthened in
1992, and investment in industrial equipment edged
up after three years of decline. Spending for aircraft traced out a volatile pattern during 1992 and,

Monetary Policy Report to the Congress

for the year as a whole, was down only moderately
from the high level of 1991; however, these outlays
closed out the year on a weak note, and prospects
for 1993 are not encouraging, given the losses that
have been experienced by airline companies and
the related cancellations and stretch-outs of orders.
The small decline in nonresidential construction
outlays during 1992 reflected some widely divergent trends across the various types of construction
activity. Spending for new office buildings fell
sharply further during the year, to a fourth-quarter
level that was about 60 percent below the peak of
the mid-1980s. In addition, real outlays for industrial structures declined in 1992 for the second year
in a row, influenced, no doubt, by the current high
levels of unused industrial capacity and by the
ongoing trend toward tighter control of inventories
and concomitant reductions in needed storage
space. Annual outlays for oil and gas drilling also
fell further in 1992; a rise in drilling in the year's
final quarter probably was prompted mainly by
a year-end phaseout of certain tax incentives,
although some drillers may also have been
responding to an upturn in natural gas prices over
the year.
Other types of construction activity fared better
in 1992. Spending for commercial structures other
than office buildings moved up over the year, after
sharp declines in both 1990 and 1991, and the
outlays of utilities rose appreciably, boosted by
environmental requirements as well as by further
moderate additions to capacity. Increases in construction spending also were reported for various
types of institutional structures, such as religious
facilities and hospitals.
The Government

Sector

Government purchases of goods and services, the
portion of government spending that is included in
GDP, increased slightly in real terms over the
course of 1992, after declining slightly during
1991. Federal purchases fell Vi percent in real
terms over the year, as a further decline in real
defense purchases more than offset another year of
increase in real nondefense purchases. State and
local purchases of goods and services increased
about IV2 percent during 1992, a rise slightly larger
than in 1991 but still well below the rates of
increase seen through much of the 1980s.




175

Governments at all levels continued to be
plagued by severe budgetary imbalances in 1992.
At the federal level, the unified budget deficit rose
about $20 billion in fiscal year 1992, to a level of
$290 billion. With the economy gradually strengthening, the rate of increase in federal receipts picked
up a little, to 3V2 percent, from only 2lA percent in
fiscal 1991. However, spending once again rose
faster than receipts; total federal outlays were up
4V2 percent in fiscal 1992, after a rise of nearly
53/4 percent in the previous fiscal year.
The rates of growth in total spending in 1991 and
1992 may well understate the degree of upward
momentum in federal outlays in those years. In
1991, total spending was held down considerably
by a convention used in the federal budget to
account for the flow of contributions to the United
States from its allies in the Gulf War. Those contributions were counted as negative defense outlays
rather than additions to receipts. Additional contributions from the allied countries were received in
fiscal year 1992, but they were much smaller than
in 1991. Another important factor at work in 1992,
however, was a delay in funding the activities of
the Resolution Trust Corporation, which kept the
1992 outlays for deposit insurance programs much
lower than they otherwise would have been.
Excluding the outlays for deposit insurance and
the effect of the allied contributions on reported
levels of defense spending, federal expenditures
rose about 6V2 percent in nominal terms in fiscal
year 1992, after an increase of nearly 9 percent in
fiscal year 1991. Spending for entitlements, especially those related to health care and income support, continued to grow very rapidly in 1992. In the
health area, federal outlays for Medicaid increased
nearly 30 percent, and spending for Medicare rose
14 percent. Spending for income security was
boosted in 1992 by further large increases in unemployment benefits and food stamp disbursements.
In dollar terms, the combined rise in outlays for
health care and income security amounted to about
$60 billion. Increased expenditures for social security added almost another $20 billion.
Combined spending for all other programs rose
only slightly in fiscal year 1992. Within that broad
and diverse grouping, defense outlays fell sharply
in nominal terms, once adjustment is made for the
allied contributions, but some nondefense functions posted large increases in outlays.

176

Federal Reserve Bulletin • March 1993

State and local governments saw no relief from
budgetary pressures in 1992. The combined deficit
in their operating and capital accounts, net of social
insurance funds, widened a bit over the first three
quarters of the year, reversing the small improvement that had been achieved in the latter part of
1991. As is true at the federal level, a rapidly rising
level of mandated transfer payments to individuals
for health and income support is at the core of the
budget difficulties of many states and localities; in
nominal terms, transfer payments in the fourth
quarter were about 16 percent above the level of a
year earlier.
Construction spending by state and local governments picked up in 1992. According to preliminary
data, the real gain in these outlays amounted to
about 3V2 percent over the four quarters of the year.
Spending for highways increased considerably in
1992, and outlays for buildings other than schools
were strong in the first half of the year. Construction of educational facilities, which has been
boosted by increases in the school-age population
in recent years, rose further in 1992, but the
increase was small, both in absolute terms and
relative to the gains in most other recent years.
Growth in other major categories of state and
local expenditures was restrained. Compensation
of employees, which accounts for more than half of
total state and local expenditures, increased about
1 V2 percent in real terms over the four quarters of
1992; in nominal terms, the rise over the year
amounted to about AV2 percent, similar to that of
1991 but much less than the nominal increases seen
in the years before 1991. Restraint on wage growth
was widespread in the state and local sector in
1992, and although total employment in the sector
grew a little faster than in 1991, hiring freezes,
furloughs, and layoffs continued to be reported in
some hard-pressed jurisdictions. State and local
purchases of durable and nondurable goods—such
things as equipment and supplies—apparently grew
little in real terms over the course of 1992. Real
purchases of services from outside suppliers apparently edged down for the third year in a row.
Many states and localities have implemented tax
increases in recent years in an effort to bolster
receipts. In addition, grants-in-aid from the federal
government have been rising rapidly, and, in 1992,
improvement in the economy helped boost receipts
to some degree. In total, state and local receipts




rose IV2 percent in annual average terms in 1992,
outpacing the growth of nominal GDP by a considerable amount. However, for the third year in a
row, the increase in receipts fell short of the annual
rise in nominal expenditures, which amounted to
8 percent in 1992.
The External

Sector

The trade-weighted foreign exchange value of the
U.S. dollar, measured in terms of the other G-10
currencies, rose nearly 6 percent on balance from
December 1991 to December 1992. The dollar
increased over the first three months of 1992 amid
expectations of strengthening economic recovery
in the United States and slowing economic growth
abroad. Over the summer, however, the dollar
declined to a point below the previous year's low
as growth of the U.S. economy was perceived to be
more sluggish than expected and as the Federal
Reserve eased short-term interest rates further. The
dollar reversed direction again in the fall, strengthening sharply in the wake of turmoil in the European Monetary System and, more important, on
evidence of increased momentum in the U.S. economic expansion and sluggish conditions in foreign
industrial economies. The dollar's rise continued
into the early weeks of 1993.
On a bilateral basis, the net rise in the weighted
average dollar over 1992 primarily reflected sharp
increases in the dollar's value against several European currencies and against the Canadian dollar.
Denmark's rejection of the Maastricht Treaty in
early June called into question the future of European monetary and political union and led to pressures on the exchange rate mechanism (ERM) of
the European Monetary System. In September,
those pressures intensified enough to force Italy
and the United Kingdom to withdraw from the
ERM, and their currencies depreciated sharply. For
the year as a whole, the dollar appreciated against
those two currencies by 19 percent and 18 percent
respectively. Several other European currencies,
including those of Spain, Portugal, and the Scandinavian countries, also depreciated sharply against
the dollar in the autumn. The parity of the French
franc with the German mark was maintained within
the ERM, but at the cost of relatively high French
short-term interest rates in the face of a sluggish
French economy and rising unemployment.

Monetary Policy Report to the Congress

The dollar fell more than 7 percent against the
German mark from December 1991 to August
1992, as German monetary policy, responding to
relatively high German money growth and inflation, remained tight longer than market participants
had expected. That decline of the dollar was more
than reversed during the fall and winter, however,
as it became clear that German economic activity
had turned significantly downward and as German
monetary policy was eased somewhat. By midFebruary 1993, the dollar was about 5 percent
higher against the mark than it had been in December 1991.
The dollar depreciated about 6 percent on balance against the Japanese yen during 1992 and
early 1993, despite a noticeable decline in Japanese
GDP during the second and third quarters and a
significant reduction in Japanese interest rates. The
net strengthening of the yen probably can be attributed, at least in part, to market reactions to a
substantial widening of Japan's external surplus.
The U.S. merchandise trade deficit widened to
about $84 billion in 1992, compared with $65 billion in 1991 (Census basis). Imports grew about
twice as fast as exports as the U.S. economic recovery gained some momentum, while economic
growth in U.S. markets abroad was sluggish on
average. Early in the year, the deficit narrowed
somewhat when a drop in oil prices lowered the
value of imports. The deficit widened sharply in the
second quarter, however, when imports surged and
exports remained about unchanged. During the second half of 1992, imports continued to expand
somewhat more rapidly than exports, and the deficit increased further.
The current account balance worsened substantially more than the trade deficit, moving from near
balance in 1991 to a deficit of $51 billion at an
annual rate over the first three quarters of 1992.
However, one-time cash transfers associated with
the Gulf War accounted for most of the difference;
these transfers had reduced the current account
deficit by $42 billion in 1991, but they reduced it
by only about $2 billion at an annual rate during
the first three quarters of 1992. Excluding these
transfers, the current account deficit weakened
somewhat less than the trade deficit, owing to a
strengthening of net service receipts.
U.S. merchandise exports grew 4lA percent in
real terms over the four quarters of 1992. Most of




14

the increase occurred in the second half of the year
and consisted largely of stronger shipments of agricultural goods, computers, other machinery, and
automotive products. Excluding agricultural products and computers, the quantity of exports grew
only 1 percent in 1992, compared with a rise of
6V2 percent in 1991; the slowdown was mainly a
reflection of sluggish demand in key industrial
countries. By region of the world, most of the
increase in exports during 1992 went to areas that
continued to register moderate to fairly strong rates
of economic growth—primarily developing countries in Asia and Latin America. Exports to Japan
and to European countries, whose growth rates
probably averaged less than 1 percent when
weighted by the shares of those countries in U.S.
exports, actually declined in 1992.
Merchandise imports grew IOV2 percent in real
terms during 1992. Two categories—oil and computers, the latter of which includes peripherals and
parts—accounted for a significant portion of that
rise. Oil imports rose 13 percent over the four
quarters of 1992 as U.S. consumption of petroleum
products recovered from depressed levels in 1991
and as domestic oil production resumed its longrun downtrend. U.S. domestic sales of computers
were very strong beginning in the summer, fueled
by price wars and by a push on the part of U.S.
businesses to upgrade PCs and workstations to take
advantage of improvements in software. Most of
the sales were at the lower end of the spectrum of
computer products—items that often are imported.
Imports of products other than oil and computers
increased 5lA percent in 1992 as domestic demand
in the United States picked up. The strongest increases were in a wide range of consumer goods,
especially from China and various other developing countries in Asia. Imports of telecommunications equipment, electric machinery, and other
types of machinery also showed significant
increases in 1992, for the first time since 1988.
For the first three quarters of 1992, the substantial current account deficit was more than matched
by recorded net capital inflows, both official and
private. Net official inflows amounted to more than
$30 billion at an annual rate, despite substantial
net outflows associated with intervention sales of
dollars by major foreign industrial countries. Net
private inflows were almost as large, with banks
accounting for a large part of these inflows. The

178

Federal Reserve Bulletin • March 1993

agencies and branches of Japanese-based banks
used funds from abroad to substitute for a runoff in
CDs outstanding in the United States, while other
foreign-based banks used funds from abroad to
help finance asset expansion in the United States. A
reduction in the holdings of Euro-deposits by U.S.
residents also contributed to the net private capital
inflow during the first three quarters of the year, but
that reduction was partially reversed in the fourth
quarter.
Although securities transactions contributed little to the net inflow of capital in the first three
quarters of 1992, the continued impact of the globalization of financial markets was apparent. U.S.
net purchases of foreign stocks and bonds were
very strong, accompanied by a near-record pace of
foreign bond issues in the United States. During the
same period, foreigners added substantially to their
holdings of U.S. government and corporate bonds;
however, they made net sales of U.S. equities.
U.S. direct investment abroad was very strong in
the first three quarters of 1992. Outflows to Europe
remained high, while outflows to Latin America
and Asia grew. In contrast, foreign direct investment in the United States fell further, producing a
net outflow. The rate of new foreign direct investment in the United States has declined dramatically
in recent years from large inflows recorded during
the latter part of the 1980s, partly reflecting the
sharp drop in mergers and acquisitions in the U.S.
business sector. In addition, the very low rates of
return reported by foreign direct investors on their
holdings in the United States in recent years may
have helped discourage new investment.
Labor Market

Developments

The labor market remained relatively sluggish in
1992. Some large companies continued to undergo
major restructurings or reorganizations, and these
changes led in many cases to permanent work force
reductions at those firms. More generally, businesses remained hesitant to take on new workers,
even as the recovery progressed. The still-sluggish
pace of output growth in the first half of the year
tended to limit labor requirements during that
period. Later on, when firms started to expand
output more rapidly, they were able to do so without making major long-term hiring commitments.
Needs for additional workers were met, in many
cases, through use of temporary-help firms, rather



than through permanent additions to companies'
own payrolls.
Nonetheless, the tilt of the overall employment
trend was positive, rather than negative as it had
been in 1990 and 1991. Payroll employment, a
measure that is derived from a monthly survey of
business establishments, was up about 600,000 during 1992 and an additional 100,000 in January. The
number of jobs in manufacturing fell further in
1992, but not as much as in either of the two
previous years; small increases in the number of
factory jobs were reported toward year-end and in
early 1993. In addition, employment in construction changed little in 1992, after two years of sharp
decline.
About 900,000 new jobs were created in the
service-producing sector of the economy in 1992.
The number of jobs in retail trade turned up a little,
on net, after dropping about one-half million over
the two previous years. In addition, firms that provide services to other businesses recorded strong
employment growth in 1992; more than likely,
these firms were the ones that benefited most from
the tendency of businesses to purchase labor and
services from other firms rather than hire additional
workers of their own. Employment in health services, which had remained on a strong upward
trend right through the recession, continued to grow
rapidly in 1992.
The employment measure that is derived from
the monthly survey of households was stronger
than the payroll measure in 1992; it showed an
increase of about Wi million in the number of
persons holding jobs and by year-end had moved
back close to the previous cyclical peak of mid1990. Reasons for the stronger performance of the
household series are not entirely clear. Differences
in coverage between the household survey and the
payroll survey accounted for only a small part of
the 1992 gap, and other possible explanations are
little more than conjecture at this point. A portion
of the gap between the two series was eliminated in
January, as the rise in jobs reported in the payroll
survey in that month was accompanied by a decline
in the household measure of employment.
The number of unemployed persons increased in
the first half of 1992, to a peak in June of nearly
9.8 million. Job losses—many of them apparently
permanent—continued to mount in the first half of
the year, and new job opportunities did not open up
fast enough to fully absorb either those workers or

Monetary Policy Report to the Congress

others entering the work force for the first time. As
a result, the unemployment rate rose more than Vi
of a percentage point in the first half of the year, to
a June level of 7.7 percent.
The second-half outcome was more favorable.
The number of unemployed persons declined about
one-half million from June to December, and the
unemployment rate moved down over that period,
to a level of 7.3 percent at year-end. Some of the
workers who had been laid off temporarily were
recalled in the second half of the year. In addition,
the number of unemployed workers not expecting
to be recalled—the so-called permanent job
losers—also declined; presumably, these workers
either found new jobs elsewhere in the economy or
dropped out of the labor force altogether. A similar
story applied to unemployed new entrants, a category of jobless workers whose ranks were a little
thinner at the end of 1992 than they had been at
midyear. In January of this year, the number of
unemployed persons fell further, and the unemployment rate edged down to 7.1 percent.
In the aggregate, the civilian labor force—the
sum of those persons who are employed and those
who are looking for work—rose sharply in the first
half of 1992 but changed relatively little thereafter.
Its level in January of 1993 was up about one million from that of a year earlier. The labor force
participation rate—the proportion of the workingage population that is in the labor force—fell over
the second half of the year and into January of
1993, leaving it about where it had been at the end
of 1991.
Against a backdrop of slack in labor markets and
in the context of reduced inflation, the rate of rise
in workers' hourly compensation continued to slow
in 1992. The employment cost index for private
industry—a measure of labor cost that includes
both wages and benefits and that covers the entire
nonfarm business sector—increased V/i percent
from December of 1991 to December of 1992. The
index had risen nearly AVi percent in the previous
twelve-month period, and as recently as mid-1990
its twelve-month rate of change had exceeded
5 percent. The employment cost index for wages
and salaries increased only 2.6 percent during
1992; this was the smallest annual rise ever reported in this measure, which dates back to 1975.
The rate of rise in the cost of benefits provided by
firms to their employees also slowed in 1992, but
the size of the increase—5lA percent—was still



179

relatively large. Many firms, both large and small,
continued to be pressured by the rising cost of
medical care for their employees and by the
increased cost of workers compensation insurance;
the difficulty of bringing these costs under control
may well have been a serious deterrent to increased
hiring in 1992.
Despite the further slowdown in nominal compensation per hour in 1992, the purchasing power
of an hour's labor appears to have risen in real
terms, as the nominal increase in hourly wages and
benefits, as measured by the employment cost index, outpaced the rise in consumer prices for the
second year in a row. Real compensation, computed in this manner, had declined sharply in 1990,
and the increase in 1989 had been barely positive.
Sustained increases in real living standards
depend ultimately on achieving advances in the
productivity of the work force, and on that score
the economy performed well in 1992. Output per
hour worked in the nonfarm business sector jumped
3 percent over the year, the largest annual gain
since 1975. Although a portion of this large rise is
no doubt a reflection of normal cyclical tendencies,
longer-range improvement in productivity growth
also may be in progress. The jump in output per
hour in 1992, combined with the slowing of compensation gains, held the annual increase in unit
labor costs to just 0.7 percent.
Price

Developments

The consumer price index rose 3 percent over the
four quarters of 1992, the same as in the previous
year. Energy prices, which had fallen in 1991,
turned up a little in 1992, but price increases elsewhere in the economy were generally smaller than
those of the previous year. The limited rise in labor
costs in 1992 was one important factor exerting
restraint on the rate of price increase. In addition,
the cost of materials used in production rose only
moderately over the year, as did the prices of goods
imported from abroad. Although inflation expectations, as reported in various surveys of consumers and business officials, have remained a step or
so above actual inflation rates, they too appear to
have moved lower over time. On average, their
recent levels are about in line with—or, according
to some surveys, less than—the lower bound of the
range of inflation expectations reported during the
1980s. In view of these recent trends in prices,

180

Federal Reserve Bulletin • March 1993

labor costs, and inflation expectations, the January
rise of 0.5 percent in the CPI appears to be something of an aberration.
The CPI for food increased a bit less than
l3/4 percent in 1992, the same as in 1991. Not since
the 1960s has there been a two-year period in
which the cumulative increase in food prices was
so small. This low rate of food price inflation in
1991 and 1992 was, in part, a reflection of the same
factors that were working to pull inflation down in
other parts of the economy. In addition, food prices
have been restrained by favorable supply conditions in the farm sector. Meat production rose further in 1992, and the output of crops soared. Dryness in some regions imparted temporary volatility
to crop prices in late spring. Thereafter, growing
conditions turned exceptionally favorable and
remained so through the summer and into early
autumn. Unusually wet conditions in some regions
later on in the autumn apparently made only a
small dent in the eventual size of the harvest.
The rise in consumer energy prices over the four
quarters of 1992 amounted to about 2Vi percent.
The previous year, energy prices had fallen 8 percent. With no major supply or demand shocks
springing up in world oil markets in 1992, the price
of West Texas Intermediate stayed in the relatively
narrow trading range of about $18 to $23 per
barrel; the price has remained in that range in the
early part of 1993. At the retail level, price changes
for petroleum products were mixed in 1992; the
price of gasoline rose about 3 percent, while fuel
oil prices declined moderately. The CPI for natural
gas rose about 5 percent in 1992, considerably
more than in other recent years. Although much of
that rise in gas prices came in the second half of the
year in the wake of supply disruptions caused by
Hurricane Andrew, prices of gas at the wellhead
had already moved up considerably before the
hurricane hit, in response to a somewhat tighter
supply-demand balance than had existed over the
previous year or so.
The CPI excluding food and energy rose 3.4 percent over the four quarters of 1992, a percentage
point less than it had risen in 1991. The slowdown
was widespread among the various categories of
goods and services that are included in this measure of core inflation. The rate of rise in the cost of
shelter—the single most important category in the
CPI, with a weight equal to more than one-fourth
of the total—slowed further in 1992; rents for both



apartments and houses apparently were damped by
the large amount of vacant housing that was available in many parts of the country. The prices of
other services that are included in the CPI—which
collectively make up another one-fourth of the total
index—also slowed appreciably in 1992; nonetheless, their overall rate of increase remained relatively high. The costs of medical care services and
tuition continued to rise much faster than prices in
general in 1992, and airfares rebounded from their
1991 decline. The CPI for commodities other than
food and energy rose 2Vi percent during 1992, after
an increase of more than 4 percent over the four
quarters of 1991. Price increases for this broad
category of goods were restrained by the cost and
price developments in manufacturing: Unit labor
costs in manufacturing actually declined in 1992,
and the producer price index for finished goods
rose less than 2 percent.
After falling sharply from mid-1990 to the end
of 1991, the prices of industrial commodities generally changed little, on balance, during 1992. By the
end of 1992, however, prices for some industrial
metals had begun to tilt up, consistent with the
pickup in the pace of industrial expansion toward
year-end, and additional price increases have been
reported in some of these markets in early 1993.
The prices of lumber and plywood—following a
path considerably different from that of most other
commodities—rose substantially during 1992, and
further steep increases have been evident in early
1993. The surge in prices of these products appears
to be a reflection of the uptrend in single-family
housing construction, weather-related supply disturbances in some timber regions, and adjustment
of the logging industry to environmental restrictions that have been implemented in some areas of
the country. Prices of some other wood products,
such as pulp, also rose sharply at the producer level
in 1992.
The recent increases in prices of these raw materials have shown through to some extent to broader
measures of producer prices. For example, the producer price index for intermediate materials excluding food and energy—a price index that encompasses a wide range of production materials—rose
1 percent during 1992 after declining about 3A of a
percentage point during 1991, and the past couple
of months have seen some further pickup in that
measure of price change. From an economywide
perspective, however, that pickup in materials

Monetary Policy Report to the Congress

prices has not been sufficient to dominate the deceleration in labor costs, which account for a far
greater share of total production costs.
MONETARY AND FINANCIAL DEVELOPMENTS
IN 1992
Federal Reserve policy in 1992 was directed at
promoting and extending the recovery from the
1990-91 recession, in the context of continued
progress toward price stability. The difficulty of
designing and implementing constructive monetary
policies during this period has been exceptional. In
1992, as earlier, economic activity was held back to
an unusual degree by the efforts of households,
nonfinancial businesses, and some key providers of
credit to the economy, including commercial banks,
to strengthen their balance sheets. These forces
have tended to alter the normal relations between
financial flows—particularly those reflected in
movements in M2 and M3—and the behavior of
the economy. Under the circumstances, the Federal
Reserve has had to take a flexible approach to the
use of money and credit aggregates as intermediate
policy targets; specifically, in light of evidence that
expansion in economic activity was being financed
to an unusual extent in capital markets rather than
through banks and other depositories, the System
tolerated shortfalls of M2 and M3 from their target
ranges.
The Federal Reserve judged it appropriate to
ease reserve conditions on three occasions in 1992,
when financial and economic data suggested that
the economy might be losing momentum. The
extent of the easings last year was considerably
less than in 1991, however, as the underlying trend
of the economy overall was more positive. Partly
as a result of the cumulative effect of the monetary
easings of recent years, economic activity accelerated in 1992 to its fastest pace since 1988. This
pickup was achieved even as various measures of
inflation evidenced further slowing, with the
"core" inflation rate falling to levels last seen in
the early 1970s. Thus, 1992 was a year not only of
financial repair, but also of improved aggregate
economic performance in the United States.
The Implementation

of Monetary

Policy

The year 1992 began with short-term interest rates
at their lowest levels in more than a quarter of a



181

century, following a series of actions by the Federal
Reserve in the latter part of 1991 that reduced the
discount rate and the level around which the federal funds rate was expected to trade to 3Vz percent
and 4 percent respectively. Long-term rates were
also at lower levels, reflecting the policy actions
and a weakening of economic activity in the final
quarter of 1991.
Evidently in the expectation that these rate cuts
would revive the recovery, the stock market began
the year with strong upward momentum, and the
dollar appreciated. However, other evidence that
the economy was picking up remained scanty in
the initial part of the year, despite the significant
monetary stimulus already in place and the positive
developments in equity and capital markets. Apart
from rising housing starts, a phenomenon in part
related to special weather and tax factors, the economy appeared sluggish and confidence levels were
low. Spending by households and businesses
seemed to be restrained by efforts to strengthen
financial positions, and banks had done little to
reverse the substantial tightening of lending standards that occurred in 1990 and 1991. In view of
the still-tentative nature of the recovery and the
solid progress against inflation that had been made
to that point, the Federal Open Market Committee
at its first meeting of 1992 instructed the Manager
of the Open Market Account at the Federal Reserve
Bank of New York to remain especially alert to
evidence that money market conditions might need
to be eased before the next scheduled meeting of
the Committee. Such a policy stance biased toward
ease had prevailed over much of 1991.
M2 and M3, which had posted moderate gains
in January, surged in February, owing partly to
stronger income and earlier sharp declines in shortterm interest rates and partly to special factors—
above-average tax refunds and a jump in mortgage
refinancing, which results in funds being held
temporarily in demand deposits. Underlying money
growth remained very weak, however, and well
below that consistent with expectations based on
the historical relationship of money with income,
deposit rates, and market interest rates. In March,
as the influence of the special factors abated, M2
was about flat and M3 contracted.
The economy seemed to be improving during
much of the first quarter: Retail sales and housing
starts were strong, industrial production turned up,
and confidence levels of the business and house-

182

Federal Reserve Bulletin • March 1993

hold sectors were rising, as was the quality of their
balance sheets. The signs of recovery and the market view that the prospects for further near-term
monetary ease had faded caused long-term interest
rates to increase, and the dollar rose on foreign
exchange markets as well. Increases in private
interest rates were less than increases in rates on
Treasuries, likely reflecting perceived reductions in
the riskiness of private debt as the economy
strengthened coupled with concerns about enlarged
Treasury demands on credit markets stemming
from discussions of possible fiscal stimulus. Areas
of weakness in the economy remained, however—
some attributable to the substantially overbuilt
commercial real estate sector and some to the transition to a smaller defense sector. In addition, the
backup in long-term interest rates threatened to
slow the pace of balance sheet adjustment and
could damp housing and its related industries as
well as business investment spending, and the outlook for exports clouded.
In early April, the System eased reserve conditions again. The action was taken on indications
that the monetary aggregates, already at the bottom
of their target ranges after their flat performance in
March, were beginning to contract, that the balance
of evidence was beginning to suggest a slowing of
the economic expansion, and that inflation was
continuing to recede. Short-term interest rates fell
more than the XA percentage point drop in the
trading level of the federal funds rate, as market
participants judged the economy sufficiently weak
to make further near-term monetary easing moves
likely. The easing buoyed the stock market, but
long-term rates showed a limited response and
remained well above year-end levels.
In the weeks following the easing, the economy
appeared to improve a bit, but the evidence continued to be mixed. Single-family housing starts,
which had contracted in March, fell considerably
further in April, and retail sales were little changed
on balance between February and April. On the
other hand, nonfarm payroll employment and industrial production continued to expand. Weakness
in the monetary aggregates persisted into April, but
concerns on this front were allayed to some degree
by evidence that this was importantly related to the
ongoing rechanneling of credit away from depository institutions and into capital markets, and by
expectations that this rechanneling and other financial restructuring would continue to damp money



growth considerably more than economic activity.
Moreover, what restraint balance sheet restructuring was exerting on spending was seen as likely to
abate in view of the considerable progress that by
then had been made in this area, both by the
borrowing sectors and by depository institutions, as
banks added rapidly to capital. At its mid-May
meeting, the Committee determined that its bias
toward ease in assessing possible intermeeting policy changes was no longer appropriate.
Data becoming available over subsequent weeks,
however, suggested that the forces restraining economic expansion continued to be quite strong. The
contraction of consumer credit accelerated, and
bank loans more generally began to run off. With
the forces that had been constraining money growth
intensifying, all three monetary aggregates contracted in June.
Nonfinancial data confirmed that the economy
remained slack. Although both nonfarm payroll
employment and industrial production increased in
May for the fourth straight month, the unemployment rate rose sharply, owing to a rising labor force
participation rate. Moreover, homebuying and retail
sales, other than of automobiles, slowed from the
pace earlier in the year, and demand for U.S.
exports was held down as growth in some foreign
industrial countries slowed or turned negative while
other countries struggled to recover from their
downturns in 1991 or remained in recession.
With the tenor of incoming economic news having become distinctly negative, long-term Treasury
rates, which had been little changed over most of
May and June, turned down around midyear,
although they remained above year-end lows. In
light of these developments, and with the downward trend in inflation continuing, the System reinstated its bias toward ease at its midyear meeting.
Immediately after that meeting, on July 2, with
evidence of a weakening economy confirmed by a
further rise in the unemployment rate, to VA percent in June, the Federal Reserve reduced both the
discount rate and the federal funds rate by Vi percentage point, to 3 percent and V-A percent respectively. Banks lowered their prime rate, also by
V2 percentage point, to 6 percent, leaving its unusually wide spread over market rates intact.
Long-term interest rates fell in response to the
employment data and the monetary easing, and
they moved down further into early August as the
incoming economic news continued to be poor.

Monetary Policy Report to the Congress

The drop in yields brought long-term rates to the
lowest levels since the early 1970s, and the dollar
continued to retreat from its peak levels reached in
April.
In early September, with another weak labor
report and in the context of contracting industrial
production and expansion in the monetary and
credit aggregates that, while now positive, was
weaker than had been expected, reserve conditions
were eased further and the federal funds rate fell
to around 3 percent. Shorter-term market rates
dropped on this action, bringing them to the neighborhood of zero in real terms. Despite the poor
economic news and expectations that further easing
moves were in the offing, long-term rates, although
they initially declined, drifted back up on renewed
concerns that the federal deficit would be enlarged
by fiscal actions taken to stimulate the economy.
Throughout the late summer and early fall, policy was conducted against a background of tension
in foreign exchange markets; a strong deutsche
mark had caused several European countries to
raise interest rates sharply to preserve fixed
exchange rate relationships with and within the
exchange rate mechanism of the European Monetary System at a time when aggregate demand in
these countries was slowing or sluggish. The dollar
continued to decline into early September but then
began to firm. The rise in long-term rates contributed to the reversal, as did actions by several European countries to devalue their currencies, in some
cases dropping out of the ERM, and to lower
interest rates.
With short-term interest rates in the United
States lower, the monetary aggregates continued to
expand in September. The implications of the
strength of M2 were difficult to assess, however,
because it reflected to an uncertain degree the
impact of mortgage refinancing on demand deposits as well as strong foreign demands for U.S.
currency. Stronger income also appeared to be contributing to money growth, as private employment
edged up and the unemployment rate declined in
September. Nevertheless, the outlook for the economy remained uncertain. Final demand seemed
weak and was being met in part through higher
imports, holding down industrial production and
employment, and business and consumer sentiment
remained relatively depressed.
In these circumstances, the Committee established a strong bias toward ease at its early October



183

meeting. In the event, however, an improvement
in economic indicators immediately after the meeting, along with evidence of some strength in M2
and bank credit, stayed any further easing actions.
Because anticipation of further easing had been
built into the structure of interest rates, short-term
rates backed up after the meeting. Rates also rose at
the long end, responding to growing expectations
that fiscal stimulus could follow the upcoming
presidential election, as well as to the indications of
improved economic performance.
Evidence of greater economic strength continued
to accumulate in a variety of indicators of production and spending over the fourth quarter. Although
this news initially put further upward pressures on
longer-term interest rates, these came to be muted
and then reversed as the better economic prospects,
along with statements and actions of the incoming
Administration, began to be viewed as reducing the
likelihood of outsized fiscal stimulus. Also helping
to lower longer-term rates was continuing good
news on inflation. These factors, buttressed by an
increasing focus in public discourse on reducing
the federal deficit, continued to play an important
role as long-term rates fell further into the new
year.
With the better economic news, the Federal
Reserve kept reserve conditions and short-term
interest rates unchanged as the year ended, and the
Committee at its December meeting decided to
move back to a symmetric policy stance. Reflecting
the improved economic outlook, a stock market
rally developed that rivaled in strength the rally
at the beginning of the year, and the dollar rose
further.
Although the monetary aggregates strengthened
a bit in the fourth quarter, the depressing effects of
balance sheet restructuring continued to be important, a fact that became clearer once the hard-tomeasure temporary boost to deposits deriving from
higher mortgage refinancing abated after October.
The velocities of both M2 and M3 rose significantly further in the final quarter of the year, contributing to the exceptional velocity increases
posted by both measures for the year as a whole.
Monetary

and Credit

Flows

Credit flows again were quite damped in 1992, and
money growth was exceptionally weak. Despite an
appreciable pickup in nominal GDP growth last

184

Federal Reserve Bulletin • March 1993

year, the broad monetary aggregates decelerated
further, and expansion of the nonfinancial debt
aggregate edged up only a bit. As had been the case
for the last couple of years, considerable efforts by
key sectors of the economy to improve balance
sheets had a significant restraining effect on credit
and, especially, on money growth—a much greater
effect than they had on spending itself. Growth of
the debt of nonfinancial borrowers other than the
federal government edged up only lA percentage
point from 1991, to 2Vi percent, as businesses and
households restrained borrowing by financing
spending out of cash flow and equity issuance and
by limiting accumulation of financial assets. The
expansion of federal debt slowed slightly to a stillrapid 103/4 percent, held down by the lack of activity by the Resolution Trust Corporation (RTC)
after April, when it exhausted its legislative authority to fund losses at savings and loans. Reflecting
the slowdown in the activities of the RTC and the
improving health of depositories, federal outlays
attributable to deposit insurance activity fell from
around $50 billion in 1991 to nil last year. The
total nonfinancial debt aggregate expanded about
4*/2 percent last year, at the lower end of its monitoring range.
The sluggishness in credit and money growth
last year appeared to represent mainly weak demand, rather than any new tightening of credit
supply terms. At banks, loan flows were depressed,
and, in the absence of appreciable credit demands,
bank asset growth mainly took the form of security
acquisitions. Some have argued that the shift to
government securities over recent years has been
motivated by the Basle risk-weighted capital standards, which require capital against loans but not
against many government securities. However, the
effect of these standards appears to be relatively
minor. As in 1990 and 1991, banks that had already
achieved adequate capital positions were the major
purchasers of U.S. Treasury and agency securities
last year, and loan flows were depressed at these
banks as well. Moreover, other regulatory factors
may be contributing to a reduction in willingness to
take deposits and make loans, including rising
deposit insurance premiums and the tighter regulations and requirements of new laws governing
banks and thrift institutions in recent years. A
similar pattern of asset growth concentrated in
government securities occurred at credit unions,
which are not subject to the Basle capital standards.




Although loan growth at banks remained lackluster, it strengthened in the final quarter of the year
as the economy began to expand more rapidly. At
the same time, the growth of bank holdings of
government securities, which had been very rapid
all year, slowed.
To be sure, the pickup of bank lending toward
year-end seemed primarily related to stronger demand. Banks gave little indication in Federal
Reserve surveys that they had begun to ease the
tighter lending standards and terms that they had
put in place in 1990 and 1991, and the unusually
wide spread of the prime rate over market rates
persisted. Banks do seem better positioned to meet
increases in demand than they were a few years
ago. Not only has their liquidity improved with the
acquisition of government securities, but they have
made substantial progress in improving capital
positions, including leverage ratios—which are
unaffected by asset composition—as both profits
and debt and equity issuance reached record levels
in 1992. Moreover, the quality of their assets
showed some scattered signs of improvement last
year; the delinquency rate for bank loans, though
still high, began to turn down, as did the rate of
charge-offs.
Other financial intermediaries also have taken
steps to strengthen balance sheets, and the availability of credit from these lenders also remains
somewhat constrained—though probably not more
so than in 1991. Life insurance companies, for
example, have suffered from an abundance of bad
loans and remain saddled with poor-quality commercial real estate loans. Such firms have been
limiting acquisitions primarily to high-quality, easily marketable assets, meaning that, as in 1991,
some medium-sized, below-investment-grade companies found credit from life insurance companies
difficult to obtain in 1992. Some business finance
companies also have experienced high and rising
levels of nonperforming loans, many of which were
secured by commercial real estate, with effects on
their willingness to make new loans.
Downgradings of the manufacturing parents of
automobile sales finance companies have led to
some increases in their funding costs. To date,
however, there has been little or no effect on the
cost or availability of consumer credit, as these
finance companies have increased the volume of
loans they have securitized. The availability of
credit at thrift institutions likely improved a bit last

Monetary Policy Report to the Congress

year. Reflecting the declines in interest rates, profits
of private sector savings and loan associations had
reached a record level as of the third quarter, sustained by a wide spread between interest earned on
assets and the cost of funds as well as by a decline
in the industry's still high level of troubled assets.
Weak credit demand and constraints on some
sources of supply have produced generally sluggish
borrowing in each major nonfinancial sector other
than the federal government. Overall household
borrowing accelerated slightly but continued moderate, as demand was depressed by insecurity about
employment as well as by efforts to restructure
balance sheets. Declines in mortgage rates promoted only about a V2 percentage point boost to net
home mortgage growth, but they spurred a substantial volume of refinancing. Some of the proceeds of
mortgage refinancings likely were used to pay
down higher-cost consumer credit. Consumer
credit also was held down last year as households
apparently used funds that otherwise would have
been held in low-yielding deposits to reduce highcost debt.
With the pace of debt accumulation by the
household sector damped, and with rates on consumer debt falling and mortgage debt being refinanced at lower rates, the ratio of debt-servicing
payments to household income declined considerably further last year. Another sign of improving
household financial conditions has been recent
trends in delinquency rates. Consumer loan delinquency rates mostly fell last year, although they
remain at high levels. Home mortgage delinquency
rates were little changed on balance last year and
still somewhat above their pre-recession levels, but
well below those of the mid-1980s.
Business debt grew only slightly last year as
internally generated funds exceeded investment
spending. Taking advantage of the strong stock and
bond markets, nonfinancial corporations stepped
up their equity issuance and refinanced large volumes of longer-term debt at more favorable rates.
In part, the proceeds of these issues were used to
pay down short-term debt, particularly bank loans,
thereby lengthening liability structures.
The hospitality of the capital markets extended
even to lower-graded business borrowers, which
issued substantially more bonds than in recent
years. Overall public gross bond issuance by nonfinancial corporations was well above the 1991 level.
Likewise, gross equity issuance by nonfinancial



185

corporations also rose from the already high pace
of 1991 and was four times that of the late 1980s
and early 1990s. As a result of debt refinancing and
sales of equity, corporate net interest payments as a
percentage of cash flow fell for the second year. As
declining interest rates allowed firms to reduce debt
burdens, and as the economy advanced, corporate
debt ratings began to improve and quality spreads
narrowed.
The state and local sector also benefited from the
rate declines last year, with large amounts of debt
being refinanced, including a large volume that
was called. Net debt growth continued to be moderate, however, as this sector's spending remained
constrained.
Although balance sheet restructuring has damped
credit flows and spending, its greatest impact has
been on the monetary aggregates, as an unusually
high proportion of spending in recent years has
been financed outside the depository system,
whose liabilities make up the bulk of the monetary
aggregates. Some of this spending has been supported through sources other than borrowing, for
example, by issuing equity or restraining the accumulation of liquid assets. Depository credit
expanded last year, following two years of contraction, but it continued to shrink as a share of
nonfinancial debt as borrowers concentrated their
credit demands in long-term securities markets—
bonds for corporations and fixed-rate mortgages for
households.
The sluggish expansion of depository credit was
echoed in M3, which comprises most—though not
all—of the instruments depositories use to finance
their credit extensions. In fact, growth of M3
slowed last year to V2 percent despite the pickup in
depository credit, as depositories relied much more
on equity issuance and sales of subordinated debt,
which are not in M3. Large time deposits at banks
and thrift institutions fell rapidly. The tendency for
spending to be financed outside of depositories,
along with the latter's reliance on non-M3 funds,
produced a sizable increase in M3 velocity last
year—at a rate far above that of recent years. The
rise in velocity of M3 would have been even
greater had it not been for strong inflows into
institution-only money funds over the first three
quarters of the year. The attractiveness of these
funds increases when short-term interest rates are
falling, a phenomenon caused by the fact that the
funds do not mark to market, so that their yields

186

Federal Reserve Bulletin • March 1993

tend to exceed market rates when those rates are
declining.
M2 increased about 2 percent last year, below
the 2Vi percent lower end of its target range
(table 3). M2 registered modest growth in the first
and last quarters of the year but was about flat over
the middle quarters. The underlying weak money
growth appeared to stem from several important
factors, many related to the unattractiveness of
holding funds in M2 assets relative to other possible uses of savings.
Contributing to the relative attractiveness of nonmonetary assets was the rapidity with which banks
adjusted down offering rates on retail deposits as
market rates declined last year. Banks' unaggressive pricing of deposits reflected substantial paydowns of bank debt by households and businesses,
which kept loan demand low and banks' need for
funds to finance them quite limited. In addition,
banks and thrift institutions have been discouraged
from going after deposits by the rising cost of
issuing deposits to make loans; among the factors
accounting for this increase have been increases in
deposit insurance rates and higher capital ratios
occasioned by market and regulatory forces.
The prompt declines and low level of deposit
rates have combined with several other factors to
induce savers to cut back on holdings of assets in
M2. One important influence was the unprecedented steepness of the yield curve, which was
pulling deposit funds into capital markets. An

3.

important method for accomplishing this portfolio
shift was mutual funds, which experienced record
inflows last year. Not only were yields on these
funds attractive, but they have become increasingly
available through banks and thrift institutions.
Assets in bond and equity mutual funds (apart from
those held by institutions and those in IRA and
Keogh accounts) increased $125 billion last year,
up from $117 billion in 1991 and an average of
$30 billion over the previous five years. In 1991
and 1992 for the first time, increases in mutual fund
assets exceeded increases in M2.
Money growth has also weakened as consumer
loan rates have moved downward less rapidly than
deposit rates. As a consequence, households face a
considerable interest rate incentive, particularly
after taking account of changes in the tax deductibility of consumer interest payments, to use funds
in deposit accounts to pay down, or limit the accumulation of, debt. In fact, the rise in consumption
has been accompanied by an unusually small
increase in debt, implying that consumption has
been financed to a large extent by reducing or
limiting holdings of financial assets.
The cuts in bank deposit rates were particularly
evident for larger (and presumably more interest
sensitive) accounts and at longer maturities. Small
time deposits ran off throughout the year. Some of
these funds appeared to flow into more-liquid
deposit accounts, as rates on small time deposits
fell faster than those on savings and checkable

Growth of money and debt
Percent

1. From average for fourth quarter of preceding year to average for fourth
quarter of year indicated.




2. Adjusted for shift to NOW accounts in 1981.
3. From average for preceding quarter to average for quarter indicated.

Monetary Policy Report to the Congress

deposits. General purpose and broker-dealer
money market mutual funds (MMMFs) also contracted over the year, despite the yield advantage
these assets offered vis-a-vis other money market
rates in an environment of declining yields. This
appeared to be another example of the attraction
that bond and equity mutual funds and other capital
market instruments provided to investors last year.
MMMFs grew in October and November, however,
perhaps reflecting capital losses in bond funds
resulting from the rise in long-term rates in September and October.
The overall effect of the unusual forces that have
been influencing M2 is summed up by the behavior
of its velocity, which accelerated for the second
year in a row, to a 3V2 percent rate, despite the
sharp downward trend in short-term interest rates
over this period. Over previous decades, the velocity of M2 and short-term rates had moved together
in a reasonably predictable way. This occurred
because deposit rates lagged market rates. When,
for example, short-term rates fell, deposit rates
dropped by less, providing an incentive to shift
assets from market instruments to deposits and
depressing velocity. However, because of the
unusual configuration of forces discussed above,
these incentives to hold M2 have not followed their
usual pattern in the current cycle. As noted, despite
the drop in short-term interest rates, a combination
of the steep yield curve, sluggish adjustment
of loan rates, and other factors has decreased, not
increased, the incentives to hold M2 in the last
year. In other words, the opportunity cost—the
earnings given up—in holding M2 actually has
widened, rather than narrowed as has happened
in the past when market interest rates fell, and
this helps to explain why M2 velocity has risen
atypically.
Another indication of the unusual behavior of
the velocity of M2 is the recent performance of the
Board staff's P* model in predicting inflation. The
model is premised on reasonably stable M2 velocity over time and under this premise predicts the




187

price level and inflation rates that are consistent
with M2 growth. If the velocity of M2 is rising
atypically, slow growth of M2 would not be associated with the degree of disinflationary pressures
that would be predicted by the P* model, which
assumes normal velocity behavior. In fact, consistent with the notion that velocity is behaving abnormally, the model, using actual M2 growth, underpredicted inflation in 1992.
The growth of M2 over the year was entirely
attributable to its currency and transactions deposit
components, as M l growth surged to about
14 l A percent in 1992. This performance reflected
the advance in income growth but stemmed mainly
from declines in both short- and long-term interest
rates. Long-term rate declines prompted large volumes of mortgage-rate refinancings, particularly in
the first and last quarters. Because a large portion
of prepayments are held in demand deposits until
the mortgage servicer remits the funds, the level of
demand deposits is temporarily boosted by mortgage refinancings. Falling short-term rates boosted
demand deposits by lowering the opportunity cost
of holding them and by increasing the amount of
deposits businesses needed to hold under compensating balance arrangements. In addition, NOW
accounts were boosted by funds shifted from small
time deposits, as rates on the latter fell faster than
those offered on the former. Growth in NOW
accounts last year accelerated from the already
brisk pace of 1991, and demand deposits posted the
largest increase since at least 1959.
To accommodate the growth in transactions
deposits associated with the process of easing
reserve conditions, the Federal Reserve supplied
large volumes of new reserves in 1992. Total
reserves grew at around 20 percent, more than
twice the rate of increase in 1991. Currency growth
also was rapid, in part owing to shipments abroad,
and as a consequence the monetary base increased
IOV2 percent last year—the highest growth rate
in the Board's official series, which begins in
1959.
•

188

The Herfindahl-Hirschman Index
Stephen A. Rhoades, of the Board's Division of
Research and Statistics, prepared this technical
note.
The Herfindahl-Hirschman index, better known as
the Herfindahl index, is a statistical measure of
concentration. It has achieved an unusual degree of
visibility for a statistical index because of its use by
the Department of Justice and the Federal Reserve
in the analysis of the competitive effects of mergers. The Herfindahl index can be used to measure
concentration in a variety of contexts. For example,
it can be used to measure the concentration of
income (or wealth) in U.S. households and also
market concentration, that is, the degree of concentration of the output of firms in banking or industrial markets. It is useful in analyzing horizontal
mergers because such mergers affect market concentration, and economic theory and considerable
empirical evidence suggest that, other things equal,
the concentration of firms in a market is an important element of market structure and a determinant
of competition. However, despite its visibility, the
Herfindahl index is sometimes not understood in
terms of its use, measurement, or interpretation in
merger analysis.
To facilitate and simplify the application of the
antitrust laws regarding mergers, in 1982 the
Department of Justice published formal numerical
guidelines for horizontal mergers (those between
firms operating in the same product and geographic
markets) based on the Herfindahl index (HHI).1 In
1985, the Justice Department proposed somewhat
modified numerical guidelines for mergers in the
banking industry and published revised guidelines
1. The index was developed independently by the economists
A.O. Hirschman (in 1945) and O.C. Herfindahl (in 1950). Hirschman presented the index in his book, National Power and the
Structure of Foreign Trade (Berkeley: University of California
Press, 1945). Herfindahl's index was presented in his unpublished
doctoral dissertation, "Concentration in the U.S. Steel Industry"
(Columbia University, 1950). For more detail on the background of
the index, see Albert O. Hirschman, "The Paternity of an Index,"
American Economic Review (September 1964), pp. 761-62.




in 1992. These numerical guidelines are used by
the Federal Reserve as the first step in analyzing
the effect on competition of bank mergers. The
guidelines, as applied to banking, specify that if a
bank merger would result (1) in a post-merger HHI
in a market of less than 1,800 or (2) in a change in
the HHI of less than 200 (less than 50 in other
industries), it is likely that the market structure
would not reach a concentration level, or concentration would not increase enough, such that firms
in the market would have the market power to
maintain prices above the competitive level for a
significant period.
The HHI is only one element in the analysis of
the competitive effects of bank mergers. However,
because of the importance attached to market concentration as an indicator of competition and the
relative ease of calculating the HHI, this index
serves as an efficient screening device for regulators and as a planning tool for bankers. At the
Federal Reserve, the HHI is calculated by including 100 percent of the deposits of commercial
banks in a market and at least 50 percent of the
deposits of thrift institutions. If the post-merger
HHI does not exceed the numerical guidelines, it is
generally presumed that the merger would not be
seriously anticompetitive, and no further analysis is
conducted. If, on the other hand, the post-merger
HHI exceeds the numerical guidelines, a detailed
economic analysis of competition is undertaken to
determine whether other factors, such as potential
competition, indicate that the market would be
more (or less) competitive than the HHI alone
suggests.
The HHI accounts for the number of firms in a
market, as well as concentration, by incorporating
the relative size (that is, market share) of all firms
in a market. It is calculated by squaring the market
shares of all firms in a market and then summing
the squares, as follows:
n

HHI = Z(M5,)2,
i=i

189

where MSt represents the market share of firm i and
there are n firms in the market. The following
example of calculating the HHI before and after
a merger illustrates the use of the formula. Assume
that there are four banks in a market. Bank A holds
40 percent of bank deposits in the market, Bank B
holds 30 percent, Bank C holds 20 percent, and
Bank D holds 10 percent. Substituting these values
in the formula gives the HHI for bank deposits in
this market:
(40)2 + (30)2 + (20)2 + (lO)2.
Completing this calculation gives the beforemerger HHI:
1,600 + 900 + 400 + 100 = 3,000.
Next assume that Bank C, with 20 percent of the
market, acquires Bank D, which has 10 percent of
the market. The HHI after the merger would be
2

(40)2 + (30)2 + (20 + lO) .

notion in economics that the greater the concentration of output in a small number of firms (a high
HHI), the greater the likelihood that, other things
equal, competition in a market will be weak. In
contrast, if concentration is low, reflecting a large
number of firms with small market shares (a low
HHI), competition will tend to be vigorous. The
HHI reaches a maximum value of 10,000 when a
monopoly exists in which one firm has 100 percent
of the market, that is, the HHI = (100)2 = 10,000. In
contrast, the HHI takes on a very small value,
theoretically approaching zero, in a purely competitive market in which there are many firms with
small market shares. For example, in a market with
100 firms that each have a 1 percent share of the
market, the HHI = ( l ^ 2 + (1 2 )2... (l100)2 = 100.
The following table provides a sense of what
different values of the HHI imply for the concentration of a market, assuming that all firms in the
market have the same market share. For example,
row 2 of the table indicates that a market with five
firms of equal size (that is, each with 20 percent of
the market) would have an HHI of 2,000.

Completing this calculation gives the post-merger
HHI:
1,600 + 900 + 900 = 3,400.
The merger therefore increased the HHI by 400,
from 3,000 to 3,400.
Further examination of this example reveals that
the HHI gives much heavier weight to firms with
large market shares than to firms with small shares
as a result of squaring the market shares. This
feature of the HHI corresponds to the theoretical




HHI
1,000
2,000
3,300
5,000

Number of firms
of equal size in
the market

Market share
of each firm
(percent)

10
5
3
2

10.0
20.0
33.3
50.0

In conclusion, note that, although the HHI is a
useful tool in merger analysis, particularly as an
initial screening device, other factors are considered in an economic analysis of competition.
•

190

Industrial Production and Capacity Utilization
Released for publication

January

15

Industrial production rose 0.3 percent in December,
compared with an upward-revised gain of 0.7 percent in October and a rise of 0.4 percent in November. The December rise of 5.0 percent in the output
of motor vehicles and parts accounted for much of
the overall gain. The production of business equip-

ment advanced further, but the output of energyrelated products and materials, as well as of construction supplies, declined. For the fourth quarter
as a whole, total industrial production grew at a
3.7 percent annual rate; the gain in the previous
quarter was 2.3 percent. At 110.5 percent of its
1987 average, total industrial production in December was 2.9 percent above its year-ago level. Total

Industrial production indexes
Twelve-month percent change

Twelve-month percent change

Total industry

Products

Materials

Nondurable
manufacturing

Manufacturing

Durable
manufacturing

Capacity and industrial production
Ratio scale, 1987 production =100

Ratio scale, 1987 production = 100
Total industry

Manufacturing
Capacity

Capacity

Production

Production

Percent of capacity

Percent of capacity
Manufacturing

Total industry
Utilization

Utilization

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




191

Industrial production and capacity utilization
Industrial production, index, 1987= 1001
Percentage change
Category

1992
19922
r

Sept.

Oct/

Nov.'

Dec.P

Sept.'

Total

108.9

109.7

110.1

110.5

Previous estimate

108.8

109.3

109.7

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

109.6
110.7
125.4
97.1
107.9

110.7
111.9
126.8
98.6
108.2

111.1
112.0
128.3
98.8
108.7

Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities

109.8
108.2
111.8
98.3
110.2

110.6
109.5
111.9
99.1
110.9

111.1
110.2
112.3
99.8
109.7

Oct.'

Nov.'

-.2

.7

.4

-.3

.5

.4

111.4
112.4
129.4
98.4
108.9

-.2
-.1
-.4
-1.4
-.2

1.0
1.2
1.2
1.6
.3

111.7
111.0
112.6
100.0
107.6

-.3
-.9
.4
-.5
1.3

.7
1.2
.2
.8
.6

Dec.?

Dec. 1991
to
Dec. 1992

3

2.9

.3
.1
1.1
.2
.4

.3
.3
.9
-.4
.2

2.8
3.0
6.6
3.6
3.0

.5
.7
.4
.8
-1.0

.5
.7
.2
.2
-1.9

3.3
3.7
2.8
1.2
-.2

Capacity utilization, percent
1991
Average,
1967-92

Low,
1982

High,
1988-89

1992

Dec.

Sept.r

Oct.'

Nov.1

Dec.p

Total

82.0

71.8

85.0

78.7

78.6

79.0

79.2

79.3

2.1

Manufacturing
Advanced processing
Primary processing .
Mining
Utilities

81.3
80.8
82.3
87.4
86.6

70.0
71.4
66.8
80.6
76.2

85.1
83.6
89.0
87.2
92.3

77.7
76.6
80.2
86.2
83.4

77.5
76.0
81.3
85.6
84.6

77.9
76.4
81.8
86.3
85.1

78.2
76.5
82.4
87.0
84.1

78.4
76.8
82.5
87.1
82.5

2.4
2.9
1.0
.1
1.0

1. Seasonally adjusted.
2. Change from preceding month.

industrial capacity utilization edged up in December, to 79.3 percent, the highest rate since November 1991.
When analyzed by market group, the data show
that the December output of consumer goods
excluding motor vehicles was about unchanged
from the preceding month as declines in consumer
energy products, particularly gasoline and utility
output for residential use, offset gains in goods for
the home, such as appliances. The production of
most other major sectors within consumer goods
was little changed. The output of business equipment other than autos and trucks increased 0.5 percent as production of information processing equipment and industrial equipment advanced further.
The output of materials, led by widespread gains
within durables, increased 0.2 percent; however,
the production of energy materials fell sharply,
mainly as a result of reduced utility output. The




r Revised,
p Preliminary.

production of nondurable materials changed little
in December as a decline in paper materials about
offset increases in textiles and chemicals.
When analyzed by industry group, the data show
that output in manufacturing increased 0.5 percent
in December and grew at a 4.0 percent annual rate
in the fourth quarter. Factory utilization rose
0.2 percentage point in December, to 78.4 percent,
and has risen nearly 1 percentage point since
September. In the past few months, operating rates
have grown strongly in both primary and advanced
processing industries. Among primary processing
industries, large advances that occurred in primary metals and fabricated metals at least partly
reflected the recent strength in motor vehicles. The
overall rise in the utilization rate for advanced
processing industries was concentrated in nonelectrical equipment and in motor vehicles and
parts.

192

Federal Reserve Bulletin • March 1993

In December, output at utilities fell sharply and
was little changed from a year ago. The December
decline in utility output is based on preliminary
data that show a large decline in electricity gen-




eration during the month. Production at mines
increased slightly, as activity at coal mines and oil
and gas well drilling activity rose further.
•

193

Statement to the Congress
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Joint Economic Committee,
U.S.
Congress, January 27, 1993

The Federal Reserve will submit its semiannual
report on monetary policy to the Congress in just
a few weeks, after our upcoming Federal Open
Market Committee meeting. At that time, I will
be in a position to address more specifically our
expectations for economic growth and inflation
and also the ranges of money and credit expansion that we anticipate to be consistent with the
achievement of our goal of maintaining maximum
sustainable growth in the economy by fostering a
stable, noninflationary financial environment.
Under the circumstances, my opening remarks
this morning will focus primarily on identifying
the major tendencies visible in our economy
today.
The available data suggest that economic activity has been increasing at a firmer pace of late.
After having risen at only about a Wi percent
annual rate, on average, over the first five quarters of the expansion, real gross domestic product increased at about a V/i percent rate in the
third quarter of 1992. The advance estimate of
the Bureau of Economic Analysis for fourthquarter growth, which will be released tomorrow, is expected by many analysts to show a
substantial gain as well. Meanwhile, industrial
production posted a healthy advance over the
final three months of 1992, with solid growth for
a broad range of industries.
The recent news on the inflation front has also
been quite favorable, as businesses have continued their efforts to contain production costs and
to boost efficiency. All told, the increase in the
consumer price index excluding food and energy—a measure that is widely used as a rough
proxy for the underlying trend of inflation—was
just 3.3 percent over the twelve-month period




ending in December, a full percentage point less
than during 1991.
Although several economic indicators are distinctly encouraging, this is not to say that we
have clear sailing ahead. As I indicated when I
appeared before this committee last March,
households and businesses have been struggling
to redress structural imbalances unparalleled in
the postwar period. The speculative bidding-up
of real estate and other asset prices over the
course of the 1980s fostered an excessive accumulation of debt and assets. The subsequent
weakening of asset prices in the early 1990s left
the balance sheets of many households and businesses strained with debt overload. Banks and
other intermediaries that had financed the
buildup suffered losses that severely eroded capital. The pressures to work down debt, reinforced by understandably more conservative
lending practices, slowed economic growth.
Some time ago I likened these pressures to headwinds of 50 miles per hour.
Those headwinds have now slackened somewhat. But they have not disappeared. The process of balance sheet adjustment, while becoming less of a restraint on the economy, will
doubtless be with us for some time. In addition,
we are coping with a sizable retrenchment in the
national defense area. And, although U.S. domestic demand appears to be improving, many of
our key trading partners are experiencing disappointing economic performance, which is acting
as a drag on our exports and our output.
Much of the strength suggested by the incoming U.S. data has been in the consumer sector.
The speedup in consumption comes after a period of more conservative spending behavior,
when many households seem to have focused on
paying down debts and shoring up balance
sheets, so badly pressured by the events of
recent years. The relative strength of spending,
thus, may reflect the improvement that has been
achieved to date in the financial health of house-

194

Federal Reserve Bulletin • March 1993

holds. Debt-to-income ratios have fallen slightly,
and debt-servicing burdens have declined quite
noticeably, in large part because of the reductions in interest rates. At the same time, the
value of household financial assets has been
buoyed by the rise in stock prices last year.
Moreover, concerns about housing prices, which
probably were a key reason why consumers were
so distressed for much of the past few years,
seem to have lessened.
The strengthening of the housing market may
also be important in a more specific way. Sales of
single-family homes have picked up, and when
existing homes are sold, the capital gains that
usually have accumulated over time can be realized. The buyer of the home typically takes out a
mortgage that is greater than that paid off by the
seller. The difference largely reflects the realized
capital gain of the seller who receives unencumbered cash, only part of which is apparently
added to a down payment on a subsequent home
purchase. Such cash provides the seller with
additional liquid funds to spend on consumer
goods and services.
History suggests that this is just what has been
happening. The marked rise in existing home sales
in recent months has added to households' purchasing power by enabling them to realize capital
gains at an increasing rate, thereby helping to fuel
the growth in consumer spending. Homeowners
also have an opportunity to liquify capital gains
when refinancing an existing mortgage, and refinancing surged in the latter part of 1992. Realized
or liquified capital gains are not accounted for in
the computation of the official saving rate; therefore the recent decline in the official saving rate
probably overstates the drop in the flow of saving
as perceived by households. However, unless
home sales, mortgage refinancing, and the associated equity extraction continue to rise, there is a
limit to how much longer this factor can fuel the
growth of consumer spending. The measured personal saving rate is at a relatively low level, and
further outsized increases in consumption are not
very likely in the absence of a sustained pickup in
income growth.
Consequently, a significant consideration, in
terms of the outlook for consumer demand, is the
employment picture. The optimism revealed in
the recent surveys of consumer attitudes may




prove fleeting if overall labor market conditions
remain subdued. Indeed, despite signs of modest
improvement in the past few months, since the
recession trough in March 1991, employment has
shown essentially no net change on the payroll
basis and only a modest increase in the household
series.
Of course, the softness in employment in the
current expansion is partly the counterpart of
another development—namely, a dramatic improvement in productivity. Since the recession
ended in early 1991, productivity has grown at an
average annual rate of about 2Vi percent, a betterthan-expected performance given the relatively
slow pace of the economic recovery to date.
The corporate restructuring and downsizing
efforts that have been associated with the recent
productivity gains have in part been a response
to the profit squeeze that emerged during the
1990-91 recession. These efforts also have been
spurred by increasing costs of health insurance
and other fringe benefits, which have restrained
hiring and encouraged a surge in the use of
temporary workers. But restructuring also seems
to have reflected an effort to capitalize on new
opportunities for greater efficiency. Although we
cannot be sure how or why these new opportunities have arisen, I suspect they are the product
of the accelerating advances in computer software and applications. Past large accumulations
of computer hardware did not seem to have the
expected effects on productivity. But a new
synergy of hardware and software applications
may finally be showing through in a significant
increase in labor productivity.
These far-reaching changes in the production
processes in manufacturing and in the means by
which services are produced and distributed
have apparently yet to run their course, although
one must assume that the pace of restructuring
will surely slow. Accordingly, we may see less of
a tapering off in productivity gains in coming
quarters than past cyclical experience would
suggest. That prospect is highly favorable in
terms of the longer-run potential output of the
economy and our international competitiveness,
but it would also imply some continuing adjustments in the work force in the near term.
The push to acquire state-of-the-art technology
has also been providing a discernible thrust to

Statement to the Congress

capital spending in recent quarters—and likely
will continue to do so. Real outlays for office and
computing equipment have soared as firms continue the transition to the more powerful and
cost-effective machines that are now available,
and purchases of communications equipment
continue to be boosted by, among other things,
the shift to fiber-optic networks. Demand for
other, more traditional types of equipment now
appears to be growing as well. The improved
pace of economic expansion has doubtless lifted
sales expectations, and the marked increases in
profits and cash flow over the past year are
providing funds for new purchases.
Problems, however, remain in several areas,
although with some lessening of concern. Chief
among them are the ongoing difficulties in the
credit area. Depressed demand is doubtless the
major explanation for weak loan growth at banks
and many other intermediaries. However, increased regulation presumably has also played a
role. Moreover, lenders, seeking to protect their
capital positions, have been extremely cautious.
Although they seem to have stopped tightening
credit terms, a significant easing is not yet evident.
Commercial real estate has accounted for much
of the asset quality problems at financial institutions. Until real estate values clearly stabilize,
banks and other intermediaries are not apt to
become substantially more eager lenders. The
liquidity of real estate markets remains impaired,
and lenders are uncertain about the value of
collateral and the appropriate level of reserves
against nonperforming loans. The risk that further
reserving may be necessary has led banks to
bolster book capital, widen lending margins, and
approach new credits with caution. It is not necessary for real estate values to rise to reduce this
risk, but lenders need to be more confident that
prices will not continue to fall and that, if necessary, they can sell collateral expeditiously at reasonably predictable prices. Although there are
some initial signs that commercial real estate
markets in some regions are finding a bottom,
uncertainty remains high. Having accumulated
substantial liquid assets and rebuilt capital, banks
seem well positioned to meet increased loan demand, especially once collateral uncertainty diminishes. Endeavors by both the Resolution Trust
Corporation and private parties to encourage the




195

development of a secondary market in commercial mortgages will help liquify the market in
commercial real estate itself. However, if problems in commercial real estate persist, credit
conditions for small and riskier business may ease
only gradually for some time.
Soft property prices, engendered by high vacancy rates and sluggish demand for space, are
likely to continue to restrain commercial construction spending in 1993, and the prospects for
multifamily housing are not much better. In addition, budgetary pressures on state and local governments remain intense.
Meanwhile, we must continue to work through
the sizable adjustment in military spending that
has been under way since the late 1980s. From a
longer-run perspective, the defense cutbacks
carry the anticipation of substantial benefits for
the U.S. economy. By freeing up resources that
can then be devoted to improving the nation's
stock of productive physical and human capital,
they should ultimately lead to higher living standards. In the short run, of course, lower defense
spending is a depressant on economic activity and
on jobs and incomes. For industries and regions
that rely heavily on military spending, the dislocations may well be sizable. In industries that
depend on defense expenditures for at least 50
percent of their output, employment has fallen
more than 20 percent (300,000 jobs) since 1987.
And in California, where the share of civilian
employment in defense-related jobs may be almost twice the national average, the unemployment rate has risen to about 10 percent, nearly 3
percentage points above the national average.
In addition, our export performance is being
restrained by developments abroad. Countries
that earlier had been growing at least moderately
have shown clear signs of slower growth, or
outright declines, in economic activity. In both
Germany and Japan, real output fell for part of
1992, and growth for the year as a whole was
substantially less than in 1991. Many of the other
countries of continental Europe have recorded
only weak growth. And in Canada and the United
Kingdom, signs of recovery from prolonged recession have ranged between weak and elusive.
Foreign officials have reacted to these developments with measures intended to boost spending
and to promote recovery. In Japan, official inter-

196

Federal Reserve Bulletin • March 1993

est rates have been lowered nearly 3 percentage
points since the start of 1991, and a supplementary budget of additional government spending
has just been passed. In Germany, the choice of
policy steps has been complicated by the special
circumstances associated with the massive task of
unifying the economies of eastern and western
Germany. Monetary conditions have been eased
somewhat, but continued rapid money growth and
persistent inflation have made officials cautious.
In the other European countries tied to Germany
through the exchange rate commitments of the
European Monetary System, scope for aggressive
monetary easing has been limited. This has led
some countries to relax that commitment, at least
for a time, and to ease monetary policy.
I will, of course, be discussing Federal Reserve
monetary policy in detail when I present the
Federal Reserve System's Humphrey-Hawkins
Report to the Congress next month. However, let
me comment briefly on an issue that has arisen
recently regarding the ranges for monetary growth
in 1993. The issue, as I indicated in my letter to
Senator Sasser earlier this month, is that an unusual portion of aggregate spending has continued
to be financed by credit that is granted outside of
banks and other depositories—evidently a side
effect of the balance sheet restructuring process
that I referred to earlier. 1 Should the phenomenon
persist in 1993, it implies that growth in M2
1. The attachment to this statement is available from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, DC 20551.

consistent with our broader economic objectives
would be slower than indicated by normal historical relationships of money and spending—and
that a technical adjustment to our monetary
growth ranges might thus be in order. That assessment is wholly technical and should not be interpreted as indicative of any change in monetary
policy per se. Partly in view of these developments, the Federal Reserve cannot rely exclusively on money supply growth relative to its
targets in formulating monetary policy. In any
event, the Federal Open Market Committee will
reexamine this issue, along with other, broader
considerations, when it meets next week to set
monetary policy goals for 1993.
Regardless of the specific ranges established
for the growth of money and credit over the
coming year, the objectives of monetary policy
remain unchanged: We are seeking to foster
financial conditions that will encourage maximum sustainable growth in the economy. As I,
and my colleagues, have stressed, a noninflationary environment is a precondition to such a goal.
For the coming year we will continue to play a
constructive role in supporting an extension of
the recent more hopeful signs of solid growth,
while endeavoring to avoid any excesses that
might lead to a flare-up of inflationary pressures
down the road. Such a course will help the
economy emerge from the financial difficulties
of recent years, maintain the progress toward
price stability that has been achieved thus far,
and thereby promote a sustainable economic
expansion.
•

Chairman Greenspan presented identical testimony before the Committee
U.S. Senate, January 28, 1993.




on the

Budget,

197

Announcements
STATEMENT

BY CHAIRMAN

GREENSPAN

Chairman Alan Greenspan, on behalf of the Federal Reserve Board, issued on January 5, 1993, the
following statement regarding the announcement
that E. Gerald Corrigan planned to step down as
President of the Federal Reserve Bank of New
York:
President Corrigan has had an extraordinary career in
central banking and public service. His unique grasp of
financial markets and their operation, both domestically
and internationally, and his expertise in crisis management has served the nation exceedingly well during his
tenure as President of the Federal Reserve Bank of New
York and earlier, as President of the Federal Reserve
Bank of Minneapolis, and in other roles in the System.
His contributions to monetary and financial policy, to
banking supervision and regulation and to international
cooperation and coordination in these areas are legion.
His wise judgment and practical advice will be sorely
missed by the Board, by the Federal Reserve System
generally and by the nation as well. We wish him well in
whatever future endeavor he undertakes.
On a personal note, I will miss him as a friend and
confidant whose judgment I have valued highly during
my years as Federal Reserve Chairman.

APPOINTMENT OF NEW MEMBERS
CONSUMER ADVISORY
COUNCIL

TO THE

The Federal Reserve Board named on January 19,
1993, ten new members to its Consumer Advisory
Council to replace those members whose terms
have expired and designated a new Chairman and
Vice Chairman of the council for 1993.
The Consumer Advisory Council was established by the Congress in 1976, at the suggestion of
the Board, to advise the Board on the exercise of its
duties under the Consumer Credit Protection Act
and on other consumer-related matters. The thirtymember council, with staggered three-year terms
of office, meets three times a year.
Denny D. Dumler, Senior Vice President of the
Colorado National Bank in Denver, Colorado, was




designated Chairman. His term will run through
December 1993. Jean Pogge, Vice President of
South Shore Bank in Chicago, Illinois, was designated Vice Chairman. Her term on the council
expires in December 1994.
The ten new members are the following:

Douglas D. Blanke
St. Paul, Minnesota
Mr. Blanke is the Director of Consumer Policy for the
State of Minnesota's Office of Attorney General. He has
been with the Attorney General's Office since 1978 and in
his current position since 1991. He is responsible for the
overall development of consumer protection policy and
priorities, legislative and regulatory initiatives, consumer
education, and strategic planning on consumer issues,
including credit-related activities. Mr. Blanke recently
joined with the International Credit Association to prepare a
teaching unit called "I'm CreditWise" to help high school
students learn the importance of handling credit responsibly.
Michael Ferry
St. Louis, Missouri
Mr. Ferry has been a Staff Attorney in the Consumer Unit
of Legal Services of Eastern Missouri since 1979. The
majority of Mr. Ferry's work for Legal Services is in
the field of consumer law, particularly consumer credit,
although he has litigated cases in other areas, including
shelter for the homeless and prison conditions. As community education coordinator, he oversees the program's educational efforts in the community. Mr. Ferry also supervises
clinical and work-study law students from the law schools
at both St. Louis University and Washington University,
where he is an Adjunct Professor of Law. He writes a
weekly newspaper column on legal topics for the St. Louis
Post-Dispatch.

Norma L. Freiberg
New Orleans, Louisiana
Ms. Freiberg has been the Executive Director of the New
Orleans Neighborhood Development Foundation since
1988. Her responsibilities include administration of a nonprofit education and advocacy program for low- and
moderate-income homebuyers. She is also responsible for
the administration of an annual operating budget of approximately $240,000. Ms. Freiberg is in charge of the Founda-

198

Federal Reserve Bulletin • March 1993

tion's fundraising for operating expenses and permanent
financing for clients. She identifies and negotiates revenueproducing projects and is also the negotiator and
liaison with appropriate offices and departments of the city
government.
Lori Gay
Los Angeles, California
Ms. Gay is the Executive Director of the Los Angeles
Neighborhood Housing Service. She has worked for NHS
since 1985 and in the community development field for
fifteen years. Her efforts have been focused on rebuilding
impoverished communities and creating mechanisms for
community empowerment and ownership. The mission of
NHS is to rebuild neighborhoods within the city of Los
Angeles for the primary benefit of the residents, using a
public-private partnership that includes financial institutions, insurance companies, local businesses, government,
and community residents.
Bonnie Guiton
Charlottesville, Virginia
Ms. Guiton is Dean of the Mclntire School of Commerce,
University of Virginia. Previously she was Secretary of the
State and Consumer Services Agency of California where
she had oversight of fourteen state departments. Ms. Guiton
served as Special Adviser for Consumer Affairs and Director of the U.S. Office of Consumer Affairs for President
Bush. She also headed the U.S. Delegation to the Committee on Consumer Policy of the Organisation for Economic
Co-operation and Development. For President Reagan, Ms.
Guiton served as an Assistant Secretary in the U.S. Department of Education and as Vice-Chair of the U.S. Postal Rate
Commission.
Ronald Homer
Boston, Massachusetts
Mr. Homer has been the Chairman and Chief Executive
Officer of the Boston Bank of Commerce since 1983. In
1990 he was named chairman of the board of directors of
the bank. During 1979-83, Mr. Homer was affiliated with
Freedom National Bank of New York,firstas a senior vice
president and senior loan officer and subsequently as executive vice president and chief operating officer. He is a past
president of the American Bankers Association and currently serves as chairman of its Steering Committee for the
Center for Community Development. Mr. Homer also serves
as a director for New England Telephone and the New
England Student Loan Marketing Corporation (NellieMac).
Thomas L. Houston
Dallas, Texas
Mr. Houston has been the Executive Director of the
Dallas Black Chamber of Commerce since 1982. Under his




leadership, the chamber has grown to more than 1,000
members and is the largest black chamber of commerce in
the country. The Dallas Black Chamber of Commerce is
nationally recognized for its initiatives and successes and is
frequently called on to provide counsel, training, and direction to the 250-plus other minority chambers of commerce
representing thousands of small business owners throughout
the country. Mr. Houston began his career when he was
recruited into a bank management program by Chase Manhattan Bank in 1968. He left banking in 1978 to start his
own business.
Jim West
Tijeras, New Mexico
Mr. West is President of Jim West Financial Group, a
firm that he started in 1987. Mr. West specializes in business development,financialplanning, budget and cash flow
analysis, government and board training, and economic
development. Previously he was the vice president of the
American Indian National Bank. His duties included commercial lending, credit and finance, business development,
project evaluation, andfinancialplanning.
Grace W. Weinstein
Englewood, New Jersey
Ms. Weinstein, afinancialwriter and consultant, is currently a columnist for Good Housekeeping magazine and
consulting editor for the New Jersey Investor Section of the
Star-Ledger, Newark, New Jersey. She is the author of nine
books, including the Lifetime Book of Money Management.
She has written feature articles, primarily on personal
finance and business topics, for a variety of magazines,
including Money, Working Mother, Woman's Day, and
Kiplinger's Personal Finance. Ms. Weinstein receives
letters from all over the country, and many of them have
questions about consumer financial services and credit—
how to establish it, how to manage it, and how to understand its accompanying rights and responsibilities. She is a
frequent guest on radio and television call-in shows.
Robert O. Zdenek
Washington, DC
Since 1980 Mr. Zdenek has been the President of the
National Congress for Community Economic Development
(the trade association of community development corporations). He designs and participates in a range of public
policy initiatives that have significantly increased the stature of community-based development organizations. Mr.
Zdenek developed and implemented a diversified fundraising campaign that raises more than $1 million yearly from
twenty to thirty foundations and corporations. He has given
numerous speeches and published more than thirty articles
and chapters on community development and other topics.

Other Council members whose terms continue
through 1993 and 1994 are listed below (together

Announcements

with the expiration date of each one's term of
office).
Barry Abbott, Partner, Morrison & Foerster, San Francisco, California, December 31,1994
John R. Adams, Corporate Vice President and Compliance Officer, CoreStates Financial Corporation, Philadelphia, Pennsylvania, December 31, 1994
John A. Baker, Senior Vice President, Equifax, Inc.,
Atlanta, Georgia, December 31, 1994
Veronica E. Barela, Executive Director, NEWSED
Community Development Corporation, Denver, Colorado,
December 31, 1993
Mulugetta Birru, Executive Director, Urban Redevelopment Authority of Pittsburgh, Pittsburgh, Pennsylvania,
December 31, 1994
Genevieve Brooks, Deputy Borough President, Office of
the Bronx Borough President, Bronx, New York, December 31, 1994
Toye L. Brown, Director, Massachusetts Bay Transportation Authority, Boston, Massachusetts, December 31, 1993
Edmund Mierzwinski, Consumer Advocate, U.S. Public
Interest Research Group, Washington, D.C., December 31,
1994
John V. Skinner, President & Chief Executive Officer,
Jewelers Financial Services, Inc., Irving, Texas, December 31, 1994
Cathy Cloud, Enforcement Program Director, National
Fair Housing Alliance, Washington, D.C., December 31,
1994
Michael D. Edwards, President, Prairie Security Bank,
Yelm, Washington, December 31, 1994
Donald A. Glas, President, First State Federal Savings
and Loan Association, Hutchinson, Minnesota, December 31, 1993
Joyce Harris, President and Chief Executive Officer,
Teleco Community Credit Union, Madison, Wisconsin,
December 31, 1993
Gary S. Hattem, Vice President, Community Development Group, New York, New York, December 31, 1994
Julia E. Hiler, Executive Vice President, Sunshine Mortgage Corporation, Marietta, Georgia, December 31, 1993




199

Henry Jaramillo, Jr., President, Ranchers State Bank,
Belen, New Mexico, December 31, 1993
Lowell N. Swanson, President (Retired), United Finance
Company, Portland, Oregon, December 31, 1994
Michael W. Tierney, Director, Local Initiatives Support
Corporation, Washington, D.C., December 31, 1994

ISSUANCE OF FINAL RULE TO CARRY OUT
PROVISIONS OF THE FEDERAL DEPOSIT
INSURANCE CORPORATION
IMPROVEMENT
ACT OF 1991
The Federal Reserve Board issued on January 5,
1993, a final rule to carry out provisions of section
202(d) and 210 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (FDICIA)
that affect bank holding companies and foreign
banking organizations with operations in the United
States.
The final rule, which is effective February 4,
1993, replaces an interim rule adopted in April
1992 and amends Regulation Y (Bank Holding
Companies and Change in Bank Control) to specify
additional factors that the Federal Reserve must
consider in acting on applications submitted under
the Bank Holding Company Act to acquire a bank.

ISSUANCE OF FINAL RULE TO IMPLEMENT
PORTIONS OF THE FOREIGN BANK
SUPERVISION ENHANCEMENT ACT OF 1991
The Federal Reserve Board issued on January 12,
1993, a final rule implementing portions of the
Foreign Bank Supervision Enhancement Act of
1991. The final rule amends the Board's Regulation K (International Banking Operations) and Regulation Y (Bank Holding Companies and Change
in Bank Control). The rule is effective immediately
and replaces an interim regulation issued in April
1992.
The amendments to Regulation K reflect the
Board's new authority to supervise and regulate
foreign banks that conduct or seek to conduct a
banking business in the United States. The rule
requires that foreign banks seeking to conduct
direct banking operations in the United States must

200

Federal Reserve Bulletin • March 1993

be subject to comprehensive supervision by their
home-country authorities on a consolidated basis.
The amendment to Regulation Y requires a foreign banking organization to file an application
with the Board to acquire more than 5 percent of
the shares of a U.S. bank or bank holding company.
The Board is also requesting additional comments on the definition of representative office and
the types of activities such an office may conduct.
These comments must be received by March 15,
1993.

DECISION ON MSA

DESIGNATIONS

The Federal Reserve Board announced on January
22, 1993, that lenders covered by Regulation C
(Home Mortgage Disclosure) should continue to
use, through 1993, the Metropolitan Statistical Area
(MSA) designations that were in place during most
of 1992.
The Office of Management and Budget issued
new designations before year-end 1992, and lenders covered by the Home Mortgage Disclosure Act
ordinarily would be required to use the new MSA
boundaries for identifying property locations beginning January 1, 1993. The Board, however, has
decided to delay implementing this change in MSA
designations so that lenders have adequate time to
make the necessary programming changes for data
collection.

APPROVAL OF AN ALTERNATIVE METHOD TO
ADJUST THE 10 PERCENT REVENUE TEST
The Federal Reserve Board announced on January
26, 1993, approval of an alternative method to
adjust the 10 percent revenue test limiting ineligible securities activities of section 20 subsidiaries of
bank holding companies.
The alternative method is effective immediately
and is designed to accommodate changes in the
level and structure of interest rates since the revenue test was last examined in September 1989 and
to preserve the same level of activity.
Section 20 of the Glass-Steagall Act prohibits a
member bank from being affiliated with a company
that is "engaged principally" in underwriting and
dealing in bank ineligible securities. The current




test is based on the revenue earned from ineligible
and total securities activities. The alternative test
will index revenue to interest rate changes, comparing current interest rates for various portfolio durations with rates of corresponding durations in
September 1989.
A company can elect to use either the original
10 percent revenue standard or the alternative
indexed revenue test for purposes of calculating
compliance.

PROPOSED ACTIONS
The Federal Reserve Board issued for public comment on January 6,1993, proposed amendments to
its Regulations H (Membership of State Banking
Organizations in the Federal Reserve System), K
(International Banking Operations), and Y (Bank
Holding Companies and Change in Bank Control)
to implement a uniform multiagency criminal
referral form. Comments were requested by February 10, 1993.

PRELIMINARY FIGURES AVAILABLE
ON OPERATING INCOME
OF THE FEDERAL RESERVE BANKS
Preliminary figures released on January 13, 1993,
indicate that operating income of the Federal
Reserve Banks amounted to $20,234 billion during
1992. Net income before payment of dividends,
additions to surplus, and payments to the Treasury
totaled $17,348 billion. About $16,774 billion was
paid to the U.S. Treasury during 1992.
Federal Reserve System income is derived primarily from interest earned on U.S. government
securities that the Federal Reserve has acquired
through open market operations. Income from
the provision of financial services amounted to
$757 million.
Operating expenses of the twelve Reserve Banks
and their branches totaled $1,440 billion. Also,
$175 million for earnings credits were granted to
depository institutions under the Monetary Control
Act of 1980. Assessments to Reserve Banks for
Board expenditures totaled $129 million, and the
cost of currency amounted to $295 million.

Announcements

Net deductions from income amounted to
$959 million. Net deductions from income resulted
primarily from unrealized losses on assets denominated in foreign currencies to reflect current market
exchange rates. These unrealized losses were partially offset by gains on the sales of assets denominated in foreign currencies and securities from the
System Open Market Account. Statutory dividends
to member banks were $172 million.
Under the policy established by the Board of
Governors at the end of 1964, all net income after
the statutory dividend to member banks and the
amount necessary to equate surplus to paid-in capital is transferred to the U.S. Treasury as interest on
Federal Reserve notes.

REVISED LISTS OF MARGINABLE OTC
STOCKS AND OF FOREIGN MARGIN STOCKS
NOW AVAILABLE
The Federal Reserve Board published on January
22, 1992, a revised List of Marginable OTC Stocks
for over-the-counter (OTC) stocks that are subject
to its margin regulations. Also published was the
List of Foreign Margin Stocks for foreign equity
securities that are subject to Regulation T (Credit
by Brokers and Dealers). The lists were effective
February 9, 1993, and superseded the previous lists
that were effective November 9, 1992.
The foreign list specifies those foreign equity
securities that are eligible for margin treatment at
broker-dealers. There were no deletions to the for-




201

eign list, and the one addition brings the number of
foreign equity securities on the list to 302.
The changes that have been made to the revised
OTC list, which now contains 3,160 OTC stocks,
are as follows:
• One hundred eighteen stocks have been
included for the first time, 103 under National
Market System (NMS) designation
• Thirty-six stocks previously on the list have
been removed for substantially failing to meet the
requirements for continued listing
• Thirty-eight stocks have been removed for
reasons such as listing on an national securities
exchange or involvement in an acquisition.
The OTC List is published by the Board for the
information of lenders and the general public. It
includes all OTC securities designated by the Board
pursuant to its established criteria as well as all
OTC stocks designated as NMS securities for
which transaction reports are required to be made
pursuant to an effective transaction reporting plan.
Additional OTC securities may be designated as
NMS securities in the interim between the Board's
quarterly publications and will be immediately
marginable. The next publication of the Board's
list is scheduled for March 1993.
Besides NMS-designated securities, the Board
will continue to monitor the market activity of
other OTC stocks to determine which stocks meet
the requirements for inclusion and continued inclusion on the OTC List.
•

203

Legal Developments
FINAL RULE—AMENDMENTS
G, T, U AND X

TO REGULATIONS

The Board of Governors is amending 12 C.F.R. Parts
207, 220, 221, and 224, its Regulations G, T, U, and X
(Securities Credit Transactions; List of Marginable
OTC Stocks; and List of Foreign Margin Stocks). The
List of Marginable OTC Stocks (OTC List) is comprised of stocks traded over-the-counter (OTC) in the
United States that have been determined by the Board
of Governors of the Federal Reserve System to be
subject to the margin requirements under certain Federal Reserve regulations. The List of Foreign Margin
Stocks (Foreign List) represents foreign equity securities that have met the Board's eligibility criteria
under Regulation T. The OTC List and the Foreign
List are published four times a year by the Board. This
document sets forth additions to and deletions from
the previous OTC List and an addition to the Foreign
List. Both Lists were last published on October 29,
1992, and effective on November 9, 1992.
Effective February 8, 1993, accordingly, pursuant to
sections 7 and 23 of the Securities Exchange Act of
1934, as amended (15 U.S.C. 78g and 78w), and in
accordance with 12 C.F.R. 207.2(k) and 207.6 (Regulation G), 12 C.F.R. 220.2(u) and 220.17 (Regulation
T), and 12 C.F.R. 221.20 and 221.7 (Regulation U),
there is set forth below a listing of deletions from and
additions to the OTC List and an addition to the
Foreign List.

Deletions from the List of Marginable OTC
Stocks
Stocks R e m o v e d for Failing Continued Listing
Requirements
Action Auto Rental, Inc.: $.01 par common
Adtec, Inc.: $.01 par common
Aegis Group PLC: American Depositary Receipts
Aero Systems, Inc.: $.02 par common
Artel Communications Corporation: $.01 par common
Burritt Interfinancial Bancorporation: $1.00 par common




CBL Medical Inc.: Warrants (expire 12-21-93)
Cencor, Inc.: $1.00 par common
Congress Street Properties, Inc.: $.10 par common
CrownAmerica, Inc.: No par common
Crystal Oil Company: Series A, $.01 par convertible
preferred
Eastland Financial Corporation: $.01 par common
First Bank of Philadelphia: $2.00 par common
First New York Bank for Business: $.10 par common
FLS Holdings, Inc.: Series A, $.01 par convertible
preferred
Hotelecopy, Inc.: $.01 par common
ILIO, Inc.: $.01 par common; Warrants (expire
08-31-93)
Indiana Financial Investors, Inc.: N o par common
KMS Industries, Inc.: $.08 par common
Marine Drilling Company: Rights (expire 12-23-92)
Meritor Savings Bank: $1.00 par common
Networks Electronic Corporation: $.25 par common
Newport Electronics, Inc.: $.01 par common
Piedmont Federal Corporation: $.01 par common
Quartz Mountain Gold Corp.: No par common
Rocky Mount Undergarment Co., Inc.: $.01 par common
Sanborn, Inc.: Series A, convertible preferred stock;
Warrants (expire 08-07-96)
Second National Bancorporation: $1.00 par common
Sheffield Industries, Inc.: $.01 par common
Simtek Corporation: $.01 par common; Warrants
(expire 03-06-96)
Sun Microsystems, Inc.: 63/s% convertible subordinated debentures
Symbolics, Inc.: $.01 par common

204

Federal Reserve Bulletin • March 1993

Stocks Removed for Listing on a National
Securities Exchange or Being Involved in an
Acquisition

Western Capital Investment Corp.: $1.00 par common
Wetterau Incorporated: $1.00 par common

Additions to the List of Marginable OTC
Stocks
Advanced Telecommunications Corporation: $.02 par
common
Affiliated Bankshares of Colorado, Inc.: $5.00 par
common
American Biodyne, Inc.: $.01 par common
American Funeral Services Corp.: $.06 par common
Archive Corporation: $.01 par common
Betz Laboratories, Inc.: $.10 par common
Brandon Systems Corporation: $.10 par common
Carmike Cinemas, Inc.: Class A, $.03 par common
CCNB Corporation: $1.00 par common
Century Medicorp, Inc.: No par common
Chesapeake Utilities Corporation: $.48% par common
CK Federal Savings Bank: $1.00 par common
Compusa, Inc.: No par common
First Commercial Bancshares, Inc.: $1.00 par common
First Florida Banks, Inc.: $1.00 par common
Flagship Financial Corporation: $.01 par common
Fleer Corporation: $.01 par common
Hadson Energy Resources Corp.: $.10 par common
Healthsource, Inc.: $.10 par common
Home Financial Corporation: $1.00 par common
HomeTrust Bank of Georgia: $1.00 par common
Horizon Industries, Inc.: No par common
INB Financial Corporation: No par common
Insituform Group, Ltd.: Ordinary shares, par Vi pence
Moorco International, Inc.: $.01 par common
Patlex Corporation: $.10 par common
Phoenix Resource Companies, Inc.: $.01 par common
Ramsey - HMO, Inc.: $.001 par common
Savannah Foods & Industries, Inc.: $.25 par common
Summit Holding Corporation: $.625 par common
Sunair Electronics, Inc.: $.10 par common

Aaron Rents, Inc.: Class B, $.50 par common
Ace Cash Express, Inc.: $.01 par common
ACX Technologies, Inc.: $.01 par common
Alpha-Beta Technology, Inc.: $.01 par common
American Educational Products, Inc.: $.01 par common
Amfed Financial, Inc.: $.01 par common
ANB Corporation: No par common
Autofinance Group, Inc.: No par common
BankUnited, A Savings Bank (Florida): Class A, $.01
par common
Belize Holdings Inc.: $.01 par non-voting ordinary
shares
Books-A-Million, Inc.: $.01 par common
Boomtown, Inc.: $.01 par common
BPI Environmental, Inc.: Warrants (expire 10-08-94);
Warrants (expire 10-08-96)
Brooktrout Technology, Inc.: $.01 par common
Canterbury Educational Services, Inc.: $.001 par common
Casino Magic Corporation: $.01 par common
Celebrity, Inc.: $.01 par common
Central Mortgage Bancshares, Inc. (Missouri): $1.00
par common
Citation Computer Systems, Inc.: $.01 par common
Citizens National Corporation (Florida): $2.50 par
common
Commercial Bancorp (Oregon): $2.50 par common
Comptronix Corporation: 63/4% convertible subordinated debentures
Compuware Corporation: $.01 par common
Continental Savings of America, A Federal Savings &
Loan Association (California): Series A, non-cumulative convertible preferred
Copley Pharmaceutical, Inc.: $.01 par common
Corel Corporation: No par common
Cortech, Inc.: $.002 par common; Units (expire
05-24-94)
Creative Biomolecules, Inc.: $.01 par common

Ultra Bancorp: $.01 par common
Uni-Marts, Inc.: Class A, $.10 par common

Danka Business Systems, PLC: American Depositary
Receipts
DEP Corporation: Class A, $.01 par common
Dial Page, Inc.: $.01 par common

Value Health, Inc.: No par common
Viratek, Inc.: $.10 par common

E-Z-EM, Inc.: Class B; $.10 par common
Edmark Corporation: No par common

Tejas Gas Corporation: $.25 par common




Legal Developments

Edusoft Ltd.: Ordinary shares (NIS .1 par)
Embrace Systems Corporation: $.001 par common
Energy Research Corporation: $.0001 par common
Environmental Technologies Corporation: $.01 par
common; Warrants (expire 12-17-97)
Exstar Financial Corporation: $.01 par common
F.N.B. Corporation: Series B convertible preferred,
$25.00 stated value
Financial Security Corporation: $.01 par common
FONIC, Inc.: $.01 par common; Warrants (expire
05-01-93)
Fortune Bancorp, Inc. (Florida): Series A, 8% par
convertible preferred
Fresh Choice, Inc.: $.001 par common
Fritz Companies, Inc.: $.01 par common
GBC Technologies, Inc.: $.01 par common
Gray Communications Systems, Inc.: No par common
Ha-Lo Industries, Inc.: No par common
Haggar Corporation: $.10 par common
HCC Insurance Holdings, Inc.: $1.00 par common
Health Management Systems, Inc.: $.01 par common
Home Savings Bank, F.S.B. (Florida): $1.00 par common
HS Resources, Inc.: $.001 par common
Hyal Pharmaceutical Corporation: No par common
ImageAmerica, Inc.: $.01 par common
Infu-Tech, Inc.: $.01 par common
Interfirst Bankcorp, Inc. (Michigan): $.01 par common
IQ Software Corporation: $.00033 par common
ISG International Software Group, Ltd.: Ordinary
shares (NIS .1)
Kankakee Bancorp, Inc. (Illinois): $.01 par common
Kemet Corporation: $.01 par common
Kendall International, Inc.: $.01 par common
Landoptics Ltd.: Ordinary shares (NIS .02)
Ligand Pharmaceuticals Incorporated: Convertible
Class A, $.001 par common
Liposome Company, Inc., The: Depositary shares
Main Street & Main, Inc.: $.001 par common; Warrants (expire 09-04-96)
Matritech, Inc.: $.01 par common
Mayflower Group, Inc.: No par common
MB Communications, Inc.: $.001 par common
Media Vision, Inc.: $.001 par common
Memtec Limited: American Depositary Receipts
Micro Warehouse, Inc.: $.01 par common
Microtest, Inc.: $.001 par common
Midland Financial Group, Inc.: No par common




205

Miles Homes, Inc.: $.10 par common
Neoprobe Corporation: $.001 par common; Class E,
Warrants (expire 11-10-96)
Networth, Inc.: $.01 par common
NPM Healthcare Products, Inc.: $.01 par common
NU Horizons Electronics Corporation: $.01 par common
Olicom A/S: DKK $.25 par common
Olympic Financial Ltd. (Minnesota): $.01 par common
Orion Pictures Corporation: $.25 par common
Patterson Dental Company: $.01 par common
Peoplesoft, Inc.: $.01 par common
Physicians Clinical Laboratory, Inc.: $.01 par common
Platinum Software Corporation: $.001 par common
President Riverboat Casinos, Inc.: $.01 par common
Purolator Products Company: $.01 par common
Rand Capital Corporation: $.10 par common
Raven Industries, Inc.: $1.00 par common
Res-Care, Inc.: No par common
Rottlund Company, Inc., The: $.01 par common
Seacor Holdings, Inc.: $.01 par common
Simmons First National Corporation (Arkansas):
Class A, $5.00 par common
Snapple Beverage Corporation: $.01 par common
Sport Chalet, Inc.: $.01 par common
St. Mary Land & Exploration Company: $.01 par
common
Sterling Bancshares, Inc. (Texas): $1.00 par common
Syratech Corporation: $.01 par common
Taco Cabana, Inc.: Class A, $.01 par common
Tracor, Inc.: $.01 par common; Warrants (expire
12-31-2001)
Trident Microsystems, Inc.: $.001 par common
U.S. Physical Therapy, Inc.: $.01 par common
Ultralife Batteries, Inc.: $.10 par common
United Waste Systems, Inc.: $.001 par common
USA Classic, Inc.: $.01 par common
Vision-Sciences, Inc.: $.01 par common
Washington Mutual Savings Bank: Series C, $1.00 par
non-cumulative perpetual preferred; Series D, $1.00
par convertible perpetual preferred
Western Water Company: No par common
Whitman Medical Corporation: No par common
Wholesome & Hearty Foods, Inc.: No par common

206

Federal Reserve Bulletin • March 1993

Addition to the List of Foreign Margin Stocks
Jefferson Smurfit Group, PLC: Ordinary shares, £.25
par value

FINAL RULE—AMENDMENT

TO REGULATION

K

The Board of Governors is amending 12 C.F.R. Parts
211, 225, 263, and 265, its Regulation K (International
Banking Operations) and Regulation Y (Banking Holding Companies and Change in Bank Control), implementing portions of the Foreign Bank Supervision
Enhancement Act of 1991 (FBSEA), Subtitle A of
Title II of the Federal Deposit Insurance Corporation
Improvement Act of 1991, which made changes to the
authority of the Board of Governors of the Federal
Reserve System (Board) under the International Banking Act of 1978 (IBA). These changes generally provided the Board with new authority to approve the
establishment of U.S. offices by foreign banks and to
regulate and supervise the U.S. operations of foreign
banks. The final rule replaces the previous interim rule
and reflects the Board's authority with respect to the
supervision and regulation of foreign banks that conduct or seek to conduct a banking business in the
United States. The Board has also requested additional comment on aspects of the final rule concerning
representative offices of foreign banks. Lastly, the
final rule amends Regulation Y to reflect the requirement that a foreign banking organization must file an
application with the Board under the Bank Holding
Company Act (BHC Act) in order to acquire more
than 5 percent of the shares of a U.S. bank or bank
holding company.
Effective January 28, 1993, 12 C.F.R. Parts 211,
225, 263, and 265 are amended as follows:

Part 211—International Banking

Operations

1. The authority citation for 12 C.F.R. Part 211 continues to read as follows:
Authority: Federal Reserve Act (12 U.S.C. 221 et seq.);
Bank Holding Company Act of 1956, as amended
(12 U.S.C. 1841 et seq.); the International Banking Act
of 1978 (Pub. L. 95-369; 92 Stat. 607; 12 U.S.C. 3101
et seq.); the Bank Export Services Act (title II, Pub. L.
97-290, 96 Stat. 1235); the International Lending Supervision Act (title IX, Pub. L. 98-181, 97 Stat. 1153;
12 U.S.C. 3901 et seq.); and the Export Trading Company Act Amendments of 1988 (title III, Pub. L.
100-418, 102 Stat. 1384 (1988)).




2. Section 211.2 is amended by revising paragraph (t)
to read as follows:

Section 211.2—Definitions.
(t) Representative office means an office that:
(1) Engages solely in representational and administrative functions, such as soliciting new business or
acting as liaison between the organization's head
office and customers in the United States; and
(2) Does not have authority to make any business
decision (other than decisions relating to the premises or personnel of the representative office) for the
account of the organization it represents, including
contracting for any deposit or deposit-like liability
on behalf of the organization.
*

*

*

*

*

3. Section 211.21 is redesignated as section 211.20.
Newly designated section 211.20 is amended by revising paragraphs (b)(3) through (b)(8) and by adding new
paragraphs (b)(9) and (c) to read as follows:

Section 211.20—Authority, purpose, and
scope.
j|e

$

$

$

$

(b) * * *
(3) Board approval of the establishment of an office
of a foreign bank in the United States under sections
7(d) and 10(a) of the IBA (12 U.S.C. 3105(d),
3107(a));
(4) The termination by the Board of a foreign bank's
representative office, state branch, state agency, or
commercial lending company subsidiary under sections 7(e) and 10(b) of the IBA (12 U.S.C. 3105(e),
3107(b)) and the transmission of a recommendation
to the Office of the Comptroller of the Currency to
terminate a federal branch or federal agency under
section 7(e)(5) of the IBA (12 U.S.C. 3105(e)(5));
(5) The examinaion of an office or affiliate of a
foreign bank in the United States as provided in
sections 7(c) and 10(c) of the IBA (12 U.S.C.
3105(c), 3107(c));
(6) The disclosure of supervisory information to a
foreign supervisor under section 15 of the IBA
(12 U.S.C. 3109);
(7) The limitations on loans to one borrower by state
branches and state agencies of a foreign bank under
section 7(h)(2) of the IBA (12 U.S.C. 3105(h)(2));
(8) The limitation of a state branch and a state
agency to conducting only activities that are permis-

Legal Developments

sible for a federal branch under section 7(h)(1) of the
IBA (12 U.S.C. 3105(h)(1)); and
(9) The deposit insurance requirement for retail
deposit taking by a foreign bank under section 6 of
the IBA (12 U.S.C. 3104).
(c) Additional requirements. Compliance by a foreign
bank with the requirements of this subpart and the
laws administered and enforced by the Board does not
relieve the foreign bank of responsibility to comply
with the laws and regulations administered by the
licensing authority.
4. Section 211.22 is redesignated as section 211.21 and
is revised to read as follows:

Section 211.21—Definitions.
The definitions contained in section 211.2 in subpart A
of this part apply to this subpart except as a term is
otherwise defined in this section:
(a) Affiliate, of a foreign bank or of a parent of a foreign
bank, means any company that controls, is controlled
by, or is under common control with, the foreign bank
or the parent of the foreign bank.
(b) Agency means any place of business of a foreign
bank, located in any state, at which credit balances are
maintained, checks are paid, money is lent, or, to the
extent not prohibited by state or federal law, deposits
are accepted from a person or entity that is not a
citizen or resident of the United States. Obligations
shall not be considered credit balances unless they are:
(1) Incidental to, or arise out of the exercise of,
other lawful banking powers;
(2) To serve a specific purpose;
(3) Not solicited from the general public;
(4) Not used to pay routine operating expenses in
the United States such as salaries, rent, or taxes;
(5) Withdrawn within a reasonable period of time
after the specific purpose for which they were
placed has been accomplished; and
(6) Drawn upon in a manner reasonable in relation to
the size and nature of the account.
(c) Banking subsidiary, with respect to a specified
foreign bank, means a bank that is a subsidiary as the
terms bank and subsidiary are defined in section 2 of
the BHC Act (12 U.S.C. 1841).
(d) Branch means any place of business of a foreign
bank, located in any state, at which deposits are
received and that is not an agency, as that term is
defined in paragraph (b) of this section.
(e) Change the status of an office means convert a
representative office into a branch or an agency, an
agency into a branch, a federal branch into a state
branch, or a federal agency into a state agency, but




207

does not include renewal of the license of an existing
office.
(f) Commercial lending company means an organization, other than a bank or an organization operating
under section 25 of the Federal Reserve Act (FRA)
(12 U.S.C. 601-604a), organized under the laws of any
state, that maintains credit balances permissible for an
agency and engages in the business of making commercial loans. Commercial lending company includes
any company chartered under Article XII of the banking law of the State of New York.
(g) Comptroller means the Office of the Comptroller of
the Currency.
(h) Control has the same meaning assigned to it in
section 2 of the BHC Act (12 U.S.C. 1841), and the
terms controlled and controlling shall be construed
consistently with the term control.
(i) Domestic branch means any place of business of a
foreign bank, located in any state, that may accept
domestic deposits and deposits that are incidental to or
for the purpose of carrying out transactions in foreign
countries.
(j) A foreign bank engages directly in the business of
banking outside of the United States if the foreign
bank engages directly in banking activities usual in
connection with the business of banking in the countries where the foreign bank is organized or operating,
(k) To establish means to:
(1) Open and conduct business through an office;
(2) Acquire directly, through merger, consolidation,
or similar transaction with another foreign bank, the
operations of an office that is open and conducting
business;
(3) Acquire an office through the acquisition of a
foreign bank subsidiary that will cease to operate in
the same corporate form following the acquisition;
(4) Change the status of an office; or
(5) Relocate an office from one state to another.
(1) Federal agency, federal branch, state agency, and
state branch have the same meanings as in section 1 of
the IBA (12 U.S.C. 3101).
(m) Foreign bank means an organization that is organized under the laws of a foreign country and that
engages directly in the business of banking outside of
the United States. The term foreign bank does not
include a central bank of a foreign country that does
not engage or seek to engage in a commercial banking
business in the United States through an office,
(n) Foreign banking organization means a foreign
bank, as defined in section 1(b)(7) of the IBA
(12 U.S.C. 3101(7)), that operates a branch, agency, or
commercial lending company subsidiary in the United
States, or that controls a bank in the United States,
and any company of which the foreign bank is a
subsidiary.

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Federal Reserve Bulletin • March 1993

(o) Home country, with respect to a foreign bank,
means the country in which the foreign bank is chartered or incorporated.
(p) Home country supervisor, with respect to a foreign
bank, means the governmental entity or entities in the
foreign bank's home country with responsibility for
the supervision and regulation of the foreign bank,
(q) Licensing authority means:
(1) The relevant state supervisor, with respect to an
application to establish a state branch, state agency,
commercial lending company, or representative office of a foreign bank; or
(2) The Comptroller, with respect to an application
to establish a federal branch or federal agency.
(r) Office or office of a foreign bank means any branch,
agency, representative office, or commercial lending
company subsidiary of a foreign bank in the United
States.
(s) The parent of a foreign bank means any company of
which the foreign bank is a subsidiary; the immediate
parent of a foreign bank is the company of which the
foreign bank is a direct subsidiary; and the ultimate
parent of a foreign bank is the parent of the foreign
bank that is not the subsidiary of any other company,
(t) Regional administrative office means a representative office that:
(1) Is established by a foreign bank that operates one
or more branches, agencies, commercial lending
companies, or banks in the United States;
(2) Is located in the same city as one or more of the
foreign bank's branches, agencies, commercial lending companies, or banks in the United States; and
(3) Manages, supervises, or coordinates the operations of the foreign bank or its affiliates, if any, in a
particular geographic region.
(u) Relevant state supervisor means the state entity
that is authorized to supervise and regulate a state
branch, state agency, commercial lending company, or
representative office.
(v) Representative office means any place of business
of a foreign bank, located in any state, that is not a
branch, agency, or subsidiary of the foreign bank,
(w) State means any state of the United States or the
District of Columbia.
(x) Subsidiary means any organization 25 percent or
more of whose voting shares is directly or indirectly
owned, controlled, or held with the power to vote by a
company, including a foreign bank or foreign banking
organization, or any organization that is otherwise
controlled or capable of being controlled by a foreign
bank or foreign banking organization.
5. Section 211.23 is redesignated as section 211.22.
6. Section 211.24 is redesignated as section 211.23,




paragraphs (a) through (h) of newly designated section
211.23 are redesignated as paragraphs (b) through (i)
respectively, and a new paragraph (a) is added and
reserved.
7. Sections 211.25 through 211.29 are redesignated as
sections 211.24 through 211.28, respectively, and are
revised to read as follows:

Section 211.24—Approval of offices of foreign
banks; procedures for applications; standards
for approval; representative office activities and
standards for approval; preservation of existing
authority.
(a) Board approval of offices of foreign banks—
(1) Prior Board approval of branches, agencies, or
commercial lending companies of foreign banks.
(i) Except as otherwise provided in paragraph
(a)(3) of this section, a foreign bank shall obtain
the approval of the Board before it:
(A) Establishes a branch, agency, or commercial lending company subsidiary in the United
States; or
(B) Acquires ownership or control of a commercial lending company subsidiary.
(2) Prior Board approval of representative offices of
foreign banks. Except as otherwise provided in
paragraphs (a)(2) or (a)(3) of this section, a foreign
bank shall obtain the approval of the Board before it
establishes a representative office in the United
States.
(i) Prior notice for regional administrative offices.
After providing 45 days' prior written notice to
the Board, a foreign bank may establish a regional
administrative office. The Board may waive the
45-day period if it finds that immediate action is
required by the circumstances presented. The
notice period shall commence at the time the
notice is accepted. The Board may suspend the
period or require Board approval prior to the
establishment of such an office if the notification
raises significant policy, prudential, or supervisory concerns.
(ii) General consent for representative offices.
The Board grants its general consent for a foreign
bank to establish a representative office that
solely engages in limited administrative functions
that are clearly defined, are performed in connection with the banking activities of the foreign
bank, and that do not involve contact or liaison
with customers or potential customers (such as
separately maintaining back office support systems), provided that the foreign bank notifies the

Legal Developments

Board in writing within 30 days of the establishment of the representative office.
(3) After-the-fact Board approval. Where a foreign
bank proposes to establish a branch, agency, representative office, or commercial lending company in
the United States through the acquisition of, or
merger or consolidation with, a foreign bank with an
office in the United States, the Board may, in its
discretion, allow the acquisition, merger, or consolidation to proceed before an application to establish
the office has been filed or acted upon under this
section if:
(i) The foreign bank or banks resulting from the
acquisition, merger, or consolidation will not directly or indirectly own or control more than
5 percent of any class of the voting securities of,
or control, a U.S. bank;
(ii) The Board is given reasonable advance notice
of the proposed acquisition, merger, or consolidation;
(iii) Prior to consummation of the acquisition,
merger, or consolidation, each of the relevant
foreign banks commits in writing to comply with
the procedures for an application under this section within a reasonable period of time or has
already filed an application; and
(iv) Each of the relevant foreign banks commits in
writing to abide by the Board's decision on the
application, including, if necessary, a decision to
terminate the activities of any such U.S. office, as
the Board or the Comptroller may require.
(4) Notice of change in ownership or control or
conversion of existing office. A foreign bank with a
U.S. office shall notify the Board in writing within
10 days of either:
(i) A change in the foreign bank's ownership or
control where the foreign bank is acquired or
controlled by another foreign bank or company
and the acquired foreign bank with a U.S. office
continues to operate in the same corporate form
as prior to the change in ownership or control; or
(ii) The conversion of a branch to an agency or
representative office, an agency to a representative office, a state branch to a federal branch, or a
state agency to a federal agency.
(5) Transactions subject to approval under Regulation Y. Subpart B of the Board's Regulation Y
(12 C.F.R. 225.11-225.14) governs the acquisition
by a foreign banking organization of direct or indirect ownership or control of any voting securities of
a bank or bank holding company in the United
States if the acquisition results in the foreign banking organization's ownership or control of more than
5 percent of any class of voting securities of a U.S.
bank or bank holding company, including through



209

acquisition of a foreign bank or foreign banking
organization that owns or controls more than
5 percent of any class of the voting securities of a
U.S. bank or bank holding company,
(b) Procedures for application—(1) Filing application.
An application for the Board's approval pursuant to
this section shall be filed in the manner prescribed
by the Board.
(2) Publication requirement—(i) General. Except
with respect to a proposed transaction where
more extensive notice is required by statute or as
otherwise provided in paragraphs (b)(2)(ii) and
(b)(2)(iii) of this section, the applicant shall publish a notice in a newspaper of general circulation
in the community in which the applicant proposes
to engage in business. The notice shall state that
an application is being filed as of the date of the
notice and provide the name of the applicant, the
subject matter of the application, the place where
comments should be sent, and the date by which
comments are due pursuant to paragraph (b)(3) of
this section. The applicant shall furnish with its
application to the Board a copy of the notice, the
date of its publication, and the name and address
of the newspaper in which it was published.
(ii) Exception. The Board may modify the publication requirement of paragraph (b)(2)(i) of this
section in appropriate circumstances.
(iii) Federal branch or federal agency. In the case
of an application to establish a federal branch or
federal agency, compliance with the publication
procedures of the Comptroller shall satisfy the
publication requirement of this section. Comments regarding the application should be sent to
the Board and the Comptroller.
(3) Written comments. Within 30 days after publication as required in paragraph (b)(2) of this section,
any person may submit to the Board written comments and data on an application. The Board may
extend the 30-day comment period if the Board
determines that additional relevant information is
likely to be provided by interested persons or if
other extenuating circumstances exist.
(4) Board action on application—(i) Time limits.
The Board shall act on an application from a
foreign bank within 60 calendar days after the
foreign bank has been notified that its application
has been accepted, unless the Board determines
that the public interest will be served by providing
additional time to review the application and
notifies the applicant that the 60-day period is
being extended.
(ii) Additional information. The Board may request any information in addition to that supplied
in the application when the Board believes that

210

Federal Reserve Bulletin • March 1993

additional information is necessary for its decision.
(5) Coordination with other regulators. Upon receipt of an application by a foreign bank under this
section, the Board shall promptly notify, consult
with, and consider the views of the licensing
authority.
(c) Standards for approval—(1) Mandatory standards— (i) General. As specified in section 7(d) of
the IBA (12 U.S.C. 3105(d)), the Board may not
approve an application to establish a branch or an
agency, or to establish or acquire ownership or
control of a commercial lending company, unless
it determines that:
(A) Each of the foreign bank and any parent
foreign bank engages directly in the business of
banking outside the United States and is subject
to comprehensive supervision or regulation on
a consolidated basis by its home country supervisor; and
(B) The foreign bank has furnished to the Board
the information that the Board requires in order
to assess the application adequately.
(ii) Basis for determining comprehensive supervision or regulation on a consolidated basis. In
determining whether a foreign bank and any
parent foreign bank is subject to comprehensive
supervision or regulation on a consolidated basis, the Board shall determine whether the foreign bank is supervised or regulated in such a
manner that its home country supervisor receives sufficient information on the worldwide
operations of the foreign bank (including the
relationships of the bank to any affiliate) to
assess the foreign bank's overall financial condition and compliance with law and regulation. In
making such a determination, the Board shall
assess, among other factors, the extent to which
the home country supervisor:
(A) Ensures that the foreign bank has adequate
procedures for monitoring and controlling its
activities worldwide;
(B) Obtains information on the condition of the
foreign bank and its subsidiaries and offices
outside the home country through regular reports of examination, audit reports, or otherwise;
(C) Obtains information on the dealings and
relationships between the foreign bank and its
affiliates, both foreign and domestic;
(D) Receives from the foreign bank financial
reports that are consolidated on a worldwide
basis, or comparable information that permits
analysis of the foreign bank's financial condition on a worldwide, consolidated basis;




(E) Evaluates prudential standards, such as
capital adequacy and risk asset exposure, on a
worldwide basis.
(2) Discretionary standards. In acting on any application under this subpart, the Board may take into
account:
(i) Consent of home country supervisor. Whether
the home country supervisor of the foreign bank
has consented to the proposed establishment of a
branch, agency, or commercial lending company
subsidiary;
(ii) Financial resources. The financial resources of
the foreign bank (including the foreign bank's
capital position, projected capital position, profitability, level of indebtedness, and future prospects) and the condition of any U.S. office of the
foreign bank;
(iii) Managerial resources. The managerial resources of the foreign bank, including the competence, experience, and integrity of the officers and
directors; the integrity of its principal shareholders; management's experience and capacity to
engage in international banking; and the record
of the foreign bank and its management of complying with laws and regulations, and of fulfilling
any commitments to, and any conditions imposed
by, the Board in connection with any prior application;
(iv) Sharing information with
supervisors.
Whether the foreign bank's home country supervisor and the home country supervisor of any
parent of the foreign bank share material information regarding the operations of the foreign bank
with other supervisory authorities;
(v) Assurances to Board. Whether the foreign
bank has provided the Board with adequate assurances that information will be made available to
the Board on the operations or activities of the
foreign bank and any of its affiliates that the Board
deems necessary to determine and enforce compliance with the IBA, the BHC Act, and other
applicable federal banking statutes; these assurances shall include a statement from the foreign
bank describing the laws that would restrict the
foreign bank or any of its parents from providing
information to the Board;
(vi) Compliance with U.S. law. Whether the
foreign bank and its U.S. affiliates are in compliance with applicable U.S. law, and whether the
applicant has established adequate controls and
procedures in each of its offices to ensure continuing compliance with U.S. law, including
controls directed to detection of money laundering and other unsafe or unsound banking practices.

Legal Developments

(3) Additional factor. In acting on an application,
the Board may consider the needs of the community and the history of operation of the foreign
bank and its relative size in its home country,
provided, however, that the size of the foreign
bank shall not be the sole factor in determining
whether an office of a foreign bank should be
approved.
(4) Board conditions on approval. The Board may
impose such conditions on its approval as it deems
necessary, including a condition which may permit
future termination of any activities by the Board or,
in the case of a federal branch or a federal agency,
by the Comptroller, based on the inability of the
foreign bank to provide information on its activities
or those of its affiliates that the Board deems necessary to determine and enforce compliance with U.S.
banking laws.
(d) Representative offices—(1) Activities. A representative office may engage in:
(i) Representational and administrative functions
in connection with the banking activities of the
foreign bank which may include soliciting new
business for the foreign bank, conducting research, acting as liaison between the foreign
bank's head office and customers in the United
States, performing any of the activities described
in 12 C.F.R. 250.141(h), or performing back office
functions, but shall not include contracting for
any deposit or deposit-like liability, lending
money, or engaging in any other banking activity
for the foreign bank; and
(ii) Other functions for or on behalf of the foreign
bank or its affiliates, such as operating as a
regional administrative office of the foreign bank,
but only to the extent that such other functions
are not banking activities and are not prohibited
by applicable federal or state law or by ruling or
order of the Board.
(2) Standards for approval of representative offices. As specified in section 10(a)(2) of the IB A
(12 U.S.C. 3107(a)(2)), in acting on the application
of a foreign bank to establish a representative
office, the Board shall take into account to the
extent it deems appropriate the standards for approval set out in paragraph (c) of this section.
(3) Additional requirements. The Board may impose any additional requirements that it determines to be necessary to carry out the purposes of
the IBA.
(e) Preservation of existing authority. Nothing in this
subpart shall be construed to relieve any foreign
bank or foreign banking organization from any otherwise applicable requirement of federal or state law,
including any applicable licensing requirement.




211

Section 211.25—Termination of offices of
foreign banks.
(a) Grounds for termination—(1) General. Under sections 7(e) and 10(b) of the IBA (12 U.S.C. 3105(e),
3107(b)), the Board may order a foreign bank to
terminate the activities of its representative office,
state branch, state agency, or commercial lending
company subsidiary if the Board finds that:
(i) The foreign bank is not subject to comprehensive supervision or regulation on a consolidated
basis by its home country supervisor in accordance with section 211.24(c)(1) of this subpart; or
(ii) (A) There is reasonable cause to believe that
the foreign bank or any of its affiliates has
committed a violation of law or engaged in an
unsafe or unsound banking practice in the
United States; and
(B) As a result of such violation or practice, the
continued operation of the foreign bank's representative office, state branch, state agency, or
commercial lending company subsidiary would
not be consistent with the public interest or
with the purposes of the IBA, the BHC Act, or
the Federal Deposit Insurance Act (FDI Act)
(12 U.S.C. 1811 etseq.).
(2) Additional ground. The Board may also enforce
any condition imposed in connection with an order
issued under section 211.24 of this subpart.
(b) Factor. In making its findings under this section,
the Board may take into account the needs of the
community as well as the history of operation of the
foreign bank and its relative size in its home country,
provided, however, that the size of the foreign bank
shall not be the sole determining factor in a decision to
terminate an office.
(c) Consultation with relevant state supervisor. Except
in the case of termination pursuant to paragraph (d)(3)
of this section, before issuing an order terminating the
activities of a state branch, state agency, representative office, or commercial lending company subsidiary
under this section, the Board shall request and consider the views of the relevant state supervisor.
(d) Termination procedures—(1) Notice and hearing.
Except as otherwise provided in paragraph (d)(3) of
this section, an order issued under paragraph (a)(1)
of this section shall be issued only after notice to the
relevant state supervisor and the foreign bank and
after an opportunity for a hearing.
(2) Procedures for hearing. Hearings under this
section shall be conducted pursuant to the Board's
Rules of Practice for Hearings (12 C.F.R. part 263).
(3) Expedited procedure. The Board may act without providing an opportunity for a hearing if it
determines that expeditious action is necessary in

212

Federal Reserve Bulletin • March 1993

order to protect the public interest. When the Board
finds that it is necessary to act without providing an
opportunity for a hearing, the Board, solely in its
discretion, may provide the foreign bank that is the
subject of the termination order with notice of the
intended termination order, grant the foreign bank
an opportunity to present a written submission
opposing issuance of the order, or take any other
action designed to provide the foreign bank with
notice and an opportunity to present its views concerning the order.
(e) Termination of federal branch or federal agency.
The Board may transmit to the Comptroller a recommendation that the license of a federal branch or
federal agency be terminated if the Board has reasonable cause to believe that the foreign bank or any
affiliate of the foreign bank has engaged in conduct for
which the activities of a state branch or state agency
may be terminated pursuant to this section.
(f) Voluntary termination. A foreign bank shall notify
the Board at least 30 days prior to terminating the
activities of any office. Notice pursuant to this paragraph is in addition to, and does not satisfy, any other
federal or state requirements relating to the termination of an office or the requirement for prior notice of
the closing of a branch pursuant to section 39 of the
FDI Act (12 U.S.C. 1831p).

Section 211.26—Examination of offices and
affiliates of foreign banks.
(a) Conduct of examinations—(1) Examination of
branches, agencies, commercial lending companies, and affiliates. The Board may examine any
branch or agency of a foreign bank, any commercial
lending company or bank controlled by one or more
foreign banks or one or more foreign companies that
control a foreign bank, and any other office or
affiliate of a foreign bank conducting business in any
state.
(2) Examination of representative offices. The Board
may examine any representative office in the manner and with the frequency it deems appropriate.
(b) Coordination of examinations. To the extent possible, the Board shall coordinate its examinations of
the U.S. offices and U.S. affiliates of a foreign bank
with the licensing authority and, in the case of an
insured branch, the Federal Deposit Insurance Corporation (FDIC), including through simultaneous examinations of the U.S. offices and U.S. affiliates of a
foreign bank.
(c) Annual on-site examinations. Each branch,
agency, or commercial lending company subsidiary of
a foreign bank shall be examined on-site at least once




during each 12-month period (beginning on the date
the most recent examination of the office ended) by:
(1) The Board;
(2) The FDIC, if the branch of the foreign bank
accepts or maintains insured deposits;
(3) The Comptroller, if the branch or agency of the
foreign bank is licensed by the Comptroller; or
(4) The state supervisor, if the office of the foreign
bank is licensed or chartered by the state.

Section 211.27—Disclosure of supervisory
information to foreign supervisors.
(a) Disclosure by Board. The Board may disclose
information obtained in the course of exercising its
supervisory or examination authority to a foreign bank
regulatory or supervisory authority if the Board determines that disclosure is appropriate for bank supervisory or regulatory purposes and will not prejudice the
interests of the United States.
(b) Confidentiality. Before making any disclosure of
information pursuant to paragraph (a) of this section,
the Board shall obtain, to the extent necessary, the
agreement of the foreign bank regulatory or supervisory authority to maintain the confidentiality of such
information to the extent possible under applicable
law.

Section 211.28—Limitation on loans to one
borrower.
(a) Limitation. Except as otherwise provided in paragraph (b) of this section, the total loans and extensions
of credit by all the state branches and agencies of a
foreign bank outstanding to a single borrower at one
time shall be aggregated with the total loans and
extensions of credit by all federal branches and federal
agencies of the same foreign bank outstanding to such
borrower at the time and shall be subject to the
limitations and other provisions of section 5200 of the
Revised Statutes (12 U.S.C. 84), and the regulations
promulgated thereunder, in the same manner that
extensions of credit by a federal branch or federal
agency are subject to section 4(b) of the IBA
(12 U.S.C. 3102(b)) as if such state branches and
agencies were federal branches and agencies.
(b) Preexisting loans and extensions of credit. Any
loans or extensions of credit to a single borrower that
were originated prior to December 19, 1991, by a state
branch or state agency of the same foreign bank and
that, when aggregated with loans and extensions of
credit by all other branches and agencies of the foreign
bank, exceed the limits set forth in paragraph (a) of
this section, may be brought into compliance with
such limitations through routine repayment, provided

Legal Developments

that any new loans or extensions of credit, including
renewals of existing unfunded credit lines or extensions of the dates of maturity of existing loans, to the
same borrower shall comply with the limits set forth in
paragraph (a) of this section.

213

sition is also by a foreign banking organization and
otherwise subject to section 225.11(f) of this subpart.
Part 263—Rules

of Practice for

Hearings

8. A new section 211.29 is added and reserved to read
as follows:

1. The authority citation for 12 C.F.R. part 263 is
revised to read as follows:

Section 211.29—Applications by state-licensed
branches and agencies to conduct activities not
permissible for federal branches—

Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505,
18170), 1818, 1828(c), 1847(b), 1847(d), 1884(b),
1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15 U.S.C. 21,
78o-4, 78o-5, and 78u-2.

[Reserved].
Part 225—Bank Holding Companies
Change in Bank Control

and

1. The authority citation for 12 C.F.R. part 225 continues to read as follows:
Authority:
12 U.S.C. 18170(13), 1818, 1831i,
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3907, 3909,
3310, and 3331-3351.
2. Section 225.11 is amended by revising paragraph (f)
to read as follows:
Section 225.11—Transactions requiring Board
approval.

2. Section 263.51 is amended by revising paragraph (c)
to read as follows:
Section 263.51—Definitions.

(c) Institution has the same meaning as that assigned to
it in section 263.3(f) of subpart A, and includes any
foreign bank with a representative office in the United
States.
Part 265—Rules
Authority

Regarding

Delegation

of

1. The authority citation for 12 C.F.R. part 265 continues to read as follows:
Authority: 12 U.S.C. 248(i) and (k).

(f) Transactions by foreign banking organization. Any
transaction described in paragraphs (a) through (e) of
this section by a foreign banking organization (as
defined in 12 C.F.R. 211.21(n)) that involves the acquisition of an interest in a U.S. bank or in a bank
holding company for which application would be required if the foreign banking organization were a bank
holding company.
3. Section 225.12 is amended by revising paragraph (f)
to read as follows:
Section 225.12—Transactions not requiring
Board approval.

(f) Acquisition of foreign banking organization. The
acquisition of a foreign banking organization (as defined in 12 C.F.R. 211.21(n)) where the foreign banking organization does not directly or indirectly own or
control a bank in the United States, unless the acqui-




2. Section 265.6 is amended by revising paragraph
(b)(2) and by adding a new paragraph (f) to read as
follows:
Section 265.6—Functions delegated to General
Counsel.

(b) * * *
(2) Disclosure to foreign authorities. To make the
determinations required for disclosure of information to a foreign bank regulatory or supervisory
authority, and to obtain, to the extent necessary, the
agreement of such authority to maintain the confidentiality of such information to the extent possible
under applicable law (12 C.F.R. 211.27).

(f) International banking. (1) With the concurrence of
the Board's Director of the Division of Banking
Supervision and Regulation, to grant a request by a

214

Federal Reserve Bulletin • March 1993

foreign bank to establish a branch, agency, commercial lending company, or representative office
through certain acquisitions, mergers, consolidations, or similar transactions, and to file an after-thefact application for the Board's approval to establish
that office pursuant to section 211.24(a)(3) of Regulation K (12 C.F.R. 211.24(a)(3)); and
(2) To modify the requirement that a foreign bank
that has applied to establish a branch, agency, commercial lending company, or representative office
pursuant to section 211.24(a) of Regulation K
(12 C.F.R. 211.24(a)) shall publish notice of the
application in a newspaper of general circulation in
the community in which the applicant proposes to
engage in business as provided in section
211.24(b)(2)(ii)
of
Regulation
K
(12 C.F.R.
211.24(b)(2)(ii)).
3. Section 265.7 is amended by revising paragraph
(d)(8) to read as follows:

Section 265.7—Functions delegated to Director
of Division of Banking Supervision and
Regulation.

United States pursuant to section 211.24 of
Regulation K (12 C.F.R. 211.24), provided
that:
(A) The foreign bank previously received approval from the Board to establish a branch,
agency, or commercial lending company in the
United States pursuant to section 211.24 of
Regulation K (12 C.F.R. 211.24); and
(B) The application raises no significant policy
or supervisory issues.
(ii) Representative office. To approve an application by a foreign bank to establish a representative
office in the United States pursuant to section
211.24 of Regulation K (12 C.F.R. 211.24), provided that:
(A) The foreign bank previously received approval from the Board to establish a branch,
agency, commercial lending company, or representative office in the United States pursuant
to section 211.24 of Regulation K (12 C.F.R.
211.24); and
(B) The application raises no significant policy
or supervisory issues.
*

*

*

$

^ ***
(8) Conduct and coordination of examinations. To
authorize the conduct of examinations of the U.S.
offices and affiliates of foreign banks as provided in
sections 7(c) and 10(c) of the IBA (12 U.S.C.
3105(c), 3107(c)), and, where appropriate, to coordinate those examinations with examinations of
the Office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, and the
state entity that is authorized to supervise or
regulate a state branch, state agency, commercial
lending company, or representative office.

4. Section 265.11 is amended by adding paragraph
(d)(ll) to read as follows:

Section 265.11—Functions delegated to Federal
Reserve Banks.

^^ * * *
(11) Establishment of additional office by foreign
bank—
(i) Additional branch, agency, or commercial
lending company. To approve an application by
a foreign bank to establish an additional branch,
agency, or commercial lending company in the




ORDERS ISSUED UNDER BANK
COMPANY ACT

HOLDING

Orders Issued Under Section 3 of the Bank
Holding Company Act

FCFT, Inc.
Princeton, West Virginia
Order Approving Acquisition and Merger of a Bank
and Establishment of Branches
FCFT, Inc., Princeton, West Virginia ("FCFT"), a
bank holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has applied
under section 3 of the BHC Act (12 U.S.C. § 1842), to
acquire Peoples Bank of Rich wood, Inc., Richwood,
West Virginia ("Peoples Bank"). A subsidiary bank of
FCFT, First Community Bank, Inc., Princeton, West
Virginia ("FCFT Bank"), also has applied to merge
Peoples Bank into FCFT Bank pursuant to section
18(c) of the Federal Deposit Insurance Act
(12 U.S.C. § 1828(c)) (the "Bank Merger Act"), and
to establish branches at the present offices of Peoples

Legal Developments

Bank pursuant to section 9 of the Federal Reserve Act
(12 U.S.C. § 338).1
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 48,385 (1992)) and
given in accordance with applicable law. As required
by the Bank Merger Act, reports on the competitive
effects of the merger were requested from the United
States Attorney General, the Office of the Comptroller
of the Currency, and the Federal Deposit Insurance
Corporation. The time for filing comments has expired, and the Board has considered the applications
and all the comments received in light of the factors set
forth in the BHC Act, the Bank Merger Act, and the
Federal Reserve Act.
FCFT is the sixth largest commercial banking organization in West Virginia, controlling deposits of
$527.4 million, representing 3.3 percent of the total
deposits in commercial banking organizations in the
state.2 Peoples Bank controls deposits of $31.9 million, representing less than 1 percent of the total
deposits in commercial banking organizations in the
state. Upon consummation of this proposal, FCFT
would become the fifth largest commercial banking
organization in West Virginia, controlling deposits of
$559.3 million, representing 3.5 percent of the total
deposits in commercial banking organizations in the
state.
FCFT and Peoples Bank compete directly in the
Nicholas County banking market in West Virginia.3
FCFT is the third largest commercial banking or thrift
organization (together "depository institutions"), controlling deposits of $52.8 million, representing approximately 22.3 percent of total deposits in depository
institutions in the market ("market deposits").4 Peoples Bank is the fourth largest depository institution in
the Nicholas County banking market, controlling deposits of $32.7 million, representing approximately
14 percent of market deposits. Upon consummation of
this proposal, FCFT would become the largest depository institution in the Nicholas County banking market, controlling deposits of $85.5 million, representing
approximately 36.3 percent of market deposits. The

1. These branches are at: 16 West Main Street, Richwood; Red Oak
Plaza, Craigsville; and Route 39, Nettie, all in West Virginia.
2. State banking data are as of June 30, 1992. Market deposit data
are as of June 30, 1991.
3. The Nicholas County banking market is approximated by Nicholas County, West Virginia.
4. Market deposit data are based on calculations in which the
deposits of thrift institutions are included at 50 percent. The Board
previously has indicated that thrift institutions have become, or have
the potential to become, major competitors of commercial banks. See
Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989);
National City Corporation, 70 Federal Reserve Bulletin 743 (1984).




215

Herfindahl-Hirschman Index ("HHI") for this market
would increase by 625 points to 3261.5
The BHC Act and the Bank Merger Act prohibit the
Board from approving the FCFT proposal if the effect
of this proposal would be to substantially lessen competition in the Nicholas County banking market unless
the Board finds "that the anticompetitive effects of the
proposed transaction are clearly outweighed in the
public interest by the probable effect of the transaction
in meeting the convenience and needs of the community to be served."6 The courts have concluded that a
proposed transaction does not substantially lessen
competition in a banking market if the proposal involves a troubled financial institution and there is no
reasonable alternative to the proposal that would
result in less injury to competition.7
Initially, the Board notes that a number of factors
indicate that the competitive effects of the proposal
may be overstated by the increase in HHI. Peoples is
experiencing financial weakness and has not been a
viable competitor. Following consummation, two
other commercial banks will remain in the market.
These banks are subsidiaries of the two largest West
Virginia commercial banking institutions8 and each
controls at least 30 percent of the deposits held by
depository institutions in the Nicholas County banking
market.
The Board has also carefully considered the public
benefits associated with this proposal, including the
financial condition of Peoples Bank and potential costs
associated with the bank's resolution. In this regard,
FCFT's proposal will resolve financial difficulties experienced by Peoples without any federal government
assistance and will ensure that communities previously served by Peoples Bank will continue to be
served by a viable competitor in the market.
The facts of record also indicate that these benefits
are not likely to result from other means less injurious
to competition. In this case, Peoples Bank undertook
substantial efforts to find a buyer both in and out of the
5. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (1984), a market in which the post-merger
HHI is above 1800 is considered to be highly concentrated. In such
markets, the Justice Department is likely to challenge a merger that
increases the HHI by more than 50 points. The Department of Justice
has informed the Board that, as a general matter, a bank merger or
acquisition will not be challenged, in the absence of other factors
indicating anticompetitive effects, unless the post-merger HHI is at
least 1800 and the merger increases the HHI by 200 points. The Justice
Department has stated that the higher-than-normal HHI thresholds for
screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other
non-depository financial entities.
6. See 12 U.S.C. §§ 1842(c)(2) and 1828(c)(6).
7. See United States v. Third National Bank in Nashville, 390 U.S.
171, 189 (1967); FleetlNorstar Financial Group, Inc., 77 Federal
Reserve Bulletin 750 (1991).
8. These institutions are One Valley Bancorp and Key Centurion.

216

Federal Reserve Bulletin • March 1993

state. FCFT has emerged as the only purchaser for the
bank. Nicholas County is a rural banking market and is
relatively unattractive for entry, because of low employment and poor commercial and population growth
prospects.
The Department of Justice has informed the Board
that it has no objection to the proposal. The West
Virginia Bank Commissioner has approved the acquisition on the grounds that the benefits of the acquisition to the public outweigh any adverse competitive
effects. Based on all the facts of record, the Board
concludes that the competitive effects in the Nicholas
County banking market are not significantly adverse
and in any event are outweighed by the public benefits
associated with FCFT's acquisition of Peoples Bank.
In reaching this conclusion, the Board has considered
comments from several residents ("Protestants") alleging that the proposal would result in a reduction in
competition.
The financial and managerial resources and future
prospects of FCFT, FCFT Bank, and Peoples Bank
are consistent with approval. The Board also finds that
considerations relating to the convenience and needs
of the communities to be served and the other supervisory factors the Board must consider under section 3
of the BHC Act and the Bank Merger Act are also
consistent with approval of this proposal.9
FCFT Bank also has applied under section 9 of the
Federal Reserve Act to establish branches at some of
the present offices of Peoples Bank. The Board has
considered the factors it is required to consider when
reviewing applications pursuant to section 9 of the
Federal Reserve Act and finds those factors to be
consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. This approval is specifically
conditioned upon compliance by FCFT and its subsidiaries with the commitments made in connection with
these applications. For purposes of this action, commitments and conditions will both be considered conditions imposed in writing and, as such, may be
enforced in proceedings under applicable law.
The West Virginia Bank Commissioner has indicated that an emergency exists requiring expeditious
action. Accordingly, as provided in section 11 of the
9. Protestants have also commented that the proposal would result
in increased unemployment in the Richwood, West Virginia, area. In
response to this allegation, FCFT has indicated that due to its
anticipated consolidation of existing physical facilities, approximately
one-third fewer employees would be needed to operate Peoples Bank
and First Community Bank, Inc., Princeton, West Virginia, the
subsidiary of FCFT that under the proposal would merge with Peoples
Bank. Based on all the facts of record, the Board does not find that
these comments cause the balance of the convenience and needs
factors to be inconsistent with approval of this proposal.




BHC Act and section 18(c)(6) of the Bank Merger Act,
the transaction may be consummated on or after the
fifth calendar day following the effective date of this
Order, but not later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Richmond, pursuant to delegated authority.
By order of the Board of Governors, effective
January 19, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

FCNB Corp
Frederick, Maryland
Order Approving the Acquisition of Shares of a
Bank Holding Company
FCNB Corp, Frederick, Maryland ("FCNB"), a bank
holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has applied
under section 3 of the BHC Act (12 U.S.C. § 1842) to
acquire up to 14.9 percent of the voting shares of
HomeTown Bancorp, Inc., Myersville, Maryland
("HomeTown").1
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (57 Federal Register 54,792 (1992)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the factors set forth in
section 3(c) of the BHC Act.
FCNB is the 18th largest commercial banking
organization in Maryland, controlling deposits of
$292.7 million, representing less than 1 percent of total
deposits in commercial banks in the state.2 HomeTown is the 60th largest commercial banking organization in Maryland, controlling deposits of $48.8 million, representing less than 1 percent of total deposits
in commercial banks in the state.
FCNB has indicated that it does not intend to
control HomeTown and has proposed to acquire the
voting shares of HomeTown as a passive investment.
As part of this proposal, FCNB has made a number of

1. FCNB currently holds approximately 4.9 percent of HomeTown's voting stock, and proposes to acquire an additional 10 percent
of HomeTown's shares. HomeTown is a bank holding company by
virtue of its ownership of 100 percent of the voting shares of
Myersville Bank, Myersville, Maryland ("Bank").
2. State deposit data are as of June 30, 1992.

Legal Developments

commitments, previously accepted by the Board in
similar proposals,3 in order to ensure that FCNB will
not control HomeTown as a result of the proposed
share acquisitions. In particular, FCNB has committed that it will not, without the Board's prior approval:
(1) Exercise or attempt to exercise a controlling
influence over the management or policies of HomeTown or its bank subsidiaries;
(2) Have or seek to have any employee or representative serve as an officer, agent or employee of
HomeTown or its bank subsidiaries;
(3) Take any action causing HomeTown or its bank
subsidiaries to become a subsidiary of FCNB ;
(4) Acquire or retain shares that would cause the
combined interests of FCNB and its officers, directors and affiliates to equal or exceed 25 percent of
the outstanding voting shares of HomeTown;
(5) Seek or accept representation on the board of
directors of HomeTown;
(6) Propose a director or slate of directors in opposition to a nominee or slate of nominees proposed by
the management or board of directors of HomeTown;
(7) Attempt to influence the dividend policies or
practices of HomeTown or its bank subsidiaries;
(8) Solicit or participate in soliciting proxies with
respect to any matter presented to the shareholders
of HomeTown;
(9) Attempt to influence the loan and credit decisions or policies of HomeTown and its bank subsidiaries, the pricing of services, any personnel decision, the location of any offices, branching, the
hours of operation, or similar activities of HomeTown and its bank subsidiaries;
(10) Dispose or threaten to dispose of shares of
HomeTown in any manner as a condition of specific
action or nonaction by HomeTown; or
(11) Enter into any other banking or nonbanking
transactions with HomeTown, except that FCNB
may establish and maintain deposit accounts with
bank subsidiaries of HomeTown, provided that the
aggregate balances of all such accounts do not
exceed $500,000 and that the accounts are maintained on substantially the same terms as those
prevailing for comparable accounts of persons unaffiliated with HomeTown.
Based on the facts of record and FCNB's commitments, the Board has concluded that FCNB would not
acquire control or the ability to exercise a controlling

3. See, e.g., Summit Bancorp, Inc., 77 Federal Reserve Bulletin 952
(1991); The Summit Bancorporation, 75 Federal Reserve Bulletin 712
(1989); United Counties Bancorporation, 75 Federal Reserve Bulletin
714 (1989).




217

influence over HomeTown upon consummation of this
proposal.
The Board's inquiry does not end, however, with its
finding that FCNB would not control HomeTown. The
Board is required under section 3(c) of the BHC Act to
consider, among other factors, the competitive effects
of the proposal, the financial and managerial resources
and future prospects of the companies and banks
concerned, and the effect of the proposal on the
convenience and needs of the communities to be
served.
In this regard, the Board has received comments
from HomeTown and several individuals (collectively,
"Protestants") who have objected to FCNB's proposal, alleging that the application is opposed by
community leaders and by management, shareholders,
and customers of HomeTown and Bank. In particular,
Protestants assert that:
(1) FCNB has failed to disclose its intention to
acquire control of HomeTown;
(2) The proposal will cause adverse competitive
effects and an adverse impact on HomeTown's
financial condition;
(3) HomeTown represents a poor investment opportunity for FCNB; and
(4) FCNB's application has disrupted HomeTown's
business plans.
Protestants also have commended Bank's operations,
financial condition, banking services, and customer
and community relations, and contend that these positive features of Bank will be diminished if Bank is
acquired by a larger institution located outside the
community.4
The Board has carefully considered Protestants'
comments in light of the factors the Board must

4. Certain of the Protestants also have alleged that FCNB currently
controls 6.6 percent of HomeTown's voting shares without having
obtained prior approval from the Federal Reserve System. These
Protestants believe that FCNB's current 4.9 percent ownership interest should be aggregated with the 1.7 percent of HomeTown's voting
shares which Protestants allege are controlled by an FCNB shareholder ("Shareholder"). Protestants' argument appears to be based
upon the fact that both Shareholder and FCNB purchased interests in
HomeTown from the same seller in October 1991. In response to
Protestants' allegations, FCNB has represented that:
(1) Shareholder owns less than 5 percent of FCNB's outstanding
common shares;
(2) Shareholder is not an officer or director of FCNB or any of its
subsidiaries or affiliates; and
(3) FCNB does not control these shares in any respect, directly or
indirectly, and does not have any agreement, arrangement, or
understanding with Shareholder concerning the voting, acquisition,
or disposition of the HomeTown stock.
FCNB also has stated that it has no knowledge as to whether
Shareholder still controls the HomeTown stock in question. In light of
all of the facts of record, including representations made by FCNB,
the Board has concluded that these allegations do not warrant denial
of this application.

218

Federal Reserve Bulletin • March 1993

consider under section 3(c) of the BHC Act. FCNB
has indicated that it does not intend to alter the
operations of HomeTown or Bank in any respect upon
consummation of the share acquisitions, and has proposed to invest in HomeTown on a passive basis. In
this regard, FCNB has made a number of commitments, discussed above, to ensure that FCNB does
not exercise a controlling influence over the operations
of HomeTown. The Board also notes that FCNB is
required to obtain prior Board approval before altering
the nature of its passive investment or increasing its
share ownership, and that Protestants would have an
opportunity at that time to present their views as to
whether FCNB should be permitted to exercise control over HomeTown.
The Board previously has noted that one company
need not acquire control of another in order to lessen
competition between them substantially.5 In this case,
however, FCNB and HomeTown do not compete with
each other in any banking market. On the basis of all of
the facts of record, including the considerations discussed above, the Board has concluded that consummation of this proposal would not result in a significantly adverse effect on competition in any relevant
banking market.
The Board also has reviewed the financial resources
of FCNB in light of the size and nature of the proposed
investment, and has concluded on the basis of all of
the facts of record that these resources, as well as
other considerations relating to the financial and managerial resources and future prospects of FCNB,
HomeTown, and their respective subsidiaries, are
consistent with approval of this application. The
Board also has concluded that the other factors it is
required to consider under section 3(c) of the BHC
Act, including convenience and needs considerations,
are consistent with approval of this application.6

5. See note 3, supra, and cases cited therein.
6. Some Protestants have requested that the Board hold a public
meeting or hearing on this application. The Board is not required
under section 3 of the BHC Act to hold a public meeting or hearing
unless the primary supervisor for the bank to be acquired disapproves
the proposal. In this case, the primary supervisor for the institution to
be acquired has not objected to FCNB's proposal.
Under its rules, the Board may, in its discretion, hold a public
meeting or hearing on an application to clarify factual issues related to
the application and to provide an opportunity for testimony, if
appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered Protestants' requests, and the written comments
submitted by Protestants. In the Board's view, interested parties have
had ample opportunity to submit and have submitted substantial
written comments that have been considered by the Board. In light of
the foregoing and all of the facts of record, the Board has determined
that a public meeting or hearing is not necessary to clarify the factual
record in this application, or otherwise warranted in this case.
Accordingly, the request for a public meeting or hearing on these
applications is hereby denied.




Based on the foregoing and other facts of record,
and subject to and in reliance upon representations
and commitments made by FCNB, the Board has
determined that the application should be, and hereby
is, approved. The Board's approval is specifically
conditioned upon compliance by FCNB with all of the
commitments made in connection with this application
and with the conditions referenced in this Order. For
purposes of this action, the commitments and conditions relied on in reaching this decision shall be
deemed to be conditions imposed in writing by the
Board and, as such, may be enforced in proceedings
under applicable law.
The transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Richmond, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
January 25, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, Lindsey, and Phillips. Absent and
not voting: Governor LaWare.
JENNIFER J. JOHNSON

Associate Secretary of the Board

KeyCorp
Albany, New York
Key Bancshares of New York, Inc.
Albany, New York
Order Approving Acquisition of a Savings Bank
KeyCorp and Key Bancshares of New York, Inc.,
both of Albany, New York (together, "KeyCorp"),
bank holding companies within the meaning of the
Bank Holding Company Act ("BHC Act"), have
applied for the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842) to acquire all of the
voting shares of The National Savings Bank of Albany, Albany, New York ("National").1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 49,084 (1992)). The
time for filing comments has expired, and the Board

1. In connection with KeyCorp's proposed acquisition of National,
KeyCorp has requested Board approval under section 3 of the BHC
Act to acquire an option to purchase up to 19.9 percent of the voting
shares of National. This option will become moot upon consummation
of KeyCorp's application to acquire National.

Legal Developments

has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
KeyCorp is the sixth largest commercial banking
organization in New York, controlling two banking
subsidiaries with $11 billion in deposits, representing
4.3 percent of the total deposits in commercial banking
organizations in the state.2 National is the 44th largest
thrift organization in New York, controlling $574.6
million in deposits, representing less than 1 percent of
the total deposits in commercial banking organizations
in the state. Upon consummation of this transaction,
KeyCorp would remain the sixth largest commercial
banking organization in New York, controlling
$11.6 billion in deposits, representing 4.5 percent of
the total deposits in commercial banking organizations
in the state.
Competitive Effects
KeyCorp and National compete directly in the Pittsburgh3 and Albany4 banking markets in New York. In
the Plattsburgh banking market, KeyCorp is the largest commercial banking or thrift organization ("depository institution"), controlling deposits of $298.5 million, representing 33.6 percent of total deposits in
depository institutions in the market ("market deposits").5 National is the fifth largest depository institution in the market, controlling deposits of $63.1 million, representing 7.1 percent of market deposits.
Upon consummation of this proposal, KeyCorp would
remain the largest depository institution in the Plattsburgh banking market, controlling deposits of
$424 million, representing 44.6 percent of market
deposits. The Herfindahl-Hirschman Index ("HHI")
would increase by 732 points to 2503.6

2. Deposit data are as of June 30, 1992.
3. The Plattsburgh banking market is approximated by Clinton and
Essex Counties in New York.
4. The Albany banking market is approximated by Albany, Columbia, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga,
Schenectady, Schoharie, Warren and Washington Counties in New
York.
5. Market data are as of June 30, 1991. Market share data are based
on calculations in which the deposits of thrift institutions are included
at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal
Reserve Bulletin 386 (1989); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984).
6. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anti-competitive effects) unless the post-merger HHI is at
least 1800 and the merger or acquisition increases the HHI by at least




219

In order to mitigate the anticompetitive effects that
would result from consummation of this proposal in
the Plattsburgh banking market, KeyCorp has committed to divest several branches in this market that hold,
in the aggregate, at least $98 million in deposits.7
Accounting for these divestitures, the share of the
Plattsburgh banking market controlled by KeyCorp
will increase by less than one percent.8 KeyCorp has
further committed that, in the event the divestitures
cannot be effected as proposed, its divestitures will not
result in an increase in market concentration that
would exceed the Department of Justice guidelines. In
light of the relatively small increase in market concentration after the proposed divestiture, the fact that ten
depository institution competitors would remain in the
market, and other facts of record, the Board concludes
that consummation of this proposal, with the proposed
divestitures, would not have a significantly adverse
competitive effect in the Plattsburgh market.
KeyCorp is the largest depository institution in the
Albany banking market, controlling deposits of
$1.9 billion, representing 15.3 percent of total deposits
held by depository institutions in the market. National
is the 16th largest depository institution in the market,
controlling deposits of $203.3 million, representing
1.6 percent of total deposits held by depository institutions in the market. Upon consummation of this
proposal, KeyCorp would remain the largest depository institution in the market, controlling total deposits
of $2.3 billion, representing 18.2 percent of the total
deposits in depository institutions in the Albany market. The HHI would increase 95 points to a level of
841, and 38 depository institutions would remain in the
market.
Based on all the facts of record, and for the reasons
discussed above, the Board believes that consummation of this proposal would not have a significantly

200 points. The Justice Department has stated that the higher than
normal threshold for an increase in the HHI when screening bank
mergers and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other
non-depository financial entities.
7. KeyCorp has committed to execute final sales agreements to
effect these divestitures prior to the consummation of the acquisition
of National, and to consummate these divestitures within 180 days of
consummation of the acquisition of National. KeyCorp also has
committed that, in the event it is unsuccessful in completing the
divestiture within 180 days of consummation of the proposal, KeyCorp will transfer the relevant office or offices to an independent
trustee that has been instructed to sell the office promptly. See, e.g.,
BankAmerica Corporation, 78 Federal Reserve Bulletin 338, 340
(1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484, 485 (1991).
8. KeyCorp would remain the largest depository institution in the
Plattsburgh banking market, controlling approximately $326.6 million in deposits, representing approximately 34.3 percent of market
deposits.

220

Federal Reserve Bulletin • March 1993

adverse effect on competition in the Plattsburgh, Albany, or any other relevant banking markets.
Other Considerations
The financial and managerial resources, supervisory
factors and future prospects of KeyCorp, its subsidiaries, and National, are consistent with approval of
this proposal. Considerations relating to the convenience and needs of the communities to be served and
the other factors the Board must consider under section 3 of the BHC Act are also consistent with approval of this proposal.
Based on the foregoing and all the facts of record,
the Board has determined that the application should
be, and hereby is, approved. The Board's approval of
this proposal is expressly conditioned on compliance
with the commitments made by KeyCorp in connection with this application, including the divestiture
commitments made by KeyCorp, and with the conditions referenced in this Order. For purposes of this
action, these commitments and conditions relied on in
reaching this decision are deemed to be conditions
imposed in writing by the Board in connection with its
findings and decision, and, as such, may be enforced in
proceedings under applicable law.
This transaction shall not be consummated before
the thirtieth day following the effective date of this
Order, or later than three months after the effective
date of this Order, unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of New York, acting pursuant to delegated
authority.
By order of the Board of Governors, effective
January 19, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

ing Cherry Hill National Bank, Medford, New Jersey
("Cherry Hill").1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 45,060 (1992)). The
time for filing comments has expired, and the Board
has considered this application and all comments
received in light of the factors set forth in section 3(c)
of the BHC Act.
Meridian, with approximately $11.9 billion in consolidated assets, controls two subsidiary banks located
in Pennsylvania and one subsidiary bank located in
Delaware.2 Cherry Hill is the 50th largest commercial
banking organization in New Jersey, controlling deposits of $110.0 million, representing less than 1 percent of the deposits in commercial banking organizations in the state.
Douglas Amendment
Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire any
bank located outside the bank holding company's
home state, 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."3 For purposes of the
Douglas Amendment, the home state of Meridian is
Pennsylvania.4 The New Jersey interstate banking
statute expressly authorizes an out-of-state bank
holding company, such as Meridian, to acquire a
New Jersey bank, such as Bank and Cherry Hill,
subject to certain conditions.5 After careful review of
the relevant statutes, and in light of the facts of
record, the Board concludes that Meridian's acquisition of Cherry Hill complies with the New Jersey
interstate banking statute, and that Board approval
of this proposal is not prohibited by the Douglas
Amendment. Approval of this proposal is conditioned upon Meridian receiving all required state
regulatory approvals.

Meridian Bancorp, Inc.
Reading, Pennsylvania
Order Approving Acquisition of a Bank
Meridian Bancorp, Inc., Reading, Pennsylvania ("Meridian"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), has
applied for the Board's approval under section 3(a)(3)
of the BHC Act (12 U.S.C. § 1842(a)(3)) to establish a
de novo bank, Meridian Bank, New Jersey, Cherry
Hill, New Jersey ("Bank"), for the purpose of acquir-




1. Cherry Hill will merge into Bank, with Bank to be the surviving
entity. This merger will require regulatory review and approval by the
FDIC under the Bank Merger Act, 12 U.S.C. § 1828(c).
2. Asset and deposit data are as of June 30, 1992.
3. 12 U.S.C. § 1842(d).
4. A bank holding company's home state is that state in which the
total deposits of all banking subsidiaries of the bank holding company
were largest on July 1, 1966, or the date on which the company
became a bank holding company, whichever is later. Id.
5. See, National Westminster Bank PLC, 74 Federal Reserve
Bulletin 142 (1988); CoreStates Financial Corporation, 72 Federal
Reserve Bulletin 798 (1986).

Legal Developments

Competitive, Financial, Managerial and Supervisory
Considerations
Meridian does not currently operate a banking subsidiary in New Jersey. Based on all of the facts of record
in this case, the Board concludes that consummation
of this proposal would not have a significantly adverse
effect on competition or the concentration of banking
resources in any relevant banking market. The Board
also concludes, based on all of the facts of record in
this case, that the financial and managerial resources6
and future prospects of Meridian, its subsidiary banks,
Bank, and Cherry Hill, and the other supervisory
factors that the Board must consider under the BHC
Act, are consistent with approval of this proposal.

221

employees on the boards and committees of these
organizations. Two of these commenters also urge the
Board to approve Meridian's application on the basis
of Meridian's CRA activities, and believe that Meridian should be encouraged to continue its current level
of CRA activities.
The Board also has received comments from New
Jersey Citizen Action ("Protestant") criticizing the
CRA performance of Meridian and of Cherry Hill. In
general, Protestant asserts that Meridian's level of
CRA performance in New Jersey will not be equal to
its CRA performance in Pennsylvania, because Meridian has not sufficiently considered the needs of the
communities to be served in New Jersey.8

Record of Performance

Under the CRA

Convenience and Needs Considerations

A. CRA Performance Examination
In considering this application, the Board is required
under the CRA to take into account the records of
Meridian, its subsidiary banks, and Cherry Hill under
the Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA"). The Board has received more than
twenty comments from a variety of community organizations located in Pennsylvania supporting the efforts of Meridian to help meet the credit needs of the
entire communities it serves.7 For example, commenters commend Meridian for its participation and efforts
in a variety of lending and community development
activities, including providing home mortgages on
flexible terms and credit counseling to low- and moderate-income homebuyers, loans and grants to community organizations for the acquisition, rehabilitation, construction, and operation of affordable
housing, bridge funding to community organizations
involved in government assisted redevelopment
projects, and leadership and technical assistance
through the service of numerous Meridian officers and

6. The Board has considered a comment alleging that a subsidiary
bank of Meridian has employed wrongful demand and collection
procedures in connection with loans made to a minority-owned
partnership. On the basis of all the facts of record, including the
Federal Reserve Bank of Philadelphia's investigation and relevant
reports of examination by the Reserve Bank, the Board concludes that
this comment does not raise issues that would warrant a denial of this
application. See also Meridian Bancorp, Inc., 78 Federal Reserve
Bulletin 942 (1992).
7. Commenters in support of Meridian's application include the
following: The Allegheny West Foundation, a community development corporation that rehabilitates deteriorated housing and develops
large-scale, tax-assisted rental housing projects; Greater Germantown
Housing Development Corporation, a community development corporation that has undertaken a large-scale, mixed-use redevelopment
project; Philadelphia Neighborhood Housing Services, which provides home improvement loans, housing rehabilitation assistance, and
financial counseling to individuals; Community Action Agency of
Delaware County, Inc., which encourages urban homesteading; and
the Redevelopment Authority of the City of Bethlehem.




The CRA requires the federal financial supervisory
agencies to encourage financial institutions to help
meet the credit needs of the local communities in
which they operate consistent with the safe and sound
operation of such institutions. To accomplish this end,
the CRA requires the appropriate federal supervisory
authority to "assess the institution's record of meeting
the credit needs of its entire community, including
low- and moderate-income neighborhoods, consistent
with the safe and sound operation of such institution,"
and to take this record into account in its evaluation of
bank holding company applications."9 The CRA and
the Statement of the Federal Financial Supervisory
Agencies Regarding the Community Reinvestment Act
("Agency CRA Statement")10 indicate that a CRA
examination is an important and often controlling
factor in the consideration of an institution's CRA
record and that these reports will be given great weight
in the applications process.11
The Board notes that Meridian Bank, Reading,
Pennsylvania ("Meridian Bank"), Meridian's lead
banking subsidiary, accounting for approximately
87 percent of Meridian's consolidated assets, received
an "outstanding" rating from its primary federal reg8. Protestant also criticizes Meridian's failure to enter into a
reinvestment agreement with Protestant that would provide specific
lending goals and a monitoring process by a community organization.
Protestant also alleges that Meridian's proposed CRA activities for
Cherry Hill lack specificity and are deficient in the following areas:
(1) Community contacts to ascertain credit needs;
(2) Marketing and advertising programs;
(3) Types of credit products for low- and moderate-income consumers; and
(4) Participation in community development projects and charitable
contributions.
9. 12 U.S.C. § 2903.
10. 54 Federal Register 13,742 (1989).
11. Id. at 13,745.

222

Federal Reserve Bulletin • March 1993

ulator, the Federal Reserve Bank of Philadelphia, at its
most recent examination for CRA performance as of
July 1, 1991.12 The Board also has recently concluded
that the CRA performance records of Meridian's subsidiary banks are generally consistent with approval of
an application under the convenience and needs factor
in the BHC Act.13 Cherry Hill, which will account for
less than 1 percent of Meridian's consolidated assets,
received a "needs to improve" CRA performance
rating from the OCC as of September 30, 1991, and
previously as of December 31, 1989.

B. Corporate Policies
Meridian has committed to implement at Bank the
Meridian Community Partnership Loan Program
("MCPLP") that has been in place at Meridian's
current subsidiary banks since 1988. Under MCPLP,
Meridian has appointed a CRA officer at each subsidiary bank, who is in charge of a Corporate Community
Affairs Department, to implement and administer the
program. Each bank also has established a CRA
Monitoring Committee, which includes senior officers
of the bank, to meet quarterly to review the bank's
CRA performance, to make CRA-related policy decisions, and to make regular presentations of CRA
matters to the bank's board of directors.
Meridian also has committed to establish a new
geographic operating division for New Jersey and a

12. Meridian's remaining subsidiary banks have been rated as
follows: Delaware Trust Company, Wilmington, Delaware, received
an "outstanding" performance rating from the FDIC on July 20,1990;
and The First National Bank of Pike County, Milford, Pennsylvania,
received a "satisfactory" performance rating from the OCC on
August 30, 1992.
The CRA examination of Meridian Bank noted some areas for
improvement in its record of CRA performance in the Harrisburg,
Pennsylvania MSA. Even noting these weaknesses, Meridian Bank
received an "outstanding" CRA performance rating. In Protestant's
view, Meridian's CRA performance in Cherry Hill, without Protestant's proposed reinvestment agreement, will suffer the same weaknesses found in Harrisburg because Protestant believes the Harrisburg
MSA demographically resembles the areas of New Jersey served by
Cherry Hill. Meridian did not begin its lending operations in the
Harrisburg MSA until late 1990, following its acquisition of three
branches of a failed savings association. Accordingly, its CRA programs are not as well-established in this service area as in other
service areas in Pennsylvania. However, Meridian Bank has initiated
several steps designed to assist in meeting the credit needs of all
communities in the Harrisburg MSA. For example, Meridian Bank
has hired additional staff and instituted CRA training programs at the
Harrisburg branches. Meridian Bank also has supported the credit
counseling and homebuyer workshop programs of the Harrisburg Fair
Housing Council through financial contributions and the participation
of Meridian officers. The bank also has contributed to the South
Central Pennsylvania Housing Development Fund, to support the
renovation of 60 homes in downtown Harrisburg, and is negotiating
with the Tri-County Housing Development Corporation concerning its
credit needs for a multi-phase rehabilitation project in downtown
Harrisburg. In addition, Meridian Bank has sponsored a regional
minority small business trade fair in Harrisburg.
13. Meridian Bancorp Inc., supra.




new advisory committee at Bank for that division,
corresponding to the six geographic divisions and
advisory committees that currently exist at Meridian's
subsidiary banks in Pennsylvania and Delaware. The
advisory committees are composed of leaders from
non-profit, public sector, minority, and religious organizations, in addition to Meridian employees. The
advisory committees review loan data and marketing
information, and have the authority and the ability to
organize themselves to respond to more specific credit
needs.14 The staff of the Corporate Community Affairs
Department reviews the minutes of these meetings to
assist it in evaluating and developing the subsidiary
banks' products.
Meridian has further committed that Bank will target specific low- and moderate-income neighborhoods
in New Jersey, participate in New Jersey state and
local loan programs and FHA and VA home mortgage
programs, enter into projects with local housing
groups on a case-by-case basis, and utilize the income
levels and purchase price maximums set by the New
Jersey Housing and Mortgage Finance Agency in
developing and administering loan products targeted at
low- and moderate-income borrowers.

C. Ascertainment and Marketing Efforts
Meridian uses a variety of methods to gather and
analyze information concerning the credit needs of the
communities it serves, to develop products, services,
and marketing programs to serve those needs, including the needs of minority and low- and moderateincome individuals in those communities, and to measure the receptivity of those communities to those
marketing efforts. Meridian's methods include an extensive program of calls on community organizations
and public sector agencies, focus group sessions
among customers, non-customers, and employees,15
surveys of customers and non-customers, demographic research, including the use of census tract

14. In one division in Pennsylvania, the advisory committee has
formed four subcommittees, each of which focuses on a separate
developmental objective. The small business sub-committee helped
establish a small business loan program for minority businesses. In
another division, the advisory committee established a Community
Credit Committee, composed of senior lending officers and community leaders, to help meet credit needs in Berks County, Pennsylvania.
The committee meets monthly, and decides as a group whether to
approve or decline loan requests generated by community groups in
that area. As of May 1992, there were outstanding IS loans approved
by the committee in the aggregate amount of approximately $86,000,
with no delinquencies.
15. Meridian recently hired a bilingual focus group consultant to
conduct research among black and Hispanic individuals. This consultant's work has been used in a video, radio, and print advertising
campaign for mortgage lending.

Legal Developments

data, and on-going analysis of loan data.16 MCPLP
staff also meet with Meridian's divisional advisory
committees to learn about community needs. The
Meridian Community Forum, a speakers bureau designed to educate the communities Meridian serves
about its credit products, also serves as a means for
Meridian to learn from these communities about their
credit needs.
The Meridian marketing program is approved, monitored, and analyzed by senior management, and
reaches all communities it serves. Advertising directed
to minority and low- and moderate-income individuals
is a distinct part of its advertising program, and
Meridian uses minority newspapers, business directories, and radio stations to deliver these marketing
programs to these persons. Many materials have been
produced in Spanish, Spanish language radio and print
advertising and ATMs have been used, and a toll-free
bilingual mortgage information line has been established. Mass mailings have been made to Hispanic
civic, community, and service organizations. In Harrisburg, Meridian has used direct mail advertising to
realtors doing business in low- and moderate-income
areas to encourage the use of Pennsylvania Housing
Finance Agency low-interest mortgage loans, and a
video and print media campaign targeted at individuals
with limited income was conducted in the fall of 1992
to promote mortgage lending. Meridian also has advertised at special events in Philadelphia, including DiversCity, an annual celebration of Black History Month,
and events sponsored by the United Black Business
Association of Philadelphia and the Philadelphia Hispanic Chamber of Commerce.
In New Jersey, Meridian has developed a list of
media that effectively reach low- and moderate-income areas, and has initiated a calling program to meet
with local groups involved in creating affordable housing, shelter and social services for the homeless, and
economic development. Meridian has helped to form
the Collaborative Lending Initiative of Camden, which
will provide over $1 million in construction, bridge,
and permanent financing to qualified community development groups. Meridian also has met with a number of community groups in New Jersey, including
Jersey Counseling and Housing Development, Inc.,
Camden Peace Mission, Volunteers of America, Camden Neighborhood Housing Services, and St. Joseph's
Carpenters Society, and with several small business
owners.

16. On the basis of this data, Meridian Bank introduced a new loan
product, NEED (Necessary Emergency Expense Disbursement)
Loans, in amounts up to $1,500, repayable at an interest rate one-half
percent below the prevailing consumer loan rate.




223

D. Lending and Other Activities
Meridian offers a variety of products and services
under MCPLP, including fourteen permanent mortgage loan types, four construction loan and permanent
financing facilities, and various special credit programs, designed to meet the credit needs of low- and
moderate-income homebuyers. Meridian participates
in federal and state programs, such as FHA and
Pennsylvania Housing Finance Agency loan programs, and has developed its own lending programs as
well. For example, the Meridian Community Partnership Mortgage offers first-time homebuyers a reduced
interest rate, a reduced application fee, and financing
for up to 95 percent of the purchase price. Meridian
has begun negotiations with the appropriate housing
finance and community development agencies in New
Jersey to participate in their programs of governmentally insured, guaranteed, or subsidized loan programs
as well.
In addition, Meridian has committed that Bank will
help meet the credit needs of communities, including
low- and moderate-income neighborhoods, in the service area of Bank in New Jersey. For example, Bank
will make a minimum of $5 million in loans in the
aggregate over three years in New Jersey in a number
of areas intended to serve low- and moderate-income
members of the community. This includes at least
$3 million in residential mortgage and home improvement loans utilizing flexible underwriting criteria, reduced down payments, and New Jersey Housing and
Mortgage Finance Agency funding programs. At least
$1 million will be invested in low-income housing tax
credits, and at least $500 thousand will be invested in
community development organizations for the acquisition and rehabilitation of housing, for new construction of affordable housing, and for economic development projects. Another $500 thousand will be
earmarked for start-up small businesses that provide
goods and services to low- and moderate-income communities, stabilize and revitalize deteriorated neighborhoods, and create long-term job employment opportunities.

E. HMDA Data and Lending Practices
The Board has reviewed the 1990 and 1991 HMDA
data reported by Meridian in light of Protestant's
comments, including comments relating to the effectiveness of certain MCPLP programs and the level of
Meridian's commitment to compliance with CRA outside of the state of Pennsylvania. Data cited by Protestant indicate disparities in rates of housing-related
loan applications and in application approvals that

224

Federal Reserve Bulletin • March 1993

vary by racial or ethnic group in Harrisburg and in
Delaware.
Because all banks are obligated to ensure that thenlending practices are based on criteria that assure not
only safe and sound lending, but also assure equal
access to credit by creditworthy applicants regardless
of race, the Board is concerned when the record of an
institution indicates disparities in lending to minority
applicants. The Board recognizes, however, that
HMDA data alone provide only an incomplete measure of an institution's lending in its community. The
Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent
other information, for conclusively determining that
an institution has engaged in illegal discrimination in
making lending decisions.
The most recent examinations of Meridian Bank and
of Delaware Trust Company, Wilmington, Delaware,
for CRA performance found no evidence of illegal
discrimination. In addition, the examination of Meridian Bank found that its board of directors and senior
management periodically assess the adequacy of its
implemented nondiscriminatory policies, procedures,
and training programs through internal reviews and
management reporting systems. Meridian Bank's policies and procedure manuals were found to contain
information that is intended to inform operating personnel of the provisions of the various consumer regulations adopted to prevent discriminatory or illegal credit
practices. Many of the staff meet directly with community groups to review needs and discuss products and
programs. Each mortgage loan application that is declined is reviewed by a senior mortgage lender, and a
senior MCPLP lender meets approximately every 45
days with the Meridian mortgage lending department
staff to further review the files of declined applications.
Meridian's mortgage denial figures also are discussed
with the bank's advisory committees.17
Meridian also has taken a number of other steps
designed to enhance a loan applicant's ability to obtain
a residential mortgage loan or other loan products.
These programs have primarily involved participation
with community development organizations in providing credit counseling and personal financial management workshops. For example, for several years Meridian has provided board representation, counseling
materials, and financial support to the Philadelphia
Council for Community Advancement in its programs

17. Meridian denies Protestant's assertion that the decline in loan
volume under certain MCPLP programs last year reflects a lack of
commitment by Meridian to these programs, and attributes the decline
to general economic conditions. Meridian also maintains that its
emphasis on lending programs for first-time homebuyers as opposed
to refinancings reflects the assessment of credit needs by its advisory
committees and community leaders.




of credit counseling. Meridian has provided personnel,
counseling materials, and technical assistance to the
Bucks County Tenant Association to develop a similar
program. In 1991, together with other community
lenders, Meridian created a comprehensive loan counselor training program for community groups, in order
to develop a sustained supply of qualified applicants
under the Delaware Valley Mortgage Plan.

G. Conclusion Regarding Convenience and
Needs Factors
The Board has carefully considered all of the facts of
record, including the comments filed in this case, in
reviewing Meridian's CRA record under the BHC Act.
Based on a review of the entire record of performance,
including information provided by Protestant and the
other commenters, the performance examinations by
the banks' primary regulators, and Meridian's plans for
instituting its CRA program at Cherry Hill in New
Jersey, the Board believes that the efforts of Meridian
and its subsidiary banks to help meet the credit needs of
all segments of the community served by these banks,
including low- and moderate-income neighborhoods,
are consistent with approval of this application.18
The CRA requires insured depository institutions in
a multi-state banking organization to meet their CRA
responsibilities in every state in which the organization operates an insured depository institution, not just
in the home state of the lead bank subsidiary. In this
case, Protestant has raised concerns principally regarding Meridian's dedication following its acquisition
of Cherry Hill to meeting the credit needs of low- and
moderate-income neighborhoods in New Jersey.
Many of the CRA policies and programs to be implemented in New Jersey are modeled on programs
currently in place at Meridian's subsidiary banks in
Pennsylvania and Delaware. The Board believes that
the "outstanding" rating for CRA performance af-

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

Legal Developments

forded these banks reflects Meridian's willingness to
assist in meeting credit needs in each community in
which it is located, and to address promptly areas
where improvements can be made to help meet community credit needs. Meridian has committed to implement at Bank the corporate policies and programs
currently in place at Meridian Bank, and to undertake
additional initiatives in New Jersey specifically designed to assist in meeting the credit needs of all of its
service communities. The Board expects Meridian to
fulfill its CRA responsibilities in New Jersey, and will
continue to review its performance in the applications
process.
Based on the foregoing, including the conditions and
commitments described in this Order and those made
in this application, and all of the facts of record, the
Board has determined that the application should be,
and hereby is, approved. The Board's approval is
specifically conditioned upon compliance with the
commitments made by Meridian in connection with
this application. All of the commitments and conditions relied upon by the Board in reaching its decision
are commitments imposed in writing by the Board in
connection with its findings and decision, and may be
enforced in proceedings under applicable laws. This
approval also is conditioned upon Meridian receiving
all necessary Federal and state approvals. The transactions approved in this Order shall not be consummated before the thirtieth calendar day following the
effective date of this Order, or later than three months
after the effective date of this Order, unless such
period is extended for good cause by the Federal
Reserve Bank of Philadelphia, pursuant to delegated
authority.
By order of the Board of Governors, effective
January 4, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Orders Issued Under Section 4 of the Bank
Holding Company Act

225

Act"), has applied under section 4(c)(8) of the BHC
Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3)
of the Board's Regulation Y (12 C.F.R. 225.23(a)(3)),
for its wholly owned subsidiary, NationsBanc Financial Services
Corporation,
Tucker,
Georgia
("NBFSC"), to acquire certain assets and assume
certain liabilities of Chrysler First Inc., Allentown,
Pennsylvania ("CFI"), and of certain subsidiaries and
affiliates of CFI and thereby engage in general consumer and commercial lending pursuant to section
225.25(b)(1) of the Board's Regulation Y (12 C.F.R.
225.25(b)(1)).1
Notice of these applications, affording interested
persons an opportunity to submit comments, has been
published (57 Federal Register 57,067 (1992)). The
time for filing comments has expired, and the Board
has considered these applications and all comments
received in light of the factors set forth in sections
4(c)(8) and 4(c)(13) of the BHC Act.
NationsBank, with total consolidated assets of
$118.7 billion, is the fourth largest banking organization in the United States. NationsBank operates
eleven subsidiary banks and engages directly and
through subsidiaries in a variety of permissible nonbanking activities.2
NationsBank proposes to acquire loan receivables
of approximately $1.1 billion, as well as certain mortgage and other loan servicing rights and certain incidental assets. NationsBank would engage through
NBFSC in consumer lending and commercial lending,
as well as in the servicing of consumer and commercial
loans, both for itself and others. The Board previously
has determined by regulation that these activities are
closely related to banking. 12 C.F.R. 225.25(b)(1).
Under section 4 of the BHC Act, the Board also is
required to determine that the performance of the
proposed activities by NationsBank "can reasonably
be expected to produce benefits to the public . . . that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." 12 U.S.C. § 1843(c)(8). Consummation of
this proposal can reasonably be expected to result in
public benefits, including an increased capacity to fund
loans, increased efficiency, and reduced operating
expenses.

NationsBank Corporation
Charlotte, North Carolina
Order Approving Applications to Engage in
Consumer and Commercial Lending
NationsBank Corporation, Charlotte, North Carolina
("NationsBank"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC




1. NationsBank also proposes under section 4(c)(13) of the BHC
Act for NBFSC, either through a United States or Canadian subsidiary or subsidiaries, to acquire certain assets and assume certain
liabilities of Chrysler First Commercial Corporation Inc. and Chrysler
Credit Canada Ltd., both of Ontario, Canada, and to engage in
consumer and commercial lending activities in Canada that are
substantially similar to the activities to be engaged in by NBFSC in the
United States.
2. Data are as of September 30, 1992.

226

Federal Reserve Bulletin • March 1993

The record does not indicate that consummation of
this proposal is likely to result in any significantly
adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices that are not
outweighed by the public benefits. The Board has
received comments from two organizations expressing
concern that a substantial portion of the mortgage
loans held by CFI may have arisen from lending
transactions in which the party originating the loan
engaged in unfair or unscrupulous practices. In response to these concerns, NationsBank has indicated
that NBFSC will apply its own underwriting criteria
and operating guidelines to the origination and servicing of loans after consummation of the proposal and
that these criteria and guidelines will be in full compliance with all applicable laws and regulations. The
administrative procedures, lending policies, and personnel training of NationsBank appear to be satisfactory to assure compliance by NBFSC with all applicable consumer lending laws and regulations and to
address any instances of noncompliance in a prompt
and effective manner.
On the basis of all of the facts of record, including
the commitments made by Applicant in this case, the
Board has determined that the balance of public interest factors that it must consider under section 4(c)(8)
of the BHC Act is favorable and consistent with
approval.
Based upon the foregoing and all of the other facts of
record, including commitments made by NationsBank, the Board has determined that the applications
should be, and hereby are, approved. The Board's
determination is subject to all of the commitments
made in connection with these applications as well as
all of the conditions set forth in the Board's Regulation
Y, including the Board's authority to require modification or termination of the activities of a bank holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders thereunder. All of the
commitments and conditions relied upon by the Board
in reaching its decision are conditions imposed in
writing in connection with the Board's findings and
decision and, as such, may be enforced in proceedings
under applicable law.
The transaction approved in this Order shall not be
consummated later than three months after the effective date of this Order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 13, 1993.




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

Associate Secretary of the Board

Order Approving Modifications to Section 20
Orders
Order Approving Modifications to Section 20 Orders
to Allow Use of Alternative Index Revenue Test to
Measure Compliance with the 10 Percent Limit on
Bank-Ineligible Securities Activities
Beginning in 1987 the Board has approved, under
section 4(c)(8) of the Bank Holding Company Act
(12 U.S.C. § 1843(c)(8)), applications by a number of
bank holding companies to establish separate subsidiaries ("section 20 subsidiaries") to underwrite and
deal in securities that a bank may not underwrite or
deal in directly ("ineligible securities").1 In order to
ensure compliance with section 20 of the GlassSteagall Act, which prohibits a member bank from
being affiliated with a company that is "engaged principally" in underwriting and dealing in securities,2 the
Board found that a section 20 subsidiary's underwriting and dealing in ineligible securities may not be a
substantial activity of the subsidiary. In particular, the
Board provided that the amount of revenue the subsidiary may derive in any quarter from such ineligible
securities activities may not exceed 10 percent of the
total revenue of the subsidiary for that quarter, when
revenue is averaged over a rolling 8-quarter period.

I. Proposed Modifications to the 10 Percent
Revenue Limit
On July 23, 1992, the Board requested public comment
on two methods for creating an alternative to the
10 percent revenue test.3 The Board took this action in
response to historically unusual changes in the level
and structure of interest rates, which have distorted
the revenue test as a measure of the relative importance of ineligible securities activities in a manner that
was not anticipated when the Board established the 10
percent limit in September 1989. The Board noted that
short-term interest rates had declined sharply in recent
months but that there had been very little correspond-

1. E.g., Citicorp, 73 Federal Reserve Bulletin 473 (1987); J.P.
Morgan & Co., 75 Federal Reserve Bulletin 192 (1989). As of
December 31, 1992, 30 bank holding companies are authorized under
section 4(c)(8) to underwrite and deal in ineligible securities.
2. 12 U.S.C. § 377.
3. 57 Federal Register 33,507.

Legal Developments

ing decline in longer term rates, producing an unusually wide difference between short- and long-term
rates.
In its request for public comment, the Board noted
that since eligible securities4 tend to be shorter term
than ineligible securities, recent revenue data suggested that the current unusually sharp increase in the
steepness of the yield curve has caused the revenue
earned by at least some section 20 subsidiaries from
holding eligible securities to decline in relation to
ineligible revenue, even though the relative proportion
of eligible and ineligible securities activities being
conducted by these subsidiaries has remained essentially unchanged. Thus, the Board found that this
decline in the eligible revenue base of section 20
subsidiaries could be attributed to extraordinary factors beyond the control of the subsidiary rather than to
an increase in the relative importance of its ineligible
activities. Accordingly, the Board stated that the results produced by the revenue test, due to their
dependence on interest rates, may not be as reliable as
the Board had anticipated when the 10 percent limit
was established.
The Board proposed two alternatives to the current
revenue test designed to take into account the current
unforeseen alteration in historic interest rate relationships. First, the Board proposed that current interest
and dividend revenue from eligible and ineligible securities could be adjusted to approximate the revenue
that would have been derived if interest rate conditions were those that existed in September 1989.
Under this proposed modification, current interest and
dividend revenue for each quarter would be increased
or decreased by an adjustment factor provided by the
Board according to the average duration of a subsidiary's eligible and ineligible securities portfolios. The
adjustment factor would represent the ratio of interest
rates on Treasury securities in September 1989 to
average interest rates on Treasury securities in the
most recent quarter for obligations having that particular duration. On July 29, 1992, as supplemental
information to the request for public comment, the
Board published a table of adjustment factors based on
interest rates prevailing in the second quarter of 1992
that could be used under the proposed indexing
method.
Second, the Board proposed an alternative test
under which compliance with the current 10 percent

4. Bank-eligible or "eligible" securities are those securities that a
national bank may underwrite or deal in pursuant to
12 U.S.C. § 24(7), and include obligations of the United States, and
obligations of states and their political subdivisions.




227

limit would be computed based on assets rather than
revenue.5

II. Adoption of Alternative Indexed Revenue
Test
After review of relevant information, the Board has
decided to modify its section 20 orders to allow section
20 subsidiaries to measure compliance with the "engaged principally" test in section 20 on the basis of an
indexed revenue test, as described in the request for
public comment. To use the indexed revenue test as an
alternative to the current revenue test section 20
subsidiaries must notify the Federal Reserve of such
an election and may not alter that election for two
years.

Compliance with the Glass-Steagall

Act

The Board believes that measuring compliance with
the "engaged principally" standard based on a test
that indexes revenues according to interest rate conditions prevailing when the current 10 percent revenue
test was adopted is fully consistent with section 20 of
the Glass-Steagall Act. As noted above, the Board in
1987 concluded that a bank affiliate would not be
"engaged principally" in ineligible securities activities
for purposes of section 20 if those activities are not
"substantial" relative to other activities of the subsidiary, i.e., do not exceed 10 percent of the subsidiary's
total activities.6 This view was upheld by the courts.7
Although the statutorily-imposed "engaged principally" limitation on ineligible activities represents a
"hard and fast limit" that may not be administratively
modified,8 nothing in section 20 itself dictates what
criteria must be used to determine compliance with
that limit. Indeed, the statutory term "engaged principally" is "intrinsically ambiguous."9 Thus, the statute gives the Board discretion in selecting the criteria

5. Under the proposed asset-based test, a section 20 subsidiary
would be viewed as in compliance with section 20 for any quarter if the
average daily assets held in connection with underwriting and dealing
in ineligible securities for that quarter, when added to the average
daily assets held in connection with ineligible securities activities for
the previous seven quarters, does not exceed 10 percent of the average
daily total assets of the subsidiary for that quarter and the previous
seven quarters.
6. Bankers Trust New York Corp., 73 Federal Reserve Bulletin 139,
140-45 (1986); Citicorp, supra, 73 Federal Reserve Bulletin at 481-86
(1986).
7. Securities Industry Association v. Board of Governors, 839 F.2d
47, 62-67 (2d Cir.), cert, denied, 486 U.S. 1059 (1988); Securities
Industry Association v. Board of Governors, 847 F.2d 890, 894-99
(D.C. Cir. 1988).
8. Securities Industry Association v. Board of Governors, 839 F.2d
at 68.
9. Id., at 63; See Securities Industry Association v. Board of
Governors, 847 F.2d at 894.

228

Federal Reserve Bulletin • March 1993

for determining when ineligible securities activities
become substantial.
In the Board's view, the proposed indexed revenue
test is consistent with the language and purposes of
section 20 and is a permissible means to measure
compliance with the "engaged principally" standard
set forth in that section. When the revenue limit was
initially established, the Board found that revenue is an
appropriate factor for assessing whether a section 20
subsidiary is engaged principally in ineligible activities
because revenue is an "objective and meaningful measure of the importance of the activity to the enterprise
as a whole and reflects the level of risk involved in the
activity."10 As noted above, the 10 percent revenue
limit has been judicially upheld as a reasonable interpretation of the language of section 20. As explained
below, the proposed indexing modification is designed
to treat current interest and dividend revenue as if such
revenue had been earned under interest rate conditions
that prevailed in September 1989, when the existing
10 percent revenue limit was established. There can be
no reasonable dispute that the 10 percent revenue limit,
as applied under those interest rate conditions, is consistent with the terms and purposes of the "engaged
principally" test.

Indexed Revenue Test as an Appropriate
Measure of Substantial Activity
The Board finds that the proposed indexed revenue
test is a reasonably reliable method for measuring the
substantiality of ineligible securities activities in light
of the current highly unusual interest rate structure.
First, it is not disputed that the size of the recent
decline in short-term interest rates as compared to the
decline in long-term rates is historically significant,
and has resulted in a steepness of the yield curve that
is highly unusual. The comments also confirm that
current interest rate conditions have, at least for some
section 20 subsidiaries, caused an artificial decline in
the eligible revenue base and that this in turn has made
the revenue test a less reliable indicator of the relative
mix of eligible and ineligible activities than the Board
had anticipated when the 10 percent limit was adopted
in 1989.
The commenters also do not contest that the method
proposed by the Board of indexing eligible and ineligible revenue, which adjusts revenue based on comparable rates on Treasury securities based for categories of average portfolio duration, will reasonably
approximate what current revenue would be if the

10. Bankers Trust New York Corporation, 73 Federal Reserve
Bulletin at 145; Citicorp, 73 Federal Reserve Bulletin at 484.




interest rate conditions prevailing in 1989 exist during
the current quarter.
For this reason, the Board finds no merit in the
allegations of commenter the Securities Industry Association (the "SIA") that the indexed revenue test
would permit the ineligible securities activities of
section 20 subsidiaries to become substantial in violation of section 20. Rather than allowing the relative
level of ineligible securities activities to increase, as
the SIA asserts, the index formula represents a more
refined method for measuring whether a section 20
subsidiary has exceeded the level of ineligible activity
that the Board believed to be substantial when it set
the 10 percent limit.11
The Board also finds that the fact that the current
unusual yield curve may have an impact on only some
section 20 subsidiaries does not preclude the adoption
of the indexed revenue test, since the Board believes
that the current test does in fact produce less reliable
results than the indexed adjustment for those companies.

The Proposed Alternative Asset-Based

Test

The Board does not find it necessary at this time to
decide whether to adopt the proposed alternative
asset-based test because the Board is unable to determine satisfactorily at this time the potential practical
effect of such a test.

Continued Use of Current Revenue

Test

Many banking organizations that commented on the
proposed modifications to the 10 percent limit stated
that the proposed indexing of the current revenue test,
which would adjust revenue according to the duration
of the eligible and ineligible securities portfolio, would
impose additional costly and burdensome recordkeeping and compliance requirements. For example, a
number of banking organizations stated that their
section 20 subsidiaries do not have in place computer
systems to calculate the duration of all of the securities
in their portfolio on a regular basis.
Accordingly, the Board believes that it is appropriate to allow section 20 subsidiaries the option of
continuing to use the current unadjusted revenue test
11. The Board also finds without merit the SIA's concerns that
under the current revenue test some section 20 subsidiaries have made
incursions into underwriting markets traditionally dominated by nonbank firms. Although the Board initially imposed a separate market
share test because of perceived weaknesses in using revenue alone as
the sole measure of "engaged principally" (Bankers Trust New York
Corporation, 73 Federal Reserve Bulletin at 146), the market share
test was rejected by the court on judicial review as inconsistent with
the statute and a revenue-only measure was upheld. Securities Industry Association v. Board of Governors, 839 F.2d at 67-68.

Legal Developments

to measure compliance with the "engaged principally"
standard. Each existing section 20 subsidiary that
elects to use the indexed revenue test for the current
quarter shall notify the relevant Federal Reserve Bank
of this fact within 30 days of publication of this order.
Thereafter, any existing section 20 subsidiary that
elects to use the indexed revenue test shall notify the
appropriate Reserve Bank no later than 30 days prior
to the beginning of the calendar quarter during which
the indexed test will be used. Upon making this
selection, the subsidiary will be required to continue
using the indexed revenue test for a period of at least
two years. After such a period, the subsidiary may
change its compliance measurement if it chooses. The
Board believes that it is necessary to require a section
20 subsidiary to continue to comply with the test that
it chooses for a set period of time in order to guard
against potential manipulation that may occur should a
subsidiary be permitted to continually switch between
the two alternative tests.

Operation of the Indexed Revenue Test
As with the current revenue test, under the indexed
revenue test a subsidiary will be in compliance with
section 20 for any quarter if adjusted revenue from
ineligible securities underwriting and dealing activities
for that quarter, when added to the adjusted revenue
from ineligible securities activities for the seven previous quarters, do not exceed 10 percent of adjusted
total gross revenues of the subsidiary for that quarter
and the previous seven quarters.
Under the indexing method, current revenue will be
adjusted by a series of factors supplied by the Board
that vary according to the average duration of the
securities portfolio of the section 20 subsidiary. For
each category of average duration the adjustment
factor represents the ratio of interest rates in September 1989 on Treasury securities to the average interest
rates in the most recent quarter. These adjustment
factors will then be applied to current interest and
dividend revenue.
To use the indexing method in conjunction with the
tables to be provided for any given quarter, a section
20 subsidiary must adhere to the following procedure.
1. The subsidiary calculates the average duration of
its eligible assets and of its ineligible assets.12

12. In the proposal for modifications of the 10 percent revenue limit,
the Board noted that computation of duration on a daily basis
appeared to be the most appropriate method, since interest and
dividends are earned on securities held as of the end of the day.
Several commenters said that daily computation of duration would be
unduly burdensome and suggested monthly or quarterly computation.
After considering the comments as well as other facts of record, the




229

2. The subsidiary determines the appropriate adjustment factor corresponding to the duration of
the eligible and ineligible assets from the table of
adjustment factors published by the Board for that
quarter.
3. The subsidiary adjusts its current interest and
dividend revenue from its eligible and its ineligible
activities by the appropriate adjustment factors.
4. The subsidiary adds the adjusted eligible and
ineligible interest and dividend revenue to the other
types of revenue earned by the subsidiary to calculate an adjusted ratio of ineligible to total revenue
for that quarter.
Several commenters have raised various technical
questions with regard to the method for computing
average duration of assets for purposes of this formula. Specifically, the Board is aware that there may
be diversity of opinion with respect to calculating
duration of certain securities, such as obligations
containing explicit options (e.g., callable securities)
and those with imbedded options (e.g., collateralized
mortgage obligations ("CMOs") with prepayment options). To ensure uniformity, the Board's staff will
attempt to address these issues in revising the FR Y-20
and in responding to specific inquiries.
To reduce burden and ensure uniform treatment, the
staff has been directed, to the extent possible, to rely
on regulatory precedent in addressing these types of
issues. For example, callable bonds would be considered to have a maturity equivalent to the first call
date.13 Alternatively, it would be proper, where feasible, to use the methodology contained in the Federal
Financial Institutions Examination Council policy
statement on investments (i.e., the so-called "stress
test") to calculate appropriate duration for CMOs and
similar products.14
With regard to the timing of the Board's publication
of the table of adjustment factors, the Board intends to
publish the table applicable to each quarter at the
beginning of that quarter based on average interest
rates prevailing during the immediately prior quarter.
Although the use of prior quarter rates will not necessary produce adjustments that directly mirror the
interest rate conditions likely to be faced by section 20
subsidiaries in the coming quarter, the differences in
rates from quarter to quarter are unlikely to be highly
significant, and publication of the applicable adjust-

Board is requiring that section 20 subsidiaries that choose to use the
indexing method compute duration on a weekly basis.
13. See Municipal Securities Rulemaking Board Rule G-15, Customer Confirmations.
14. See Federal Reserve Regulatory Service, pages 3-484.8 through
3-484.11.

230

Federal Reserve Bulletin • March 1993

ment factors at the beginning of the quarter should
provide for greater predictability in meeting the limits.
A table of the factors that will be used to adjust
revenue earned during the first quarter of 1993 is
attached to this Order.
The Board recognizes that some section 20 subsidiaries do not currently have available sufficient prior
data related to the duration of their assets to initially
measure compliance with an indexed revenue test over
past quarters. Accordingly, while the Board will retain
the eight-quarter rolling average method of measuring
compliance with the "engaged principally" test, the
indexed revenue test will be implemented on a prospective basis only. Accordingly, to determine compliance with the indexed revenue test during the first
two-year period after election of this test, adjusted
revenues from ineligible securities activities for each
quarter during this two-year period, when added to the
adjusted revenues from ineligible securities activities
for each previous quarter during the period, may not
exceed 10 percent of the section 20 subsidiary's
adjusted total gross revenues for that quarter and all
previous quarters during the initial two-year period.
After the end of the initial two-year period, compliance would be measured on the rolling eight-quarter
average basis described above.
The Board is in the process of modifying the FR
Y-20 (Financial Statements for a Bank Holding Company Subsidiary Engaged in Ineligible Securities Underwriting and Dealing) instructions and reporting
form to take into account the adoption of an indexed
revenue test. The FR Y-20 is used by the Board to
collect data for off-site monitoring of compliance with
the Board's revenue test and certain Board conditions,
and monitoring of general financial condition.

Other

comments

Two commenters cite recent allegations that some
banking organizations unlawfully tied credit services
with investment banking services offered by their
section 20 subsidiaries and assert that adoption of the
proposed adjustment would increase the possibility for
illegal tying. However, as explained above, this proposal is not designed to expand ineligible activities and
allegations of illegal tying are currently under review
by Board staff.

Procedural

issues

The SI A, in initially commenting on the Board's
proposal, requested that the Board extend the original
comment period by 90 days and hold a public hearing
to discuss the proposal. The SIA also requested that
the Board disclose the data on operations of section 20




subsidiaries upon which the Board relied in proposing
the alternative tests. The SIA believed that access to
such data is essential in order to allow it to adequately
assess the proposal.
The Board does not believe that it is necessary to
extend the comment period or hold a public hearing on
this proposal. The Board previously held a public
hearing on defining the term "engaged principally" in
section 20 of the Glass-Steagall Act in connection with
the Board's first section 20 order in Citicorp. This
interpretation is only a modest procedural adjustment,
however, and does not involve the major policy issues
the Board faced in initially allowing bank holding companies to engage in ineligible securities underwriting
and dealing. In addition, the Board has generally only
held public hearings on matters when written submissions are an inadequate means for the public to express
an opinion on a proposal. The Board believes that in
this case, written submissions have been an adequate
means for the public to comment on the proposal.
As for the data to which the SIA requested access,
it appears that the release of data on the level of
ineligible securities activities for a specific section 20
subsidiary would not be warranted. The Board and
other federal agencies generally do not disclose to the
public commercial or financial information about a
person that could harm that person's competitive
position in the marketplace.15 In this case, data about
the composition of the portfolios of various section 20
subsidiaries could be potentially harmful to the competitive position of these subsidiaries, since their competitors could learn the relative mix of their eligible
and ineligible activities and whether the ineligible
activities might have to be curtailed because of the
10 percent limit. The Board notes that the factual
circumstances that prompted the decision to modify
the current revenue test, the current unusual interest
rate conditions, are a matter of public record.. In
addition, in order to assist the section 20 subsidiaries
and the public in assessing how the indexed revenue
test would operate in practice, the Board has published a sample table of adjustment factors, based on
historic interest rate data, that could be used in applying the indexed revenue test.
A final procedural issue relates to the process under
which a section 20 subsidiary may change its method
of compliance with the "engaged principally" test.
The Board's Regulation Y requires a notice to be filed
with the Board to alter a nonbanking activity in any
material respect from that considered by the Board in
acting on the application to engage in the activity.16 As

15. See, e.g., 5 U.S.C. § 552(b)(4).
16. 12 C.F.R. 225.23(b)(3).

Legal Developments

noted above, the Board views the changes adopted to
the revenue test as procedural adjustments to account
for distortion caused by changes in interest rates. It is
not the Board's intention, and the Board does not
believe, that its action will materially alter the activity
of engaging in ineligible securities underwriting and
dealing for those section 20 subsidiaries that choose to
adopt an indexed revenue test. Accordingly, the Board
will not require a section 20 subsidiary that adopts the
indexed revenue test to file a formal notice pursuant to
Regulation Y before making this change, but merely to
notify the relevant Federal Reserve Bank of the test it
is choosing to measure its compliance with the "engaged principally" standard.

III. Raising the Percentage Limitation
A large number of commenters who favored adjusting
the current revenue test also suggested that the Board
raise the current percentage limitation from 10 percent
to as high as 25 percent. Because this suggestion goes
beyond the scope of the Board's current proposal, no
action is now being taken with respect to the
10 percent limit.

IV. Conclusion
Accordingly, for the reasons and subject to the conditions set forth in this Order, the Board concludes that
the proposed indexed revenue test, as an alternative to
the existing 10 percent revenue limit on the ineligible
securities activities of section 20 subsidiaries, is consistent with section 20 of the Glass-Steagall Act.
Accordingly, the Board modifies its prior section 20
orders to permit section 20 subsidiaries to use this
indexed revenue test under the conditions prescribed
in this Order. This modification applies to all section
20 subsidiaries and is effective immediately. This
modification does not affect in any other way the
authorizations to engage in securities underwriting and
dealing granted by the Board in its prior section 20
Orders and is subject to the Board's continuing authority to reexamine limitations on such activities established on section 20 subsidiaries in these prior Orders.
By order of the Board of Governors, effective
January 26, 1993.
Voting for this action: Chairman Greenspan and Governors
Kelley, LaWare, Lindsey, and Phillips. Voting against this
action: Governors Mullins and Angell.




WILLIAM W . WILES

Secretary of the Board

231

Dissenting Statement of Governors Mullins and
Angell
We believe that the indexed revenue test is an unduly
complex and burdensome solution to the problem it is
intended to address, i.e., the unreliability of the current 10 percent revenue limit on the ineligible securities activities of section 20 subsidiaries due to the
unusual structure of interest rates at the present. As
indicated by many of the comments on this proposal,
the indexed revenue test will impose extensive new
recordkeeping and reporting obligations.
Rather than merely fine-tuning the current test, we
believe that a more fundamental and efficient approach
to this problem is appropriate. In light of the unreliability of the current revenue test, the Board should directly consider an increase in the 10 percent level. As
the Board's Order recognizes, the specific limits of the
statutory directive that a section 20 subsidiary not be
engaged principally, or substantially, in ineligible securities activities are by no means precise. Therefore, the
Board has, in our judgment, a considerable degree of
latitude in selecting the appropriate quantitative level
for applying the engaged principally standard.
The Board selected the 10 percent level without the
benefit of the recent experience with unanticipated
interest rate relationships, which have now shown the
unreliability of the current test. Moreover, the Board
has now had considerable experience in reviewing the
overall operations of the section 20 subsidiaries, and in
light of this experience we believe that it is now
appropriate to revisit the issue of the proper measure
for determining whether a section 20 subsidiary is
engaged principally in ineligible securities activities. In
our view, addressing the issue of whether an increase
Factors to adjust interest income
Ratio of interest rates in September 1989 to fourth quarter 1992
Duration

Factor

Months
1
3
6
12

2.70
2.52
2.42
2.30

Years
2
3
4
5
6
7
10
20
30

1.83
1.62
1.43
1.35
1.28
1.25
1.14
1.03
0.97

NOTE: Adjustment factors were calculated using secondary-market
quotes of the yields on Treasury bills for durations of three, six, and
twelve months and on STRIPSs, or zero-coupon Treasury securities,
for durations two years and greater. Data are averages of Wednesday
observations.

232

Federal Reserve Bulletin • March 1993

in the quantitative level of activity should be permitted
to take into account this recent experience would be
consistent with the basic objectives of the GlassSteagall Act.
January 26, 1993

Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act

First Union Corporation
Charlotte, North Carolina
Order Approving Acquisition of a Bank Holding
Company
First Union Corporation, Charlotte, North Carolina
("First Union"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 3(a)(3) of the BHC Act
(12 U.S.C. § 1842(a)(3)) to acquire Dominion Bankshares Corporation, Roanoke, Virginia ("Dominion"),
and thereby indirectly acquire its six subsidiary banks:
Dominion Bank, N.A., Roanoke, Virginia; Dominion
Bank of Washington, N.A., Washington, D.C.; Dominion Bank of Maryland, N.A., Rockville, Maryland;
Dominion Bank of Middle Tennessee, Nashville, Tennessee; Merchants & Planters Bank, Newport, Tennessee; and Citizens Union Bank, Rogersville, Tennessee. 1 First Union also has applied under section 4(c)(8)
of the BHC Act (12 U.S.C § 1843(c)(8)) to acquire the
nonbanking subsidiaries of Dominion.2
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 52,776 (1992)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in sections 3(c)
and 4(c)(8) of the BHC Act.
1. Upon consummation of this proposal, Dominion will merge with
and into First Union Corporation of Virginia, a wholly owned subsidiary of First Union. In connection with the proposed acquisition, First
Union has also requested Board approval under section 3 of the BHC
Act to acquire an option to purchase 19.9 percent of the voting shares
of Dominion. This option will become moot upon consummation of
First Union's application to acquire Dominion.
2. First Union has applied to acquire the following Dominion
nonbanking subsidiaries:
(1) Dominion Bankshares CDC, Inc., Roanoke, Virginia, and
thereby engage in community development activities pursuant to
section 225.25(b)(6) of the Board's Regulation Y;
(2) Dominion Trust Company, Roanoke, Virginia, and Dominion
Trust Company of Tennessee, Nashville, Tennessee, and thereby
engage in trust company activities within the Commonwealth of
Virginia and the State of Tennessee, respectively, pursuant to
section 225.25(b)(3) of the Board's Regulation Y, and
(3) Old Dominion Leasing, Inc., Roanoke, Virginia, and thereby
engage in leasing personal property pursuant to section 225.25(b)(5),
and in making and servicing loans pursuant to section 225.25(b)(1)
of the Board's Regulation Y.




First Union has consolidated assets of approximately $48.3 billion, and controls five banks in Florida, Georgia, South Carolina, North Carolina, and
Tennessee.3 Upon consummation of this proposal,
First Union would become the fourth largest commercial banking organization in Virginia, controlling
deposits of $5.6 billion, representing approximately
10.2 percent of the deposits in commercial banks in the
state.4
Douglas Amendment
Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire any
bank located outside of the bank holding company's
home state, 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."5 For the purposes of the
Douglas Amendment, the home state of First Union
is North Carolina.6 The Board has previously determined that the interstate banking statutes of Maryland, Tennessee, Virginia and the District of Columbia permit a North Carolina bank holding company to
acquire banking organizations in those jurisdictions.7
In considering this proposal, the Board has analyzed
the interstate banking statutes of all the states involved and of the District of Columbia and has
concluded that First Union is authorized under these
statutes to acquire the banking subsidiaries of Dominion located in these states and the District of
Columbia.8 Accordingly, Board approval of this proposal is not prohibited by the Douglas Amendment.
Approval of this proposal, however, is conditioned

3. Asset data are as of September 30, 1992.
4. State deposit data are as of June 30,1992. Market deposit data are
as of June 30, 1991.
5. 12 U.S.C. § 1842(d).
6. A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later. The
operations of a bank holding company are considered principally
conducted in that state in which the total deposits of all such banking
subsidiaries are largest.
7. See NCNB Corporation, 78 Federal Reserve Bulletin 141 (1992).
8. Each of these state statutes permit a bank holding company
located in North Carolina to acquire a bank in each respective state.
See Md. Fin. Inst. Code Ann. § 5-1001 et seq.;V&. Code Ann. § 6.1399; D.C. Code Ann. §§ 26-801, 802(a)(1); Tenn. Code Ann. §§ 4512-102, 103. The Tennessee statute conditions entry on the requirement that the out-of-state bank holding company not hold more than
16.5 percent of the total deposits held by all federally insured financial
institutions located in Tennessee. Upon consummation of this transaction, First Union would hold approximately 4.3 percent of the
federally insured deposits in Tennessee.

Legal Developments

upon First Union's receiving all required state regulatory approvals.9
Competitive, Financial, Managerial and Supervisory
Considerations

233

Union and Dominion, and their respective subsidiaries, and the other supervisory factors that the Board
must consider under section 3 of the BHC Act, are
consistent with approval.
Convenience and Needs Considerations

First Union and Dominion compete directly in the
Washington, D.C. 10 and Nashville, Tennessee11 banking markets. Upon consummation of this proposal,
First Union would become the ninth largest commercial bank or thrift organization ("depository institution") in the Washington, D.C. banking market, controlling deposits of $1.6 billion, representing
approximately 3.5 percent of total deposits in depository institutions in the Washington, D.C. banking
market.12 First Union would become the fourth largest
depository institution in the Nashville banking market,
controlling deposits of $806.9 million, representing
approximately 8.1 percent of total deposits in depository institutions in the Nashville banking market.
After considering the number of competitors remaining in the respective markets, the relatively small
increase in concentration as measured by the Herfindahl-Hirschman Index ("HHI"),13 market share, and
all other facts of record, the Board concludes that
consummation of the proposal would not result in a
significantly adverse effect on competition in the
Washington, D.C. banking market, the Nashville banking market, or any other relevant banking market.
The Board also concludes that the financial and
managerial resources and future prospects of First

9. The appropriate banking supervisors in Maryland, Tennessee,
Virginia and the District of Columbia have each indicated preliminarily that First Union's proposed acquisition of banking institutions in its
state is not prohibited by the relevant state banking statutes.
10. The Washington, D.C. banking market is defined as the Washington, D.C., Ranally Metropolitan Area.
11. The Nashville banking market is approximated by Davidson,
Robertson, Sumner, Williamson, Wilson, and Rutherford Counties in
Tennessee.
12. Market share data are based on calculations in which the
deposits of thrift institutions are included at 50 percent. The Board
previously has indicated that thrift institutions have become, or have
the potential to become, significant competitors of commercial banks.
See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989);
National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
13. First Union's presence in the Washington, D.C. banking market
is de minimis and the HHI for this market would not increase as a
result of this proposal. The HHI in the Nashville banking market
would increase 5 points to 1439. Under the revised Department of
Justice Merger Guidelines (49 Federal Register 26,823 (June 29,
1984)), a market in which the post-merger HHI is between 1000 and
1800 is considered moderately concentrated. The Justice Department
has informed the Board that a bank merger or acquisition generally
will not be challenged (in the absence of other factors indicating
anti-competitive effects) unless the post-merger HHI is at least 1800
and the merger increases the HHI by 200 points. The Justice Department has stated that the higher than normal HHI thresholds for
screening bank mergers for anti-competitive effects implicitly recognize the competitive effect of limited-purpose lenders and other
non-depository financial entities.




In acting upon an application to acquire a depository
institution under the BHC Act, the Board must consider the convenience and needs of the communities to
be served, and take into account the records of the
relevant depository institutions under the Community
Reinvestment Act (12 U.S.C. § 2901 et
seq.)
("CRA"). The CRA requires the federal financial
supervisory agencies to encourage financial institutions to help meet the credit needs of the local communities in which they operate, consistent with the
safe and sound operation of such institutions. To
accomplish this end, the CRA requires the appropriate
federal supervisory authority to "assess the institution's record of meeting the credit needs of its entire
community, including low- and moderate-income
neighborhoods, consistent with the safe and sound
operation of such institution," and to take that record
into account in its evaluation of bank holding company
applications.14
The Board has received comments from several
organizations and individuals ("Protestants") that
raise issues regarding the efforts by First Union and
Dominion to meet the credit needs of their entire
communities, including low- and moderate-income
neighborhoods.15 In particular, the Protestants criticize First Union's policies with regard to residential
mortgage lending, participation in government-insured
loan programs and small business loans. Protestants
also raise concerns about First Union's ability to meet
the credit needs of communities currently serviced by
Dominion, and the absence of an acceptable plan for
future community reinvestment. Moreover, Protestants question First Union's record of lending to
minorities, citing data filed under the Home Mortgage

14. 12 U.S.C. § 2903.
15. One of the Protestants has raised concerns regarding branch
closings by First Union in Florida. First Union has responded that
almost all branches were closed following in-market acquisitions and
that these offices were consolidated into other First Union branches
with the result that no low-income areas were deprived of branch
operations. In addition, First Union National Bank of Florida has
formal procedures for opening and closing offices that were reviewed
and found to be adequate by the bank's primary regulator. In this
regard, First Union's policy requires that special efforts be made to
consult with local community leaders before a formal decision is made
to close a branch that will significantly impact a low- and moderateincome community. The Federal Deposit Insurance Corporation Improvement Act of 1991 also requires a bank to provide its customers
at least 30 days notice prior to closing any branch, and provide to the
bank's primary regulator 90 days' prior notice. 12 U.S.C. § 1831p.

234

Federal Reserve Bulletin • March 1993

Disclosure Act ("HMDA"), as evidence that First
Union's lending is marked by low levels of applications from minorities and low approval rates of loans
to minorities.16
The Board has carefully reviewed the CRA performance records of First Union, Dominion, and their
respective subsidiary banks, as well as all comments
received regarding this application, First Union's responses to those comments, and all of the other
relevant facts of record in light of the CRA, the
Board's regulations, and the Statement of the Federal
Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement").17

Record of Performance

Under the CRA

A. CRA Performance Examination
The Agency CRA Statement provides that a CRA
examination is an important and often controlling
factor in the consideration of an institution's CRA
record, and that these reports will be given great
weight in the applications process. 18 The Board notes
that all of First Union's subsidiary banks have been
examined for CRA performance and have received
"outstanding" or "satisfactory" ratings during the
most recent examinations of their CRA performance.
In particular, First Union's lead subsidiary bank,
First Union National Bank of North Carolina, Charlotte, North Carolina ("First Union Bank-NC"),
received an "outstanding" rating for CRA performance from the Office of the Comptroller of the
Currency ("OCC") in May 1992.19 In addition, all of
Dominion's subsidiary banks have received "out-

16. One of the Protestants also raised concerns about the minority
hiring and promotion practices of First Union. First Union maintains
that it actively promotes employment opportunities for minorities.
While the Board fully supports affirmative programs designed to
promote equal opportunity in every aspect of a bank's personnel
policies and practices in the employment, development, advancement, and treatment of employees, the Board believes that the alleged
deficiencies in First Union's general personnel and employment
practices are beyond the scope of the factors that the Board may
properly consider under the CRA, or the convenience and needs
factor of the BHC Act.
17. 54 Federal Register 13,742 (1989).
18. Id. at 13,745.
19. First Union's other subsidiary banks have received the following CRA ratings: First Union National Bank of Georgia, Clardston,
Georgia, received a "satisfactory" rating from the OCC in April 1992;
First Union National Bank of Florida, Jacksonville, Florida, received
a "satisfactory" rating from the OCC in April 1992; First Union
National Bank of South Carolina, Greenville, South Carolina, received a "satisfactory" rating from the OCC in May 1992; and First
Union National Bank of Tennessee, Nashville, Tennessee, received a
"satisfactory" rating from the OCC in May 1992.




standing" or "satisfactory" ratings during the most
recent examinations for CRA performance.20

B. Corporate Policies
First Union has in place the types of policies outlined
in the Agency CRA Statement that contribute to an
effective CRA program, and will implement these
policies in all Dominion banks. The board of directors
of First Union has adopted a written CRA plan which
includes goals, objectives, and methodology for selfassessment. The First Union board has established a
Corporate CRA Steering Committee to supervise and
monitor First Union's overall compliance with this
plan. In addition, each First Union bank maintains a
State CRA Self-Assessment Committee to assess compliance with corporate CRA policy and to assist in
developing and implementing action plans to respond
to demonstrated needs for change in performance.21
Each bank has a CRA Coordinator and local advisory
boards, comprised of business, community, and education leaders, who discuss current CRA data and
issues. First Union and each of its subsidiary banks
also conduct regular CRA self-assessments, and actively support CRA training for all bank personnel.

C. Ascertainment and Marketing
First Union ascertains community credit needs
through various community outreach programs. For
example, First Union representatives conduct regularly scheduled interviews with representatives of
community groups and other people knowledgeable
about community needs. First Union representatives
attend local focus group discussions and make ongoing
needs ascertainment calls on businesses, consumers,
government agencies, community-based organizations
and advocacy groups.22 Recently there has been an
additional emphasis on increased education of members of the public. For example, First Union Bank-NC

20. These banks and their CRA examination dates include: Dominion Bank, N.A., Roanoke, Virginia, November 1991; Dominion Bank
of Maryland, N.A., Rockville, Maryland, November 1991; Dominion
Bank of Washington, N.A., Washington, D.C., September 1991;
Dominion Bank of Middle Tennessee, Nashville, Tennessee, August
1990; Merchants and Planters Bank, Newport, Tennessee, February
1991; and Citizens Union Planters Bank, Newport, Tennessee, October 1990. With the exception of Dominion Bank of Middle Tennessee,
which was rated "outstanding" for CRA, all of the other Dominion
subsidiaries listed above received "satisfactory" CRA ratings from
their primary regulators.
21. In its most recent examination of First Union Bank-NC, the
OCC noted that First Union's CRA plan has proven to be effective in
managing the bank's overall CRA efforts.
22. In the past 24 months, First Union has made over 6,000 needs
ascertainment calls to help determine how First Union can best meet
the needs of its local communities, especially the needs of low- and
moderate-income neighborhoods.

Legal Developments

conducts seminars for consumers and small business
owners throughout the state.
In addition, First Union uses various market research programs to formally ascertain the credit needs
of low- and moderate-income communities. On a periodic basis, all consumer loans and consumer deposits
are geocoded. Each institution analyzes the geographic distribution of all consumer loans and deposits
to help determine the extent to which First Union is
serving all areas of its communities, with particular
emphasis on service to low- and moderate-income
areas. First Union also analyzes the results of the
ascertainment process and census tract data in its
efforts to determine unmet credit needs, and outlines
remedial actions if the analysis indicates inadequate
CRA performance.
First Union markets its products and services
through a variety of advertising activities, including
print advertising in media targeted to low- and moderate-income individuals and minorities, brochures promoting financial seminars, flyers, and doorhangers
promoting bank credit products. Bank subsidiaries
also purchase advertising on radio stations targeted to
minority and low- and moderate-income individuals.
This marketing program has been enhanced by mail
inserts in bank statements to all bank customers, and
direct mail campaigns to religious leaders outlining
banking products available to members of the community. First Union State Advertising Managers review
all advertising efforts to assure that they are informative and responsive to low- and moderate-income
communities. First Union also solicits business
through outreach to community groups, realtors and
other organizations that can assist in soliciting new
business in low- and moderate-income communities.
D. Lending and Other Activities
First Union participates in a number of governmental
programs designed to help meet the housing-related
credit needs of low- and moderate-income borrowers.
For example, First Union is an active participant in the
HUD/Farmers Home Administration, FHA, and VA
government insured lending programs. In addition,
First Union Mortgage Corporation, Charlotte, North
Carolina, First Union's mortgage subsidiary, has produced approximately $42 million in loans through the
North Carolina Finance Agency's single-family firsttime homebuyer program since the program began in
1985.
With respect to small business lending, First Union
participates in a number of Small Business Administration loan programs and actively supports local small
business development. For example, during 1991,
First Union Bank-NC made 2,401 small business and




235

farm loans totalling $85 million. Of this total, 353 loans
(15%) were extended to small businesses that were in
low- and moderate-income areas. First Union
Bank-NC has recently committed to provide additional funding to local small businesses and to vest
future loan approvals for this fund with the loan
committee of the West Charlotte Business Incubator.
In addition, in its most recent examination, the OCC
rated First Union Bank-NC "outstanding" with regard
to marketing and types of credit offered, citing these
and other programs.
With regard to residential lending, First Union actively provides residential mortgage loans, housing
rehabilitation loans, and home improvement loans.
For example, in December 1989, First Union
Bank-NC introduced the affordable home mortgage
loan for people earning 80 percent or less of the
county's median household income. In addition, First
Union Bank-NC's Charlotte office markets opportunities for credit to 35 low-income census tracts within its
delineated community, and from January through October 1992 successfully originated $21.2 million in
various types of consumer and mortgage loans in these
census tracts.
First Union actively participates in the CharlotteMecklenburg Housing Partnership, a consortium of
local banks that was established to facilitate making
mortgage loans in low-income areas. This partnership
concentrates on low-income housing consisting of new
single-family residences, new multi-family residences,
and the rehabilitation of existing housing. In order to
facilitate these purchases, below-market interest rate
loans are made available through this partnership.23
The Raleigh office of First Union Bank-NC has
recently purchased the entire $3 million issue of special purchase bonds issued by the North Carolina
Housing Finance Agency. These bonds will fund second mortgages on low-income, first-time homeowner
properties throughout North Carolina. First Union
Bank-NC also offers flexible underwriting criteria and
relaxed credit terms for its home improvement loan
program.
E. HMDA Data and Lending Practices
The Board has reviewed the 1990 and 1991 HMDA
data reported by First Union in light of Protestants'
comments. Data cited by the Protestants indicate
disparities in rates of housing-related loan applications
and in approvals and denials that vary by racial and
ethnic group in areas served by First Union.
23. In response to one of the Protestants comments concerning
Dominion's community development efforts, First Union has committed to continue and expand these programs.

236

Federal Reserve Bulletin • March 1993

Because all banks are obligated to ensure that their
lending practices are based on criteria that assure not
only safe and sound lending, but also assure equal
access to credit by creditworthy applicants regardless
of race, the Board is concerned when the record of an
institution indicates disparities in lending to minority
applicants. The Board recognizes, however, that
HMDA data alone provide only a limited measure of
any given institution's lending in its community. The
Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent
other information, for conclusively determining
whether an institution has engaged in illegal discrimination on the basis of race or ethnicity in making
lending decisions.
The most recent CRA examinations of all First
Union bank subsidiaries found no evidence of illegal
discrimination. In this regard, the OCC's examination
of First Union's lead subsidiary bank, First Union
Bank-NC, took into account preliminary 1991 HMDA
data. First Union also periodically assesses the adequacy of the implementation of its nondiscriminatory
policies, procedures, and training programs through
internal review and management reporting systems.
First Union reviews all forms, disclosures, contracts
and other legal documents for potential discriminatory
factors. In addition, each State CRA Coordinator,
regulatory compliance division, and the corporate
auditors of First Union review bank lending areas to
ensure that no discriminatory practices are present.
First Union has undertaken a number of steps to
improve its lending to minorities and low- and moderate-income neighborhoods. For example, First Union
has an ongoing Fair Lending Program designed to
ensure that all applicants, regardless of race, have
equal access to credit. First Union also aggressively
markets its credit opportunities to potential consumers
in low- and moderate-income areas.

F. Conclusion Regarding Convenience and
Needs Factors
The Board has carefully considered the entire record,
including the comments filed in this case, in reviewing
the convenience and needs factor under the BHC Act.
Based on a review of the entire record of performance,
including information provided by Protestants and by
the bank's primary regulators, and the commitments
made by First Union, the Board believes that the
efforts of First Union and Dominion to help meet the
credit needs of all segments of the communities served
by First Union and Dominion, including low- and
moderate-income neighborhoods, are consistent with
approval. In this light, and on the basis of all of the




facts of record, the Board concludes that the convenience and needs considerations, including the CRA
performance records of all bank subsidiaries, are consistent with approval of this application.24
Nonbanking Activities
First Union has also applied, pursuant to section
4(c)(8) of the BHC Act, to engage in community
development, trust, personal property leasing, and
loan servicing activities. As noted above, these activities are permissible for bank holding companies under
the Board's Regulation Y, and First Union proposes to
conduct these activities in accordance with the
Board's regulations.
In light of the facts of record, the Board concludes
that First Union's acquisition of Dominion's nonbanking subsidiaries would not significantly affect competition in any relevant market. Furthermore, there is no
evidence in the record to indicate that consummation
of this proposal is likely to result in any significantly
adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practice. Accordingly,
the Board has determined that the balance of public
interest factors it must consider under section 4(c)(8)
of the BHC Act is favorable and consistent with
approval of First Union's application to acquire Dominion's nonbanking subsidiaries.
Conclusion
Based on the foregoing, including the conditions and
commitments described in this Order and those made
in this application, and all of the facts of record, the
Board has determined that these applications should
be, and hereby are, approved. The Board's approval is
specifically conditioned upon compliance by First
Union with all the commitments made in connection
with this application. The commitments and conditions relied on by the Board in reaching this decision
are deemed to be conditions imposed in writing by the
Board in connection with its findings and decision, and
as such may be enforced in proceedings under applicable law. This approval is also conditioned upon First

24. One Protestant has raised concerns regarding potential unemployment in the Roanoke County, Virginia, area. First Union has
responded that it will reduce its work force in the short term, but that
these reductions will be phased in throughout 1993. In addition, First
Union intends to create new jobs in the Roanoke area by consolidating
future acquisitions into its Roanoke headquarters and by transferring
positions into the Roanoke area. Based on all the facts of record, the
Board does not believe that these comments cause the balancing of the
convenience and needs factors to be inconsistent with approval of this
proposal.

Legal Developments

Union's receiving all necessary Federal and state approvals.
The determinations as to the nonbanking activities
are subject to all of the conditions contained in the
Board's Regulation Y, including those in sections
225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and
225.23(b)(3)), and to the Board's authority to require
such modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, or to
prevent evasions of, the provisions and purposes of
the BHC Act and the Board's regulations and orders
issued thereunder.
The banking acquisitions should not be consummated before the thirtieth calendar day following the
effective date of this Order, and the banking and
nonbanking acquisitions shall not be consummated
later than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or the Federal Reserve Bank of Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 11, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Kelley, and Phillips. Absent and not voting: Governors Angell, LaWare, and Lindsey.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Order Issued Under Bank Merger Act

1st Source Bank
South Bend, Indiana
Order Approving Acquisition of Branches
1st Source Bank, South Bend, Indiana ("1st Source
Bank"), a state member bank, has applied for the
Board's approval under the Bank Merger Act
(12 U.S.C. § 1828(c)) to acquire the assets and liabilities of two branches of 1st Source Bank of Starke
County, Hamlet, Indiana ("Starke County Bank").1
These branches are located in Portage and Michigan
City, both in Indiana. 1st Source Bank also has
applied for the Board's approval, pursuant to section
9 of the Federal Reserve Act (12 U.S.C. § 321), to

1. 1st Source Bank and Starke County Bank are subsidiaries of 1st
Source Corporation, South Bend, Indiana ("1st Source"). Under the
proposed transaction, Starke County Bank would transfer to 1st
Source Bank approximately $6.0 million in assets, and 1st Source
Bank would assume liabilities of approximately $6.9 million.




237

establish and operate a branch office at each of the
Portage and Michigan City locations of these
branches.
Notice of the applications, affording interested
persons an opportunity to submit comments, has
been published in accordance with the Bank Merger
Act and the Board's Rules of Procedure (12 C.F.R.
262.3(b)). As required by the Bank Merger Act,
reports on the competitive effects of the proposal
were requested from the United States Attorney
General, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and
the Board has considered the applications and all the
comments received in light of the factors set forth in
the Bank Merger Act and the Federal Reserve Act.
1st Source Bank, with total assets of approximately $1.4 billion, is the 11th largest commercial
banking institution in Indiana.2 Starke County Bank,
with total assets of approximately $44.3 million, is
the 129th largest commercial banking institution in
Indiana.
Competitive, Financial, and Managerial
Considerations
This proposal represents a reorganization of existing
offices of depository institutions that already are
controlled by the same bank holding company. The
Board notes that competitive considerations were
reviewed when 1st Source Bank acquired Farmers
State Bank of Wyatt, Wyatt, Indiana,3 a competitor
in the LaPorte County, Indiana banking market4 with
Starke County Bank, which at that time also was
owned by 1st Source.5 This acquisition did not result
in any significantly adverse competitive effects in the
LaPorte County, Indiana banking market. On the
basis of all the facts of record, the Board has
concluded that consummation of this proposal would
not result in a significantly adverse effect on competition in any relevant banking market.
The financial and managerial resources and future
prospects of 1st Source Bank and Starke County
Bank also are consistent with approval of this
proposal.

2. State asset data are as of June 30, 1992.
3. See 78 Federal Reserve Bulletin 574 (1992).
4. The LaPorte County, Indiana banking market is approximated by
LaPorte County, except for New Durham, Clinton, Cass, Dewey, and
Prairie Townships; Olive and Warren Townships in St. Joseph
County; and Pine Township in Porter County, all in Indiana; plus New
Buffalo, Three Oaks, Galien, and Weesaw Townships in Berrien
County, Michigan.
5. See 73 Federal Reserve Bulletin 755 (1987).

238

Federal Reserve Bulletin • March 1993

Convenience and Needs Considerations
In considering the convenience and needs of the
communities to be served by these institutions under
the Bank Merger Act, the Board has taken into account the records of 1st Source Bank and Starke
County Bank under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to
encourage financial institutions to help meet the credit
needs of the local communities in which they operate
consistently with the safe and sound operation of such
institutions. To accomplish this end, the CRA requires
the appropriate federal supervisory authority to "assess the institution's record of meeting the credit
needs of its entire community, including low- and
moderate-income neighborhoods, consistent with the
safe and sound operation of such institution", and to
take that record into account in its consideration of
applications for deposit facilities.6
In connection with these applications, the Board has
received comments from an organization ("Protestant") alleging that 1st Source Bank's housing-related
lending in low- and moderate-income communities in
the South Bend, Indiana area is inadequate. Protestant
also maintains that 1st Source Bank has made a
disproportionately low number of home mortgage
loans to low-income minorities as compared with the
number of such loans made to low-income whites on
the basis of 1990 data filed under the Home Mortgage
Disclosure Act ("HMDA").
The Board has carefully reviewed the CRA performance records of 1st Source Bank and Starke County
Bank and all of the other relevant facts of record in
light of the CRA, the Board's regulations, and the
Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act
("Agency CRA Statement").7

Record of Performance

Under the CRA

A. CRA Performance Examinations
The Agency CRA Statement provides that a CRA
examination is an important and often controlling
factor in the consideration of an institution's CRA
record and that these reports will be given great weight
in the applications process.8 In this regard, 1st Source
Bank received a "satisfactory" rating at the examination for CRA performance conducted by the Federal

6. See 12 U.S.C. § 2903.
7. 54 Federal Register 13,742 (1989).
8. Id. at 13,745.




Reserve Bank of Chicago as of February 3, 1992
("February Examination").

B. Lending and Other Activities
1st Source Bank offers several loan products and
programs designed to assist in meeting the housingrelated credit needs of all the communities it serves,
including low- and moderate-income borrowers. For
example, single-family home credit products include
special products offered through the bank's Home
Ownership Opportunity Program ("HOOP")9 in addition to conventional mortgage loans and products
offered in government-sponsored loan programs
through agencies such as the Federal Housing Administration.10 1st Source Bank is a founding member of
the Community Home Buyers Corporation, which is a
non-profit entity currently being organized to provide
loans to low- and moderate-income borrowers who do
not qualify for customary mortgage financing.11 1st
Source Bank also participates in the "Gold Leaf
Mortgage Program" of the Indiana Housing Finance
Authority, which provides low interest rate mortgages
for first time home buyers and persons purchasing
homes in targeted inner-city areas. In addition, 1st
Source Bank offers home improvement loan products
both on standard terms and through the HOOP program, and a full range of other consumer credit products, including credit cards, installment and home
equity loans, and student loan products.
1st Source Bank also offers a full range of traditional
commercial loan products, which include small business and other CRA-related lending programs. 1st
Source Bank is a significant lender to small businesses
in its service communities, including low- and moderate-income areas. In 1991, the bank made 31 percent of
its business development calls in low- and moderateincome census tracts, which resulted in approximately
$2 million in small business loan originations. 1st
Source Bank also is an active participant in loan
programs sponsored by the Small Business Administration, having made 22 SBA loans in 1991 totalling
approximately $3.4 million. In addition, the bank is
actively involved in community development efforts
through affiliations with community groups, the purchase of municipal and industrial revenue bonds, and
loans made in urban enterprise zones, and to churches

9. The HOOP program covers both conventional and governmentsponsored loan products for both home purchase and home improvement, and offers special features including reduced down payment
requirements and more flexible underwriting criteria.
10. The February Examination concluded that 1st Source Bank
actively participates in government-sponsored loan programs.
11. 1st Source Bank has $3 million committed to this initiative over
a three-year period.

Legal Developments

and other non-profit organizations. The Board notes
that the February Examination concluded that the
bank's aggregate loan volume for all types of loans,
including small business, consumer, and housingrelated loans, was reasonable.

C. HMD A Data and Lending Practices
The Board has reviewed the 1990 and 1991 HMDA
data reported by 1st Source Bank in light of Protestant's comments12 and the February Examination.13
The Board notes that the February Examination found
no evidence of illegal discrimination or other illegal
credit practices at 1st Source Bank. In this regard, the
examination specifically considered the results of the
1990 HMDA data and the preliminary results of the
1991 HMDA data.14 The Board notes that in 1991, 1st
Source Bank made 4.8 percent of its conventional
mortgage loans, 15.4 percent of its government-sponsored mortgage loans, and 16.7 percent of its home
improvement loans in the South Bend area to minority
credit applicants. The Board also notes that minority
residents constitute approximately 11.3 percent of the
population of the South Bend, Indiana MSA.
1st Source Bank has implemented a number of
measures designed to increase the volume of its housing-related lending in low-and moderate-income and
minority areas. 1st Source Bank recently has instituted
a special loan review process for low- and moderateincome and minority customers, and has opened a new
branch office in a city neighborhood to serve low- and
moderate-income and minority segments of its community. In addition, 1st Source Bank has increased its
marketing efforts directed toward low- and moderateincome customers, become a member of the Community Home Buyers Corporation, and instituted the
HOOP program for low- and moderate-income borrowers. The Board expects that these measures, when
fully implemented, will result in further improvements
in the CRA lending record of 1st Source Bank in lowand moderate-income and minority areas.

12. In this regard, the Board notes that the data discussed in
Protestant's comments do not report all of 1st Source Bank's HMDArelated lending activity for 1990. Corrected data were submitted to the
Board and furnished to Protestant.
13. Under the HMDA, banks are required to report information
regarding both loan approvals and denials to banking agencies and the
public. This information includes data on the race, gender and income
of individual applicants, as well as the location of the property
securing the potential loan and the disposition of the application.
14. The Board previously has stated that HMDA data alone provide
only a limited measure of an institution's lending in the communities
it serves. The Board also recognizes that HMDA data have limitations
that make the data an inadequate basis, absent other information, for
conclusively determining whether an institution has engaged in illegal
discrimination on the basis of race or ethnicity in making lending
decisions.




239

1st Source Bank's ascertainment and marketing
efforts also are designed to assist in meeting housingrelated credit needs in these areas. Ascertainment
efforts include bank representatives' personal contacts
with members of the community and affiliations with
community organizations, as well as a formal business
development program. These ascertainment activities
have resulted in the creation of a special loan program
targeted at low-income segments of the bank's community. Marketing efforts, similarly, are varied and
thorough and include media designed to reach the
bank's entire delineated community. These efforts are
part of 1st Source Bank's formal CRA program. In
general, 1st Source Bank has instituted the types of
policies and procedures that the Board and the other
federal bank supervisory agencies have indicated contribute to an effective CRA program. The bank has
appointed a CRA officer and a CRA committee to
monitor CRA compliance and to assure that senior
management and the board of directors are informed
of CRA issues and the institution's CRA performance.
In addition, 1st Source Bank has appointed a CRA
Advisory Board comprised of members of senior management and community representatives. The bank
also has adopted a detailed CRA plan and a formal
CRA policy statement.
Conclusion on Convenience and Needs Factor
The Board has carefully considered all of the facts of
record, including the comments filed in this case, in
reviewing the convenience and needs factor under the
Bank Merger Act. Based on a review of the entire
record of these applications, including the most recent
CRA performance examinations of the institutions
involved in this case, the Board believes that the
efforts of 1st Source Bank and of Starke County Bank
to help meet the credit needs of all segments of the
communities served by these institutions, including
low- and moderate-income neighborhoods, and all
other convenience and needs considerations, are consistent with approval of these applications.
The Board recognizes that the record compiled in
these applications points to some areas for possible
improvement in the CRA performance of 1st Source
Bank. The Board expects 1st Source Bank to continue its progress in addressing the housing-related
credit needs of low- and moderate-income and minority neighborhoods in its service communities, and
of other segments of such communities, and to
implement fully the CRA plans and programs discussed in this Order and in 1st Source Bank's response to Protestant's comments. 1st Source Bank's
progress in these areas will be considered in future

240

Federal Reserve Bulletin • March 1993

applications by 1st Source or its subsidiaries to
expand their deposit-taking facilities.
Other Factors
1st Source Bank also has applied under section 9 of
the Federal Reserve Act (12 U.S.C. § 321) to establish branches at the present sites of Starke County
Bank in Portage and Michigan City, both in Indiana.
The Board has considered the factors it is required to
consider in applications for establishing and operating branches, and has concluded that the financial
condition of 1st Source Bank, the general character
of its management, and the proposed exercise of
corporate powers, as well as CRA and other convenience and needs considerations, are consistent with
approval and the purposes of section 9 of the Federal
Reserve Act. 15
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. This approval is specifically
conditioned upon compliance by 1st Source Bank with
all of the commitments made in connection with these
applications and with the conditions referenced in this
Order. For purposes of this action, the commitments
and conditions relied on in reaching this decision are
both conditions imposed in writing by the Board and,
as such, may be enforced in proceedings under applicable law. The acquisition shall not be consummated
before the thirtieth calendar day after the effective
date of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Chicago, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
January 4, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.

(12 U.S.C. § 1828(c)) (the "Bank Merger Act") to
merge with The State Bank, West, Jackson, Wyoming
("State Bank"), an affiliated bank, with Bank as the
surviving entity.1 Bank also has applied under section 9 of the Federal Reserve Act (12 U.S.C. § 321) to
establish a branch at the current location of State
Bank.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
given in accordance with the Bank Merger Act and the
Board's Rules of Procedure (12 C.F.R. 262.3(b)). As
required by the Bank Merger Act, reports on the
competitive effects of the merger were requested from
the United States Attorney General, the Office of the
Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corporation ("FDIC"). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in the Bank
Merger Act and in section 9 of the Federal Reserve
Act.
United Bancorporation, with total consolidated assets of $307 million,2 operates three banking subsidiaries in Wyoming.3 United Bancorporation is the
fourth largest commercial banking organization in Wyoming, controlling approximately $263.6 million in
commercial bank deposits, representing approximately 6.3 percent of total deposits in commercial
banking organizations in the state.4
In view of the fact that Bank and State Bank are
subsidiaries of the same bank holding company, and
based on all the other facts of record, the Board
concludes that the proposed transaction would have
no adverse effect on existing competition, and would
not increase the concentration of resources, in any
relevant banking market.
The Board has received comments from a bank in
Jackson ("Protestant") alleging that Bank's proposal
represents the establishment of a de novo branch in
Jackson in contravention of Wyoming law.5

JENNIFER J. JOHNSON

Associate Secretary of the Board

The Jackson State Bank
Jackson, Wyoming
Order Approving the Merger of Banks
The Jackson State Bank, Jackson, Wyoming
("Bank"), a state member bank, has applied under
section 18(c) of the Federal Deposit Insurance Act

15. See 12 U.S.C. §§ 322, 2903.




1. Both Bank and State Bank are wholly owned subsidiaries of
United Bancorporation of Wyoming, Inc., Jackson, Wyoming ("United Bancorporation"). In June 1992, the Federal Reserve Bank of
Kansas City, acting pursuant to delegated authority, approved United
Bancorporation's application to acquire 100 percent of the stock of
State Bank. See letter dated June 15, 1992, from Thomas M. Hoenig,
President, Federal Reserve Bank of Kansas City, to W. Richard
Scarlett, Chairman, United Bancorporation, Inc.
2. Asset data are as of September 30, 1992.
3. In addition to Bank and State Bank, United Bancorporation owns
99.9 percent of the outstanding voting shares of Shoshone First
National Bank, Cody, Wyoming.
4. Deposit data are as of June 30, 1992.
5. Protestant also raises concerns regarding the competitive effects
of the proposal. Since the proposal represents the corporate reorganization of the parent holding company's existing ownership interest,
the merger would not result in significantly adverse anticompetitive
effects. In examining State Bank's charter application, the Wyoming

Legal Developments

Wyoming branching law prohibits a state bank from
establishing a de novo branch in any community where
another bank already exists.6 Since there are four
banking institutions located in Jackson, Bank would
appear to be prohibited from establishing a de novo
branch in this community.
A separate provision of Wyoming law authorizes a
bank that merges with a second bank to retain, operate
and maintain the offices of the second bank and to
continue to provide services or functions at these
locations.7 Applicant argues that this provision governs the merger proposed in this case and authorizes
Bank to retain the branch in Jackson.
Protestant disputes the applicability of the branchby-merger provision to this proposal and contends that
to permit the establishment of a branch under its
provisions would constitute an evasion of Wyoming's
branch limitations. Bank's parent holding company
had stated for the record that it intended to establish a
branch in the future at State Bank's Jackson location.
Protestant notes that State Bank has only been operating for six months, and that Bank and State Bank
have the same directors.
The Attorney General for the State of Wyoming
and the State Banking Commissioner have both
indicated that Wyoming law provides separate statutory authorizations for establishing branches and
that Bank may establish a branch in Jackson by
merging with State Bank notwithstanding Wyoming's
limitation on de novo branching.8 Protestant's arguments were fully presented in the initial proceedings
to charter State Bank and renewed in Bank's application to merge with State Bank. In each proceeding,
Protestant's arguments were rejected by the State

State Banking Commissioner was required under Wyoming law to
consider, among other factors, the ability of the Jackson community
to support State Bank. Wyo. Stat. Ann. § 13-2-207 et seq. (Supp.
1992). The order approving State Bank's charter on February 14,
1992, by the Wyoming State Banking Board, took Protestant's competitive concerns into account.
6. Wyo. Stat. Ann. § 13-2-702.
7. Wyo. Stat. Ann. § 13-4-104. The context of the statutory reference to "banking house" and "office" indicates that these terms
include a "branch." Wyo. Stat. Ann. § 13-4-104(b).
8. See letter dated January 5,1993, from Joseph B. Meyer, Attorney
General, State of Wyoming, to Sue E. Mecca, State Banking Commissioner, Wyoming Division of Banking. In previously considering
the effect of a State law, the Board has examined the statute itself,
judicial interpretations of that law and, in the absence of judicial
interpretations, the opinions of the State's Attorney General or the
State's relevant administrative agency. When the Board has concluded that the opinion of the State authority is well reasoned,
consistent with the statutory language and not inconsistent with the
apparent intent of the statute or its legislative history, the Board has
accorded deference to the State authority. See Bancorp of Mississippi, 72 Federal Reserve Bulletin 257 (1986).




241

banking regulators, and Bank's proposal was found
to be consistent with Wyoming law. 9
Interpretations by state officials, as well as the
specific statutory provisions, support the conclusion
that Wyoming law provides separate means of establishing branches. For example, the branch-by-merger
authorization, enacted by the Wyoming legislature
prior to the de novo branching authorization, specifies
that its provisions do not authorize de novo branching.10 The Board believes that by interpreting each
provision as providing a separate authorization for
establishing a branch — either de novo or by merger—
both statutory provisions may be given full effect.11
The facts of record also indicate that the proposal
involves the merger of separately incorporated, chartered and capitalized institutions.12 State Bank's officers and employees do not directly perform any services for customers of Bank other than those services
that would be provided for customers of other area
banks.13 State Bank also maintains its own separate
books of account, issues its own distinctive checks
and uses its own stationery. Moreover, State Bank's
customers are able to deposit and withdraw their funds
with respect to their accounts only at State Bank. The
Board has previously found that such factors are
useful in determining that a bank has been operated as
a stand-alone institution and not as a de facto branch
of an affiliate.14 For the reasons stated above, the
Board concludes that Bank's proposal is consistent

9. See Bank Charter Decision dated February 14, 1992, by the
Wyoming State Banking Board, and letter dated October 30, 1992,
from Sue E. Mecca, State Banking Commissioner, Wyoming Division
of Banking, to W. Richard Scarlett, Chairman, The Jackson State
Bank, approving Bank's branch application.
10. Wyo. Stat. Ann. § 13-4-104(c).
11. Protestant disputes this construction and argues that the requirement in the branch-by-merger provision that retained offices provide
services in the same manner as "had the consolidation or merger not
occurred" was intended to prevent a branch not otherwise authorized
under Wyoming law from being retained. See Wyo. Stat. Ann.
§ 13-4-104(b). This construction however, conflicts with the Attorney General's conclusion that the de novo and branch-by-merger
provisions of Wyoming law provide separate means of establishing a
branch in Wyoming.
12. State Bank was chartered in February 1992, and has been in
operation six months. In its most recent consolidated report of
condition, filed with the Wyoming Department of Audit, State Bank
reported receiving deposits in excess of $3 million between July 1992
and September 1992.
13. In this regard, State Bank has public notices declaring that State
Bank is not a branch of Bank, and does not conduct transactions on
behalf of Bank.
14. See Grandview Bank and Trust Co. v. Board of Governors of the
Federal Reserve System, 550 F.2d 415 (8th Cir. 1977), cert, denied,
434 U.S. 821 (1977); North Hills Bank v. Board of Governors of the
Federal Reserve System, 506 F.2d 623 (8th Cir. 1974). See also
Commerce Bancshares, Inc., 64 Federal Reserve Bulletin 803 (1978);
United Banks of Colorado, Inc., 64 Federal Reserve Bulletin 37
(1978); First International Bancshares, Inc., 63 Federal Reserve
Bulletin 744 (1977).

242

Federal Reserve Bulletin • March 1993

with Wyoming's authorization for retaining a branch
after a bank merger.
The financial and managerial resources and future
prospects of Bank, State Bank and United Bancorporation are consistent with approval. The Board also
finds that considerations relating to the convenience
and needs of the community to be served are consistent with approval. The Board also has considered the
factors it is required to consider when approving
applications for establishment of branches pursuant to
section 9 of the Federal Reserve Act and finds those
factors to be consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved.15 The Board's approval is
specifically conditioned upon compliance by Bank
15. Protestant has requested that the Board hold a public meeting or
hearing on these applications. The Board is not required under the
Bank Merger Act or the Federal Reserve Act to hold a public hearing
or meeting in this case. Under the Board's rules, the Board may, in its
discretion, hold a public hearing or meeting on an application to clarify
factual issues related to the application and to provide an opportunity
for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d).
The Board has carefully considered this request. In the Board's
view, interested parties have had a sufficient opportunity to present
written submissions, and have submitted substantial written comments that have been considered by the Board. In light of this, the

with all the commitments made in its application. For
purposes of this action, the commitments discussed in
this order are considered conditions imposed in writing by the Board in connection with its findings and
decisions, and, as such, may be enforced in proceedings under applicable law.
This transaction should not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Federal Reserve Bank
of Kansas City, acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 25, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, Lindsey, and Phillips. Absent and
not voting: Governor La Ware.
JENNIFER J. JOHNSON

Associate Secretary of the Board

Board has determined that a public meeting or hearing is not necessary
to clarify the factual record in these applications, or otherwise
warranted in this case. Accordingly, the request for a public meeting
or hearing on these applications is hereby denied.

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

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

Bank Holding Company
Grenada Sunburst System
Corporation,
Grenada, Mississippi

Acquired
Thrift
Eastover Bank for
Savings,
Jackson, Mississippi

Surviving
Bank(s)
Sunburst Bank,
Grenada,
Mississippi

Approval
Date
January 22, 1993

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT

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




Legal Developments

243

Section 3

Applicant(s)
Texas East BanCorp, Inc.,
Jacksonville, Texas

Effective
Date

Bank(s)
CBC, Inc.,
Shreveport, Louisiana
TFC, Inc.,
Shreveport, Louisiana
WhiFin, Inc.
Shreveport, Louisiana
Cherokee Bancorp, Inc.,
Long view, Texas
Timpson Financial Corporation,
Timpson, Texas
Whitehouse Financial Corporation,
Whitehouse, Texas

January 29, 1993

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT

By Federal Reserve

Banks

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

Section 3

Applicant(s)
Citizens Bancshares of
Woodville, Inc.,
Woodville, Wisconsin
CNB Financial Corporation,
Kansas City, Kansas
The Employees Stock Ownership
Plan and Trust of Southwest
Georgia Financial Corporation,
Moultrie, Georgia
The First National Bank of
Berryville Employee Stock
Ownership Trust,
Berryville, Arkansas
First National Bank of Sauk
Centre Retirement Savings
Plan and Trust,
Sauk Centre, Minnesota
First Rushmore Bancorporation,
Inc.,
Worthington, Minnesota




Bank(s)
Elmwood Financial
Services, Inc.,
Elmwood, Wisconsin
Security State Bank of
Fort Scott,
Fort Scott, Kansas
Southwest Georgia
Financial Corporation,
Moultrie, Georgia

Reserve
Bank

Effective
Date

Minneapolis

December 31, 1992

Kansas City

January 7, 1993

Atlanta

December 30, 1992

The First National Bank
of Berryville,
Berryville, Arkansas

St. Louis

January 12, 1993

Sauk Centre Financial
Services, Inc.,
Sauk Centre, Minnesota

Minneapolis

January 14, 1993

First Rushmore
Bancshares, Inc.,
Rushmore, Minnesota

Minneapolis

January 8, 1993

244

Federal Reserve Bulletin • March 1993

Section 3—Continued
Applicant(s)
First Wilton Bancshares, Ltd.,
Wilton, North Dakota
Florida Barnett Corporation,
Jacksonville, Florida
F.S.B. Properties, Inc., ESOP,
Quinton, Oklahoma
Hopeton Bancshares, Inc.,
Hopeton, Oklahoma
Lucan Bancshares, Inc.,
Lucan, Minnesota
Mark Twain Bancshares, Inc.,
St. Louis, Missouri
Mercantile Bancorporation Inc.,
St. Louis, Missouri
Northome Bancshares, Inc.,
Northome, Minnesota
OMNIBANCORP,
Denver, Colorado
Prairie State Bancshares, Inc.,
Oakley, Kansas
United Missouri Bancshares,
Inc.,
Kansas City, Missouri
United Subsidiary, Inc.,
Kansas City, Missouri
United Missouri Bancshares,
Inc.,
Kansas City, Missouri
United Subsidiary, Inc.,
Kansas City, Missouri
Upper Rio Grande Bank
Corporation,
Del Norte, Colorado
Wally Bancorp, Inc.,
Parker, Colorado




Bank(s)

Reserve
Bank

Effective
Date

First State Bank of
Wilton,
Wilton, North Dakota
Barnett Bank of
Hillsborough County,
Tampa, Florida
F.S.B. Properties, Inc.,
Quinton, Oklahoma
The Hopeton State Bank,
Hopeton, Oklahoma
State Bank of Lucan,
Lucan, Minnesota
First Shawnee
Bancshares, Inc.,
Shawnee, Kansas
The First National Bank
of Flora,
Flora, Illinois
First State Bank of
Northome,
Northome, Minnesota
Met-State Corp.,
Kansas City, Missouri
Jent, Inc.,
Oakley, Kansas
Farmers Banshares of
Abilene, Inc.,
Abilene, Kansas

Minneapolis

December 28, 1992

Atlanta

January 13, 1993

Kansas City

January 8, 1993

Kansas City

December 31, 1992

Minneapolis

January 8, 1993

St. Louis

December 30, 1992

St. Louis

January 22, 1993

Minneapolis

January 4, 1993

Kansas City

December 30, 1992

Kansas City

January 13, 1993

Kansas City

January 6, 1993

Overland Park
Bancshares, Inc.,
Overland Park, Kansas

Kansas City

January 6, 1993

The Rio Grande County
Bank,
Del Norte, Colorado
Community Bank of
Parker,
Parker, Colorado

Kansas City

January 8, 1993

Kansas City

January 8, 1993

Legal Developments

245

Section 4
Applicant(s)
BankAmerica Corporation,
San Francisco, California
Barnett Merger Corporation,
Jacksonville, Florida
Citizens Bankshares, Inc.,
Shawano, Wisconsin
Norwest Corporation,
Minneapolis, Minnesota
Norwest Corporation,
Minneapolis, Minnesota
Withee Bank Shares, Inc.,
Withee, Wisconsin

Nonbanking
Activity/Company

Reserve
Bank

First Associates
Financial, Inc.,
Tampa, Florida
Barnett Banks Trust
Company, N.A.,
Jacksonville, Florida
Wisconsin Finance
Corporation,
Shawano, Wisconsin
Boris Systems, Inc.,
East Lansing, Michigan
Norwest Insurance
Wyoming, Inc.,
Wheatland, Wyoming
to engage de novo in the
ownership and
development of a
low-income housing
project

Effective
Date

San Francisco

December 30, 1992

Atlanta

January 28, 1993

Chicago

December 30, 1992

Minneapolis

January 14, 1993

Minneapolis

January 7, 1993

Chicago

January 21, 1993

Sections 3 and 4

Applicant(s)
Tower Bancshares, Inc.,
Cloquet, Minnesota

Nonbanking
Activity/Company
Tower Soudan Agency,
Inc.,
Tower, Minnesota
State Bank of Tower,
Tower, Minnesota

Reserve
Bank
Minneapolis

Effective
Date
January 8, 1993

APPLICATIONS APPROVED UNDER BANK MERGER ACT

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

Applicant(s)
Suntrust Banks, Inc.,
Atlanta, Georgia




Bank(s)
Sun Bank/Gulf Coast,
Sarasota, Florida

^Date^
January 26, 1993

246

Federal Reserve Bulletin • March 1993

APPLICATIONS APPROVED UNDER BANK MERGER ACT

By Federal Reserve

Banks

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

Applicant(s)
Fifth Third Bank,
Cincinnati, Ohio
First Florida Bank,
Tampa, Florida
First Florida Bank,
Tampa, Florida

Reserve
Bank

Bank(s)
The First National Bank,
Dayton, Ohio
Barnett Bank of
Hillsborough County,
Tampa, Florida
Barnett Bank of Tampa,
N.A.,
Tampa, Florida

Effective
Date

Cleveland

January 7, 1993

Atlanta

January 13, 1993

Atlanta

January 13, 1993

PENDING CASES INVOLVING THE BOARD OF GOVERNORS

This list of pending cases does not include suits
against the Federal Reserve Banks in which the Board
of Governors is not named a party.
Sisti v. Board of Governors, No. 93-0033 (D.D.C.,
filed January 6, 1993). Challenge to Board staff
interpretation with respect to margin accounts.
U.S. Check v. Board of Governors. No. 92-2892
(D.D.C., filed December 30, 1992). Challenge to
partial denial of request for information under the
Freedom of Information Act.
CBC, Inc. v. Board of Governors. No. 92-9572 (10th
Cir., filed December 2, 1992). Petition for review of
civil money penalty assessment against a bank
holding company and three of its officers and
directors for failure to comply with reporting requirements.
DLG Financial Corporation v. Board of Governors.
No. 392 Civ. 2086-G (N.D. Texas, filed October 9,
1992). Action to enjoin the Board and the Federal
Reserve Bank of Dallas from taking certain enforcement actions, and seeking money damages on
a variety of tort and contract theories. On October
9, 1992, the court denied plaintiffs' motion for a
temporary restraining order. On November 20,
1992, the Board filed a motion to dismiss. On
December 17, 1992, plaintiffs filed an amended
complaint.
Zemel v. Board of Governors. No. 92-1057 (D. District
of Columbia, filed May 4, 1992). Age Discrimination
in Employment Act case.




Fields v. Board of Governors. No. 92-3920 (6th Cir.,
filed September 14, 1992). Federal Tort Claims Act
complaint alleging misrepresentation during the application process. The district court for the Northern District of Ohio granted the Board's motion to
dismiss on August 10, 1992. On September 14, 1992,
the plaintiff filed a notice of appeal. The action was
voluntarily dismissed by plaintiff/appellant on December 18, 1992.
State of Idaho, Department of Finance v. Board of
Governors. No. 92-70107 (9th Cir., filed February 24, 1992). Petition for review of Board order
returning without action a bank holding company
application to relocate its subsidiary bank from
Washington to Idaho. The Board's brief was filed on
June 29, 1992. Oral argument was held October 6,
1992.
In re Subpoena Served on the Board of Governors,
Nos. 91-5427, 91-5428 (D.C. Cir., filed December 27,1991). Appeal of order of district court, dated
December 3, 1991, requiring the Board and the
Office of the Comptroller of the Currency to produce
confidential examination material to a private litigant. On June 26,1992, the court of appeals affirmed
the district court order in part, but held that the bank
examination privilege was not waived by the agencies' provision of examination materials to the examined institution, and remanded for further consideration of the privilege issue. On August 6,1992, the
district court ordered the matter held in abeyance
pending settlement of the underlying action.

Legal Developments

First Interstate BancSystem of Montana, Inc. v.
Board of Governors, No. 91-1525 (D.C. Cir., filed
November 1, 1991). Petition for review of Board's
order denying on Community Reinvestment Act
grounds the petitioner's application under section
3 of the Bank Holding Company Act to merge with
Commerce BancShares of Wyoming, Inc. On December 14, 1992, the court granted the parties'
joint motion to dismiss the case.
Board of Governors v. Kemal Shoaib. No. CV 915152 (C.D. California, filed September 24, 1991).
Action to freeze assets of individual pending administrative adjudication of civil money penalty
assessment by the Board. On October 15, 1991, the
court issued a preliminary injunction restraining
the transfer or disposition of the individual's assets.
Board of Governors v. Ghaith R. Pharaon. No.
91-CIV-6250 (S.D. New York, filed September 17,
1991). Action to freeze assets of individual pending
administrative adjudication of civil money penalty
assessment by the Board. On September 17, 1991,
the court issued an order temporarily restraining
the transfer or disposition of the individual's assets.
Fields v. Board of Governors. No. 3:91CV069 (N.D.
Ohio, filed February 5, 1991). Appeal of denial of
request for information under the Freedom of Information Act. The Board's motion for summary judgment was granted in part and its motion to dismiss
was denied on June 23, 1992. The action was dismissed on January 15, 1993.

FINAL ENFORCEMENT DECISION ISSUED BY THE
BOARD OF GOVERNORS
In the Matter of
CBC, INC.,
Clovis, New Mexico and
LYNELL G. SKARDA, LANGDON L. SKARDA,
and KENT CARRUTHERS
Institution-Affiliated Parties of

CBC, Inc.,
Clovis, New Mexico
Respondents.
Docket Nos. 90-033-CMP-BHC
90-033-CMP-I1
90-033-DMP-I2
90-033-CMP-I3




247

Final Decision and Order
This is an administrative civil money penalty action
by the Board of Governors of the Federal Reserve
System (the "Board") against a bank holding company, CBC, Inc. ("CBC"), and three officers and
directors of CBC, Lynell G. Skarda, Langdon L.
Skarda, and Kent Carruthers (collectively "Respondents").
On April 5, 1991, the Board issued Notices of
Assessment of Civil Money Penalties (the "Notices")
against each of the Respondents pursuant to
12 U.S.C. § 1818(i)(2) and 12 U.S.C. § 1847(b). The
Notices alleged, inter alia, that the individual Respondents have been responsible for CBC's failure to file
annual reports with the Board containing consolidated
financial statements for the year 1988 that have been
certified by an independent public accountant, as
required by the Board's Regulation Y and Form FR
Y-6.1 As explained in the Notices, CBC failed to
comply with the Board's requirements in connection
with the 1988 and 1989 Y-6 reports filed by CBC in
March, 1989 and March, 1990, respectively, even
though on August 30, 1988, those requirements were
upheld by the United States Court of Appeals for the
Tenth Circuit in litigation commenced by CBC against
the Board.2
The Board's Notices assessed penalties in the
amounts of $10,000 each against CBC and Lynell
Skarda and $5,000 each against Langdon Skarda and
Kent Carruthers. Respondents opposed the Board's
assessments and requested a hearing. The case was
subsequently referred to Administrative Law Judge
Paul S. Cross.
In this case, the material facts are not disputed by
the parties. Instead, respondents dispute whether, in
light of the uncontested facts, an assessment of civil
money penalties is warranted. Respondents also contest the amount of the penalties that should be assessed. Accordingly, the parties entered into written
stipulations as to the relevant facts upon which these
matters should be decided. After the parties submitted
proposed findings of fact and conclusions of law, an
oral argument was held before the Administrative Law
Judge on June 1, 1992.

1. The Board's Form Y-6 requires each bank holding company to
submit an annual report within 90 days of the end of the company's
fiscal year. The report must include the company's most recent two
year comparative financial statements. Thus, financial statements for
1988 would be submitted with both the 1988 and 1989 Y-6 reports.
In addition, a company with total consolidated assets of $150 million
or more must file consolidated financial statements that are certified
by an independent public accountant and that are prepared in accordance with generally accepted accounting principles.
2. CBC, Inc. v. Board of Governors, 855 F.2d 688 (10th Cir. 1988),
cert, denied, 489 U.S. 1096 (1989).

248

Federal Reserve Bulletin • March 1993

Based on the stipulated facts, the pleadings submitted, and the arguments made at the hearing, the
Administrative Law Judge issued a recommended
decision and order on June 9, 1992, in which he
recommended that the Board impose penalties against
each of the Respondents in the amounts set forth in the
Notices. The Judge also adopted proposed findings of
fact and conclusions of law. On July 15, 1992, Respondents filed exceptions to the Judge's recommended
decision and order and to his proposed findings and
conclusions.
Upon review of the administrative record, including
the exceptions filed by Respondents, the Board hereby
issues its Final Decision and Order. The Board adopts,
and incorporates herein by reference, the Administrative Law Judge's Decision and Recommended Order
and proposed Findings of Fact and Conclusions of
Law, as supplemented below, together with the reasoning and citations contained therein. Accordingly,
the Board hereby assesses civil money penalties in the
amounts of $10,000 each against CBC and Lynell G.
Skarda; and $5,000 each against Langdon L. Skarda
and Kent Carruthers.
Pursuant to the applicable statutes, the Board must
take into account the appropriateness of the penalties
with respect to several mitigating factors: the size of
financial resources and good faith of each of the
Respondents; the gravity of the violations, the history
of previous violations and such other matters as justice
may require. 12 U.S.C. §§ 1847(b)(2), 1818(i)(2)(G). In
light of the fact that the parties have stipulated to the
material facts and because the legal issues were determined previously by the Court of Appeals, the Board
has focused particular attention on those factors.
In considering the "gravity" of the violations, the
Board notes that its reporting requirements are central
to its responsibility to supervise bank holding companies. The requirement of certified financial statements
ensures that the accounting systems and internal controls of a holding company will be reviewed by independent experts. The certification provides the Board
with an increased measure of reliability regarding the
financial statements. See CBC, Inc. v. Board of Governors, supra, 855 F.2d at 691. The independent audit
makes it easier to uncover fraud, misappropriation, or
negligence in the operation of the institution. Respondents' refusals to comply with the applicable reporting
requirements, were not trivial, nor were they technical
deficiencies. Penalties are warranted in order to deter
Respondents and others from future noncompliance.
Respondents' willful and continuing noncompliance
following CBC's unsuccessful legal challenge evidences a lack of good faith. The record reflects that in
March, 1987 the Board expressly denied CBC's request for a stay of the certification requirement while




the litigation was pending. CBC never sought a stay of
the Board's requirements from the court. Thus, after
the Board's requirements were upheld by the Court of
Appeals in 1988, good faith required that Respondents
abide by the Court of Appeals' ruling with respect to
the 1988 financial statements.
CBC's financial statements for subsequent years
have been certified in compliance with the Board's
requirements. This has been considered as a mitigating
factor that weighs against assessing larger penalties in
this case, but it is not sufficient in light of the other
factors discussed below to lead the Board to conclude
that no penalties should be assessed in this case.
The Board is also authorized to consider "such
other
factors
as
justice
may
require."
12 U.S.C. §§ 1847(b)(2), 1818(i)(2)(G). The Board believes that one such factor is whether the parties
involved in the violations derived any economic benefit from the misconduct. See 12 C.F.R. 263.62. Respondents submitted evidence for the record indicating the likely cost of obtaining certified financial
statements for the 1988 fiscal year. This cost was
estimated by an accounting firm to be approximately
$30,000 to $60,000. CBC also asserted that it actually
paid about $10,000 to obtain non-certified statements
from an independent accounting firm. Thus, CBC
saved between approximately $20,000 and $50,000 in
auditor's fees. Under these circumstances, the penalties assessed by the Board, which total $30,000, are
reasonably calculated to ensure that Respondents do
not derive substantial economic benefit from the violations.3
Respondents attempt to compare the Board's assessments in this case to the amounts assessed in other
cases. Such comparisons are of little relevance. A
determination as to the appropriate amount of any
monetary penalty necessarily depends on the facts and
circumstances of the particular case. Thus, the
amounts assessed in the cases cited by Respondents
are not useful in this case.
The Board also offered Respondents an opportunity
to demonstrate that their financial resources warranted
the assessment of smaller amounts. On June 21, 1990,
the Board's General Counsel wrote to Respondents to
advise them that the Board's staff intended to recommend the assessment of civil money penalties against
them. At that time, Respondents were requested to
submit financial statements and any evidence that
would mitigate against the assessment of a civil money
penalty. On July 5, 1990, a reply was submitted on
behalf of all of the Respondents, but no financial
3. There is no authority to support Respondents' claim that the
Board must consider as a mitigating factor, the amounts that they have
expended in defending this proceeding.

Legal Developments

information was included. Respondents also failed to
submit any such information to the Administrative
Law Judge.
Evidence concerning the size of a respondent's
financial resources is inherently within the control of
the respondent. Consequently, the Board does not
carry the entire burden of proof concerning the Respondents' financial condition. See Stanley v. Board of
Governors, 940 F.2d 267, 274 (7th Cir. 1991). After
giving Respondents an opportunity to supplement the
record, which they did not take, the Board has based
its assessments on the information available to it from
reports of inspections of CBC and from reports of
examinations of CBC's subsidiary bank.
Together, Lynell and Langdon Skarda own over
99 percent of CBC's shares. CBC's assets largely
consist of its investment in its subsidiary bank. CBC's
total equity was $18.2 million as of December 31, 1990
and was $15.3 million as of June 30, 1991.4 CBC has
received substantial dividends from its subsidiary
bank in recent years, which in turn have been used by
CBC to pay substantial dividends to its shareholders.
The record also reflects that as the president of CBC's
subsidiary bank, Kent Carruthers receives compensation adequate to support the penalty assessed against
him. Thus, the amounts assessed are consistent with
each Respondent's financial resources and do not
constitute any undue burden.
There are mitigating factors weighing in Respondents' favor, such as the fact that for 1989 and all
subsequent years, CBC has complied with the certification requirements. However, the relatively small
amounts assessed are consistent with this fact and the
fact that Respondents do not have a history of other
violations.
The violations charged in this case are continuing.
They have been outstanding since March 29, 1989, the
date on which CBC's Y-6 report for 1988 was filed.
Consequently, as of April 5, 1991, the date that the
Board's Notices were issued, the total amount that
could have been assessed against each of the Respondents was over $600,000. After consideration of the
required factors, however, the Board has assessed
penalties representing only a fraction of the maximum
amount authorized by the statute. Nevertheless, the
assessments reflect the Board's judgment that the
imposition of penalties for the Respondents' knowing
violation of the Board's reporting requirements is
appropriate in order to deter future noncompliance.

249

offender along with Lynell Skarda, who as controlling
shareholder of CBC has played the leading role in
orchestrating CBC's noncompliance.
NOW, THEREFORE, IT IS HEREBY ORDERED, pursuant to section 8(i) of the Federal Deposit Insurance Act, as amended (12 U.S.C.
§ 1818(i)), and section 8(b) of the Bank Holding
Company Act, as amended (12 U.S.C. § 1847(b)), that
the below-named respondents are hereby assessed,
and shall forfeit and pay as hereinafter provided, civil
money penalties in the amounts specified below:
1. CBC, Inc. is hereby assessed and shall forfeit and
pay a civil money penalty in the amount of Ten
Thousand Dollars ($10,000);
2. Lynell G. Skarda is hereby assessed and shall
forfeit and pay a civil money penalty in the amount
of Ten Thousand Dollars ($10,000);
3. Langdon L. Skarda is hereby assessed and shall
forfeit and pay a civil money penalty in the amount
of Five Thousand Dollars ($5,000); and
4. Kent Carruthers is hereby assessed and shall
forfeit and pay a civil money penalty in the amount
of Five Thousand Dollars ($5,000).
IT IS FURTHER ORDERED, that payment of the
assessed penalties set forth herein shall be made on or
before the sixtieth day following the effective date of
this Order, payable in full to the order of the Board of
Governors of the Federal Reserve System, who shall
make remittance of the same to the Treasury of the
United States as required by statute. Payment of the
assessed penalty shall be transmitted to:
William W. Wiles, Secretary
Board of Governors of the Federal
Reserve System
20th and C Streets, N.W.
Washington, D.C. 20551.
By order of the Board of Governors, effective this
17th day of November, 1992.
WILLIAM W . WILES

Secretary of the Board

FINAL ENFORCEMENT ORDERS ISSUED BY THE
BOARD OF GOVERNORS

The greater amounts imposed upon CBC and Lynell
Skarda are warranted because CBC is the principal

Joe R. Clarke, III
Forest, Mississippi

4. The June 30, 1991 data was not yet available at the time the
Board's Notices were issued.

The Federal Reserve Board announced on January 26,
1993, the issuance of an Order of Assessment of a Civil
Money Penalty against Joe R. Clarke, III, an institu-




250

Federal Reserve Bulletin • March 1993

tion-affiliated party of the Bank of Forest, Forest,
Mississippi.

the Federal Reserve Bank of Dallas and Daingerfield
Bancshares, Inc., Daingerfield, Texas.

WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS

PT Bank Niaga
Jakarta, Indonesia

Daingerfield B a n c s h a r e s , I n c .
Daingerfield, T e x a s

The Federal Reserve Board announced on January 14,
1993, the execution of a Written Agreement between
the Federal Reserve Bank of San Francisco and the PT
Bank Niaga, Jakarta, Indonesia, and its Los Angeles
Agency.

The Federal Reserve Board announced on January 12,
1993, the execution of a Written Agreement between




Financial and Business Statistics
CONTENTS

WEEKLY REPORTING COMMERCIAL BANKS

A3 Guide to Tabular Presentation

Assets and liabilities
A21 All reporting banks
A23 Branches and agencies of foreign banks

Domestic Financial Statistics
MONEY STOCK AND BANK CREDIT

FINANCIAL MARKETS

A4

A24 Commercial paper and bankers dollar
acceptances outstanding
A24 Prime rate charged by banks on short-term
business loans
A25 Interest rates—money and capital markets
A26 Stock market—Selected statistics
A27 Selected financial institutions—Selected assets
and liabilities

A5
A6
A7

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

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

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

FEDERAL FINANCE
A27
A28
A29
A29

Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types
and ownership
A30 U.S. government securities
dealers—Transactions
A31 U.S. government securities dealers—Positions
and financing
A3 2 Federal and federally sponsored credit
agencies—Debt outstanding

MONETARY AND CREDIT AGGREGATES
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Bank debits and deposit turnover
A17 Loans and securities—All commercial banks

COMMERCIAL BANKING INSTITUTIONS
A18 Major nondeposit funds
A19 Assets and liabilities, last-Wednesday-of-month
series




SECURITIES MARKETS AND
CORPORATE FINANCE
A33 New security issues—State and local
governments and corporations
A34 Open-end investment companies—Net sales
and asset position
A34 Corporate profits and their distribution
A34 Nonfarm business expenditures on new
plant and equipment
A35 Domestic finance companies—Assets and
liabilities and business credit

2

Federal Reserve Bulletin • March 1993

Domestic Financial Statistics—Continued
REAL ESTATE
A36 Mortgage markets
A37 Mortgage debt outstanding

A55 Foreign branches of U.S. banks—Balance
sheet data
A57 Selected U.S. liabilities to foreign official
institutions

REPORTED BY BANKS
IN THE UNITED STATES

CONSUMER INSTALLMENT CREDIT
A3 8 Total outstanding and net change
A38 Terms
FLOW OF FUNDS
A39
A41
A42
A43

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

Domestic Nonfinancial Statistics

A57
A58
A60
A61

Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches

REPORTED BY NONBANKING BUSINESS
ENTERPRISES IN THE UNITED STATES
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners

SELECTED MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross domestic product and income
A52 Personal income and saving

International Statistics
SUMMARY STATISTICS
A53
A54
A54
A54

U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks




SECURITIES HOLDINGS AND TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and
notes—Foreign transactions

INTEREST AND EXCHANGE RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates

A69 Guide to Statistical Releases and
Special Tables
SPECIAL TABLE
A71 Assets and liabilities of life insurance companies,
September 30, 1992

A3

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

0
ATS
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
G-10

GENERAL

ABBREVIATIONS

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

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

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

INFORMATION

In many of the tables, components do not sum to totals because
of rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative

figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also




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

A4

DomesticNonfinancialStatistics • March 1993

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

1992

Monetary and credit aggregate
Q2

Q3

Q4

23.4
23.5
24.0
9.2

14.9
15.4
14.8
7.1

9.3
9.9
8.4
10.5

16.5
4.2
2.2
1.5
4.3

9.8
.4
-1.3
,6r
5.4

-.1
-7.4

Aug.

Sept.

27.9
27.4
29.2
13.4

20.2
21.3
21.1
16.6

24.4
23.4
23.7
16.7

42.0
40.9
45.6
14.3

20.9 r
22. l r
21.8
8.7

9.1
6.8
8.7
9.2

10.3
.2
-.1
i.r
4.2

17.6
3.6
.9
n.a.
n.a.

15.7
3.3
3.9
4.1 r
3.9

19.1
3.7
\.9
4.2 r
3.3

22.7 r
5.3 r
,5r
2.0 r
2.7

13.9*
3.5
1.9*
5.4
6.4

6.2
-1.2
-4.4
n.a.
n.a.

-3.0
-9.3

-3.6
-1.6

-1.8
-12.2

-1.4
6.5

-2.4r
-6.6

-1.6r
-23.4r

— .7r
—6.5r

-4.2
-20.9

19.1
-18.9
-18.2

12.0
-13.3
-14.8

10.0
-16.7
-16.0)

13.2
-16.9
-16.8

13.4
-19.4
-10.2

16.7
-16.8
-16.7

14.7
-18.0
-25.8 1

10.5r
-18.0
-11.8 1

5.4
-10.8
-8.7

22.4
-24.3
-29.7

18.8
-29.4
-36.7

8.4
-17.7
-17.1

9.3
-20.9
-11.9

9.2
-17.2
-22.4

10.8
-15.9
-3.5

8.8
-26.6
-1.8

10.4r
-20.9 1
-24.7

5.6
-20.6
-23.5

-.3
26.9

-4.0
20.0

-8.2
40.0

-1.0
-24.1

-6.8
54.9

-17.2
.0

10.1
-64.1

3.8
-12.3

-5.2
-54.3

10.0
2.5

14.4
2.5

10.8
1.9

n.a.
n.a.

9.7
1.9

5.0
2.7

-1.4
4.1

10.5
5.0

Oct.

institutions2

1
2
3
4

Reserves of depository
Total
Required
Nonborrowed
Monetary base 3

5
6
7
8
9

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

Nontrgnsaction
10 In M2*
11 In M3 only 6

Q1

components

Time and savings deposits
Commercial banks
Savings, including MMDAs
Smalltime 7 .
Large time 8,9
Thrift institutions
15 Savings, including MMDAs
16 Small time 7
17 Large time8'*

12
13
14

Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only

Nov.

Dec.

4

Debt components
20 Federal
21 Nonfederal

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




n.a.
n.a.

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

Money Stock and Bank Credit

A5

1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1
Millions of dollars

Oct.

Average of
daily figures

Average of daily figures for week ending on date indicated

1992

1992

Nov.

Dec.

Nov. 18

Nov. 25

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

SUPPLYING RESERVE F U N D S

1 Reserve Bank credit outstanding
U.S. government securities
Bought outright—System account
2
3
Held under repurchase agreements . . .
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements . . .
6
Acceptances
Loans to depository institutions
Adjustment credit
7
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets

321,292

327,923r

335,875

327,866

329,972

330,125

329,388

333,627

338,688

342,157

282,073
858

288,434
2,640

295,258
3,780

286,364
4,402

291,828
2,092

292,902
1,301

293,520
470

294,929
1,865

296,138
6,119

297,076
6,432

5,534
69
0

5,534
145
0

5,477
174
0

5,534
177
0

5,534
122
0

5,534
63
0

5,534
6
0

5,485
0
0

5,450
103
0

5,434
546
0

29
115
0
572
32,041

81
39
0
575r
30,474r

62
18
1
1,311
29,795

49
39
0
624
30,677

153
34
0
333
29,876

134
26
0
636
29,529

11
17
0
441
29,389

20
18
2
1,592
29,717

59
20
1
831
29,969

78
18
0
2,386
30,187

12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding

11,059
10,018
21,361r

11,059
10,018
21,396r

11,057
8,663
21,447

11,059
10,018
21,395r

11,059
10,018
21,404r

11,059
10,018
21,413

11,058
10,018
21,427

11,057
8,304
21,441

11,057
8,018
21,455

11,056
8,018
21,469

320,222r
518

324,505r
504

330,563
515

324,927r
500

325,584r
495

327,253
525

328,045
521

329,149
517

331,166
512

334,120
510

4,946
330

5,617
284

6,011
201

5,184
247

5,787
199

5,602
183

5,076
177

5,002
203

7,764
220

6,320
207

5,782
286

5,898
293

5,953
295

6,006
301

5,756
284

6,066
292

5,788
270

5,845
293

5,780
313

6,335
290

ABSORBING RESERVE F U N D S

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

8,108

7,834

8,109

7,887

8,177

7,984

7,728

8,052

8,399

8,402

23,540

25,460

25,394

25,286

26,169

24,709

24,286

25,369

25,063

26,518

Dec. 16

Dec. 23

Dec. 30

End-of-month figures
Oct.

Nov.

Wednesday figures

Dec.

Nov. 18

Nov. 25

Dec. 2

Dec. 9

SUPPLYING RESERVE F U N D S

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

320,055

331,113r

342,513

321,990

329,480

329,617

328,943

334,709

347,401

343,648

282,877
0

292,696
3,256

295,011
7,463

286,719
150

292,340
343

293,076
1,415

293,426
75

297,995
0

296,066
13,132

296,212
5,130

5,534
0
0

5,534
254
0

5,413
631
0

5,534
0
0

5,534
0
0

5,534
0
0

5,534
5
0

5,450
0
0

5,450
277
0

5,413
646
0

11
70
0
500
31,064

10
25
0
-20"^
29,358r

671
4
0
3,255
30,067

155
39
0
100
29,293

834
30
0
707
29,692

11
22
0
247
29,312

14
17
3
323
29,546

15
22
2
1,501
29,724

87
19
0
2,181
30,190

39
16
1
5,906
30,286

11,060
10,018
21,377r

11,059
10,018
21,413r

11,056
8,018
21,483

11,059
10,018
21,395r

11,059
10,018
21,404r

11,059
10,018
21,413

11,058
10,018
21,427

11,057
8,018
21,441

11,056
8,018
21,455

11,056
8,018
21,469

320,363r
505

327,261r
525

334,737
508

325,lll r
490

326,970r
525

327,659
522

328,654
518

329,863
513

333,200
510

335,001
508

4,413
415

6,985
229

7,492
206

6,504
162

6,074
185

4,760
167

4,605
196

6,958
221

6,568
178

7,270
254

6,039
317

6,066
296

6,183
372

6,006
288

5,756
278

6,066
294

5,788
273

5,845
266

5,780
305

6,335
266

7,848

8,069

8,344

8,278

23,490

33,045

26,279

ABSORBING RESERVE F U N D S

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

7,271

7,759

7,984

7,903

8,088

7,552

23,186

24,481r

25,590

17,998

24,084

25,087

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




23,563

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

A6

DomesticNonfinancialStatistics • March 1993

1.12 RESERVES AND BORROWINGS

Depository Institutions1

Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification

1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks
Total vault cash
Applied vault cash
Surplus vault cash
Total reserves
Required reserves
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit

1990

1991

1992

1992

Dec.

Dec.

Dec.

June

July

Aug.

Sept.

Oct.

Nov. r

Dec.

30,237
31,786
28,884
2,903
59,120
57,456
1,664
326
76
23

26,659
32,513
28,872
3,641
55,532
54,553
979
192
38
1

25,368
34,535
31,170
3,365
56,538
55,389
1,150
124
18
1

21,223
31,729
28,273
3,456
49,4%
48,584
913
229
149
0

21,206
32,145
28,617
3,528
49,823
48,857
965
284
203
0

21,272
32,457
28,890
3,567
50,162
49,227
935
251
223
0

22,627
32,343
28,894
3,448
51,521
50,527
994
287
193
0

23,626
32,992r
29,510
3,482r
53,136
52,062
1,074
143
114
0

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

25,368
34,535
31,170
3,365
56,538
55,389
1,150
124
18
1

Biweekly averages of daily figures for weeks ending
1992

1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks
Total vault cash
Applied vault cash ,
Surplus vault cash
Total reserves
Required reserves
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks
Seasonal borrowings
Extended credit 9

Sept. 2

Sept. 16

Sept. 30

Oct. 14

Oct. 28

Nov. 11

Nov. 25

Dec. 9 r

Dec. 23

Jan. 6

20,991
32,541
28,8%
3,645
49,887
48,820
1,067
258
226
0

23,439
31,625
28,438
3,187
51,876
51,081
795
321
187
0

22,048
33,033
29,351
3,682
51,399
50,217
1,182
259
1%
0

23,810
32,929
29,438
3,491
53,248
52,099
1,149
185
146
0

23,031
33,334r
29,790
3,544r
52,821
51,750
1,071
118
95
0

25,535

25,730
32,398r
29,117
3,281r
54,846
53,485
1,361
138
37
0

24,548
34,315
30,918
3,397
55,466
54,625
841
95
22
0

25,209
34,770
31,373
3,397
56,582
55,357
1,225
60
19
2

26,569
34,374
31,099
3,275
57,668
56,304
1,364
269
12
0

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




28,539
3,151r
54,074
53,346
728
66
53
0

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

Money Stock and Bank Credit
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS

A7

Large Banks'

Millions of dollars, averages of daily figures
1992, week ending Monday
Source and maturity

1
2
3
4

5
6
7
8

Federal funds purchased, repurchase agreements, and
other selected borrowings
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
official institutions, and U.S. government agencies
For one day or under continuing contract
For all other maturities
Repurchase agreements on U.S. government and federal
agency securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities

Oct. 5

Oct. 12

Oct. 19

Oct. 26

Nov. 2

Nov. 9

Nov. 16

Nov. 23

Nov. 30

76,088
13,207

73,095
14,234

74,222
14,254

67,637
14,797

67,714
15,148

73,286
15,385

72,781
16,007

72,061
15,626

73,350
16,355

17,986r
19,541

16,750
18,368

22,663
17,428

23,327
18,688

19,074
17,500

18,264
18,309

18,965
19,459

22,633
20,839

17,881
19,294

17,946r

11,333
18,789r

14,483
18,906r

13,088
20,719r

15,647
20,699

14,849
20,852

12,884
20,203

13,790
21,173

11,784
20,397

r

25,847
12,271r

24,517
12,631

23,481
12,159

23,164
12,719

23,464
13,206

22,855
12,731

22,846
12,882

23,570
12,860

20,912
15,722

47,192
26,564

40,377
22,468

41,392
19,175

37,812
20,103

40,066
17,793

38,858
18,799

40,289
21,181

34,923
21,060

37,285
20,546

MEMO

Federal funds loans and resale agreements in
immediately available funds in maturities of one day or
under continuing contract
9 To commercial banks in the United States
10 To all other specified customers 2

1. Banks with assets of $4 billion or more as of Dec. 31, 1988.
Data in this table also appear in the Board's H.5 (507) weekly statistical release.
For ordering address, see inside front cover.




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

A8

DomesticNonfinancialStatistics • March 1993

1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit 1
Federal Reserve
Bank

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas C i t y . . . .
Dallas
San Francisco . . .

Seasonal credit 2

On
1/29/93

Effective date

Previous rate

On
1/29/93

3

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

3.5

3.15

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

3

3.5

3.15

Extended credit 3

Effective date

Previous rate

On
1/29/93

Effective date

Previous rate

1/21/93
1/21/93
1/21/93
1/21/93
1/21/93
1/21/93

3.15

3.65

1/21/93
1/21/93
1/21/93
1/21/93
1/21/93
1/21/93

3.65

1/21/93
1/21/93
1/21/93
1/21/93
1/21/93
1/21/93

3.15

3.65

1/21/93
1/21/93
1/21/93
1/21/93
1/21/93
1/21/93

3.65

Range of rates for adjustment credit in recent years 4

Effective date

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

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

6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5

1981—May

In effect Dec. 31, 1977
1978—Jan.
May

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

Effective date

Nov.
Dec.

5
8
2
6
4

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

10
10-10.5
10.5
10.5-11
11

11

1982—July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17

11-12
12

12
12

1984—Apr.

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

12-13
13
12-13

13
13
13
12

July
Aug.
Sept.
Oct.
Nov.

12
11-12
11

10
10.5
10.5
11

11

10
10-11

11
10
10

11

11

12
12-13

12
13

13-14
14
13-14
13
12

F.R.
Bank
of
N.Y.
14
14
13
13
12

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

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

9
13
Nov. 21
26
Dec. 24

8.5-9
9
8.5-9
8.5
8

9
9
8.5
8.5
8

1985—May 20
24

7.5-8
7.5

7.5
7.5

1986—Mar. 7
10
Apr. 21
July 11

7-7.5
7
6.5-7
6

7
7
6.5
6

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

1986—Aug. 21
22

5.5-6
5.5

5.5
5.5

1987—Sept. 4
11

5.5-6
6

6
6

1988—Aug. 9
11

6-6.5

6.5

1989—Feb. 24
27

6.5-7
7

7
7

Effective date

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

6.5

6.5

1
4
30
2
13
17
6
7
20
24

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

6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5

2
7

3-3.5
3

3
3

3

3

In effect Jan. 29, 1993

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




Range (or
level)—
All F.R.
Banks

ordinarily is charged on extended-credit loans outstanding less than thirty days;
however, at the discretion of the Federal Reserve Bank, this time period may be
shortened. Beyond this initial period, a flexible rate somewhat above rates on
market sources of funds is charged. The rate ordinarily is reestablished on the first
business day of each two-week reserve maintenance period, but it is never less
than the discount rate applicable to adjustment credit plus 50 basis points.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual
Statistical Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment-credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge
was subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5,
1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2
percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period.
The surcharge was eliminated on Nov. 17, 1981.

Policy Instruments

A9

1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1

Type of deposit

Net transaction accounts
1 $0 million-$46.8 million...
2 More than $46.8 million 4 ..

12/15/92
12/15/92

3

Nonpersonal time deposits5

12/27/90

4

Eurocurrency liabilities6 ..

12/27/90

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




permit no more than six preauthorized, automatic, or other transfers per month,
of which no more than three may be checks, are not transaction accounts (such
accounts are savings deposits).
The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage change in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 15,
1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions
reporting weekly, the amount was increased from $42.2 million to $46.8 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on Apr.
2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions
that report quarterly.
5. For institutions that report weekly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to \Vi percent for the maintenance period that began Dec. 13, 1990, and
to zero for the maintenance period that began Dec. 27, 1990. The reserve
requirement on nonpersonal time deposits with an original maturity of I V4 years
or more has been zero since Oct. 6, 1983.
For institutions that report quarterly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to zero on Jan. 17, 1991.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3
percent to zero in the same manner and on the same dates as were the reserve
requirement on nonpersonal time deposits with an original maturity of less than
1 Vi years (see note 4).

A10

DomesticNonfinancialStatistics • March 1993

1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1992
Type of transaction

1989

1990

1991
May

July

Aug.

Sept.

0
0
27,755
0

271
0
25,041
0

595
0
22,268
0

0
0
687
-1,669
0

0
0
5,415
-4,617
0

550
0
0
0
0
3,325
0
0
0

Oct.

U . S . TREASURY SECURITIES

Outright transactions
transactions)

(excluding

matched

1
2
3
4

Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions

231,211
12,730

5
6
7
8
9

Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions

10
11
12
13

One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges

1,436
490
-25,534
23,250

250
200
-21,770
25,410

14
15
16
17

Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges

287
29
-2,231
1,934

0

1,280

100
-2,186
789

-2,037
2,894

18
19
20
21

More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges

0
-1,086
600

-1,681

1,226

-1,209
600

16,617
13,337
13,230

25,414
7,591
4,400

1,323,480
1,326,542

Repurchase
agreements
27 Gross purchases
28 Gross sales

29 Net change in U.S. government securities

14,284

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

20,158
120
277,314
1,000

327

425

28,848
-25,783
500

25,638
-27,424

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

12,818

0

Matched
transactions
25 Gross sales
26 Gross purchases

0

0
0
3,754
-5,225

0

0
0
0
0

2,152
-1,854

0

6,583
0

200

2,278

0
0

-21,211

-2,113
4,311

-3,447
1,854

-216

1,478

400
0
-4,036
3,567

597

0
0
-471
191

0
0
-412
700

725
0
0
0
731
0
0
0

24,594

0

0
0

306
22,392

0
0

0
0
0

-346
614

0

0
0
0

4,072

0
0

28,907

200

0
0
0

0
0
0

655

300

0

195
0
0
350

31,439
120
1,000

4,310

0
0

3,836
0
0

866
0
0

5,927
0
0

4,272

1,369,052
1,363,434

1,570,456
1,571,534

118,972
117,524

126,977
129,216

127,051
126,137

104,873
102,575

116,331
115,579

116,024
114,917

129,518
132,688

219,632
202,551

310,084
311,752

38,777
38,533

10,792
11,036

12,224
12,224

39,484
31,868

68,697
59,628

18,698
35,383

-10,055

24,886

29,729

3,107

5,831

6,184

14,244

-13,520

601
548

3,222
1,800

1,778
3,253

-1

1,385

-1,475

6,183

15,629

-14,995

284

All maturities
22
Gross purchases
23
Gross sales
24
Redemptions

0

4,110
24,275

375

0

0
0

0
0

2

FEDERAL AGENCY OBLIGATIONS

Outright
transactions
30 Gross purchases
31 Gross sales
32 Redemptions

0
0

0
0

0

0
0

442

183

5
292

160

Repurchase
agreements2
33 Gross purchases
34 Gross sales

38,835
40,411

41,836
40,461

22,807
23,595

1,281
1,281

35 Net change in federal agency obligations .

-2,018

36 Total net change in System Open Market
Account

-12,073

-1,085
26,078

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




402
402

28,644

94
94
-85

2,946

5,791

-1,000

2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements.

Federal Reserve Banks
1.18 FEDERAL RESERVE BANKS

All

Condition and Federal Reserve Note Statements1

Millions of dollars

Account
Dec. 2

Dec. 9

Wednesday

End of month

1992

1992

Dec. 16

Dec. 23

Oct. 31

Dec. 30

Nov. 30

Dec. 31

Consolidated condition statement
ASSETS

1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
9 Total U.S. Treasury securities
2

11,059
10,018
476

11,058
10,018
485

11,057
8,018
487

11,056
8,018
476

11,056
8,018
455

11,060
10,018
519

11,059
10,018
491

11,056
8,018
446

33
0
0

34
0
0

39
0
0

107
0
0

56
0
0

80
0
0

35
0
0

675
0
0

5,534
0

5,534
5

5,450
0

5,450
277

5,413
646

5,534
0

5,534
254

5,413
631

294,491

293,501

297,995

309,198

301,342

282,877

295,952

302,474

10 Bought outright
11 Bills
12 Notes
13 Bonds
14 Held under repurchase agreements

293,076
140,160
117,879
35,037
1,415

293,426
140,210
118,179
35,037
75

297,995
144,779
118,179
35,037
0

296,066
142,850
118,179
35,037
13,132

296,212
142,9%
118,179
35,037
5,130

282,877
136,716
112,576
33,584
0

292,696
139,780
117,879
35,037
3,256

295,011
141,794
118,179
35,037
7,463

15 Total loans and securities

300,058

299,074

303,484

315,031

307,456

288,491

301,775

309,192

6,452
1,029

5,780
1,026

9,594
1,026

8,418
1,028

11,756
1,028

5,136
1,024

1,912
1,029

8,378
1,026

22,157
6,134

22,179
6,408

22,200
6,634

21,832
7,529

21,852
7,468

23,067
7,020

22,150
6,245

21,514
7,738

357,384

356,027

362,499

373,387

369,089

346,334

354,679

367,368

16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other 4
20 Total assets
LIABILITIES

307,244

308,230

309,421

312,731

314,494

300,010

306,863

314,208

22 Total deposits

36,705

34,765

37,384

46,228

40,960

34,484

37,840

40,148

23
24
25
26

31,484
4,760
167
294

29,690
4,605
196
273

29,963
6,958
221
266

39,177
6,568
178
305

33,170
7,270
254
266

29,339
4,413
415
317

30,348
6,985
229
2%

32,079
7,492
206
372

5,882
1,818

5,184
1,781

7,624
1,780

6,084
1,990

5,356
1,873

4,568
1,805

2,216
1,894

5,028
1,876

351,649

349,960

356,210

367,033

362,683

340,868

348,814

361,260

3,029
2,542
164

3,029
2,592
446

3,049
2,618
622

3,054
2,640
660

3,054
2,649
702

3,040
2,419
8

3,028
2,546
291

3,054
3,054
0

357,384

356,027

362,499

373,387

369,089

346,334

354,679

367,368

289,879

294,508

287,761

288,854

290,166

293,014

285,765

291,393

21 Federal Reserve notes

Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other

27 Deferred credit items
28 Other liabilities and accrued dividends 5
29 Total liabilities
CAPITAL ACCOUNTS

30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
MEMO

34 Marketable U.S. Treasury securities held in custody
for foreign and international accounts

Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Bank)
36
LESS: Held by Federal Reserve Bank
37
Federal Reserve notes, net
38
39
40
41

Collateral held against notes, net:
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities

42 Total collateral

360,239
52,995
307,244

363,102
54,872
308,230

365,832
56,411
309,421

364,870
52,139
312,731

363,714
49,220
314,494

357,540
57,530
300,010

359,274
52,410
306,863

363,479
49,271
314,208

11,059
10,018
0
286,167

11,058
10,018
0
287,155

11,057
8,018
0
290,346

11,056
8,018
0
293,657

11,056
8,018
0
295,420

11,060
10,018
0
278,933

11,059
10,018
0
285,787

11,056
8,018
0
295,134

307,244

308,230

309,421

312,731

314,494

300,010

306,863

314,208

1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly
statistical release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.




3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign exchange commitments.

A12

DomesticNonfinancialStatistics • March 1993

1.19 FEDERAL RESERVE BANKS

Maturity Distribution of Loan and Security Holding 1

Millions of dollars

Type and maturity grouping

Wednesday

End of month

1992

1992

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

Oct. 30

Nov. 30

1 Total loans

33

34

39

107

56

80

35

675

2
3
4

14
20
0

18
16
0

37
2
0

107
0
0

55
1
0

35
46
0

23
12
0

673
1
0

5 Total acceptances

0

0

0

0

0

0

0

0

6
7
8

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

Within fifteen days
Sixteen days to ninety days
Ninety-one days to one year

Within fifteen days
Sixteen days to ninety days
Ninety-one days to one year

Dec. 31

294,491

293,501

297,995

309,199

308,435

282,877r

295,952

302,474

Within fifteen days 2
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years

13,981
68,541
95,604
69,757
18,803
27,805

11,646
69,629
95,561
69,957
18,903
27,805

15,213
72,049
94,069
69,957
18,903
27,805

22,913
71,996
97,624
69,957
18,903
27,805

18,785
70,610
103,582
68,750
18,903
27,805

3,203r
73,197r
93,205r
69,627r
17,014
26,631

8,620
75,398
95,569
69,757
18,803
27,805

12,824
70,610
103,582
68,750
18,903
27,805

16 Total federal agency obligations

5,534

5,539

5,450

5,727

6,059

5,534

5,788

6,044

Within fifteen days 2
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years

55
886
1,109
2,608
722
154

60
886
1,109
2,608
722
154

37
959
1,024
2,592
6%
142

504
769
1,024
2,592
696
142

836
810
1,064
2,511
6%
142

114
843
l,198 r
2,503
722r
154

647
548
1.1091
2,608
722
154

821
810
1,064
2,511
6%
142

9 Total U.S. Treasury securities
10
11
12
13
14
15

17
18
19
20
21
22

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




Monetary and Credit Aggregates

A13

1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures

¥

1992
1989
Dec.

1990
Dec.

1991
Dec.

1992
Dec.
May

Total reserves 3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit
Required reserves
Monetary base

July

Aug.

Sept.

Oct.

Nov.

Dec.

50.32
50.07
50.07
49.39
336.87

51.35
51.06
51.06
50.35
341.55

53.14
53.00
53.00
52.07
345.61

54.07
53.97r
53.97r
53.03r
348.11

54.48
54.35
54.35
53.33
350.78

Seasonally adjusted

ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2

1
2
3
4
5

June

40.56
40.29
40.31
39.64
267.77

41.83
41.51
41.53
40.17
293.29

45.60
45.41
45.41
44.62
317.25

54.48
54.35
54.35
53.33
350.78

49.49
49.34
49.34
48.49
328.58

49.23
49.01
49.01
48.32
329.64

49.49
49.21
49.21
48.52
332.26

Not seasonally adjusted
6
7
8
9
10

Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3 .
Required reserves
Monetary base 9

41.77
41.51
41.53
40.85
271.18

43.07
42.74
42.77
41.40
296.68

46.98
46.78
46.78
46.00
321.07

56.10
55.98
55.98
54.95
354.59

48.62
48.47
48.47
47.62
328.37

49.25
49.02
49.02
48.33
330.94

49.52
49.24
49.24
48.56
334.09

49.81
49.56
49.56
48.88
336.59

51.11
50.83
50.83
50.12
340.11

52.66 54.13
52.52
54.03
52.52
54.03
51.59 53.09
343.66 347.92r

56.10
55.98
55.98
54.95
354.59

62.81
62.54
62.56
61.89
292.55
.92
.27

59.12
58.80
58.82
57.46
313.70
1.66
.33

55.53
55.34
55.34
54.55
333.61
.98
.19

56.54
56.42
56.42
55.39
360.91
1.15
.12

48.83
48.67
48.67
47.83
333.79

49.50
49.27
49.27
48.58
336.43
.91
.23

49.82
49.54
49.54
48.86
339.87
.97
.28

50.16
49.91
49.91
49.23
342.49
.94
.25

51.52
51.23
51.23
50.53
346.21
.99
.29

53.14
54.67r
52.99
54.56
52.99 54.56
52.06
53.62
349.81 354.25r
1.07
1.04
.14
.10

56.54
56.42
56.42
55.39
360.91
1.15
.12

N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS'

11
12
13
14
15
16
17

Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit .
Required reserves
Monetary base .
Excess reserves 13
Borrowings from the Federal Reserve

1. Latest monthly and biweekly figures are available from the Board's H.3 (502)
weekly statistical release. Historical data and estimates of the impact on required
reserves of changes in reserve requirements are available from the Monetary and
Reserves Projections Section, Division of Monetary Affairs, Board of Governors
of the Federal Reserve System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.10)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally
adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally
adjusted, break-adjusted total reserves (line 1) less total borrowings of depository
institutions from the Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under
the terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9)
plus excess reserves (line 16).
8. To adjust required reserves for discontinuities that are due to regulatory
changes in reserve requirements, a multiplicative procedure is used to estimate




1.00
.16

what required reserves would have been in past periods had current reserve
requirements been in effect. Break-adjusted required reserves include required
reserves against transactions deposits and nonpersonal time and savings deposits
(but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves
(line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3)
(for all quarterly reporters on the "Report of Transaction Accounts, Other
Deposits and Vault Cash" and for all weekly reporters whose vault cash exceeds
their required reserves) the break-adjusted difference between current vault cash
and the amount applied to satisfy current reserve requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated
with changes in reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to
satisfy reserve requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted,
consists of (1) total reserves (line 11), plus (2) required clearing balances and
adjustments to compensate for float at Federal Reserve Banks, plus (3) the
currency component of the money stock, plus (4) (for all quarterly reporters on
the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current
reserve requirements. Since the introduction of changes in reserve requirements
(CRR), currency and vault cash figures have been measured over the computation
periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).

A14

DomesticNonfinancialStatistics • March 1993

1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1
Billions of dollars, averages of daily figures
1992
Item

1989
Dec.

1990
Dec.

1991
Dec.

1992
Dec.
Sept.

Oct.

Nov.

Dec.

l,007.3 r
3,497.2r
4,184.7r
5,049.9"^
ll,622.8 r

1,019.0
3,507.4r
4,191.2r
5,072.5
11,684.7

1,024.3
3,504.0
4,175.9
n.a.
n.a.

Seasonally adjusted

1
2
3
4
5

Measures2
Ml
M2
M3
L
Debt

6
7
8
9

Ml components
Currency
Travelers checks
Demand deposits 5
Other checkable deposits 6

794.1
3,227.3
4,059.8
4,890.6
10,076.7

826.1
3,339.0
4,114.6
4,965.2
10,751.3

898.1
3,439.8
4.171.0
4.988.1
11,201.3

1,024.3
3,504.0
4,175.9
n.a.
n.a.

988.6
3,481.9
4,183.0r
5,041.6r
11,596.5

222.6
7.4
279.0
285.1

246.8
8.3
277.1
293.9

267.3
8.2
289.5
333.2

292.5
8.6
338.9
384.3

286.4
8.3
327.8
366.1

288.4
8.6
336.2
374.0

290.01
8.6
339.2
381.2

292.5
8.6
338.9
384.3

2,433.2
832.5

2,512.9
775.6

2,541.7
731.2

2,479.7
671.9

2,493.2r
701.2

2,489.9r
687.5r

2,488.4r
683.8r

2,479.7
671.9

Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits',
14 Large time deposits 10 ' 11

541.5
531.0
398.2

581.9
606.4
374.0

664.9
598.5
354.0

753.3
507.0
300.1

•734.4
527.3
312.0

743.4
519.4
305.3r

749.91
511.6
302.3r

753.3
507.0
300.1

Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits'.
17 Large time deposits 0

349.7
617.5
161.1

338.8
562.3
120.9

377.7
464.5
83.1

433.9
366.3
65.2

425.1
387.9
68.0

428.2
379.3
67.9

431^
372.7r
66.5

433.9
366.3
65.2

Money market mutual funds
18 General purpose and broker-dealer .
19 Institution-only

316.3
107.2

348.9
133.7

360.5
179.1

347.2
194.3

344.7
217.2

347.6
205.6

348.7
203.5

347.2
194.3

2,249.5
7,827.2

2,493.4
8,258.0

2,764.8
8,436.5

3,004.8
8,591.7

3,001.4
8,621.4r

3,027.7
8,657.1

Nontransaction
10 In M2
11 In M3

components

Debt components
20 Federal debt
21 Nonfederal debt

n.a.
n.a.

n.a.
n.a.

Not seasonally adjusted

22
23
24
25
26

Measures1
Ml
M2
M3
L
Debt

27
28
29
30

Ml components
Currency
.
Travelers checks
Demand deposits 5
Other checkable deposits 6

811.9
3,240.0
4,070.3
4,909.9
10,063.6

844.1
3,351.9
4,124.7
4,984.9
10,739.9

917.3
3.453.6
4.181.7
5,008.3
11,191.4

1,046.2
3,520.5
4,189.4
n.a.
n.a.

983.0
3,473.3
4,174.2
5,031.3r
11,569.0

225.3
6.9
291.5
288.1

249.5
7.8
289.9
2%.9

270.0
7.7
303.0
336.5

295.1
8.2
354.9
388.1

284.7
8.9
325.4
364.0

2,428.1
830.3

2,507.8
772.8

2,536.3
728.0

2,474.3
669.0

Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits®.
35 Large time deposits 10, 11

543.0
529.5
397.1

580.0
606.3
373.0

662.4
598.7
352.8

Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits'.
38 Large time deposits

347.6
616.0
162.0

337.7
562.2
120.6

Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only

314.6
107.8

Repurchase agreements and eurodollars
41 Overnight
42 Term

Nontransaction
31 In M2
32 In M38

1,001.2
3,492.4r
4,175.2r
5,038.8r
11,600.9*

1,021.9
3,510.8r
4,193.3r
5,079.6
11,665.6

1,046.2
3,520.5
4,189.4
n.a.
n.a.

287.0
8.7
336.0
369.5

290.1
8.3
343.4
380.1

295.1
8.2
354.9
388.1

2,490.3
700.9

2,491,2r
682.8r

2,488.8rr
682.6

2,474.3
669.0

750.2
507.3
299.0

733.4
527.0
313.2

742.1
520.4
305.4

749.5r
512.1
301.91

750.2
507.3
299.0

376.3
464.6
82.8

432.0
366.5
65.0

424.6
387.6
68.3

427.5
380.1
67.9

431.6
373. l r
66.4

432.0
366.5
65.0

346.8
134.4

358.1
180.3

344.7
195.5

343.5
210.0

345.9
199.8

347.6
202.2

344.7
195.5

77.5
178.5

74.7
158.3

76.2
127.7

73.5
127.9

74.2
123.7

75.2r
125.5r

74.8r
128.4r

73.5
127.9

2,247.5
7,816.2

2,491.3
8,248.6

2,765.0
8,426.4

2,993.9
8,575.0

2,998.1
8,602.9r

3.028.3
8.637.4

components

Debt components
43 Federal debt
44 Nonfederal debt
For notes see following page.




n.a.
n.a.

n.a.
n.a.

Monetary and Credit Aggregates

NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
weekly statistical release. Historical data are available from the Money and
Reserves Projection Section, Division of Monetary Affairs, Board of Governors of
the Federal Reserve System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U.S. government, and foreign banks and official institutions, less cash items in
the process of collection and Federal Reserve float; and (4), other checkable
deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and
automatic transfer service (ATS) accounts at depository institutions, credit union
share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in
amounts of less than $100,000), and (3) balances in both taxable and tax-exempt
general purpose and broker-dealer money market funds. Excludes individual
retirement accounts (IRAs) and Keogh balances at depository institutions and
money market funds. Also excludes all balances held by U.S. commercial banks,
money market funds (general purpose and broker-dealer), foreign governments
and commercial banks, and the U.S. government. Seasonally adjusted M2 is
computed by adjusting its non-Mi component as a whole and then adding this
result to seasonally adjusted M l .
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) term Eurodollars held
by U.S. residents at foreign branches of U.S. banks worldwide and at all banking
offices in the United Kingdom and Canada, and (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money




A15

market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Debt data are based on monthly
averages. This sum is seasonally adjusted as a whole.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those owed to depository institutions, the U.S. government, and foreign
banks and official institutions, less cash items in the process of collection and
Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions,
credit union share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) MMDAs, and (4) savings and
small time deposits.
8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market fund balances (institution-only), less a consolidation adjustment that represents the estimated amount of overnight RPs and
Eurodollars held by institution-only money market funds.
9. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift
institutions are subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market
funds, depository institutions, and foreign banks and official institutions.

A16

DomesticNonfinancialStatistics • March 1993

1.22 BANK DEBITS AND DEPOSIT TURNOVER1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1992
Bank group, or type of customer

1989 2

1990 2

19912
May

4 ATS-NOW accounts 4
5 Savings deposits 5

July

Aug.

Sept.

Oct.

Seasonally adjusted

DEBITS TO

Demand deposits
1 All insured banks
2 Major New York City banks..
3 Other banks

June

256.150.4
129,319.9
126.830.5

277,916.3
131,784.0
146,132.3

281,050.1
140.905.5
140.144.6

292,177.4
154,225.3
137,952.1

302.259.2
149.743.3
152,515.9

336,868.4
179,593.4
157,275.0

298,612.4
154,231.2
144,381.2

340,723.8
184,557.7
156,166.1

328,491.6
177,490.5
151,001.1

2,910.5
547.5

3,349.6
558.8

3,624.6
1,377.4

3,552.6
3,241.4

4,070.7
3,838.9

4,024.0
3,724.9

3,594.2
2,995.9

3,940.5
3,274.9

3,637.9
2,957.1

735.1
3,421.5
408.3

800.6
3,804.1
467.7

817.6
4,391.9
449.6

771.2
4,438.0
400.9

814.2
4,470.1
451.6

910.5
5,425.1
466.9

779.4
4,445.7
414.4

880.7
5,350.4
443.2

823.4
4,900.0
416.3

15.2
3.0

16.5
2.9

16.1
3.3

13.7
4.4

15.6
5.1

15.3
5.0

13.5
4.1

14.7
4.6

13.3
4.2

DEPOSIT TURNOVER

6
7
8
9
10

Demand deposits3
All insured banks
Major New York City banks..
Other banks
ATS-NOW accounts 4
Savings deposits 5

Not seasonally adjusted

DEBITS TO

Demand deposits
11 All insured banks
12 Major New York City banks..
13 Other banks
14 ATS-NOW accounts 4
15 MMDAs
16 Savings deposits

256,133.2
129,400.1
126,733.0

277,400.0
131,784.7
145,615.3

280,922.8
140,563.0
140,359.7

290,950.2
153,163.7
137,786.5

311,175.8
154,953.8
156,222.0

336,160.9
178,555.6
157,605.3

310,646.4
162,973.4
147,673.1

329,854.7
178,998.2
150,856.4

336,605.4
182,584.2
154,021.2

2,910.7
2,677.1
546.9

3,342.2
2,923.8
557.9

3,622.4
n.a.
1,408.3

3,515.5
n.a.
3,031.2

4,032.5
n.a.
3,472.9

3,925.6
n.a.
3,461.5

3,669.6
n.a.
3,110.6

3,938.9
n.a.
3,317.2

3,660.0
n.a.
3,395.4

735.4
3,426.2
408.0

799.6
3,810.0
466.3

817.5
4,370.1
450.6

785.8
4,551.3
409.3

842.5
4,668.3
464.7

903.0
5,312.2
465.4

824.6
4,867.0
430.2

852.6
5,205.2
428.0

842.5
5,023.1
424.1

15.2
7.9
2.9

16.4
8.0
2.9

16.1
n.a.
3.4

13.7
n.a.
4.3

15.6
n.a.
4.9

15.2
n.a.
4.8

14.0
n.a.
4.3

14.9
n.a.
4.6

13.6
n.a.
4.6

DEPOSIT TURNOVER

Demand deposits3
17 All insured banks
18 Major New York City b a n k s . .
19 Other banks
20 ATS-NOW accounts 4
21 MMDAs 6
22 Savings deposits

1. Historical tables containing revised data for earlier periods can be obtained
from the Banking and Money Market Statistics Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, DC
20551.
Data in this table also appear on the Board's G.6 (406) monthly statistical
release. For ordering address, see inside front cover.
2. Annual averages of monthly figures.




3. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOWs) and
accounts authorized for automatic transfer to demand deposits (ATSs).
5. Excludes ATS and NOW accounts.
6. Money market deposit accounts.

Commercial Banking Institutions

A17

1.23 LOANS AND SECURITIES All Commercial Banks1
Billions of dollars, averages of Wednesday figures
1992
Item
Jan.

Feb.

Mar.

Apr.

May

June

July r

Aug. r

Sept. r

Oct/

Nov/

Dec.

Seasonally adjusted
1 Total loans and securities1
2 U.S. government securities
3 Other securities
4 Total loans and leases 1
5 Commercial and industrial . . . . .
6
Bankers acceptances h e l d 2 . . .
7
Other commercial and
industrial
8
U.S. addressees
9
Non-U.S. addressees 3
10 Real estate
11
Individual
12
Security
13 Nonbank financial
institutions
14 Agricultural
15
State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease-financing receivables
19 All other loans

2,852.0

2,854.8

2,863.1

2,877.5

2,877.6

2,883.7

2,884.4

2,898.6

2,914.4

2,923.8

2,935.7

2,944.9

566.2
179.7
2,106.1
617.3
7.2

571.2
180.5
2,103.1
613.2
7.2

579.5
178.1
2,105.5
610.9
6.9

592.3
178.5
2,106.7
609.2
6.5

601.7
177.1
2,098.8
607.3
6.6

611.7
175.5
2,096.5
604.6r
6.1

619.5
177.8
2,087.1
602.7
6.7

634.1
178.1
2,086.4
601.0
6.5

639.0
178.2
2,097.2
603.4
6.3

645.4
179.7
2,098.7
602.6
7.3

652.8
178.7
2,104.1
605.3
7.7

661.3
176.1
2,107.5
602.9
7.2

610.1
603.7
6.5
873.5
363.1
59.4

606.0
599.5
6.5
877.5
363.6
57.1

603.9
597.3
6.7
879.4
362.2
60.4

602.7
595.8
6.9
881.4
360.7
64.9

600.7
593.5
7.1
882.6
358.9
61.6

598.6
591.6r
6.9 1
881.3r
359. l r
63.9

596.0
588.7
7.3
879.1
358.7
60.7

594.5
587.0
7.5
879.2
357.3
62.5

597.1
589.2
7.8
883.1
356.6
66.1

595.4
587.3
8.1
886.7
355.1
65.7

597.7
589.7
7.9
889.1
354.6
64.4

595.7
587.7
8.0
889.8
354.8
66.0

40.8
33.7

42.6
33.5

43.7
34.3

42.7
34.4

43.0
34.3

42.0
34.8

40.8
34.9

41.7
35.3

44.3
35.4

44.3
35.0

45.2
34.7

45.0
34.6

28.0
7.2
2.3
31.5
49.2

28.1
6.7
2.1
31.6
47.1

28.0
6.5
2.1
31.5
46.5

27.7
6.5
2.0
31.6
45.6

27.2
6.9
2.0
31.7
43.3

26.8
7.5
2.0
31.8r
42.5r

26.3
7.8
2.1
30.8
43.2

26.0
7.1
2.1
30.7
43.4

26.0
8.0
2.1
30.8
41.7

25.5
7.2
2.1
30.6
43.8

25.2
6.8
2.5
30.5
45.8

24.9
6.9
2.5
30.5
49.4

Not seasonally adjusted
20 Total loans and securities1

2,848.8

2,857.4

2,864.0

2,876.6

2,873.1

2,884.5r

2,876.8

2,895.0

2,913.7

2,926.3

2,941.3

2,950.4

21 U.S. government securities
22 Other securities
23 Total loans and leases 1
Commercial and industrial . . . . .
24
25
Bankers acceptances held . . .
Other commercial and
26
industrial
27
U.S. addressees
28
Non-U.S. addressees
29
Real estate
30
Individual
31
Security
Nonbank financial
32
institutions
33
Agricultural
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
37
Lease-financing receivables . . . .
38
All other loans

565.7
180.3
2,102.8
614.2
7.2

575.1
180.5
2,101.8
612.4
7.4

584.9
178.2
2,100.8
613.5
6.9

594.5
178.1
2,104.0
612.1
6.3

601.8
176.8
2,094.6
609.6
6.6

610.7
175.6r
2,098.3r
606.6r
6.2

616.7
176.9
2,083.2
602.5
6.3

631.8
178.2
2,085.0
599.3
6.3

636.8
178.2
2,098.7
600.6
6.3

644.0
180.0
2,102.3
601.1
7.3

654.0
178.9
2,108.4
604.1
7.9

656.3
176.3
2,117.8
604.4
7.5

606.9
600.0
6.9
872.9
367.4
59.0

605.0
598.1
6.9
874.5
363.6
61.7

606.7
599.8
6.9
875.9
359.7
62.2

605.8
598.6
7.2
880.2
358.1
66.4

603.0
595.9
7.1
883.2
357.3
58.2

600.4r
593.l r
7.3r
881.6
357.01
63.8

5%. 2
588.9
7.3
880.3
356.1
58.7

593.0
585.6
7.4
881.2
356.4
60.7

594.3
586.6
7.7
884.0
357.9
64.0

593.9
586.4
7.5
888.1
356.0
65.9

596.2
588.8
7.4
890.6
356.0
65.1

596.9
589.3
7.6
890.0
359.4
67.3

41.3
33.2

42.3
32.7

43.1
33.0

42.3
33.4

42.3
33.9

42.3
35.0

41.0
35.6

42.0
36.2

43.7
36.4

43.8
35.9

45.4
35.1

46.6
34.6

28.4
7.0
2.3
31.8
45.4

28.2
6.6
2.1
31.7
46.0

28.0
6.4
2.1
31.7
45.2

27.6
6.4
2.0
31.6
44.0

27.3
6.8
2.0
31.7
42.3

26.8
7.2
2.0
31.6r
44.3r

26.1
7.7
2.1
30.6
42.6

25.9
7.0
2.1
30.6
43.7

25.9
8.0
2.1
30.7
45.4

25.5
7.5
2.1
30.7
45.6

25.2
7.2
2.5
30.6
46.8

24.8
7.4
2.5
30.5
50.3

1. Adjusted to exclude loans to commercial banks in the United States.
2. Includes nonfinancial commercial paper held.




3. United States includes the fifty states and the District of Columbia.

A18

DomesticNonfinancialStatistics • March 1993

1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Billions of dollars, monthly averages
1992
Source of funds
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov. r

Dec.

Seasonally adjusted
1 Total nondeposit funds
2 Net balances due to related foreign offices 3 . . .
3 Borrowings from other than commercial banks
in United States
4
Domestically chartered banks
Foreign-related banks
5

283.1
43.4

286.8
42.0

287.0
45.1

290.0
49.3

289.6
54.2

292.0
60.2

292.4
61.8

297.9r
59.0

304.7
61.9

304.2
65.4

308.1
68.6

312.4
71.4

239.6
156.5
83.1

244.8
159.8
84.9

241.9
155.8
86.1

240.7
152.8
87.9

235.4
147.6
87.8

231.9
144.3
87.5

230.6
142.8
87.7

238.9
149.1
89.8

242.8
150.8
91.9

238.7
151.9
86.8

239.5
150.8
88.7

241.0
151.5
89.5

302. l r
61.3 r

312.8
69.7
-11.7
81.3

310.6
74.9
-15.0
89.8

Not seasonally adjusted
6 Total nondeposit funds
1 Net balances due to related foreign offices . . .
8
Domestically chartered banks
9
Foreign-related banks
10 Borrowings from other than commercial banks
in United States
11 Domestically chartered banks
12
Federal funds and security RP
borrowings
13
Other 6
14 Foreign-related banks

279.0
44.1
-4.6
48.7

287.4
42.2
-.7
42.9

290.9
45.5
-.7
46.3

287.2
47.8
-5.0
52.9

295.4
56.7
-4.3
60.9

293.5
59.8
-6.4
66.2

288.9
58.3
-7.0
65.3

294.9
57.4
-9.3
66.6

72.3

305.5
64.7
-12.8
77.5

234.9
152.2

245.2
160.3

245.4
158.9

239.4
150.8

238.8
150.2

233.7
144.5

230.6
141.4

237.5
147.4

240.8
149.8

240.8
152.9

243.2
155.2

235.7
150.3

148.8
3.4
82.7

156.8
3.5
84.9

155.7
3.3
86.5

147.4
3.4
88.5

146.4
3.9
88.5

140.4
4.1
89.2

137.2
4.2
89.2

143.5
3.9
90.2

146.0
3.8
91.0

149.4
3.6
87.9

151.1
4.1
87.9

146.4
4.0
85.4

416.0
413.6

413.7
412.6

406.9
407.4

399.9
398.8

396.7
398.0

392.4
393.7

386.1
385.9

384.6
386.2

381.2
382.4

373.4r
373.4

370.1
369.7

365.1
364.0

27.8
33.1

19.5
25.2

21.8
20.1

19.9
17.7

17.0
21.0

25.8
25.2

21.9
19.7

32.6
22.4

25.4
28.7

22.4
21.9

19.4
16.5

20.5
19.5

-11.0

MEMO

Gross large time deposits1
15 Seasonally adjusted
16 Not seasonally adjusted
U.S. Treasury demand balances at
commercial banks
17 Seasonally adjusted
18 Not seasonally adjusted

1. Commercial banks are nationally and state-chartered banks in the fifty states
and the District of Columbia, agencies and branches of foreign banks, New York
investment companies majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks.
Data in this table also appear in the Board's G.10 (411) release. For ordering
address, see inside front cover.
2. Includes federal funds, repurchase agreements (RPs), and other borrowing
from nonbanks and net balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own International Banking Facilities (IBFs).
4. Borrowings through any instrument, such as a promissory note or due bill,
given for the purpose of borrowing money for the banking business. This includes




borrowings from Federal Reserve Banks and from foreign banks, term federal
funds, loan RPs, and sales of participations in pooled loans.
5. Figures are based on averages of daily data reported weekly by approximately 120 large banks and quarterly or annual data reported by other banks.
6. Figures are partly averages of daily data and partly averages of Wednesday
data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at commercial banks. Averages of daily data.

Commercial Banking Institutions
1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1

A19

Wednesday figures

Millions of dollars
1992
Account
Nov. 4

r

Nov.

LLR

r

Nov. 18

Nov. 25

r

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

A L L COMMERCIAL BANKING INSTITUTIONS 2

Assets
1 Loans and securities
2
Investment securities
3
U.S. government securities
4
Other
5 Trading account assets
6
U.S. government securities
7
Other securities
8
Other trading account assets
9 Total loans
10
Interbank loans
11
Loans excluding interbank
Commercial and industrial
12
13
Real estate
Revolving home equity
14
15
Other
Individual
16
17
All other
18 Total cash assets
19 Balances with Federal Reserve Banks
20
Cash in vault
21
Demand balances at U.S. depository institutions..
22 Cash items
Other cash assets
23
24 Other assets

3,102,194
787,211
623,344
163,867
42,073
25,497
3,375
13,202
2,272,909
165,458
2,107,452
603,132
891,076
73,413
817,663
356,343
256,901
210,395
27,764
28,919
30,209
80,060
43,443
302,193

3,110,375
789,910
626,806
163,103
41,533
25,564
3,300
12,669
2,278,932
172,880
2,106,052
602,577
892,805
73,511
819,293
355,021
255,649
223,068
28,813
30,963
32,531
87,125
43,637
299,996

3,104,864
787,653
624,739
162,915
45,636
28,987
3,097
13,553
2,271,574
165,943
2,105,631
603,563
889,967
73,513
816,454
355,843
256,257
207,168
20,818
32,578
29,263
79,980
44,530
293,728

3,113,179
788,833
625,592
163,241
42,819
27,780
2,727
12,312
2,281,527
171,418
2,110,109
605,552
889,217
73,452
815,765
356,073
259,267
220,501
26,321
31,198
32,138
86,883
43,961
288,974

3,124,835
796,728
633,984
162,744
41,976
27,610
2,653
11,713
2,286,131
172,013
2,114,118
605,658
889,734
73,381
816,353
357,203
261,523
223,599
28,329
33,128
31,053
86,083
45,005
293,899

3,128,500
794,734
632,474
162,260
39,281
25,660
2,655
10,965
2,294,486
178,924
2,115,562
601,806
891,583
73,418
818,165
357,045
265,129
204,635
25,566
32,526
29,650
72,810
44,128
294,384

3,126,879
793,218
631,188
162,030
37,490
24,295
2,743
10,452
2,296,171
179,369
2,116,802
604,450
891,599
73,352
818,247
358,083
262,671
219,622
26,428
32,437
30,734
87,261
42,743
300,286

3,116,138
795,589
633,187
162,402
35,476
21,293
3,191
10,991
2,285,073
168,628
2,116,446
604,795
889,021
73,109
815,912
360,692
261,938
233,909
35,116
31,351
34,099
92,096
41,142
295,681

3,118,734
798,474
635,476
162,998
35,076
20,755
2,935
11,386
2,285,183
161,498
2,123,685
606,185
888,562
73,219
815,343
361,940
266,998
236,138
29,078
36,339
35,478
93,614
41,834
296,473

25 Total assets

3,614,781

3,633,439

3,605,760

3,622,654

3,642,332

3,627,518

3,646,787

3,645,728

3,651,345

2,517,443
747,568
3,392
40,109
704,068
747,962
643,966
377,947
499,408
8,097
491,311
332,570

2,522,843
752,622
2,442
42,244
707,936
751,324
642,110
376,787
514,068
18,701
495,367
331,105

2,495,139
734,553
2,820
38,688
693,046
744,406
639,993
376,187
500,974
6,924
494,050
344,713

2,515,315
754,824
4,287
43,541
706,997
743,576
638,829
378,086
491,902
6,965
484,937
349,903

2,531,353
769,001
3,518
41,209
724,274
747,634
638,404
376,315
503,142
13,481
489,661
341,074

2,512,200
748,327
2,919
38,575
706,833
751,797
637,568
374,508
508,197
6,016
502,181
339,678

2,537,228
776,012
5,904
41,985
728,123
752,146
637,757
371,314
497,930
23,348
474,582
345,665

2,529,217
780,688
5,208
43,298
732,182
741,783
636,240
370,507
501,147
18,020
483,127
349,763

2,541,635
799,332
5,901
43,534
749,897
740,900
634,829
366,575
498,988
29,773
469,215
342,903

3,349,421

3,368,016

3,340,825

3,357,120

3,375,569

3,360,075

3,380,822

3,380,127

3,383,526

265,361

265,423

264,935

265,534

266,763

267,443

265,965

265,601

267,818

26
27
28
29
30
31
32
33
34
35
36
37

Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities

38 Total liabOities
39 Residual (assets less liabilities)3
Footnotes appear on the following page.




A20

DomesticNonfinancialStatistics • March 1993

1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1
Millions of dollars

Wednesday figures—Continued

1992
Nov. 4

r

Nov. l l

r

r

r

Nov. 18

Nov. 25

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

2,753,601
726,785
584,554
142,231
42,819
27,780
2,727
12,312
1,983,997
143,606
1,840,391
441,164
836,558
73,452
763,106
356,073
206,5%
192,364
25,643
31,163
30,782
84,573
20,205
170,853

2,765,984
733,311
591,872
141,440
41,976
27,610
2,653
11,713
1,990,697
146,391
1,844,307
440,535
837,634
73,381
764,253
357,203
208,934
1%,328
27,855
33,093
29,678
83,870
21,834
175,446

2,763,408
731,828
590,909
140,919
39,281
25,660
2,655
10,%5
1,992,300
149,887
1,842,413
437,054
839,343
73,418
765,925
357,045
208,971
178,146
24,830
32,492
28,277
70,657
21,936
178,021

2,763,606
729,438
588,545
140,892
37,490
24,295
2,743
10,452
1,9%,678
153,166
1,843,512
438,318
839,256
73,352
765,904
358,083
207,854
193,263
25,%3
32,398
29,263
84,884
20,737
180,028

2,746,699
731,933
591,031
140,902
35,476
21,293
3,191
10,991
1,979,291
140,843
1,838,448
437,155
836,726
73,109
763,617
360,692
203,875
207,261
34,263
31,313
32,511
89,926
19,142
175,905

2,750,768
733,344
592,588
140,756
35,076
20,755
2,935
11,386
1,982,347
139,414
1,842,934
438,799
836,899
73,219
763,680
361,940
205,2%
210,263
28,626
36,303
33,928
91,415
20,1%
177,233

DOMESTICALLY CHARTERED COMMERCIAL BANKS 4

Assets
40 Loans and securities
41 Investment securities
42
U.S. government securities
43
Other
44 Trading account assets
45
U.S. government securities
46
Other securities
47
Other trading account assets
48 Total loans
49
Interbank loans
50
Loans excluding interbank
51
Commercial and industrial
52
Real estate
53
Revolving home equity
54
Other
55
Individual
56
All other
57 Total cash assets
58 Balances with Federal Reserve Banks
59 Cash in vault
60 Demand balances at U.S. depository institutions
61 Cash items
62 Other cash assets
63 Other assets

2,753,949
726,177
583,774
142,403
42,073
25,497
3,375
13,202
1,985,698
144,252
1,841,446
440,951
838,460
73,413
765,047
356,343
205,692
182,982
27,364
28,885
28,744
77,884
20,105
179,741

2,755,782
727,787
585,714
142,074
41,533
25,564
3,300
12,669
1,986,462
146,687
1,839,775
440,225
840,169
73,511
766,658
355,021
204,360
195,592
30,926
31,005
84,816
20,824
179,027

2,749,112
726,164
583,880
142,285
45,636
28,987
3,097
13,553
1,977,311
138,998
1,838,314
439,809
837,337
73,513
763,824
355,843
205,325
178,932
20,345
32,542
27,904
77,686
20,456
171,132

64 Total assets

3,116,672

3,130,401

3,099,175

3,116,818

3,137,759

3,119,576

3,136,897

3,129,866

3,138,264

2,358,265
736,810
3,392
37,413
6%,006
743,142
641,352
236,961
363,5%
8,097
355,499
133,024

2,363,536
742,082
2,441
39,843
699,798
746,449
639,500
235,505
373,713
18,701
355,012
131,302

2,336,013
724,189
2,819
36,329
685,041
739,677
637,406
234,742
366,576
6,924
359,652
135,225

2,353,840
744,277
4,286
41,120
698,870
738,7%
636,238
234,528
364,8%
6,%5
357,931
136,122

2,370,994
758,379
3,518
38,653
716,208
742,887
635,816
233,913
369,956
13,481
356,475
133,620

2,352,255
738,006
2,919
36,135
698,952
746,978
634,980
232,291
373,200
6,016
367,184
130,251

2,376,687
765,093
5,894
39,516
719,683
747,401
635,173
229,022
367,774
23,348
344,426
130,044

2,367,568
769,721
5,207
40,680
723,834
737,219
633,673
226,954
370,431
18,020
352,411
129,840

2,381,492
788,351
5,901
40,993
741,458
736,379
632,279
224,483
366,604
29,773
336,831
125,923

2,854,884

2,868,552

2,837,814

2,854,857

2,874,569

2,855,706

2,874,505

2,867,838

2,874,019

261,787

261,849

261,362

261,961

263,190

263,870

262,392

262,028

264,245

65
66
67
68
69
70
71
72
73
74
75
76

Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities

77 Total liabilities
78 Residual (assets less liabilities)3

28,021

1. Excludes assets and liabilities of International Banking Facilities.
2. Includes insured domestically chartered commercial banks, agencies and
branches of foreign banks, Edge Act and Agreement corporations, and New York
State foreign investment corporations. Data are estimates for the last Wednesday
of the month based on a sample of weekly reporting foreign-related and domestic
institutions and quarter-end condition reports.




3. This balancing item is not intended as a measure of equity capital for use in
capital adequacy analysis.
4. Includes all member banks and insured nonmember banks. Loans and
securities data are estimates for the last Wednesday of the month based on a
sample of weekly reporting banks and quarter-end condition reports.

Weekly Reporting Commercial Banks

A21

1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
1992
Account
Nov. 4

Nov. 11

Nov. 18

Nov. 25

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

ASSETS

1 Cash and balances due from depository institutions
2 U.S. Treasury and government securities
3 Trading account
4
Investment account
5
Mortgage-backed securities 1
All others, by maturity
6
One year or less
7
One year through five years
8
More than five years
9 Other securities
10 Trading account
11 Investment account
12
State and political subdivisions, by maturity
One year or less
13
14
More than one year
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44

Federal funds sold 2
To commercial banks in the United States
To nonbank brokers and dealers
To others
Other loans and leases, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other loans
Lease-financing receivables
LESS: Unearned income
Loan and lease reserve 5
Other loans and leases, net
Other assets

45 Total assets

Footnotes appear on the following page.




108,767r
271,276
22,714
248,562
81,130

115,447r
272,236
23,108
249,128
81,048

105,584r
274,025
26,016
248,008
79,697

114,987r
273,052
25,096
247,955
82,286

117,322
278,047
25,049
252,999
83,439

104,461
274,311
22,347
251,964
83,217

116,371
270,960
21,605
249,356
82,132

126,932
266,867
18,717
248,151
81,644

126,520
267,390
18,509
248,880
81,676

27,639
76,981
62,811
55,567r
3,270
52,297r
20,634
3,220
17,414
31,663r
12,974

28,115
77,436
62,528
55,375r
3,196
52,180*
20,621
3,217
17,405
31,559*
12,449

28,925r
78,035r
61,351
55,191r
2,993
52,198r
20,613
3,213
17,399
31,585r
13,334

29,321r
76,163r
60,186
54,771r
2,624
52,147r
20,586
3,223
17,364
31,561r
12,086

29,363
77,433
62,764
54,594
2,552
52,042
20,485
3,216
17,269
31,557
11,487

30,427
76,233
62,087
54,562
2,554
52,008
20,497
3,276
17,221
31,511
10,741

29,598
76,193
61,433
54,673
2,659
52,014
20,471
3,271
17,200
31,542
10,230

29,848
76,317
60,342
55,055
3,091
51,964
20,448
3,264
17,184
31,516
10,767

30,942
75,350
60,913
54,462
2,834
51,628
20,398
3,258
17,139
31,230
11,157

82,011
54,221
22,699
5,091
980,063r
279,647r
2,146
277,50C
275,73C
1,771
401,025r
42,974r
358,052r
176,742
39,36c
14,477r
1,976
22,906r
14,492
6,116
15,067r
1,426
21,820
24,367r
2,647
37,399
940,017r
163,695

84,964
56,981
22,805
5,179
979,466r
278,903r
2,328
276,575r
274,901r
1,673
402,796r
43,143r
359,654r
175,966
39,179r
14,793r
1,927
22,459r
14,818
6,015
15,057r
1,337
21,166
24,229*
2,638
37,449
939,379*
163,139

79,924
49,537
25,468
4,919
977,71C
279,126r
2,349
276,777r
275,127r
1,650
400,777r
43,117r
357,660"
176,346r
39,374
15,383r
1,758
22,233r
14,056
5,957
14,988r
1,397
21,511
24,18c
2,363
37,507
937,841r
157,612

82,073
53,874
23,919
4,281
982,253r
280,797r
2,649
278,148r
276,397r
1,751
399,776r
43.06C
356,716r
176,71lr
39,919r
15,166r
2,459
22,294r
16,323
5,901
14,987r
1,326
22,354
24.16C
2,329
37,401
942,523r
157,349*

86,492
55,827
25,152
5,513
982,607
280,242
2,463
277,780
275,928
1,852
400,248
43,001
357,247
177,383
40,610
15,400
2,517
22,693
13,556
5,846
14,807
1,447
24,310
24,157
2,293
37,470
942,844
160,398

89,244
57,321
26,261
5,661
980,339
277,122
2,516
274,606
272,783
1,823
402,199
43,047
359,152
177,831
38,780
14,929
2,245
21,607
15,944
5,796
14,725
1,299
22,528
24,114
2,259
37,663
940,417
164,073

92,013
63,043
23,932
5,037
985,361
278,558
2,459
276,099
274,316
1,784
402,476
43,006
359,470
180,228
37,538
13,879
2,424
21,235
15,205
5,887
14,677
1,421
25,247
24,124
2,286
37,616
945,459
166,401

79,033
54,734
19,412
4,888
984,798
277,121
2,246
274,875
273,192
1,683
399,945
42,769
357,176
181,925
37,496
13,839
2,448
21,209
16,988
5,805
14,676
1,342
25,351
24,149
2,289
37,362
945,147
162,076

80,080
54,599
20,781
4,701
987,319
278,560
2,068
276,492
274,869
1,623
399,724
42,772
356,952
182,545
38,284
14,516
2,160
21,608
15,605
5,962
14,727
1,384
26,061
24,468
2,290
36,469
948,561
160,679

L,636,842 R

1,651,184

1,637,808

1,656,107

1,645,877

1,648,847

1,634,305

1,642,990

1,623,511

A22

DomesticNonfinancialStatistics • March 1993

1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1992
Account
Nov. 4

Nov. 11

Nov. 18

Nov. 25

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

1,136,181
282,192
228,485
53,707
10,754
2,129
23,526
5,927
907
10,464
117,007
736,981
710,666
26,315
21,643
2,336
2,029
307

1,120,485
265,626
216,581
49,044
9,611
1,824
21,674
5,578
861
9,497
116,446
738,414
711,972
26,442
21,799
2,338
1,979
325

1,143,025
287,067
230,749
56,318
10,466
3,623
24,082
5,876
619
11,652
117,184
738,774
712,697
26,077
21,425
2,343
1,976
332

1,132,683
287,827
230,367
57,460
10,049
3,318
25,132
6,0%
653
12,212
118,457
726,400
701,103
25,297
20,691
2,332
1,952
321

1,142,988
300,331
241,787
58,544
9,947
3,416
25,797
6,011
558
12,815
119,813
722,843
698,804
24,039
20,614
1,240
1,873
312

274,936
0
11,144
263,791

280,458
0
4,424
276,034

276,782
0
19,877
256,905

276,992
0
14,526
262,467

272,582
0
24,929
247,654

LIABILITIES

46 Deposits
47
Demand deposits
48
Individuals, partnerships, and corporations
49
Other holders
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States . . .
53
Banks in foreign countries
54
Foreign governments and official institutions ..
55
Certified and officers' checks
56
Transaction balances other than demand deposits 4 .
57
Nontransaction balances
58
Individuals, partnerships, and corporations
59
Other holders
60
States and political subdivisions
61
U.S. government
62
Depository institutions in the United States . . .
63
Foreign governments, official institutions, and banks .
64 Liabilities for borrowed money 3
65
Borrowings from Federal Reserve Banks
66
Treasury tax and loan notes
67
Other liabilities for borrowed money
68 Other liabilities (including subordinated notes and
debentures)
69 Total liabilities
70 Residual (total assets less total liabilities)7

1,123,989 1,126,347 1,109,473 l,123,858r
264,307
268,261
260,881
275,801r
214,953r
219,424r
212,104r
221,752r
r
r
r
49,354
48,837
48,777
54,049"^
9,032
8,406
8,481
9,867
2,070
1,471
1,703
2,677
22,802r
24,535r
22,132r
25,769r
5,144
5,127
5,000
5,714
882
718
698
682
9,424
8,580
10,763
9,339
116,118
114,698
113,443
113,745
743,564
743,389
735,149
734,312
716,627
716,508
708,176
707,490
26,936
26,880
26,973
26,822
22,236
22,136
22,279
22,065
2,355
2,363
2,385
2,354
2,036
2,069
1,993
2,088
310
312
316
316
271,436
0
6,606r
264,830

278,776
0
15,770r
263,006r

272,522
125
5,187
267,210

271,604
783
5,151r
265,669r

104,173

102,714

106,564

107,309

104,682

101,079

100,958

100,610

%,462

1,499,597

1,507,837

1,488,559

l,502,770 r

1,515,798

1,502,022

1,520,765

1,510,286

1,512,032

134,708

135,152

134,952

134,071

135,386

135,786

135,342

135,592

136,816

r

r

1,342,000
121,573
1,007
460
547
24,813
-15,298

1,336,947
120,149
999
457
542
24,939
-19,739

1,336,315
117,682
970
457
513
24,799
-17,005

1,327,948
115,908
%2
456
506
24,614
-16,446

1,331,293
113,940
954
452
502
24,318
-16,885

MEMO

71
72
73
74
75
76
77

Total loans and leases, gross, adjusted, plus securities'
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates9
Commercial and industrial
Other
Foreign branch credit extended to U.S. residents 1 ®...
Net due to related institutions abroad

1,333,193
123,005
1,061
476
585
24,887
-15,530

l,332,716
121,893
1,060
477
583
24,919
-14,202

1. Includes certificates of participation, issued or guaranteed by agencies of the
U.S. government, in pools of residential mortgages.
2. Includes securities purchased under agreements to resell.
3. Includes allocated transfer risk reserve.
4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits.
5. Includes borrowings only from other than directly related institutions.
6. Includes federal funds purchased and securities sold under agreements to
repurchase.
7. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
8. Excludes loans to and federal funds transactions with commercial banks in
the United States.




r

l,335,264
121,532
1,040
476
563
24,670
-13,777

l,335,196
121,719
1,014
465
549
25,001
-10,893

9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank
affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
10. Credit extended by foreign branches of domestically chartered weekly
reporting banks to nonbank U.S. residents. Consists mainly of commercial and
industrial loans, but includes an unknown amount of credit extended to other than
nonfinancial businesses.
NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large
Weekly Reporting Commercial Banks in New York City, can be obtained from the
Board's H.4.2 (504) weekly statistical release. For ordering address, see inside
front cover.

Weekly Reporting

Commercial Banks

1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Liabilities1

A23

Assets and

Millions of dollars, Wednesday figures
1992
Account
Nov. 4
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal funds sold
5 To commercial banks in the United States . . .
6
To others 2
7 Other loans and leases, gross
8
Commercial and industrial
9
Bankers acceptances and commercial
paper
10
All other
11
U.S. addressees
12
Non-U.S. addressees
13 Loans secured by real estate
14 To financial institutions
15
Commercial banks in the United States..
Banks in foreign countries
16
17
Nonbank financial institutions
18 For purchasing and carrying securities
19 To foreign governments and official
institutions
All other
20
21 Other assets (claims on nonrelated parties) ..
22 Total assets3
23 Deposits or credit balances due to other
than directly related institutions
24 Demand deposits
25
Individuals, partnerships, and
corporations
26 Other
27 Nontransaction accounts
28
Individuals, partnerships, and
corporations
29
Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased
32 From commercial banks in the
United States
33 From others
34 Other liabilities for borrowed money
35 To commercial banks in the
United States
36 To others
37 Other liabilities to nonrelated parties
38 Total liabilities6
MEMO

39 Total loans (gross) and securities, adjusted ..
40 Net due to related institutions abroad

Nov. 18

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

18,468

18,513

19,050

18,980

18,367

17,815

17,723

17,927

17,381

25,916
8,130
22,959
7,089
15,870
162,078
97,777r

25,767
7,967
22,560
7,431r
15,130"
163,627
98,631r

25,882
8,122
24,260
7,908r
16,352r
164,107
99,018r

26,565
8,242
22,902
7,081
15,820
164,014
99,460

26,216
8,257
27,300
8,734
18,566
164,171
99,237

26,904
8,172
22,244
6,995
15,249
167,227
100,023

26,5%
8,318
25,954
8,111
17,844
167,695
100,938

27,064
8,618
22,331
4,940
17,391
169,255
100,772

2,650
95,017r
92,042r
2,975
34,882
22,896r
6,046
2,240"
14,609
3,355

2,749
95,028r
92,132r
2,896
34,895
23,373r
6,276
2,137r
14,960
3,509

2,837
95,793r
92,842r
2,951
34,891
23,701r
6,435
2,094r
15,172
3,816

2,695
96,323r
93,395r
2,927
34,910
23,892r
6,320
2,281r
15,291
3,829

2,697
96,763
93,788
2,975
34,540
23,667
5,892
2,158
15,617
3,656

2,513
96,724
93,655
3,069
34,632
23,542
5,923
2,200
15,419
4,269

2,494
97,529
94,507
3,022
34,701
24,754
6,457
2,075
16,221
5,163

2,540
98,398
95,404
2,994
34,669
24,371
5,908
2,101
16,362
5,122

2,451
98,320
95,231
3,089
34,249
26,148
6,164
2,119
17,866
5,219

363
2,118
31,908

353
2,171
31,852

354
2,234
30,885

356
2,102
30,505

376
2,315
30,791

366
2,124
30,423

365
2,221
31,224

375
2,221
30,712

364
2,503
30,730

308,838

311,999

314,273

313,793

312,983

315,145

316,394

320,224

318,440

102,280
3,614

102,228
3,689

102,670
3,658

104,805
3,817

103,964
3,794

104,931
3,581

105,761
4,164

105,603
3,898

104,983
4,079

2,898
716
98,666

2,976
713
98,539

2,976
681
99,012

3,074
743
100,988

2,948
847
100,170

2,803
778
101,350

3,096
1,068
101,597

3,014
883
101,705

3,252
827
100,904

71,297
27,370

70,462
28,077

70,502
28,511

72,072
28,916

70,872
29,298

70,850
30,499

71,241
30,356

71,315
30,390

71,043
29,861

94,723
46,807

97,909
48,966

93,730
44,681

88,545
41,874

92,880
46,626

94,150
46,602

90,755
46,244

91,148
44,625

92,318
49,349

13,640
33,167
47,915

15,198
33,768
48,943

12,870
31,811
49,049

14,521
27,353
46,672

16,271
30,354
46,254

15,867
30,734
47,549

18,926
27,319
44,511

12,891
31,733
46,523

14,748
34,601
42,%9

9,537
38,378
30,917

9,532r
39,41 l r
32,258

10,683
38,367
30,303

10,272
36,399
30,874

9,635
36,619
30,847

9,982
37,567
30,688

10,184
34,327
29,984

10,427
36,0%
30,954

10,357
32,611
31,772

312,983

315,145

316,394

320,224

318,440

208,749
43,190

211,286
44,412

211,095
46,994

214,545
49,498

216,164
46,307

204,071
37,220

311,999
205,718
37,053

314,273
206,056
43,153

1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. Includes net due from related institutions abroad for U.S. branches and
agencies of foreign banks having a net "due from" position.
4. Includes other transaction deposits.




Nov. 25

24,947
8,307
20,230
4,647
15,582
161,280
97,667r

308,838
7

Nov. 11

313,793
r

208,142
47,631

r

5. Includes securities sold under agreements to repurchase.
6. Includes net to related institutions abroad for U.S. branches and agencies of
foreign banks having a net "due t o " position.
7. Excludes loans to and federal funds transactions with commercial banks in
the United States.

A24

DomesticNonfinancialStatistics • March 1993

1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December

1992

Item
1987

1988

1990

1989

1991

June

July

Aug.

Sept.

Oct.

Nov.

Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers

2
3
4
5

Financial companies 1
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted) 3
Directly placed paper4
Total
Bank-related (not seasonally
adjusted) 3

358,997

458,464

525,831

561,142

530,300

542,205

547,242

545,801

549,731

558,468

561,909

102,742

159,777

183,622

215,123

214,445

234,212

226,943

231,586

233,977

231,132

231,384

1,428

1,248

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

174,332

194,931

210,930

199,835

183,195

171,321

179,725

173,772

179,731

182,059

180,177

6 Nonfinancial companies 5

43,173

43,155

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

81,923

103,756

131,279

146,184

132,660

136,672

140,574

140,443

136,023

145,277

150,348

Bankers dollar acceptances (not seasonally adjusted) 6
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

70,565

66,631

62,972

54,771

43,770

37,767

37,733

37,090

37,814

37,599

37,651

10,943
9,464
1,479

9,086
8,022
1,064

9,433
8,510
924

9,017
7,930
1,087

11,017
9,347
1,670

9,680
8,129
1,551

9,225
7,808
1,417

9,372
7,927
1,446

10,436
9,073
1,363

10,236
8,764
1,472

10,301
9,156
1,145

0
965
58,658

0
1,493
56,052

0
1,066
52,473

0
918
44,836

0
1,739
31,014

0
1,338
26,749

0
1,269
27,239

0
1,851
25,866

0
1,803
25,575

0
1,204
26,159

0
1,289
26,061

16,483
15,227
38,854

14,984
14,410
37,237

15,651
13,683
33,638

13,095
12,703
28,973

12,843
10,351
20,577

11,569
9,062
17,135

11,825
9,015
16,893

11,600
7,861
17,628

12,227
8,051
17,536

12,116
7,849
17,633

12,133
7,673
17,846

1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other
business lending; insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. Bank-related series were discontinued in January 1989.
4. As reported by financial companies that place their paper directly with
investors.
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.

6. Data on bankers acceptances are gathered from institutions whose acceptances total $100 million or more annually. The reporting group is revised every
January. In January 1988, the group was reduced from 155 to 111 institutions. The
current group, totaling approximately 100 institutions, accounts for more than 90
percent of total acceptances activity.

1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans1
Percent per year
Period

Date of change
1
8

10.50
10.00

1991— Jan.
Feb.
May
Sept.
Nov.
Dec.

2
4
1
13
6
23

9.50
9.00
8.50
8.00
7.50
6.50

1992— July

2

6.00

1990— Jan.

Average
rate
10.01

1990
1991
1992

8.46
6.25

1990Feb.
Mar.
Apr.
May .
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.

10.11
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00

10.00
10.00

1. Data in this table also appear in the Board's H.15 (519) weekly and G.13
(415) monthly statistical releases. For ordering address, see inside front cover.




Period
1991— Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

Average
rate
9.52
9.05
9.00
9.00
8.50
8.50
8.50
8.50
8.20
8.00
7.58
7.21

Period
1992— Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1993— Jan.

Financial Markets
1.35

A25

I N T E R E S T R A T E S M o n e y and Capital Markets
Averages, percent per year; weekly, monthly, and annual figures are averages of business day data unless otherwise noted
1992
Item

1990

1991

1992, week ending

1992
Sept.

Oct.

Nov.

Dec.

Nov. 27

Dec. 4

Dec. 11

Dec. 18

Dec. 25

MONEY MARKET INSTRUMENTS

1 Federal funds 1 ' 2,3
2 Discount window borrowing
Commercial
1-month
3-month
6-month

6
7
8

Finance paper, directly
1-month
3-month
6-month

3.52
3.25

3.22
3.00

3.10
3.00

3.09
3.00

2.92
3.00

3.10
3.00

3.37
3.00

2.94
3.00

2.93
3.00

2.94
3.00

8.15
8.06
7.95

5.89
5.87
5.85

3.71
3.75
3.80

3.25
3.24
3.26

3.22
3.33
3.33

3.25
3.66
3.67

3.71
3.67
3.70

3.22
3.79
3.79

3.70
3.86
3.86

3.80
3.72
3.73

3.75
3.68
3.71

3.62
3.58
3.63

8.00
7.87
7.53

5.73
5.71
5.60

3.62
3.65
3.63

3.13
3.08
3.11

3.14
3.24
3.23

3.20
3.59
3.56

3.68
3.58
3.52

3.19
3.70
3.64

3.66
3.74
3.68

3.74
3.58
3.53

3.70
3.56
3.51

3.61
3.51
3.50

7.93
7.80

5.70
5.67

3.62
3.67

3.10
3.13

3.19
3.19

3.51
3.51

3.44
3.47

3.60
3.60

3.65
3.65

3.48
3.48

3.42
3.43

3.34
3.39

8.15
8.15
8.17

5.82
5.83
5.91

3.64
3.68
3.76

3.14
3.13
3.17

3.11
3.26
3.27

3.23
3.58
3.60

3.57
3.48
3.55

3.33
3.67
3.69

3.97
3.73
3.75

3.72
3.54
3.56

3.50
3.44
3.53

3.34
3.35
3.47

8.16

5.86

3.70

3.15

3.30

3.67

3.50

3.78

3.80

3.54

3.48

3.38

7.50
7.46
7.35

5.38
5.44
5.52

3.43
3.54
3.71

2.91
2.96
3.06

2.86
3.04
3.17

3.13
3.34
3.52

3.22
3.36
3.55

3.24
3.43
3.60

3.30
3.45
3.64

3.24
3.36
3.55

3.21
3.38
3.60

3.18
3.32
3.49

7.51
7.47
7.36

5.42
5.49
5.54

3.45
3.57
3.75

2.97
3.01
3.02

2.84
2.98
3.12

3.14
3.35
3.61

3.25
3.39
3.57

3.27
3.45
n.a.

3.31
3.46
n.a.

3.29
3.37
n.a.

3.26
3.43
3.57

3.16
3.32
n.a.

7.89
8.16
8.26
8.37
8.52
8.55
8.61

5.86
6.49
6.82
7.37
7.68
7.86
8.14

3.89
4.77
5.30
6.19
6.63
7.01
7.67

3.18
3.89
4.42
5.38
5.96
6.42
7.34

3.30
4.08
4.64
5.60
6.15
6.59
7.53

3.68
4.58
5.14
6.04
6.49
6.87
7.61

3.71
4.67
5.21
6.08
6.46
6.77
7.44

3.76
4.69
5.24
6.12
6.52
6.86
7.56

3.82
4.78
5.35
6.20
6.59
6.91
7.56

3.72
4.65
5.19
6.04
6.43
6.77
7.44

3.76
4.72
5.25
6.10
6.47
6.79
7.44

3.64
4.63
5.14
6.03
6.39
6.68
7.36

8.74

8.16

7.52

7.08

7.26

7.43

7.30

7.41

7.44

7.30

7.31

7.22

6.96
7.29
7.27

6.56
6.99
6.92

n.a.
n.a.
6.44

5.92
6.27
6.25

6.10
6.51
6.41

6.05
6.46
6.36

n.a.
n.a.
6.22

6.05
6.46
6.26

5.89
6.24
6.28

n.a.
n.a.
6.22

n.a.
n.a.
6.25

n.a.
n.a.
6.19

9.77

9.23

8.55

8.26

8.41

8.51

8.35

8.47

8.46

8.37

8.36

8.30

9.32
9.56
9.82
10.36

8.77
9.05
9.30
9.80

8.14
8.46
8.62
8.98

7.92
8.17
8.31
8.62

7.99
8.32
8.49
8.84

8.10
8.40
8.58
8.96

7.98
8.24
8.37
8.81

8.06
8.36
8.54
8.91

8.06
8.36
8.48
8.92

8.00
8.26
8.39
8.82

7.99
8.24
8.37
8.82

7.93
8.18
8.32
8.75

10.01

9.32

8.52

8.11

8.40

8.51

8.27

8.48

8.35

8.27

8.24

8.18

8.96
3.61

8.17
3.26

7.46
2.99

7.14
3.00

7.22
3.07

7.43
2.98

7.45
2.90

7.45
2.94

7.50
2.94

7.49
2.90

7.43
2.91

7.41
2.86

secondary

1-month
3-month
6-month

14 Eurodollar deposits, 3-month 3,10

18
19
20

U.S. Treasury bills
Secondary market '
3-month
6-month
1-year
Auction average ' '
3-month
6-month
1-year

21
22
23
24
25
26
27

Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
30-year

15
16
17

5.69
5.45

placed3,5,7

Bankers
acceptances3,5*
3-month
6-month
Certificates qf deposit,

11
12
13

8.10
6.98

paper3,5,6

3
4
5

9
10

,4

U . S . TREASURY NOTES AND BONDS

Composite
28 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS

Moody's series^
29 Aaa
30 Baa
31 Bond Buyer series
CORPORATE BONDS

32 Seasoned issues, all industries 15
33
34
35
36

Rating group
Aaa
Aa
A
Baa

37 A-rated, recently offered utility bonds 16
MEMO: Dividend-price ratio 17
38 Preferred stocks
39 Common stocks

1. The daily effective federal funds rate is a weighted average of rates on
trades through New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday
of the current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. An average of offering rates on commercial paper placed by several leading
dealers for firms whose bond rating is AA or the equivalent.
7. An average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest-rated money
center banks.
9. An average of dealer offering rates on nationally traded certificates of
deposit.
10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for
indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an
issue-date basis.




12. Yields on actively traded issues adjusted to constant maturities. Source:
U.S. Treasury.
13. General obligations based on Thursday figures; Moody's Investors Service.
14. General obligations only, with twenty years to maturity, issued by twenty
state and local governmental units of mixed quality. Based on figures for
Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently offered, A-rated utility bonds with a thirty-year maturity and five
years of call protection. Weekly data are based on Friday quotations.
17. Standard and Poor's corporate series. Preferred stock ratio based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases.
For ordering address, see inside front cover.

A26

DomesticNonfinancialStatistics • March 1993

1.36 STOCK MARKET

Selected Statistics
1992

Indicator

1990

1991

1992
Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Prices and trading volume (averages of daily figures)
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3 Transportation
Utility
4
5
Finance

183.66
226.06
158.80
90.72
133.21

206.35
258.16
173.97
92.64
150.84

229.00
284.26
201.02
99.48
179.29

224.55
281.60
201.28
94.92
171.05

228.55
285.17
207.88
98.24
175.89

224.68
279.54
202.02
97.23
174.82

228.17
281.90
198.36
101.18
180.96

230.07
284.44
191.31
103.41
180.47

230.13
285.76
191.61
102.26
178.27

226.97
279.70
192.30
101.62
181.36

232.84
287.80
204.63
101.13
189.27

239.47
290.77
212.35
103.85
196.87

6 Standard & Poor's Corporation
(1941-43 = 10)'

335.01

376.20

415.75

407.41

414.81

408.27

415.05

417.93

418.48

412.50

422.84

435.64

7 American Stock Exchange
(Aug. 31, 1973 = 50?

338.32

360.32

391.28

388.06

392.63

385.56

384.07

385.80

382.67

371.27

387.75

392.69

156,359
13,155

179,411
12,486

202,558
n.a.

206,251
14,096

182,027
13,455

195,089
11,216

194,138
10,722

174,003
11,875

191,774
11,198

204,787
11,966

208,221
14,925

222,736
16,523

Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange

Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers

28,210

36,660

43,990

38,750

39,890

39,690

39,640

39,940

41,250

41,590

43,630

43,990

Free credit balances at brokers*
11 Margin accounts
12 Cash accounts

8,050
19,285

8,290
19,255

8,970
22,510

8,780
16,400

7,700
18,695

7,780
19,610

7,920
18,775

8,060
18,305

8,060
19,650

8,355
18,700

8,500
19,310

8,970
22,510

Margin requirements (percent of market value and effective date) 6

13 Margin stocks
14 Convertible bonds
15 Short sales

Mar. 11, 1968

June 8, 1968

May 6, 1970

Dec. 6, 1971

Nov. 24, 1972

70
50
70

80
60
80

65
50
65

55
50
55

65
50
65

1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. On July 5, 1983, the American Stock Exchange rebased its index, effectively
cutting previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included credit extended against stocks, convertible bonds, stocks
acquired through the exercise of subscription rights, corporate bonds, and
government securities. Separate reporting of data for margin stocks, convertible
bonds, and subscription issues was discontinued in April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand.
5. New series since June 1984.
6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit
that can be used to purchase and carry "margin securities" (as defined in the
regulations) when such credit is collateralized by securities. Margin requirements




Jan. 3, 1974
50
50
50

on securities other than options are the difference between the market value (100
percent) and the maximum loan value of collateral as prescribed by the Board.
Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1,
1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1,
1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20
percent of the market value of the stock underlying the option (or 15 percent in the
case of stock-index options).

Financial Markets
1.37 SELECTED FINANCIAL INSTITUTIONS

All

Selected Assets and Liabilities

Millions of dollars, end of period
1992
Account

1990

1991
Jan.

Feb.

Mar.

Apr.

May

June

July1"

Aug.*

Sept.*

Oct.

SAIF-insured institutions
1 Assets

1,084,821

919,979

909,014

906,142

883,407

872,026

870,334

861,508r

856,371

856,146

847,367

846,679

633,385

551,322

545,728

541,734

529,158

524,954

521,911

516,616r

512,264

512,077

508,835

502,690

155,228

129,461

127,371

127,766

125,272

124,763

124,225

123,454

122,368

120,421

120,231

120,215

16,897
24,125
48,753

12,307
17,139
41,775

11,917
16,827
40,857

11,608
16,050
39,908

10,979
15,400
38,717

10,959
15,075r
37,999

11,120
14,607
37,868r

11,273r
14,024r
37,403

11,044
13,929
37,230

11,164
13,525
37,111

11,064
13,425
36,742

10,631
13,635
35,956

2 Mortgages
3 Mortgage-backed
securities
4
Contra-assets to
mortgage assets 1 .
5 Commercial loans
6 Consumer loans
Contra-assets to non7
mortgage l o a n s ' . .
8 Cash and investment
securities
9 Other 2

1,939

1,239

1,314

1,115

-1,008

980

946

910

920

975

922

146,644
95,522

120,077
73,751

118,610
72,653

121,969
71,637

119,543
67,387

116,462
64,711

120,763
63,029*

119,384
62,843r

120,220
62,315

124,140
60,956

120,1%
59,987

126,590
59,146

10 Liabilities and net worth . 1,084,821

919,979

909,014

906,142

883,407

872,026

870,334

861,508r

856,371

856,146

847,367

846,679

11
12
13
14
15
16

731,937
121,923
65,842
56,081
17,560
48,559

721,099
119,915
62,642
57,273
18,941
49,009

717,026
118,554
63,138
55,416
21,329
49,233

703,811
110,031
62,628
47,403
18,295
51,271

689,777
111,262
62,268
48,994
18,883
52,103

688,199
110,126
61,439
48,687
19,626
52,383

682,535
108,943
62,760
46,183
17,751
52,279*

676,141
109,036
62,359
46,677
18,570
52,624

672,354
110,109
62,225
47,884
20,523
53,159

667,027
110,020
64,103
45,917
18,037
52,282

660,682
114,124
63,065
51,059
19,872
52,002

Savings capital
Borrowed money
FHLBB
Other
Other
Net worth

835,4%
197,353
100,391
96,962
21,332
30,640

1. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
mortgage assets, mortgage loans, contracts, and pass-through securities—include
loans in process, unearned discounts and deferred loan fees, valuation allowances
for mortgages "held for sale," and specific reserves and other valuation allowances. Contra-assets to nonmortgage loans include loans in process, unearned
discounts and deferred loan fees, and specific reserves and valuation allowances.
2. Includes holding of stock in Federal Home Loan Bank and finance leases
plus interest.

949

NOTE. Components do not sum to totals because of rounding. Data for credit
unions and life insurance companies have been deleted from this table. Starting in
the December 1991 issue, data for life insurance companies are shown in a special
table of quarterly data.
SOURCE. Savings Association Insurance Fund (SAIF)-insured
institutions:
Estimates by the Office of Thrift Supervision (OTS) for all institutions insured by
the SAIF and based on the OTS thrift institution Financial Report.

1.38 FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year

Calendar year

Type of account or operation

1992
1990

U.S. budget1
1 Receipts, total
2 On-budget
3 Off-budget
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus or deficit ( - ) , total
8 On-budget
9
Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) ) . . .
12 Other 2

1991

1992*
July

Aug.

Sept.

Oct.

Nov.

Dec.

1,031,308
749,654
281,654
1,251,766
1,026,701
225,064
-220,458
-277,047
56,590

1,054,265
760,382
293,883
1,323,757
1,082,072
241,685
-269,492
-321,690
52,198

1,091,631
789,205
302,426
1,381,791
1,129,475
252,316
-290,160
-340,270
50,110

79,080
55,977
23,103
122,226
99,935
22,291
-43,146
-43,958
812

78,218
55,434
22,784
102,920
79,128
23,792
-24,702
-23,694
-1,008

118,344
92,813
25,531
112,943
86,709
26,235
5,400
6,104
-704

76,833
55,057
21,776
125,621*
103,781*
21,841
-48,788*
-48,724*
-65

74,635
51,221
23,414
107,365
83,446
23,919
-32,730
-32,225
-505

113,757
89,661
24,0%
152,702
116,641
36,061
-38,945
-26,980
— 11,965

220,101
818
-461

276,802
-1,329
-5,981

310,918
-17,305
-3,453

26,839
9,542
6,765

38,841
1,523
-15,662

9,853
-22,807
7,554

-1,552
39,420
10,920*

61,%9
-7,346
-21,893

21,078
-3,175
21,042

40,155
7,638
32,517

41,484
7,928
33,556

58,789
24,586
34,203

37,505
6,923
30,581

35,982
6,232
29,749

58,789
24,586
34,203

26,715
6,985
19,729

29,890
7,492
22,399

MEMO

13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts

1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act also moved two
social security trust funds (federal old-age survivors insurance and federal
disability insurance) off budget. The Postal Service is included as an off-budget
item in the Monthly Treasury Statement beginning in 1990.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota
in the International Monetary Fund (IMF); loans to the IMF; other cash and




19,369
4,413
14,956

monetary assets; accrued interest payable to the public; allocations of SDRs;
deposit funds; miscellaneous liability (including checks outstanding) and asset
accounts; seigniorage; increment on gold; net gain or loss for U.S. currency
valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and
profit on sale of gold.
SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government (MTS) and the Budget of the U.S. Government.

A28

DomesticNonfinancialStatistics • March 1993

1.39 U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Fiscal year

Calendar year

Source or type

1991

1992

1992

1991
HI

H2 r

Oct.

Nov.

Dec.

RECEIPTS

1 All sources
2 Individual income taxes, net
3
Withheld
4
Presidential Election Campaign Fund .
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10
Employment taxes and
contributions 2
11
Self-employment taxes and
contributions
12
Unemployment insurance
13
Other net receipts 4
14
15
16
17

Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5

1,054,265

1,091,631

540,504

519,293

561,125

540,867

76,833

74,635

113,757

467,827
404,152
32
142,693
79,050

476,465
408,352
30
149,342
81,259

232,389
193,440
31
109,405
70,487

234,949
210,552

246,%5
215,591
10
39,377
8,011

37,288
34,515

33,099
33,085

51,172
48,189

33,2%
8,900

237,052
198,868
19
112,328
74,163

3,583
809

1,775
1,760

3,666
683

113,599
15,513

117,951
17,680

58,903
7,904

54,016
8,649

61,681
9,402

58,022
7,219

4,291
2,194

2,312
833

23,721
772

1

0

0

0

396,011

413,689

214,303

185,839

224,569

192,599

29,594

32,900

31,918

370,526

385,491

199,727

175,802

208,110

180,758

28,135

30,264

31,252

25,457
20,922
4,563

24,421
23,410
4,788

22,150
12,296
2,279

3,306
8,721
2,317

20,433
14,070
2,389

3,988
9,397
2,445

1,034
426

2,270
366

245
421

42,430
15,921
11,138
22,852

45,570
17,359
11,143
27,195

20,703
7,488
5,631
8,991

24,629
8,694
5,507
13,508

22,389
8,145
5,701
10,992

23,456
9,497
5,733
11,815

3,670
1,666
1,027
1,491

4,082
1,503
954
618

4,014
1,539
959
1,206

0

0

0

OUTLAYS

18 All types

1,323,757

1,381,791

632,153

694,474

705,068

723,777 r

125,621 R

107,365

152,702

19
20
21
22
23
24

National defense
International affairs
General science, space, and technology .
Energy
Natural resources and environment
Agriculture

272,514
16,167
15,946
2,511
18,708
14,864

298,361
16,106
16,409
4,509
20,017
14,997

122,089
7,592
7,4%
1,235
8,324
7,684

147,669
7,691
8,472
1,698
11,130
7,418

146,%3
8,464
7,952
1,442
8,625
7,514

155,501
9,911
8,521
3,109
11,617

27,412
2,126
1,410
607
3,341
2,270

20,819
4,018
1,612
529
1,801
2,139

30,010
1,170
1,571
525
1,540
3,428

25
26
27
28

Commerce and housing credit
Transportation
Community and regional development . .
Education, training, employment, and
social services

75,639
31,531
7,432

9,514
33,337
7,411

17,992
14,748
3,552

36,534
17,093
3,783

15,583
15,681
3,901

-7,843
18,477
4,540

-2,262
2,933
1,028

-2,417
2,981
728

-1,874
2,983
774

8,881

45,248

21,234

23,224

20,922

3,797

3,882

4,393

29 Health
30 Social security and medicare
31 Income security

71,183
373,495
171,618

89,570
406,512
198,073

35,608
190,247
88,778

41,459
193,098
87,805

43,698
205,443
105,911

47,223
232,109
99,272

8,021
35,320
18,300

7,420
33,346
14,188

8,191
59,837
18,689

32
33
34
35
36

31,344
12,295
11,358
195,012
-39,356

34,133
14,450
12,939
199,429
-39,280

14,326
6,187
5,212
98,556
-18,702

17,425
6,574
6,794
99,149
-20,436

15,597
7,438
5,538
100,324
-18,229

18,561
7,283
8,138
98,549
-20,914

4,078
1,121
2,529
16,463
-2,7%

1,743
1,277
106
16,148
-2,954

4,148
1,236
2,306
16,559
-2,783

Veterans benefits and services
Administration of justice
General government
Net interest 6
Undistributed offsetting receipts

1. Functional details do not sum to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.




5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Includes interest received by trust funds.
7. Consists of rents and royalties for the outer continental shelf and U . S .
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U . S . Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1993.

Federal Finance

A29

1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1990

1991

1992

Item
Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31

1 Federal debt outstanding

3,397

3,492

3,563

3,683

3,820

3,897

4,001

4,083

n.a.

2 Public debt securities
3
Held by public
4
Held by agencies

3,365
2,537
828

3,465
2,598
867

3,538
2,643
895

3,665
2,746
920

3,802
2,833
969

3,881
2,918
964

3,985
2,977
1,008

4,065
3,048
1,016

4,177
n.a.
n.a.

33
32
0

27
26
0

25
25
0

18
18
0

19
19
0

16
16
0

16
16
0

18
18
0

3,282

3,377

3,450

3,569

3,707

3,784

3,891

3,973

4,085

3,281
0

3,377
0

3,450
0

3,569
0

3,706
0

3,783
0

3,890
0

3,972
0

4,085
0

4,145

4,145

4,145

4,145

4,145

4,145

4,145

4,145

4,145

5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt 1

June 30

Sept. 30

Dec. 31

n.a.
n.a.
n.a.

MEMO

11 Statutory debt limit

1. Consists of guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.

1.41 GROSS PUBLIC DEBT OF U.S. TREASURY

SOURCES. U.S. Treasury Department, Monthly Statement
the United States and Treasury Bulletin.

of the Public Debt of

Types and Ownership

Billions of dollars, end of period
1992
Type and holder

1989

1990

1991

1992

Q1
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14

By type
Interest-bearing
' Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues
Government
Public
Savings bonds and notes
Government account series 3
Non-interest-bearing

By holder*
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18
Commercial banks
19
Money market funds
20
Insurance companies
21
Other companies
22
State and local treasuries
Individuals
Savings bonds
23
24
Other securities
25
Foreign and international 5
26
Other miscellaneous investors

Q3

Q4

2,953.0

3,364.8

3,801.7

4,177.0

3,881.3

3,984.7

4,064.6

4,177.0

2,931.8
1,945.4
430.6
1,151.5
348.2
986.4
163.3
6.8
6.8
.0
115.7
695.6
21.2

3,362.0
2,195.8
527.4
1,265.2
388.2
1,166.2
160.8
43.5
43.5
.0
124.1
813.8
2.8

3,798.9
2,471.6
590.4
1,430.8
435.5
1,327.2
159.7
41.9
41.9
.0
135.9
959.2
2.8

4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1

3,878.5
2,552.3
615.8
1,477.7
443.8
1,326.2
157.8
42.0
42.0
.0
139.9
956.1
2.8

3,981.8
2,605.1
618.2
1,517.6
454.3
1,376.7
161.9
38.7
38.7
.0
143.2
1,002.5
2.9

4,061.8
2,677.5
634.3
1,566.4
461.8
1,384.3
157.6
37.0
37.0
.0
148.3
1,011.0
2.8

4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1

707.8
228.4
2,015.8
164.9
14.9
125.1
93.4
487.5

828.3
259.8
2,288.3
171.5
45.4
142.0
108.9
490.4

968.7
281.8
2,563.2
233.4R
80.0
168.7r
150.8
520.3r

963.7
267.6
2,664.0
256.6 r
84.0"
m.9
166.0
521.8 r

1,007.9
276.9
2,712.4
267.2
79.4
181.3
175.0
528.5

1,016.3
296.4
2,765.5
270.0
79.4
185.0
180.8
530.0

117.7
98.7
392.9
520.7

126.2
107.6
421.7
674.5

138.1
125.8
455.0"
691. l r

142.0
126.1
471.2 r
719.5 r

145.4
129.7
492.9
713.1

150.3
130.9
499.0
740.0

1. Includes (not shown separately) securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. Nonmarketable series denominated in dollars, and series denominated in
foreign currency held by foreigners.
3. Held almost entirely by U.S. Treasury and other federal agencies and trust
funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.




Q2

n.a.

n.a.

5. Consists of investments of foreign balances and international accounts in the
United States.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally sponsored agencies.
SOURCES. U.S. Treasury Department, data by type of security, Monthly
Statement of the Public Debt of the United States; data by holder, the Treasury
Bulletin.

A30

DomesticNonfinancialStatistics • March 1993

1.42 U.S. GOVERNMENT SECURITIES DEALERS

Transactions1

Millions of dollars, daily averages
1992

1992, week ending

Item
Sept.

Oct.

Nov.

Nov. 4

Nov. 11

Nov. 18

Nov. 25

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Dec. 30

41,374

46,771

44,020r

38,757

43,157

48,055

45,226

40,542

48,336

44,201

37,314

39,419

41,727
37,765r
20,476
14,240

49,532
45,749
20,425
14,672

52,718
39,539
18,198
13,861

46,690
39,983
16,570
12,805

55,239
32,844
21,160
14,747

58,383
44,604
21,250
19,200

52,940
43,507
14,912
9,%7

41,997
29,678
15,299
10,064

43,175
35,377
18,371
14,803

36,669
30,726
12,126
10,468

39,085
29,754
12,070
10,792

21,867
16,245
7,594
8,358

4,979
588
803

4,824
718
1,040

5,451
471
751

5,378
619
661

4,642
562
862

5,850
444
818

5,941
412
683

4,960
286
671

6,356
901
775

5,431
494
774

5,674
502
827

5,229
345
932

13,673
4,218

15,889
3,232

17,254r
3,545

14,440
2,143

21,114r
2,076

20,003
3,095

14,719
4,845

13,217
6,457

19,565
2,753

14,763
2,119

13,252
3,438

8,435
3,007

98,684

115,212

106,461

100,125

104,753

119,618

106,005

87,625

99,672

81,542

78,631

55,879

1,371
7,552

1,697
8,254

1,191
9,763r

1,201
8,069

1,057
11,456r

1,415
10,563

1,037
8,920

1,271
9,023

1,527
10,366

1,366
7,995

1,201
7,679

805
4,532

56,898r

61,936

61,875r

54,679

62,394

71,874

60,547

49,955

60,390

52,648

50,384

37,603

4,999
10,339

4,885
10,867

5,483
ll,035 r

5,457
8,513

5,009
11,734r

5,6%
12,535

5,999
10,644

4,645
10,651

6,505
11,952

5,333
8,887

5,802
9,011

5,700
6,910

2,969

3,689

3,245

2,332

4,354

3,306

3,148

2,488

4,923

2,421

1,004

1,087

1,915
1,853
2,950
10,091

2,253
3,050
10,612

2,235
1,969
3,548
8,782

2,106
1,906
3,219
8,545

2,493
1,250
3,202
8,963

2,444
2,019
3,818
10,917

2,120
2,323
3,683
7,232

1,680
2,490
3,719
7,315

1,960
1,734
3,253
8,645

1,548
1,150
2,262
6,455

1,840
995
2,277
6,033

1,570
480
1,028
3,929

67
88
13

67
66
20

161
117
16

65
127
20

201
102
23

185
50
11

202
144
12

58
235
23

25
38
31

108
37
16

198
4
17

86
NA
7

16,571
2,476

17,852r
1,772

15,801
1,132

16,596
1,541

19,744
691

19,000
1,899

10,842
748

11,124
444

17,078
843

15,575
1,152

9,145
1,070

3,811
365

1,084
618
825
2,009

1,317
837
742
1,623

1,683
824
817
1,607

1,452
1,201
827
1,786

2,582
1,389
664
1,331

1,549
450
561
1,409

1,041
727
1,320
2,172

2,167
305
493
975

2,640
717
309
1,191

1,192
214
313
726

945
313
363
922

976
72
227
253

452

299

344

331

377

250

458

243

523

328

279

173

IMMEDIATE TRANSACTIONS 2

1
2
3
4
5
6
7
8
9
10

11
12
13
14
15
16

By type of security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others
By type of counterparty
Primary dealers and brokers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
Customers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
FUTURES AND FORWARD
TRANSACTIONS 4

By type of deliverable security
U.S. Treasury securities
17 Bills
Coupon securities, by maturity
18 Less than 3.5 years
19 3.5 to 7.5 years
20 7.5 to 15 years
21
15 years or more
Federal agency securities
Debt, by maturity
22
Less than 3.5 years
23
3.5 to 7.5 years
24
7.5 years or mpre
Mortgage-backed
25
Pass-throughs
26
Others 3
OPTIONS TRANSACTIONS

27
28
29
30
31

5

By type of underlying security
U.S. Treasury, coupon
securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency, mortgagebacked securities
Pass-throughs

1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Averages are based on the number of trading
days in the period. Immediate, forward, and futures transactions are reported at
principal value, which does not include accrued interest; options transactions are
reported at the face value of the underlying securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Transactions for immediate delivery include purchases or sales of securities
(other than mortgage-backed agency securities) for which delivery is scheduled in
five business days or less and "when-issued" securities that settle on the issue
date of offering. Transactions for immediate delivery of mortgage-backed agency
securities include purchases and sales for which delivery is scheduled in thirty days or
less. Stripped securities are reported at market value by maturity of coupon or corpus.
3. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (16s),
and principal-only securities (POs).




4. Futures transactions are standardized agreements arranged on an exchange.
Forward transactions are agreements made in the over-the-counter market that
specify delayed delivery. All futures transactions are included regardless of time
to delivery. Forward contracts for U.S. Treasury securities and federal agency
debt securities are included when the time to delivery is more than five business
days. Forward contracts for mortgage-backed agency securities are included
when the time to delivery is more than thirty days.
5. Options transactions are purchases or sales of put-and-call options, whether
arranged on an organized exchange or in the over-the-counter market, and include
options on futures contracts on U.S. Treasury and federal agency securities.
NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published
because of insufficient activity.
Data for several types of options transactions—U.S. Treasury securities, bills;
Federal agency securities, debt; and mortgage-backed securities, other than
pass-throughs—are no longer available because activity is insufficient.

Federal Finance
1.43 U.S. GOVERNMENT SECURITIES DEALERS

A31

Positions and Financing1

Millions of dollars
1992

1992, week ending

item
Sept.

Oct.

Nov.

Nov. 4

Nov. 11

Nov. 18

Nov. 25

Dec. 2

Dec. 9

Dec. 16

Dec. 23

Positions 2
N E T IMMEDIATE POSITIONS 3

1
2
3
4
5
6
7
8
9
10
11
12
13

By type of security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others
Other money market instruments
Certificates of deposit
Commercial paper
Bankers acceptances

14,539

11,475

17,896

7,010

18,995

16,273

16,193

29,725

21,574

19,434

14,136

-1,572
-13,702
-10,785
5,795

804
-13,685
-13,207
6,617

1,755
-12,280
-9,567
5,040

-3,377
-9,605
-14,128
4,893

1,837
-12,851
-7,500
3,918

-36
-15,583
-9,597
5,642

5,415
-10,483
-8,945
5,461

3,131
-11,515
-9,643
5,295

2,369
-8,953
-10,755
7,865

-3,290
-8,366
-9,477
6,647

2,760
-4,713
-9,475
6,870

6,040
3,033
4,284

6,724r
2,955
4,190

6,384
3,127
3,418

6,778
2,850
3,795

6,657
3,115
3,363

6,963
3,262
3,406

5,349
3,090
3,444

6,325
3,230
3,173

4,854
3,434
3,186

4,271
3,338
2,891

4,339
3,270
3,561

29,518
27,455

32,278
26,559

27,626
25,622

22,742
28,469

32,924
27,048

35,699
24,480

25,404
23,715

15,923
25,614

25,614
24,948

31,688
23,931

26,285
24,951

3,852
6,389
1,053

3,501
6,374
790

3,006
6,930
864

2,922
6,598
955

3,309
6,182
1,036

2,883
6,155
825

2,959
8,163
771

2,886
7,603
737

2,619
7,557
633

2,770
7,952
745

2,915
6,963
737

-5,557

-2,336

2,797

861

1,760

3,670

4,048

2,825

-3,416

-2,250

-1,839

1,448
2,078
526
-4,380

731
2,286
2,882
-4,237

2,105
1,206
2,614
-5,164

1,950
1,075
4,274
-3,731

2,894
1,155
2,620
-2,929

1,683
3,408
2,459
-4,550

2,292
-88
1,605
-7,444

1,455
113
2,908
-7,107

213
-475
3,005
-8,435

676
164
1,207
-7,225

805
653
679
-7,320

-10
-73
-44

134
-21
-1

1
91
-6

47
-15
3

-49
53
-60

-77
36
20

67
179
-2

52
184
22

-25
-42
48

-48
-150
-72

-107
-186
2

-13,731
6,241
-242,241

-14,399
5,757
-172,555

-7,047
1,911
-125,734

-3,487
2,796
-164,770

-13,725
2,051
-145,399

-13,350
2,436
-119,575

-4,891
2,312
-105,692

5,258
-291
-103,656

-3,089
301
-98,216

-8,007
270
-61,988

-2,167
1,059
-60,495

FUTURES AND FORWARD POSITIONS 5

By type of deliverable security
U.S. Treasury securities
14 Bills
Coupon securities, by maturity
15 Less than 3.5 years
16 3.5 to 7.5 years
17 7.5 to 15 years
18 15 years or more
Federal agency securities
Debt, by maturity
19
Less than 3.5 years
3.5 to 7.5 years
20
21
7.5 years or more
Mortgage-backed
22
Pass-throughs
All others
23
24 Certificates of deposit

Financing6
Reverse repurchase agreements
25 Overnight and continuing
26 Term

209,905
310,234

214,066
341,487r

212,407
334,946r

215,839
344,226r

215,108
348,937

220,611
317,222

195,045
348,655

218,703
313,556

214,392
342,095

212,857
331,503

198,940
345,100

Repurchase agreements
27 Overnight and continuing
28 Term

369,411
285,332

383,324
317,708

362,658
329,023r

364,770
322,515

373,293
324,063

390,803
299,795

308,595
393,142

382,367
292,323

372,052
327,548

389,052
312,390

337,172
362,823

Securities borrowed
29 Overnight and continuing
30 Term

100,438
42,957

101,102
44,03 l r

104,323
44,288

102,129
42,728

102,475
44,206

107,833
42,295

105,872
47,876

101,581
43,419

102,386
46,363

101,888
46,610

103,292
48,108

Securities loaned
31 Overnight and continuing
32 Term

5,791
850

6,186
772r

5,033
552r

5,519
586

5,692
605

4,561
491

4,825
543

4,672
551

4,736
507

5,184
808

5,797
1,530

Collateralized loans
33 Overnight and continuing

17,750

17,160

15,145

15,992

15,387

16,502

14,333

13,364

17,503

16,147

18,446

MEMO: Matched book 7
Reverse repurchase agreements
34 Overnight and continuing
35 Term

144,415
267,773

146,398
295,545r

153,621
286,973r

148,347
288,973r

151,507
300,868

158,088
271,120

149,643
299,366

160,115
270,766

162,231
298,925

162,453
288,629

153,369
298,748

Repurchase agreements
36 Overnight and continuing
37 Term

188,263
215,996

196,777
240,478r

188,995
244,151r

183,458
245,976r

190,071
251,280

206,694
218,975

163,019
278,568

203,508
219,775

195,252
247,556

206,104
234,114

176,149
267,633

1. Data for positions and financing are obtained from reports submitted to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data.
2. Securities positions are reported at market value.
3. Net immediate positions include securities purchased or sold (other than
mortgage-backed agency securities) that have been delivered or are scheduled to
be delivered in five business days or less and "when-issued" securities that settle
on the issue date of offering. Net immediate positions of mortgage-backed agency
securities include securities purchased or sold that have been delivered or are
scheduled to be delivered in thirty days or less.
4. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).
5. Futures positions reflect standardized agreements arranged on an exchange.
Forward positions reflect agreements made in the over-the-counter market that
specify delayed delivery. All futures positions are included regardless of time to




delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days.
Forward contracts for mortgage-backed agency securities are included when the
time to delivery is more than thirty days.
6. Overnight financing refers to agreements made on one business day that
mature on the next business day; continuing contracts are agreements that remain
in effect for more than one business day but have no specific maturity and can be
terminated without advance notice by either party; term agreements have a fixed
maturity of more than one business day.
7. Matched-book data reflect financial intermediation activity in which the
borrowing and lending transactions are matched. Matched-book data are included
in the financing breakdowns given above. The reverse repurchase and repurchase
numbers are not always equal because of the "matching" of securities of different
values or different types of collateralization.
NOTE. Data for futures and forward commercial paper and bankers acceptances and
for term financing of collateralized loans are no longer available because of insufficient
activity.

A32

DomesticNonfinancialStatistics • March 1993

1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES

Debt Outstanding

Millions of dollars, end of period
1992
1988

Agency

1 Federal and federally sponsored agencies
2 Federal agencies
Defense Department
3
Export-Import Bank '
4
5 Federal Housing Administration 4
Government National Mortgage Association certificates of
6
participation
7 Postal Service 6
8 Tennessee Valley Authority
United States Railway Association 6
9
10 Federally sponsored agencies 7
11
Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks
15 Student Loan Marketing Association 9
16 Financing Corporation
17 Farm Credit Financial Assistance Corporation
18 Resolution Funding Corporation

1989

1990

1991
June

July

Aug.

Sept.

Oct.

381,498

411,805

434,668

442,772

457,662

457,369

464,773

475,606

479,978

35,668
8
11,033
150

35,664
7
10,985
328

42,159
7
11,376
393

41,035
7
9,809
397

40,388
7
8,156
432

39,773
7
8,156
194

40,034
7
8,156
229

41,319
7
7,698
301

41,470
7
7,698
309

0
6,142
18,335
0

0
6,445
17,899
0

0
6,948
23,435
0

0
8,421
22,401
0

0
10,123
21,670
0

0
10,123
21,293
0

0
10,123
21,519
0

0
10,123
23,190
0

0
10,123
23,333
0

345,832
135,836
22,797
105,459
53,127
22,073
5,850
690
0

375,428
136,108
26,148
116,064
54,864
28,705
8,170
847
4,522

392,509
117,895
30,941
123,403
53,590
34,194
8,170
1,261
23,055

401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,9%

417,274
106,050
32,479
149,013
51,805
38,020
8,170
1,261
29,9%

417,5%
107,343
33,959
147,377
49,241
39,765
8,170
1,261
29,9%

424,739
108,564
34,295
150,280
52,137
39,552
8,170
1,261
29,9%

434,287
110,830
36,750
155,232
52,734
38,830
8,170
1,261
29,9%

438,508
112,436
34,108
159,764
52,510
39,766
8,170
1,261
29,9%

142,850

134,873

179,083

185,576

180,848

177,700

174,003

164,422

159,899

11,027
5,892
4,910
16,955
0

10,979
6,195
4,880
16,519
0

11,370
6,698
4,850
14,055
0

9,803
8,201
4,820
10,725
0

8,150
9,903
4,820
9,025
0

8,150
9,903
4,820
8,475
0

8,150
9,903
4,820
7,275
0

7,692
9,903
4,820
7,175
0

7,692
9,903
4,790
7,175
0

58,496
19,246
26,324

53,311
19,265
23,724

52,324
18,890
70,896

48,534
18.562
84,931

44,784
18,199
85,%7

43,209
18,227
84,916

43,009
18,238
82,608

42,979
18,143
73,710

42,979
18,172
69,188

MEMO

19 Federal Financing Bank debt
20
21
22
23
24

Lending to federal and federally sponsored
Export-Import Bank
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6

Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other

agencies

1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration, the Department of Health, Education, and Welfare, the Department of
Housing and Urban Development, the Small Business Administration, and the
Veterans' Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown on line 17.
9. Before late 1982, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 22.




10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January
1988 to provide assistance to the Farm Credit System, undertook its first
borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, undertook its first
borrowing .n October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Because FFB
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter
are loans guaranteed by numerous agencies, with the amounts guaranteed by any
one agency generally being small. The Farmers Home Administration entry
consists exclusively of agency assets, while the Rural Electrification Administration entry consists of both agency assets and guaranteed loans.

Securities Market and Corporate Finance
1.45 NEW SECURITY ISSUES

A33

Tax-Exempt State and Local Governments

Millions of dollars
1992
Type of issue or issuer,
or use

1989

1 All issues, new and refunding 1

1991

1990

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

113,646

120,339

154,402

16,935

24,084

17,386

19,774

18,698

21,092

14,133

19,577

By type of issue
2 General obligation
3 Revenue

35,774
77,873

39,610
81,295

55,100
99,302

5,995
10,940

8,806
15,278

7,136
10,250

7,005
12,769

7,461
11,237

7,733
13,359

5,203
8,930

6,024
13,553

By type of issuer
4 State
5 Special district or statutory authority 2
6 Municipality, county, or township

11,819
71,022
30,805

15,149
72,661
32,510

24,939
80,614
48,849

1,165
11,031
4,739

2,063
16,477
5,544

2,836
10,040
4,510

2,933
11,203
n.a.

1,710
11,054
5,934

2,742
13,113
5,237

861
9,619
3,653

2,141
11,946
5,490

7 Issues for new capital

84,062

103,235

116,953

9,259

14,096

7,565

11,993

10,496

13,760

8,028

8,010

15,133
6,870
11,427
16,703
5,036
28,894

17,042
11,650
11,739
23,099
6,117
34,607

21,121
13,395
21,039
25,648
8,376
30,275

1,651
1,669
771
2,045
133
2,990

2,132
2,618
1,851
4,266
724
2,505

1,747
571
629
887
91
3,640

1,737
2,130
2,604
767
503
4,252

1,237
1,977
2,265
1,869
1,176
1,972

2,083
1,364
3,340
2,365
367
4,241

1,800
531
960
1,070
581
3,086

4
I
1

8
9
10
11
12
13

By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes

1. Par amounts of long-term issues based on date of sale.
2. Since 1986, has included school districts.

1.46 NEW SECURITY ISSUES

n.a.

1

•

SOURCES. Investment Dealer's Digest beginning April 1990. Securities Data/
Bond Buyer Municipal Data Base beginning 1986. Public Securities Association
for earlier data.

U.S. Corporations

Millions of dollars
1992
Type of issue, offering,
or issuer

1989

1990

1991
Apr.

1 All issues'
2 Bonds

2

By type of offering
3 Public, domestic
4 Private placement, domestic
5 Sold abroad

377,836
319,965

339,052
298,814

465,389

28,953r

389,968

r

23,615

Aug.

May

June

July

44,947

47,985

46,107r

36,872r

38,988

r

r

38,031

39,630

31,596

Oct.

Nov.

43,028r

38,604r

34,395

r

31,638r

29,896

r

Sept.

37,718

179,694
117,420
22,851

188,778
86,982
23,054

287,076
74,930
27,962

22,241r
n.a.
1,373

35,059
n.a.
2,972

35,960
n.a.
3,027

37,705r
n.a.
1,924

28,342r
n.a.
3,254

36,37 l r
n.a.
1,347

30,500
n.a.
l,909 r

28,300
n.a.
2,197

74,736
50,268
10,221
18,611
9,276
156,853

51,779
40,719
12,776
17,621
6,687
169,231

86,627
36,681
13,598
23,949
9,431
219,682

4,170
2,351
140
3,467r
1,205
12,282

6,046
2,472
621
3,041
1,590
24,261

7,263
1,630
899
4,251
1,028
23,916

5,509
3,488r
766
6,834r
2,081
20,951

4,720
2,139r
393
4,509r
1,053
18,783

5,974r
2,374r
677
5,216r
l,191 r
22,285

7,975r
2,781r
290
3,638r
427rr
16,528

3,105
2,393
0
1,254
374
22,769

12 Stocks2

57,870

40,165

75,467

5,338

6,916

8,997

6,477

5,276

5,310

6,966

4,499

By type of offering
13 Public preferred
14 Common
15 Private placement

6,194
26,030
25,647

4,360r
n.a. r
16,736

17,408
47,860
10,109

334
5,004
n.a.

1,552
5,364
n.a.

2,933
6,090
n.a.

2,413
4,064
n.a.

1,148
4,129
n.a.

1,233
4,077
n.a.

2,901
4,065
n.a.

1,540
2,958
n.a.

9,308
7,446
n.a.
3,090
n.a.
34,028

5,649
10,171
n.a.
416
n.a.
19,738

24,154
19,418
n.a.
3,474
n.a.
25,507

1,586
1,099
122
577
211
1,743

2,499
2,080
176
826
12
1,324

3,000
1,079
1,064
610
0
3,271

857
1,599
n.a.
564
n.a.
3,457

713
1,315
0
921
0
2,327

307
602
59
595
1,051
2,695

1,779
940
53
359
99
3,735

288
1,366
475
150
22
2,369

6
7
8
9
10
11

16
17
18
19
20
21

By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

1. Figures represent gross proceeds of issues maturing in more than one year;
they are the principal amount or number of units calculated by multiplying by the
offering price. Figures exclude secondary offerings, employee stock plans,
investment companies other than closed-end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.




2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCES. IDD Information Services, Inc., the Board of Governors of the
Federal Reserve System, and, before 1989, the U.S. Securities and Exchange
Commission.

A34

DomesticNonfinancialStatistics • March 1993

1.47 OPEN-END INVESTMENT COMPANIES

Net Sales and Assets

Millions of dollars
1992
Item 1

1990

1991
Apr.

May

June

July

Aug.

Sept.

Oct/

Nov.

1 Sales of own shares 2

344,420

464,488

52,309

48,127

51,457

54,915

50,627

50,039

52,214

52,019

2 Redemptions of own shares
3 Net sales 3

288,441
55,979

342,088
122,400

39,302
13,007

31,409
16,718

37,457
14,000

34,384
20,703

35,223
15,404

37,862
12,177

37,134
15,080

34,126
17,893

4 Assets4

568,517

807,001

870,011

897,211

911,218

951,806

957,145

978,507

983,151

1,020,092

5 Cash 5
6 Other

48,638
519,875

60,937
746,064

67,632
802,379

67,270
829,941

69,508
841,710

72,732
879,074

77,245
879,900

76,498
902,009

75,808
907,343

79,765
940,327

1. Data on sales and redemptions exclude money market mutual funds but
include limited-maturity municipal bond funds. Data on assets exclude both
money market mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of dividends. Excludes reinvestment of capital gains
distributions.
3. Excludes sales and redemptions resulting from transfers of shares into or out
of money market mutual funds within the same fund family.

4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership,
which comprises substantially all open-end investment companies registered with
the Securities and Exchange Commission. Data reflect underwritings of new
companies.

1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1990
Account

1989

1990

1991

1992

1991
Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits tax liability
4 Profits after taxes
5
Dividends
Undistributed profits
6

362.8
342.9
141.3
201.6
134.6
67.1

361.7
355.4
136.7
218.7
149.3
69.4

346.3
334.7
124.0
210.7
146.5
64.2

344.0
354.7
133.7
221.0
151.9
69.1

349.6
337.6
121.3
216.3
150.6
65.7

347.3
332.3
122.9
209.4
146.2
63.2

341.2
336.7
127.0
209.6
145.1
64.5

347.1
332.3
125.0
207.4
143.9
63.4

384.0
366.1
136.4
229.7
143.6
86.2

388.4
376.8
144.1
232.7
146.6
86.1

374.1
354.1
131.8
222.2
151.1
71.1

7 Inventory valuation
8 Capital consumption adjustment

-17.5
37.4

-14.2
20.5

3.1
8.4

-21.2
10.5

6.7
5.3

9.9
5.1

-4.8
9.3

.7
14.1

-5.4
23.3

-15.5
27.0

-9.7
29.7

SOURCE. U.S. Department of Commerce, Survey of Current

Business.

1.50 NONFARM BUSINESS EXPENDITURES on New Plant and Equipment
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991
Industry

1991

1992

1992

1993

19931
Q2

Q3

Q4

Q1

Q2

Q3

Q4

QL1

1 Total nonfarm business

528.39

547.39

576.55

525.02

526.59

529.87

535.72

540.91

547.53

565.40

576.07

Manufacturing
2 Durable goods industries
3 Nondurable goods industries

77.64
105.17

74.07
99.41

76.08
106.49

79.31
107.20

74.94
102.55

76.40
102.66

74.19
99.79

74.26
97.52

71.84
100.39

75.98
99.95

77.30
106.63

Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and otheH

10.02

9.25

9.97

10.08

10.09

9.99

8.87

9.18

9.09

9.87

10.97

5.95
10.17
6.54

6.91
9.69
7.06

7.43
8.63
7.69

6.25
9.95
6.67

6.32
9.61
6.63

5.44
10.41
6.45

6.65
8.86
6.37

6.50
9.75
7.27

6.87
10.13
7.69

7.64
10.00
6.90

6.71
8.80
7.96

43.76
22.82
246.32

48.10
24.09
268.81

54.23
25.59
280.43

43.09
22.00
240.46

43.27
23.25
249.94

44.75
22.67
251.11

46.06
22.75
262.17

48.45
24.19
263.80

47.73
23.92
269.86

50.15
25.51
279.42

52.96
24.74
280.00

1. Figures are amounts anticipated by business.
2. "Other" consists of construction, wholesale and retail trade, finance and
insurance, personal and business services, and communication.




SOURCE. U.S. Department of Commerce, Survey of Current

Business.

Securities Markets and Corporate Finance

A35

Assets and Liabilities1

1.51 DOMESTIC FINANCE COMPANIES

Billions of dollars, end of period; not seasonally adjusted
1991
Account

1989

1990

1992

1991
QL

Q2

Q3

Q4

QL

Q2

Q3

ASSETS

1 Accounts receivable, gross 2
2 Consumer
3 Business
4
Real estate

462.9
138.9
270.2
53.8

492.9
133.9
293.5
65.5

480.3
121.9
292.6
65.8

482.9
127.1
291.7
64.1

488.5
127.5
295.2
65.7

484.7
125.3
293.2
66.2

480.3
121.9
292.6
65.8

475.7
118.4
291.6
65.8

477.0
116.7
293.9
66.4

474.7
117.4
289.3
68.0

54.7
8.4

57.6
9.6

55.1
12.9

57.2
10.7

58.0
11.1

57.6
13.1

55.1
12.9

53.6
13.0

51.2
12.3

50.8
12.0

7 Accounts receivable, net
8 All other

399.8
102.6

425.7
113.9

412.3
149.0

415.0
118.7

419.3
122.8

414.1
136.4

412.3
149.0

409.1
145.5

413.6
139.4

411.8
146.5

9 Total assets

502.4

539.6

561.2

533.7

542.1

550.5

561.2

554.6

553.0

558.4

27.0
160.7

31.0
165.3

42.3
159.5

35.6
155.5

36.9
156.1

39.6
156.8

42.3
159.5

38.0
154.4

37.8
147.7

38.3
153.2

n.a.
n.a.
35.2
162.7
61.5
55.2

n.a.
n.a.
37.5
178.2
63.9
63.7

n.a.
n.a.
34.5
191.3
69.0
64.8

n.a.
n.a.
32.4
182.4
64.3
63.4

n.a.
n.a.
34.2
184.5
67.1
63.3

n.a.
n.a.
36.5
185.0
68.8
63.8

n.a.
n.a.
34.5
191.3
69.0
64.8

n.a.
n.a.
34.5
189.8
72.0
66.0

n.a.
n.a.
34.S
191.9
73.4
67.1

n.a.
n.a.
32.3
191.4
73.7
68.1

502.4

539.6

561.2

533.7

542.1

550.5

561.2

554.6

548.4

558.4

5 LESS: Reserves for unearned income
6
Reserves for losses

LIABILITIES AND CAPITAL

10 Bank loans
11 Commercial paper
12
13
14
15
16
17

Debt
Other short-term
Long-term
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits

18 Total liabilities and capital

1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are amounts carried on the balance sheets of finance

companies', securitized pools are not shown since they are not on the books.
2. Before deduction for unearned income and losses.

1.52 DOMESTIC FINANCE COMPANIES1
Millions of dollars, amounts outstanding, end of period
1992
Type of credit

1989

1990

1991
June

July

Aug.

Sept.

Oct.

Nov.

Seasonally adjusted
1 Total

481,436

523,023

519,573

520,804

522,834

528,117

527,858

527,323'

529,232

2 Consumer
3 Real estate 2
4 Business

157,766
53,518
270,152

161,070
65,147
296,807

154,786
65,388
299,400

154,850
66,433
299,521

153,588
66,843
302,403

154,729
67,753
305,634

155,618
67,717
304,523

154,501'
68,035
304,787'

156,593
67,838
304,801

Not seasonally adjusted
5
6 Consumer
7
Motor vehicles
8 Other consumer
9
Securitized motor vehicles
10 Securitized other consumer
11 Real estate
12 Business
n
Motor vehicles
14
Retail 5
15
Wholesale 6
16
Leasing
17 Equipment
Retail....,
18
19
Wholesale 6
Leasing —
20
21
Other business
Securitized business assets
22
23
Retail
Wholesale
24
Leasing
25

484,566

526,441

522,853

524,587

522,686

523,448

524,999

526,874'

528,895

158,542
84,126
54,732
13,690
5,994
53,781
272,243
90,416
29,505
34,093
26,818
122,246
29,828
6,452
85,966
57,560
n.a.
710
n.a.
1,311

161,965
75,045
58,818
19,837
8,265
65,509
298,967
92,072
26,401
33,573
32,098
137,654
31,968
11,101
94,585
63,774
5,467
667
3,281
1,519

155,677
63,413
58,488
23,166
10,610
65,764
301,412
90,319
22,507
31,216
36,596
141,399
30,962
9,671
100,766
60,887
8,807
576
5,285
2,946

154,859
60,056
56,634
26,195
11,974
66,437
303,291
90,075
20,674
30,505
38,8%
145,994
32,610
9,194
104,190
57,586
9,636
178
5,231
4,227

154,099
60,400
56,568
25,392
11,739
67,065
301,522
87,686
21,086
27,158
39,443
145,787
32,370
9,128
104,289
59,099
8,951
170
4,649
4,132

155,529
60,393
56,782
26,852
11,503
68,104
299,815
85,745
20,743
n.a.
39,889
145,790
32,250
9,084
104,455
59,013
9,268
158
5,193
3,917

156,416
59,806
56,808
28,204
11,598
68,064
300,519
85,261
20,407
n.a.
39,506
147,319
31,571
8,994
106,754
58,493
9,447
152
5,378
3,917

155,505'
59,290
57,013'
27,823
11,379'
68,477
302,892'
86,747
20,763
n.a.
39,536
147,146
31,475
8,928
106,743
58,898'
10,101
634
5,593
3,874

157,005
58,286
58,128
28,964
11,626
68,016
303,875
85,621
19,708
n.a.
39,020
148,202
31,427
8,824
107,952
59,269
10,782
607
5,813
4,362

1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are before deductions for unearned income and losses.
Data in this table also appear in the Board's G.20 (422) monthly statistical release.
For ordering address, see inside front cover.
2. Includes all loans secured by liens on any type of real estate, for example,
first and junior mortgages and home equity loans.
3. Includes personal cash loans, mobile home loans, and loans to purchase other
types of consumer goods such as appliances, apparel, general merchandise, and
recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
FRASER

Digitized for


5. Passenger car fleets and commercial land vehicles for which licenses are
required.
6. Credit arising from transactions between manufacturers and dealers, that is,
floor plan financing.
7. Includes loans on commercial accounts receivable, factored commercial
accounts, and receivable dealer capital; small loans used primarily for business or
farm purposes; and wholesale and lease paper for mobile homes, campers, and
travel trailers.

A36

DomesticNonfinancialStatistics • March 1993

1.53 MORTGAGE MARKETS Conventional Mortgages on New Homes
Millions of dollars except as noted
1992
Item

1990

1991

1992
June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Terms and yields in primary and secondary markets
PRIMARY MARKETS

1
2
3
4
5
6

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 year)

Yield (percent per year)
7 OTS series 3
8 HUD series 4

153.2
112.4
74.8
27.3
1.93
9.68

155.0
114.0
75.0
26.8
1.71
9.02

158.1
118.1
76.6
25.6
1.60
7.98

154.4
116.1
77.3
25.0
1.57
8.15

173.5
132.6
77.5
26.4
1.19
7.81

148.4
113.6
78.7
24.8
1.62
7.72

146.0
109.3
77.0
25.7
1.52
7.68

159.2
119.7
77.3
25.2
1.42
7.65

165.4
117.3
75.3
24.9
1.54
7.81

154.0
117.7
77.7
26.1
1.31
7.65

10.01
10.08

9.30
9.20

8.25
8.43

8.43
8.42

8.00
8.14

8.00
8.01

7.93
7.95

7.90
8.29

8.07
8.38

7.88
8.19

10.17
9.51

9.25
8.59

8.46
7.77

8.56
7.90

8.12
7.63

8.08
7.28

8.06
7.31

8.29
7.53

8.54
7.90

8.12
7.57

SECONDARY MARKETS

Yield (percent per year)
9 FHA mortgages (HUD series)
10 GNMA securities

Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION

Mortgage holdings (end of period)
11 Total
12 FHA/V A-insured
13 Conventional

113,329
21,028
92,302

122,837
21,702
101,135

142,833
22,168
120,664

142,148
22,218
119,930

142,465
22,263
120,202

142,246
22,199
120,047

144,904
22,275
122,629

149,133
22,399
126,734

153,306
22,372
130,934

158,119
22,593
135,526

Mortgage transactions (during period)
14 Purchases

23,959

37,202

75,905

5,809

4,191

3,651

6,779

8,380

7,980

8,832

Mortgage commitments
15 Issued
16 To sell9

23,689
5,270

40,010
7,608

74,970
10,493

4,662
1,831

4,663
807

6,053
10

8,880
148

8,195
0

6,084
237

6,185
1,811

20,419
547
19,871

24,131
484
23,283

n.a.
n.a.
n.a.

28,621
426
28,195

28,510
419
28,091

29,367
376
28,990

31,629
371
31,259

32,995
365
32,630

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

75,517
73,817

97,727
92,478

n.a.
177,508

14,222
13,740

12,172
11,849

13,562
12,314

16,391
14,267

20,199
18,771

n.a.
18,782

n.a.
18,274

102,401

114,031

n.a.

19,114

26,488

14,212

17,132

27,380

n.a.

n.a.

(during periodf

FEDERAL H O M E LOAN MORTGAGE CORPORATION

Mortgage holdings (end of period)9
17 Total
18 FHA/V A-insured
19 Conventional
Mortgage transactions (during period)
20 Purchases
21 Sales
Mortgage commitments
22 Contracted

10

(during period)

1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups; compiled by the Federal Housing Finance
Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at
the end of ten years; from Office of Thrift Supervision (OTS).
4. Average contract rates on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD).
5. Average gross yields on thirty-year, minimum-downpayment, first mortgages insured by the Federal Housing Administration (FHA) for immediate
delivery in the private secondary market. Based on transactions on first day of
subsequent month. Large monthly movements of average yields may reflect
market adjustments to changes in maximum permissible contract rates.
6. Average net yields to investors on fully modified pass-through securities
backed by mortgages and guaranteed by the Government National Mortgage




Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by
the Department of Veterans Affairs carrying the prevailing ceiling rate. Monthly
figures are averages of Friday figures from the Wall Street Journal.
7. Includes some multifamily and nonprofit hospital loan commitments in
addition to one- to four-family loan commitments accepted in the Federal National
Mortgage Association's (FNMA's) free market auction system, and through the
FNMA-GNMA tandem plans.
8. Does not include standby commitments issued, but includes standby
commitments converted.
9. Includes participation loans as well as whole loans.
10. Includes conventional and government-underwritten loans. The Federal
Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, while the
corresponding data for FNMA exclude swap activity.

Real Estate

A37

1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1991
Type of holder and property

1988

1989

1992

1990
Q3

Q4

Ql

Q2

Q3

1 All holders

3,288,064

3,574,975

3,797,727

3,904,394

3,919,465

3,966,775

3,992,878

4,008,590

By type of property
2 One- to four-family residences
3 Multifamily residences
4 Commercial
5

2,208,192
2%,585
698,040
85,247

2,435,158
306,762
749,031
84,025

2,644,652
310,311
758,795
83,969

2,755,381
307,846
758,002
83,165

2,777,876
308,648
749,767
83,173

2,831,195
308,398
744,271
82,910

2,870,724
300,509
738,066
83,579

2,900,748
297,840
726,150
83,853

1,831,472
674,003
334,367
33,912
290,254
15,470
924,606
671,722
110,775
141,433
676
232,863
11,164
24,560
187,549
9,590

1,931,537
767,069
389,632
38,876
321,906
16,656
910,254
669,220
106,014
134,370
650
254,214
12,231
26,907
205,472
9,604

1,914,315
844,826
455,931
37,015
334,648
17,231
801,628
600,154
91,806
109,168
500
267,861
13,005
28,979
215,121
10,756

1,860,710
870,937
478,851
36,398
337,365
18,323
719,679
547,799
81,883
89,595
402
270,094
11,720
29,%2
218,179
10,233

1,846,910
876,284
486,572
37,424
333,852
18,436
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044

1,825,983
880,377
492,910
37,710
330,837
18,919
682,338
524,536
77,166
80,278
358
263,269
11,214
29,693
212,865
9,497

1,806,122
884,598
4%,518
38,314
330,229
19,538
659,624
508,545
74,788
75,947
345
261,900
11,087
29,745
211,913
9,155

1,794,455
886,453
502,935
38,761
324,857
19,900
648,082
501,518
73,722
72,508
334
259,920
11,007
29,525
210,293
9,095

22 Federal and related agencies
23
Government National Mortgage Association
24
One- to four-family
Multifamily
25
26
Fanners Home Administration
27
One- to four-family
28
Multifamily
29
Commercial
30
Farm
31
Federal Housing and Veterans' Administrations
32
One- to four-family
33
Multifamily
34
Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Commercial
38
Farm
39 Federal National Mortgage Association
40
One- to four-family
41
Multifamily
42 Federal Land Banks
43
One- to four-family
44
Farm
45
Federal Home Loan Mortgage Corporation
46
One- to four-family
47
Multifamily

200,570
26
26
0
42,018
18,347
8,513
5,343
9,815
5,973
2,672
3,301
0
0
0
0
0
103,013
95,833
7,180
32,115
1,890
30,225
17,425
15,077
2,348

209,498
23
23
0
41,176
18,422
9,054
4,443
9,257
6,087
2,875
3,212
0
0
0
0
0
110,721
102,295
8,426
29,640
1,210
28,430
21,851
18,248
3,603

250,761
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
32,600
15,800
8,064
8,736
0
116,628
106,081
10,547
29,416
1,838
27,577
21,857
19,185
2,672

282,115
20
20
0
41,566
18,598
9,990
4,829
8,149
10,057
3,649
6,408
52,063
21,957
14,451
15,655
0
125,451
113,6%
11,755
29,053
2,124
26,929
23,906
21,489
2,417

282,856
19
19
0
41,713
18,4%
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
128,983
117,087
11,8%
28,777
1,693
27,084
26,809
24,125
2,684

2%,664
19
19
0
41,791
18,488
10,270
4,%1
8,072
11,332
4,254
7,078
49,345
15,458
16,266
17,621
0
136,506
124,137
12,369
28,776
1,693
27,083
28,895
26,182
2,713

297,300
23
23
0
41,628
17,718
10,356
4,998
8,557
11,480
4,403
7,077
44,624
15,032
13,316
16,276
0
142,148
129,392
12,756
28,775
1,693
27,082
28,621
26,001
2,620

295,874
27
27
0
41,671
17,292
10,468
5,072
8,839
11,768
4,531
7,236
37,099
12,614
11,130
13,356
0
144,904
131,835
13,069
28,775
1,693
27,082
31,629
29,039
2,591

48 Mortgage pools or trusts 5
49 Government National Mortgage Association
50
One- to four-family
51
Multifamily
52
Federal Home Loan Mortgage Corporation
53
One- to four-family
54
Multifamily
55
Federal National Mortgage Association
56
One- to four-family
Multifamily
57
58
Farmers Home Administration
59
One- to four-family
60
Multifamily
61
Commercial
62
Farm
63 Private Mortgage Conduits
64
One- to four-family
65
Multifamily
66
Commercial
67
Farm

811,847
340,527
331,257
9,270
226,406
219,988
6,418
178,250
172,331
5,919
104
26
0
38
40
66,560
66,560
0
0
0

946,766
368,367
358,142
10,225
272,870
266,060
6,810
228,232
219,577
8,655
80
21
0
26
33
77,217
77,217
0
0
0

1,110,555
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
90,684
90,684
0
0
0

1,229,836
422,500
412,715
9,785
348,843
341,183
7,660
351,917
343,430
8,487
52
12
0
20
20
106,523
105,023
1,500
0
0

1,262,685
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
106,1%
104,1%
2,000
0
0

1,302,217
421,977
412,574
9,404
367,878
360,887
6,991
389,853
380,617
9,236
43
10
0
18
16
122,465
119,825
2,640
0
0

1,339,172
422,922
413,828
9,094
382,797
376,177
6,620
413,226
403,940
9,286
43
9
0
18
15
120,184
120,184
0
0
0

1,364,537
422,255
413,063
9,192
391,762
385,400
6,362
429,935
420,835
9,100
41
9
0
18
14
120,545
120,545
0
0
0

68 Individuals and others 6
69
One- to four-family
70 Multifamily
71
Commercial
72
Farm

444,175
266,933
84,389
73,423
19,431

487,174
299,986
84,980
82,814
19,395

522,0%
328,748
87,643
86,408
19,298

531,734
333,116
87,149
92,360
19,109

527,013
326,860
87,244
93,876
19,034

541,911
338,392
86,863
97,690
18,966

550,284
346,173
86,538
98,687
18,887

553,724
348,405
86,684
100,047
18,588

By type of holder
6 Major financial institutions
7 Commercial banks
8
One- to four-family
9
Multifamily
10
Commercial
11
Farm
12 Savings institutions
13
One- to four-family
14
Multifamily
15
Commercial
16
Farm
17 Life insurance companies
18
One- to four-family
19
Multifamily
20
Commercial
21
Farm

1. Based on data from various institutional and governmental sources; figures
for some quarters estimated in part by the Federal Reserve. Multifamily debt
refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by
bank trust departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by institutions insured by the Federal Savings and Loan Insurance
Corporation include loans in process and other contra-assets (credit balance
accounts that must be subtracted from the corresponding gross asset categories to
yield net asset levels).




4. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4
because of accounting changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or
guaranteed by the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and finance companies.

A38

DomesticNonfinancialStatistics • March 1993

1.55 CONSUMER INSTALLMENT CREDIT1
Millions of dollars, amounts outstanding, end of period
1992
Holder and type of credit

1989

1990

1991
June

July

Aug.

Sept.

Oct/

Nov.

Seasonally adjusted
1 Total

716,825

735,338

727,799

722,919

721,820

720,664

722,104

722,668

723,890

2 Automobile
3 Revolving
4 Other

292,002
199,308
225,515

284,993
222,950
227,395

263,003
242,785
222,012

257,339
247,418
218,162

257,743
247,332
216,744

256,944
248,043
215,677

257,384
250,017
214,703

257,101
250,485
215,082

257,809
250,585
215,496

Not seasonally adjusted
5 Total

728,877

748,524

742,058

719,845

718,599

721,985

724,198

723,058

725,620

By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets 2 . .

342,770
138,858
93,114
44,154
57,253
3,935
48,793

347,087
133,863
93,057
44,822
46,969
4,822
77,904

339,565
121,901
92,254
44,030
40,315
4,362
99,631

324,171
116,690
92,340
37,438
35,782
4,360
109,064

323,899
117,002
91,778
37,219
35,552
4,506
108,643

323,866
117,175
92,270
38,791
35,378
4,542
109,963

324,046
116,650
92,698
38,778
35,069
4,499
112,458

324,697
116,304
92,686
39,299
34,164
4,452
111,456

324,833
116,414
92,858
40,739
33,914
4,365
112,497

By major type of credit3
13 Automobile
14 Commercial banks
15
Finance companies
16 Pools of securitized assets 2

292,060
126,288
84,126
18,185

285,050
124,913
75,045
24,428

263,108
111,912
63,413
28,057

257,442
106,645
60,056
31,024

258,104
107,722
60,400
30,454

259,128
107,978
60,393
30,826

260,395
108,355
59,806
31,971

259,312
108,068
59,290
31,757

258,608
107,697
58,286
32,222

17 Revolving
18 Commercial banks
19 Retailers
20
Gasoline companies
21
Pools of securitized assets 2

210,310
130,811
39,583
3,935
23,477

235,056
133,385
40,003
4,822
44,335

255,895
137,968
39,352
4,362
60,139

245,092
127,925
32,844
4,360
65,784

244,661
127,476
32,617
4,506
65,791

247,051
126,922
34,167
4,542
66,985

248,692
127,234
34,148
4,499
68,252

248,556
127,257
34,654
4,452
67,699

251,387
128,140
36,057
4,365
68,215

22 Other
23
Commercial banks
24
Finance companies
25
Retailers
26
Pools of securitized assets 2

226,507
85,671
54,732
4,571
7,131

228,418
88,789
58,818
4,819
9,141

223,055
89,685
58,488
4,678
11,435

217,311
89,601
56,634
4,594
12,256

215,834
88,701
56,602
4,602
12,398

215,806
88,966
56,782
4,624
12,152

215,111
88,457
56,844
4,630
12,235

215,190
89,372
57,014
4,645
12,000

215,625
88,996
58,128
4,682
12,060

6
7
8
9
10
11
12

1. The Board's series on amounts of credit covers most short- and intermediate-term credit extended to individuals that is scheduled to be repaid (or has the
option of repayment) in two or more installments.
Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.

2. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
3. Totals include estimates for certain holders for which only consumer credit
totals are available.

1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent per year except as noted
1992
Item

1989

1990

1991
May

June

July

Aug.

Sept.

Oct.

Nov.

INTEREST RATES

1
2
3
4

Commercial banks2
48-month new car
24-month personal
120-month mobile home
Credit card

Auto finance
5 New car
6 Used car

12.07
15.44
14.11
18.02

11.78
15.46
14.02
18.17

11.14
15.18
13.70
18.23

9.52
14.28
12.82
17.97

n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.

9.15
13.94
12.57
17.66

n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

8.60
13.55
12.36
17.38

12.62
16.18

12.54
15.99

12.41
15.60

10.67
14.01

10.24
13.89

9.94
13.67

8.88
13.49

8.65
13.44

9.51
13.37

9.65
13.37

54.2
46.6

54.6
46.0

55.1
47.2

54.7
47.9

54.4
48.0

54.4
48.0

53.6
47.9

53.3
47.7

54.1
47.9

54.1
47.8

91
97

87
95

88
96

89
97

89
97

89
97

90
97

90
97

89
97

89
97

12,001
7,954

12,071
8,289

12,494
8,884

13,373
9,247

13,369
9,201

13,570
9,293

13,745
9,238

13,889
8,402

13,885
9,373

14,043
9,475

companies

O T H E R TERMS 3

Maturity (months)
7 New car
8 Used car
Loan-to-value
9 New car
10 Used car

ratio

Amount financed (dollars)
11 New car
12 Used car

1. Data in this table also appear in the Board's G. 19 (421) monthly statistical
release. For ordering address, see inside front cover.




2. Data are available for only the second month of each quarter,
3. At auto finance companies.

Flow of Funds
1.57

A39

F U N D S R A I S E D IN U . S . CREDIT M A R K E T S 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991
Ql

Q2

1992
Q3

Q4

Ql

Q2

Q3

Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors ..

721.2

775.8

740.8

665.0

452.7

455.4

543.3

405.6

406.3

667.5

535.1

379.9

By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages

143.9
142.4
1.5

155.1
137.7
17.4

146.4
144.7
1.6

246.9
238.7
8.2

278.2
292.0
-13.8

227.4
251.4
-24.0

276.7
282.9
-6.2

288.4
317.2
-28.8

320.4
316.6
3.8

368.9
380.1
-11.2

351.9
351.5
.4

193.4
184.4
9.0

5 Private

577.3

620.7

594.4

418.2

174.4

228.0

266.6

117.2

85.9

298.6

183.2

186.5

14
15
16
17
18

By instrument
Debt capital instruments
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other

487.2
83.5
78.8
325.0
235.3
24.4
71.6
-6.4
90.1
32.9
9.9
1.6
45.7

474.1
53.7
103.1
317.3
241.8
16.7
60.8
-2.1
146.6
50.1
41.0
11.9
43.6

441.8
65.0
73.8
303.0
245.3
16.4
42.7
-1.5
152.6
41.7
40.2
21.4
49.3

342.3
51.2
47.1
244.0
219.4
3.7
21.0
-.1
75.8
17.5
4.4
9.7
44.2

254.6
45.8
78.8
130.0
142.2
-2.0
-9.4
-.8
-80.2
-12.5
-33.4
-18.4
-15.8

296.1
35.6
76.7
183.8
153.0
6.3
24.6
-.1
-68.0
-10.4
-15.0
-14.3
-28.3

329.9
48.5
96.5
184.8
158.1
12.5
14.9
-.7
-63.3
-7.8
-34.5
-15.9
-5.2

182.0
53.5
81.7
46.8
122.4
-29.4
-43.8
-2.5
-64.8
-24.0
-18.2
-36.3
13.7

210.6
45.5
60.3
104.8
135.1
2.7
-33.1
.0
-124.7
-8.0
-66.1
-7.0
-43.6

312.9
52.0
76.3
184.7
209.6
-1.3
-22.6
-1.1
-14.4
3.1
-26.9
12.6
-3.2

218.4
73.0
77.5
67.9
121.6
-31.6
-24.9
2.7
-35.2
-12.4
-21.5
-3.4
2.1

196.4
52.3
61.3
82.8
147.2
-10.7
-54.7
1.1
-10.0
.4
-23.3
1.7
11.2

19
20
21
22
23
24

By borrowing sector
State and local government
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate

83.0
296.4
197.8
-10.6
65.3
143.1

48.9
318.6
253.1
-7.5
61.8
198.8

63.2
305.6
225.6
1.6
50.4
173.6

48.3
254.2
115.6
2.5
26.7
86.4

38.5
158.0
-22.1
.9
-23.6
.6

36.0
160.8
31.2
3.9
13.2
14.0

38.6
188.8
39.2
2.1
9.8
27.2

37.6
136.1
-56.5
-.3
-65.9
9.7

41.9
146.3
-102.4
-2.2
-51.5
-48.7

46.1
217.1
35.4
-1.6
-20.7
57.7

63.4
143.3
-23.4
7.1
-65.6
35.2

50.0
148.1
-11.7
2.4
-51.4
37.4

6.2
7.4
-3.6
3.8
-1.4

6.4
6.9
-1.8
8.7
-7.5

10.2
4.9
-.1
13.1
-7.6

23.9
21.4
-2.9
12.3
-6.9

14.1
14.9
3.1
6.4
-10.2

63.1
11.1
8.1
46.7
-2.8

-63.2
10.6
-3.5
-51.9
-18.3

15.6
15.5
1.4
16.0
-17.2

41.0
22.3
6.5
14.9
-2.7

9.9
4.9
1.5
-7.8
11.4

55.9
22.8
14.1
27.7
-8.8

30.1
23.2
3.4
12.8
-9.3

727.4

782.2

750.9

688.9

466.8

518.5

480.1

421.2

447.3

677.3

591.0

410.1

6
7
8
9
10
11
12
N

25 Foreign net borrowing in United States
26
Bonds
Bank loans n.e.c
27
28 Open market paper
29
U.S. government loans
30 Total domestic plus foreign

Financial sectors
31 Total net borrowing by financial sectors
32
33
34
35

By instrument
U.S. government-related
Sponsored-credit-agency securities
Mortgage pool securities
Loans from U.S. government

36 Private
37 Corporate bonds
38 Mortgages
39 Bank loans n.e.c
Open market paper
40
41
Loans from Federal Home Loan Banks
42
43
44
45
46
47
48
49
50
51

By borrowing sector
Sponsored credit agencies
Mortgage pools
Private
Commercial banks
Bank affiliates
Savings and loan associations
Mutual savings banks
Finance companies
Real estate investment trusts (REITs)
Securitized credit obligation (SCO) issuers




259.0

211.4

220.1

187.1

139.2

108.9

104.0

143.4

200.5

108.9

218.4

246.2

171.8
30.2
142.3
-.8

119.8
44.9
74.9
.0

151.0
25.2
125.8
.0

167.4
17.1
150.3
-.1

147.7
9.2
138.6
.0

154.6
13.1
141.5
.0

127.4
-29.7
157.1
.0

156.3
20.6
135.8
.0

152.7
32.6
120.1
-.1

126.8
11.5
115.3
.0

199.5
48.3
151.2
.0

152.9
62.3
90.6
.0

87.2
39.1
.4
-3.6
26.9
24.4

91.7
16.2
.3
.6
54.8
19.7

69.1
46.8
.0
1.9
31.3

-11.0

19.7
34.4
.3
1.2
8.6
-24.7

-8.6
57.7
.6
3.2
-32.0
-38.0

-45.7
41.4
.1
1.0
-52.5
-35.8

-23.4
72.4
.9
-2.9
-46.0
-47.7

-12.9
29.5
-.2
10.2
-16.7
-35.7

47.8
87.5
1.5
4.5
-12.7
-33.0

-17.9
-25.1
.9
8.2
7.6
-9.5

18.9
25.5
.1
3.9
-16.3
5.7

93.2
54.5
.1
5.5
11.8
21.3

29.5
142.3
87.2
6.2
14.3
19.6
8.1
-.5
.4
39.1

44.9
74.9
91.7
-3.0
5.2
19.9
1.9
31.5
3.6
32.5

25.2
125.8
69.1
-1.4
6.2
-14.1
-1.4
59.7
-1.9
22.0

17.0
150.3
19.7
-1.1
-27.7
-29.9
-.5
35.6
-1.9
45.2

9.1
138.6
-8.6
-13.3
-2.5
-39.5
-3.5
14.5
.0
35.6

13.1
141.5
-45.7
-18.4
-9.3
-42.9
2.0
-10.3
.1
33.2

-29.7
157.1
-23.4
-11.7
-3.5
-48.7
-1.7
3.4
.1
38.7

20.6
135.8
-12.9
-9.2
-6.8
-41.1
-5.5
12.2
-.9
38.5

32.5
120.1
47.8
-14.1
9.6
-25.1
-8.7
52.9
.8
32.3

11.5
115.3
-17.9
7.2
2.7
-20.3
4.3
-39.0
4.6
22.5

48.3
151.2
18.9
.8
-8.2
2.7
.3
-20.9
.9
43.2

62.3
90.6
93.2
1.6
2.2
10.1
8.3
34.6
-.7
37.1

A40

DomesticNonfinancialStatistics • March 1993

1.57—Continued
1991
Transaction category or sector

1987

1988

1989

1990

1992

1991
QL

Q2

Q3

Q4

QL

Q2

Q3

All sectors
52 Total net borrowing, all sectors

986.4

993.6

971.0

876.0

606.0

627.4

584.1

564.6

647.7

786.2

809.4

656.2

53
54
55
56
57
58
59
60

316.4
83.5
125.2
325.4
32.9
2.7
32.3
68.0

274.9
53.7
126.3
317.5
50.1
39.9
75.4
55.8

297.3
65.0
125.5
303.0
41.7
41.9
65.9
30.6

414.4
51.2
102.9
244.3
17.5
2.8
30.7
12.4

426.0
45.8
151.4
130.6
-12.5
-27.1
-44.0
-64.2

382.0
35.6
129.2
183.9
-10.4
-5.9
-20.2
-66.9

404.1
48.5
179.5
185.8
-7.8
-40.9
-113.8
-71.2

444.8
53.5
126.6
46.5
-24.0
-6.7
-37.0
-39.1

473.2
45.5
170.1
106.2
-8.0
-55.1
-4.9
-79.3

495.7
52.0
56.0
185.6
3.1
-17.2
12.4
-1.3

551.4
73.0
125.9
67.9
-12.4
-3.5
8.1
-1.0

346.4
52.3
139.0
82.9
.4
-14.3
26.3
23.3

U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans

External corporate equity funds raised in United States
61 Total net share issues
62 Mutual funds
63 All other
64
Nonfinancial corporations
65
Financial corporations
66
Foreign shares purchased in United States

7.1

-118.4

-65.7

22.1

198.8

112.4

182.3

231.8

268.9

271.7

281.5

305.3

70.2
-63.2
-75.5
14.5
-2.1

6.1
-124.5
-129.5
4.1
.9

38.5
-104.2
-124.2
2.7
17.2

67.9
-45.8
-63.0
9.8
7.4

150.5
48.3
18.3
-.1
30.2

98.1
14.3
-6.0
-6.7
27.0

125.6
56.7
12.0
8.1
36.6

182.5
49.3
19.0
-3.8
34.1

195.9
72.9
48.0
2.0
22.9

189.8
81.9
46.0
6.0
29.9

223.3
58.2
36.0
9.7
12.5

249.2
56.2

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.2 through F.5. For ordering address, see inside front cover.




11.0

9.2
36.0

Flow of Funds
1.58

A41

SUMMARY OF FINANCIAL TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1992

1991
Transaction category or sector

1987

1988

1989

1990

1991
Ql

Q2

627.4

Q3

Q4

Ql

Q2

647.7

Q3

N E T L E N D I N G IN CREDIT MARKETS' 1

1 Total net lending in credit markets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Sponsored credit agencies
Mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank affiliates
Banks in U.S. possession
Private nonbank finance
Thrift institutions
Savings and loan associations
Mutual savings banks
Credit unions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance n.e.c
Finance companies
Mutual funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Securitized credit obligation (SCOs) issuers

876.0

606.0

786.2

809.4

656.2

-18.2
139.2
-64.4
160.0
-1.9
-2.1
-2.9
30.1
18.2
-16.1
13.9
-17.9
88.4
71.0
544.7
612.9
17.8
93.0
115.3
120.1
33.2
22.3
98.9
104.3
45.6
91.9
.6
61.3
6.4
-1.1
-1.5
.0
204.4
348.3
-49.7 -113.3
-83.3 -137.9
11.5
7.6
17.0
22.2
151.4
120.4
13.2
80.6
33.1
32.1
-22.5
89.2
29.2
17.0
246.5
197.2
-14.1
.8
105.3
124.8
53.9
61.8
-.9
-.7
7.5
50.5
22.5
32.3

73.5
47.6
-2.5
21.4
7.1
-25.1
142.5
618.4
39.9
151.2
9.8
58.4
.5
58.6
-.6
-.1
359.2
-81.6
-92.4
-7.4
18.3
192.9
92.5
22.2
51.9
26.3
247.9
-23.0
156.1
-20.9
2.6
89.8
43.2

-252.7
-276.4
-1.9
38.0
-12.3
-27.8
58.4
878.3
73.9
90.6
10.8
101.5
105.2
-2.7
-1.4
.4
601.5
-21.8
-14.5
-17.5
10.2
224.6
98.7
2.5
88.7
34.7
398.7
18.9
172.3
-16.3
2.6
184.0
37.1

564.6

647.7

786.2

809.4

656.2

-15.5
.4
19.4
339.6
99.5
27.3
104.5
-42.4
-78.1
4.0
36.3
3.0
182.5
49.3
82.4
47.5
13.0
44.9
52.3

-5.0
.5
9.2
232.5
-36.8
47.8
114.4
13.0
-117.4
26.8
16.0
-5.0
195.9
72.9
120.7
-7.7
-3.3
5.1
243.2

3.5
.1
21.2
145.9
48.8
93.2
89.0
-27.7
-81.3
106.1
15.5
-8.3
189.8
81.9
-70.0
82.6
-4.4
-24.6
124.5

-6.5
.3
30.3
185.5
27.4
-47.4
93.2
-88.5
-106.0
-38.3
136.7
-44.5
223.3
58.2
-4.3
45.5
14.2
12.5
298.9

2.5
.2
19.9
312.2
120.8
191.7
202.2
-73.3
-63.5
-13.0
135.4
4.0
249.2
56.2
73.6
42.1
-4.3
1.1
190.0

986.4

993.6

971.0

584.1

564.6

237.4
180.7
-5.6
18.5
43.9
-7.9
61.8
695.0
27.0
142.3
24.7
135.3
99.1
34.2
2.0
.1
365.8
136.9
93.5
25.6
17.8
153.5
91.7
39.5
-4.7
27.0
75.4
38.2
25.8
1.8
1.0
-30.6
39.1

226.2
198.9
3.1
5.7
18.6
-10.6
96.3
681.8
37.1
74.9
10.5
157.1
127.1
29.4
-.1
.7
402.2
119.0
87.4
15.3
16.3
186.2
103.8
29.2
18.1
35.1
96.9
49.2
11.9
10.7
.9
-8.2
32.5

21.6
209.6
203.8
49.4
190.5
-13.7
179.5
172.3
13.3
174.1
-1.4
-.8
-1.9
-1.8
-2.0
12.9
6.6
20.9
-7.6
29.0
17.9
26.2
16.3
45.4
-10.6
-3.1
33.7
10.0
35.2
24.8
74.1
58.4
44.7
19.1
51.4
690.4
580.2
529.7
523.8
317.4
-.5
16.4
14.2
27.4
-22.3
125.8
150.3
138.6
141.5
157.1
58.1
-7.3
8.1
31.1
-4.0
125.4
176.8
84.0
114.4
34.7
145.7
95.2
38.9
77.0
6.4
28.4
48.5
26.7
42.2
33.7
2.8
-2.8
-1.5
-4.7
-2.6
4.5
-1.9
1.6
-.1
-2.8
395.7
279.9
261.8
182.3
152.0
-91.0 -151.9 -144.9 -188.3 -164.8
-93.9 -143.9 -140.9 -179.8 -144.0
-16.5
-15.5
-4.8
-11.7
-31.1
7.7
8.5
11.5
3.3
10.2
207.7
188.5
215.4
236.2
219.5
93.1
94.4
83.2
112.9
132.8
29.7
34.7
26.5
32.7
37.0
36.2
16.6
60.6
42.1
.7
48.7
51.0
37.0
48.5
49.0
278.9
243.3
191.3
134.4
97.4
69.3
41.6
-13.1
-18.5
-14.5
41.4
23.8
90.3
44.0
75.3
67.1
80.9
30.1
134.2 - 6 8 . 9
.5
-.7
-.7
-1.6
-.1
96.3
34.9
49.0
-56.9
66.8
22.0
45.2
35.6
33.2
38.7

-135.3
-177.9
-1.6
32.2
12.1
-2.1
37.3
664.7
33.7
135.8
48.1
82.4
26.5
56.7
2.4
-3.3
364.7
-176.8
-156.3
-30.8
10.3
254.5
73.8
36.8
110.5
33.4
287.0
-5.2
117.1
1.1
-.3
135.8
38.5

986.4

993.6

971.0

876.0

606.0

627.4

584.1

-9.7
4.0
24.8
.5
.5
4.1
28.8
26.0
25.3
104.5
193.6
221.4
-16.5
34.8
2.9
141.1
259.9
290.0
4.1
43.2
6.1
96.7
76.3
120.8
50.6
53.6
17.6
24.0
21.9
90.1
-10.9
23.5
78.3
1.1
-3.1
-3.1
70.2
6.1
38.5
-63.2 -124.5 -104.2
-27.4
3.0
15.6
57.7
89.2
60.0
5.4
5.3
2.0
-31.2
-32.5
-60.9
222.3
269.9
241.2

2.0
2.5
25.7
186.8
34.2
96.8
44.2
59.9
-66.7
70.3
-23.5
12.6
67.9
-45.8
3.5
44.1
-.5
-39.3
120.5

-5.9
.0
22.0
263.5
-5.0
61.1
75.8
16.7
-60.9
41.3
-16.4
4.6
150.5
48.3
51.4
10.3
-9.1
-1.4
145.0

1.5
-1.2
27.9
284.1
-3.0
244.8
76.2
97.3
15.1
193.0
-160.7
24.0
98.1
14.3
-17.5
-39.6
-34.8
-21.5
219.6

-4.8
.4
31.4
197.9
-79.8
-75.4
7.9
-1.1
-63.0
-58.7
43.1
-3.6
125.6
56.7
20.1
41.1
-11.5
-34.1
65.0

1,374.3 1,336.8 1,400.3

916.7

RELATION OF LIABILITIES
TO FINANCIAL ASSETS

35 Net flows through credit markets
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54

Other financial sources
Official foreign exchange
Treasury currency and special drawing rights
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Corporate equities
Security credit
Trade debt
Taxes payable
Noncorporate proprietors' equity
Miscellaneous

55 Total financial sources
Floats not included in assets ( - )
56 U.S. government checking deposits
57 Other checkable deposits
58 Trade credit
59
60
61
62
63

Liabilities not identified as assets (—)
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous

64 Totals identified to sectors as assets

1,506.7

1,650.2 1,772.7

1,478.7 1,647.2 1,911.4

.0
.4
-8.5

1.6
.8
-.9

8.4
-3.2
.6

3.3
2.5
21.5

-13.1
2.0
18.3

-18.8
13.3
9.8

15.6
3.0
40.5

23.9
-2.1
27.1

-73.1
-6.1
-4.0

4.4
-13.3
14.7

-11.7
-17.5
-12.1

.4
-23.9
-6.5

-.1
-4.0
-21.2
6.7
10.0

-.1
-3.0
-29.8
6.3
4.4

-.2
-4.4
23.9
2.3
-95.6

.2
1.6
-34.8
6.5
-13.8

-.6
26.2
10.4
7.4
-29.9

-1.9
55.3
-115.4
-14.4
-119.9

-.3
20.8
76.2
2.0
9.3

-.2
28.4
36.9
23.4
-194.2

-.1
.2
44.0
18.5
185.0

-.4
13.4
-41.1
-18.3
-78.0

-.1
-15.1
101.5
29.5
-64.4

-.3
-8.4
67.7
11.9
36.3

1,841.0 1,387.5 1,316.1 1,592.2

749.5

1,564.2

1,358.6

1,523.4 1,670.7

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.6 and F.7. For ordering address, see inside front cover.




1,507.3 1,522.9

1,597.2 1,637.2 1,834.3

2. Excludes corporate equities and mutual fund shares.

A42

DomesticNonfinancialStatistics • March 1993

1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1
Billions of dollars, end of period
1991

1992

Q2

Ql

Q3

Q4

Ql

Q2

Q3

Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors

9,316.3

10,087.1

10,760.8

11,210.8

10,832.3

10,960.3

11,082.5

11,210.8

11,336.7

11,464.8

11,583.6

By lending sector and instrument
2 U.S. government
J
Treasury securities
4
Agency issues and mortgages

2,104.9
2,082.3
22.6

2,251.2
2,227.0
24.2

2,498.1
2,465.8
32.4

2,776.4
2,757.8
18.6

2,548.8
2,522.4
26.4

2,591.9
2,567.1
24.8

2,687.2
2,669.6
17.6

2,776.4
2,757.8
18.6

2,859.7
2,844.0
15.8

2,923.3
2,907.4
15.9

2,998.9
2,980.7
18.1

5 Private

7,211.4

7,835.9

8,262.6

8,434.5

8,283.5

8,368.3

8,395.3

8,434.5

8,477.0

8,541.5

8,584.8

6
7
8
9
10
11
12
13
14
15
16
17
18

By instrument
Debt capital instruments
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other

5,119.0
939.4
852.2
3,327.3
2,257.5
286.7
696.4
86.8
2,092.5
742.1
710.6
85.7
554.1

5,577.9
1,004.4
926.1
3,647.5
2,515.1
304.4
742.6
85.3
2,258.0
791.8
760.7
107.1
598.4

5,936.0
1,055.6
973.2
3,907.3
2,760.0
305.8
757.6
84.0
2,326.7
809.3
758.0
116.9
642.6

6,190.6
1,101.4
1,052.0
4,037.3
2,902.1
303.8
748.2
83.2
2,243.9
796.7
724.6
98.5
624.1

5,997.7
1,061.5
992.3
3,943.8
2,788.9
307.3
763.7
83.9
2,285.8
785.3
748.3
120.8
631.5

6,087.5
1,072.5
1,016.5
3,998.6
2,836.9
310.4
767.4
83.8
2,280.8
786.7
742.0
119.4
632.6

6,138.4
1,089.3
1,036.9
4,012.2
2,869.5
303.1
756.5
83.1
2,256.9
785.9
734.1
107.0
629.8

6,190.6
1,101.4
1,052.0
4,037.3
2,902.1
303.8
748.2
83.2
2,243.9
796.7
724.6
98.5
624.1

6,256.9
1,111.5
1,071.0
4,074.4
2,945.5
303.5
742.6
82.9
2,220.0
775.7
712.5
110.3
621.6

6,319.4
1,128.6
1,090.4
4,100.5
2,985.0
295.6
736.4
83.6
2,222.1
775.8
709.4
111.7
625.1

6,373.9
1,145.6
1,105.7
4,122.6
3,023.2
292.9
722.7
83.8
2,210.9
781.1
699.6
108.3
621.9

19
20
21
22
23
24

By borrowing sector
State and local government
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate

752.5
3,177.3
3,281.6
137.6
1,127.1
2,016.9

815.7
3,508.2
3,512.0
139.2
1,177.5
2,195.3

864.0
3,780.6
3,618.0
140.5
1,204.2
2,273.4

902.5
3,938.6
3,593.3
138.8
1,180.6
2,273.9

870.1
3,788.3
3,625.2
136.8
1,207.1
2,281.3

878.5
3,848.3
3,641.5
139.6
1,210.8
2,291.1

891.4
3,888.7
3,615.3
140.4
1,191.0
2,283.9

902.5
3,938.6
3,593.3
138.8
1,180.6
2,273.9

911.3
3,960.8
3,604.9
136.3
1,174.9
2,293.7

925.9
4,009.9
3,605.8
140.2
1,160.0
2,305.6

942.3
4,051.6
3,590.9
141.7
1,144.0
2,305.2

244.6

254.8

278.6

292.7

291.3

277.6

282.2

292.7

282.4

298.5

307.0

83.1
21.5
49.9
90.1

88.0
21.4
63.0
82.4

109.4
18.5
75.3
75.4

124.2
21.6
81.8
65.2

112.1
20.5
87.0
71.6

114.8
19.7
74.0
69.1

118.6
20.0
78.0
65.6

124.2
21.6
81.8
65.2

125.4
22.0
70.5
64.4

131.1
25.5
77.5
64.4

137.0
26.4
80.7
63.1

9,560.9

10,341.9

11,039.4

11,503.6

11,123.6

11,237.9

11,364.7

11,503.6

11,619.1

11,763.3

11,890.7

25 Foreign credit market debt held in
United States
26
27
28
29

Bonds
Bank loans n.e.c
Open market paper
U.S. government loans

30 Total credit market debt owed by nonfinancial
sectors, domestic and foreign

Financial sectors
31 Total credit market debt owed by
financial sectors
32
33
34
35
36
37
38
39
40
41

By instrument
U.S. government-related
Sponsored credit-agency securities
Mortgage pool securities
Loans from U.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks

By borrowing sector
42 Sponsored credit agencies
43 Mortgage pools
44 Private financial sectors
45 Commercial banks
46 Bank affiliates
47 Savings and loan associations
48 Mutual savings banks
49 Finance companies
50 Real estate investment trusts (REITs)
51 Securitized credit obligation (SCO) issuers...

2,082.9

2,333.0

2,524.2

2,667.8

2,546.3

2,571.4

2,608.2

2,667.8

2,686.9

2,739.9

2,802.6

1,098.4
348.1
745.3
5.0
984.6
415.1
3.4
35.6
377.7
152.8

1,249.3
373.3
871.0
5.0
1,083.7
491.9
3.4
37.5
409.1
141.8

1,418.4
393.7
1,019.9
4.9
1,105.8
528.2
4.2
38.6
417.7
117.1

1,566.2
402.9
1,158.5
4.8
1,101.6
590.2
4.8
41.8
385.7
79.1

1,452.1
397.0
1,050.3
4.9
1,094.1
545.4
4.2
36.5
400.9
107.0

1,482.8
389.6
1,088.4
4.9
1,088.6
562.2
4.5
37.0
390.1
94.7

1,524.4
394.7
1,124.8
4.9
1,083.9
569.5
4.4
39.0
387.0
83.9

1,566.2
402.9
1,158.5
4.8
1,101.6
590.2
4.8
41.8
385.7
79.1

1,592.9
405.7
1,182.4
4.8
1,094.0
578.2
5.0
41.6
392.9
76.3

1,641.6
417.8
1,219.0
4.8
1,098.3
583.2
5.0
43.7
389.5
76.9

1,682.2
433.4
1,244.0
4.8
1,120.4
597.0
5.1
44.5
393.7
80.2

353.1
745.3
984.6
78.8
136.2
159.3
18.6
444.6
11.4
135.7

378.3
871.0
1,083.7
77.4
142.5
145.2
17.2
504.2
10.1
187.1

398.5
1,019.9
1,105.8
76.3
114.8
115.3
16.7
539.8
10.6
232.3

407.7
1,158.5
1,101.6
63.0
112.3
75.9
13.2
557.9
11.4
268.0

401.8
1,050.3
1,094.1
68.1
114.4
104.2
16.4
539.6
10.8
240.6

394.4
1,088.4
1,088.6
65.9
113.3
91.0
16.6
540.4

399.5
1,124.8
1,083.9
64.6
110.6
79.0
15.2
543.7

407.7
1,158.5
1,101.6
63.0
112.3
75.9
13.2
557.9
11.4
268.0

410.5
1,182.4
1,094.0
60.8
115.0
71.2
13.5
547.1
12.7
273.6

422.6
1,219.0
1,098.3
61.7
112.7
70.3
14.3
541.8
13.2
284.4

438.2
1,244.0
1,120.4
63.3
112.3
71.0
16.2
550.8
13.2
293.7

11.0

11.0

250.3

259.9

All sectors
52 Total credit market debt, domestic and foreign..
53
54
55
56
57
58
59
60

U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans

11,643.9

12,674.9

13,563.6

14,171.3

13,669.9

13,809.2

13,973.0

14,171.3

14,306.0

14,503.3

14,693.3

3,198.3
939.4
1,350.4
3,330.7
742.1
767.7
513.4
801.9

3,495.6
1,004.4
1,506.0
3,650.9
791.8
819.6
579.2
827.5

3,911.7
1,055.6
1,610.7
3,911.5
809.3
815.1
609.9
839.9

4,337.7
1,101.4
1,766.4
4,042.1
796.7
788.0
565.9
773.2

3,996.1
1,061.5
1,649.9
3,948.1
785.3
805.3
608.8
814.9

4,069.8
1,072.5
1,693.5
4,003.1
786.7
798.7
583.6
801.4

4,206.7
1,089.3
1,725.0
4,016.7
785.9
793.2
572.0
784.2

4,337.7
1,101.4
1,766.4
4,042.1
796.7
788.0
565.9
773.2

4,447.8
1,111.5
1,774.6
4,079.4
775.7
776.1
573.7
767.1

4,560.1
1,128.6
1,804.7
4,105.5
775.8
778.7
578.7
771.2

4,676.2
1,145.6
1,839.7
4,127.6
781.1
770.4
582.6
770.0

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.2 through L.4. For ordering address, see inside front cover.




Flow of Funds

A43

1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars except as noted, end of period
1992

1991

Transaction category or sector

1988

1989

1990

1991
QL

Q2

Q3

Q4

QL

Q2

Q3

CREDIT MARKET DEBT OUTSTANDING 2
1 Total credit market assets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Sponsored credit agencies
Mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank affiliates
Banks in U.S. possession
Private nonbank finance
Thrift institutions
Savings and loan associations
Mutual savings banks
Credit unions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds.
Finance n.e.c
Finance companies
Mutual funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Securitized credit obligation (SCOs) issuers .

11,643.9 12,674.9 13,563.6 14,171.3 13,669.9 13,809.2 13,973.0 14,171.3 14,306.0
2,185.5
1,485.1
57.2
167.4
475.8
213.2
653.2
8,592.0
367.7
745.3
240.6
2,476.3
2,231.9
215.6
13.4
15.4
4,762.1
1,572.0
1,184.2
240.6
147.2
1,932.6
920.0
287.9
358.5
366.2
1,257.5
559.2
283.4
224.7
7.8
46.7
135.7

2,440.5
1,710.1
56.4
180.3
493.7
205.1
734.2
9,295.1
367.2
871.0
233.3
2,643.9
2,368.4
242.3
16.2
17.1
5,179.7
1,484.9
1,088.9
241.1
154.9
2,140.3
1,013.1
317.5
394.7
414.9
1,554.5
617.1
307.2
291.8
8.4
142.9
187.1

2,644.2
1,882.3
55.0
186.9
519.9
238.7
792.4
9,888.3
383.6
1,019.9
241.4
2,769.3
2,463.6
270.8
13.4
21.6
5,474.1
1,335.5
945.1
227.1
163.4
2,329.1
1,116.5
344.0
431.3
437.4
1,809.4
658.7
360.2
372.7
7.7
177.9
232.3

2,490.8
1,693.6
53.1
207.9
536.2
246.2
837.2
10,597.2
397.7
1,158.5
272.5
2,853.3
2,502.5
319.2
11.9
19.7
5,915.1
1,190.6
804.2
211.5
174.9
2,723.8
1,199.6
378.7
671.1
474.3
2,000.7
645.6
450.5
402.8
7.0
226.9
268.0

2,490.8
1,693.6
53.1
207.9
536.2
246.2
837.2
10,597.2
397.7
1,158.5
272.5
2,853.3
2,502.5
319.2
11.9
19.7
5,915.1
1,190.6
804.2
211.5
174.9
2,723.8
1,199.6
378.7
671.1
474.3
2,000.7
645.6
450.5
402.8
7.0
226.9
268.0

2,496.1
1,716.6
51.9
196.2
531.4
250.2
859.3
10,700.4
419.9
1,182.4
271.8
2,860.6
2,514.0
313.3
13.6
19.7
5,965.8
1,161.8
771.1
213.4
177.2
2,750.5
1,224.3
387.0
657.6
481.6
2,053.6
641.0
480.3
423.1
6.8
228.8
273.6

14,503.3 14,693.3
2,487.1
1,690.9
51.3
210.7
534.2
245.2
894.9
10,876.1
429.0
1,219.0
282.6
2,882.9
2,521.9
328.2
13.1
19.7
6,062.6
1,143.0
748.8
211.6
182.6
2,801.0
1,249.8
392.5
670.5
488.2
2,118.6
641.6
520.4
413.5
7.5
251.2
284.4

2,456.8
1,665.7
50.8
211.0
529.4
237.8
909.5
11,089.1
445.6
1,244.0
285.2
2,908.9
2,550.0
326.6
12.5
19.8
6,205.3
1,137.5
743.2
207.2
187.1
2,856.2
1,273.5
393.1
692.7
496.9
2,211.6
642.5
561.2
408.8
8.1
297.3
293.7

2,634.3
1,875.4
53.8
174.5
530.6
245.5
797.1
9,992.9
388.5
1,050.3
247.3
2,780.2
2,470.8
275.6
12.3
21.6
5,526.7
1,287.8
901.3
224.1
162.3
2,392.0
1,148.5
352.2
441.8
449.5
1,846.9
649.4
374.6
411.4
7.3
163.6
240.6

2,653.8
1,882.0
53.3
189.7
528.8
252.9
810.0
10,092.6
382.7
1,088.4
253.7
2,796.6
2,480.0
284.4
11.3
20.9
5,571.2
1,248.4
866.3
216.4
165.7
2,448.8
1,183.7
361.4
442.0
461.7
1,874.0
651.7
394.4
389.9
7.3
180.4
250.3

2,648.2
1,875.5
52.9
189.9
530.0
252.0
819.3
10,253.3
389.5
1,124.8
264.7
2,817.8
2,488.7
297.5
11.6
20.0
5,656.5
1,205.1
826.1
208.7
170.2
2,511.7
1,201.4
370.7
469.6
470.1
1,939.7
647.4
421.4
389.5
7.2
214.3
259.9

12,674.9 13,563.6 14,171.3 13,669.9

13,809.2

13,973.0 14,171.3 14,306.0 14,503.3 14,693.3

RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35 Total credit market debt

36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52

Other liabilities
Official foreign exchange
Treasury currency and special drawing rights
certificates
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Security credit
Trade debt
Taxes payable
Miscellaneous

53 Total liabilities

Financial assets not included in liabilities (+)
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business

11,643.9
27.1

53.6

61.3

55.4

56.6

53.6

52.9

55.4

52.7

54.4

55.4

19.8
325.5
2,755.0
46.9
4,354.7
882.8
2,169.2
596.9
338.0
325.0

23.8
354.3
3,210.5
32.4
4,644.6
888.6
2,265.4
615.4
428.1
403.2
43.9
566.2
133.9
903.9
81.8
2,508.3

26.3
380.0
3,303.0
64.0
4,741.4
932.8
2,325.3
548.7
498.4
379.7
56.6
602.1
137.4
938.0
81.4
2,678.8

26.3
402.0
4,235.9
63.9
4,802.5
1,008.5
2,342.0
487.9
539.6
363.4
61.2
812.4
188.9
940.8
72.2
2,813.7

26.0
385.0
3,520.6
59.2
4,776.4
905.1
2,355.3
553.1
551.7
348.6
62.6
661.6
132.5
903.5
75.1
2,688.6

26.1
392.3
3,555.8
35.8
4,765.7
933.1
2,351.5
532.6
532.8
354.0
61.7
683.7
137.5
909.4
65.8
2,691.0

26.2
397.2
3,720.8
60.7
4,769.5
948.3
2,339.7
517.1
533.1
368.9
62.4
744.2
158.1
935.3
71.8
2,729.0

26.3
402.0
4,235.9
63.9
4,802.5
1,008.5
2,342.0
487.9
539.6
363.4
61.2
812.4
188.9
940.8
72.2
2,813.7

26.3
407.3
4,251.2
64.2
4,801.4
984.7
2,341.3
468.8
571.0
376.4
59.1
859.3
195.1
942.6
73.5
2,816.2

26.4
414.9
4,304.4
69.2
4,797.5
1,032.8
2,315.3
437.5
557.2
406.8
47.9
936.7
194.1
949.4
70.1
2,870.5

26.5
419.8
4,439.7
100.6
4,841.7
1,071.9
2,296.4
425.5
553.2
445.7
48.9
1,013.4
212.4
976.2
72.2
2,929.0

42.8
478.3
118.3
838.4
79.8
2,312.0

22,999.5 25,188.3 26,577.2 28,585.4 26,954.9 27,125.9 27,638.6 28,585.4 28,795.8 29,190.9 29,780.2
40.0
3,141.6
2,373.1

40.3
3,819.7
2,524.9

41.3
3,506.6
2,449.4

41.6
4,630.0
2,372.5

40.7
4,047.2
2,478.4

40.7
4,104.7
2,509.4

41.1
4,338.5
2,495.9

41.6
4,630.0
2,372.5

41.3
4,739.7
2,381.4

41.5
4,678.8
2,362.6

23.2
4,832.4
2,335.6

5.9
29.6
-164.3

6.1
26.5
-159.7

15.0
28.9
-148.0

3.8
30.9
-134.1

5.2
26.7
-157.9

8.3
29.9
-157.7

19.8
23.6
-154.2

3.8
30.9
-134.1

.9
22.0
-133.3

1.4
20.1
-148.6

4.1
8.3
-154.3

-4.1
-28.5
-12.4
21.4
-134.6

-4.3
-31.0
11.5
20.6
-253.3

-4.1
-32.0
-23.3
21.8
-249.7

-4.8
-4.2
-12.9
18.8
-451.6

-4.6
-15.5
-39.6
21.4
-262.4

-4.7
-9.9
-25.8
11.7
-244.5

-4.7
-4.7
-10.6
17.5
-303.2

-4.8
-4.2
-12.9
18.8
-451.6

-4.9
-1.8
-10.1
16.6
-441.1

-4.9
-4.0
11.0
12.4
-441.2

-5.0
-7.4
32.9
9.4
-467.8

Floats not included in assets ( - )
57 U.S. government checking deposits
58 Other checkable deposits
59 Trade credit

60
61
62
63
64

Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous

65 Totals identified to sectors as assets

28,841.1 31,956.8 32,966.0 36,183.5 33,947.9 34,173.4 34,930.5 36,183.5 36,510.0 36,827.5 37,551.1

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.6 through L.7. For ordering address, see inside front cover.




2. Excludes corporate equities and mutual fund shares,

A44

Domestic Nonfinancial Statistics • March 1993

2.10 NONFINANCIAL BUSINESS ACTIVITY

Selected Measures

Monthly data seasonally adjusted, 1987=100 except as noted
1992
Measure

1 Industrial production 1
2
i
4
5
6
7

Market
groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials

Industry
groupings
8 Manufacturing
9 Capacity utilization, manufacturing
(percent) 2

1990

109.2

1991

107.1

1992

108.7

Apr.

May

June

July

Aug.

Sept.

Oct. r

Nov/

Dec.

108.1

108.9

108.5

109.4

109.1

108.9*

109.7

110.1

110.5

r

110.1
110.9
107.3
115.5
107.7
107.8

108.1
109.6
107.5
112.2
103.4
105.5

109.0
110.6
110.1
111.3
103.9
106.8

109.7
111.4
110.8
112.3
104.4
107.7

109.0
110.5
109.6
111.6
104.4
107.6

110.4
111.8
105.1
109.0

109.8
111.5
110.8
112.5
104.4
108.1

109.6
111.2 r
110.7 r
111.9
104.5 r
107.9*

110.7
112.4
111.9
113.0
105.4
108.2

111.1

110.3
112.0
104.4
107.5

112.9
112.0
114.1
105.4
108.7

111.4
113.5
112.4
114.9
105.1
108.9

109.9

107.4

109.7

109.0

109.9

109.6

110.2

110.1

109.8r

110.6

111.1

111.7

109.4

111.0

109.6

111.0

82.3

78.2

77.8

77.7

78.2

77.8

78.1

77.9

77.5 r

77.9

78.2

78.4

95.3

89.5

n.a.

93.0

86.0

90.0

89.0

90.0

89.0

104.0

92.0

n.a.

11 Nonagricultural employment, total 4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production worker
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
19
Disposable personal income
20 Retail sales 6

107.5
101.0
100.5
100.1
109.5
122.7
121.3
113.5
122.9
118.7

106.0
96.4
97.0
96.1
109.0
127.0
124.4
113.6
128.0
119.8

106.1
94.8
95.6
95.2
109.7
n.a.
n.a.
n.a.
n.a.
125.6

106.0
95.2
96.1
95.7
109.5
131.9
127.8
115.0
133.8
123.5

106.2
95.3
96.1
95.7
109.6
132.4
128.6
115.5
134.2
124.1

106.1
95.0
95.9
95.4
109.6
132.5
128.5
115.1
134.4
124.0

106.3
94.9
95.9
95.5
109.9
132.8r
128.7r
115.5"
134.5 r
125.4

106.2
94.6
95.4
94.9
109.9
m ^
129.6r
115.3 r
134.6r
125.5

106.2
94.3
95.2
94.6
110.0
133.6
129.5 r
115.3 r
135.2
126.5

106.2
94.2
94.9
94.3
110.1
135.2
130.4
116.4
136.8
129.2

106.3
94.2
95.0
94.7
110.2
135.5
131.3
116.0
137.0
128.5

106.4
94.2
95.0
94.7
110.3
n.a.
n.a.
n.a.
130.0

Prices7
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)

130.7
119.2

136.2
121.7

140.3
123.2

139.5
122.4

139.7
123.2

140.2
123.9

140.5
123.7

140.9
123.6 r

141.3
123.3

141.8
124.3

142.0
123.9

141.9
123.8

10 Construction contracts 3

1. A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989
Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the
Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other
sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, from McGraw-Hill Information Systems
Co., F . W . Dodge Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings.
Series covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current
Business.




6. Based on data from U.S. Bureau of the Census, Survey of Current
Business.
7. Based on data not seasonally adjusted. Seasonally adjusted data for changes
in the price indexes can be obtained from the Bureau of Labor Statistics, U.S.
Department of Labor, Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and
indexes for series mentioned in notes 3 and 7 can also be found in the Survey of
Current Business.
Figures for industrial production for the latest month are preliminary, and many
figures for the three months preceding the latest month have been revised. See
"Recent Developments in Industrial Capacity and Utilization," Federal Reserve
Bulletin, vol. 76 (June 1990), pp. 411-35.

Selected Measures
2.11

A45

LABOR FORCE, EMPLOYMENT, A N D U N E M P L O Y M E N T
Thousands of persons; monthly data seasonally adjusted except as noted
1992
Category

1990

1991

1992
May

June

July

Aug.

Sept.

Oct/

Nov/

Dec.

HOUSEHOLD SURVEY DATA
1
1 Noninstitutional population

190,216

191,883

193,542

193,295

193,431

193,588

193,749

193,893

194,051

194,210

194,379

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

126,954
124,787

127,421
125,303

128,948
126,982

129,027r
127,039*

129,274r
127,298r

129,316r
127,350*

129,363r
127,404r

129,220"^
127,274r

128,986
127,066

129,259
127,365

129,461
127,591

114,728
3,186

114,644
3,233

114,391
3,207

114,394r
3,186r

114,266r
3,244r

114,515r
3,207r

114,562r
3,218

114,503r
3,221r

114,518
3,169

114,855
3,209

115,049
3,262

9,788r
7.7r
64,157r

9,628r
7.6r
64,272r

r

9,624
7.6
64,386r

9,550"^
7.5
64,673r

9,379
7.4
65,065

9,301
7.3
64,951

9,280
7.3
64,918

6,874
5.5
63,262

8,426
6.7
64,462

9,384
7.4
64,594

109,872

108,310

108,434

108,496

108,423

108,594

108,485

108,497

108,571

108,647

108,711

19,117
710
5,133
5,808
25,877
6,729
28,130
18,304

18,455
691
4,685
5,772
25,328
6,678
28,323
18,380

18,192
635
4,594
5,741
25,120
6,672
28,903
18,578

18,275
641
4,632
5,745
25,143
6,681
28,833
18,546

18,236
634
4,600
5,745
25,144
6,672
28,854
18,538

18,242
633
4,584
5,742
25,156
6,660
28,971
18,606

18,145
626
4,591
5,729
25,070
6,661
28,981
18,682

18,102
620
4,574
5,738
25,079
6,669
29,065
18,650

18,046
623
4,601
5,731
25,115
6,680
29,152
18,623

18,071
622
4,584
5,733
25,099
6,669
29,183
18,686

18,074
620
4,579
5,737
25,107
6,677
29,253
18,664

9,459*
7.4r
64,268r

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 sixteen years of age and older. Monthly figures are based on sample
data collected during the calendar week that contains the twelfth day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures.
2. Includes self-employed, unpaid family, and domestic service workers.
3. Includes all full- and part-time employees who worked during, or received




pay for, the pay period that includes the twelfth day of the month; excludes
proprietors, self-employed persons, household and unpaid family workers, and
members of the armed forces. Data are adjusted to the March 1984 benchmark,
and only seasonally adjusted data are available at this time.
SOURCE. Based on data from U.S. Department of Labor, Employment and
Earnings.

A46

Domestic Nonfinancial Statistics • March 1993

2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1992

Ql

Q2

1992

Q3 R

Q4

Q2

Q3

Ql

04

Capacity (percent of 1987 output)

Output (1987=100)

1 Total industry

Ql

1992

Q2

Q3 R

Q4

Capacity utilization rate (percent)

107.1

108.5

109.1

110.1

137.0

137.7

138.4

139.1

78.2

78.8

78.8

79.2

108.0

109.5

110.0

111.1

139.7

140.6

141.4

142.2

77.3

77.9

77.8

78.2

Primary processing
Advanced processing

104.0
109.9

105.4
111.4

106.4
111.7

107.1
113.0

129.3
144.6

129.6
145.6

129.9
146.7

130.3
147.7

80.5
76.0

81.3
76.5

81.9
76.2

82.2
76.5

5
6
7
8
9
10
11
12
13

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment .

106.6
98.5
102.2
103.8
100.0
122.1
110.5
91.7

108.4
96.7
101.7
101.6
101.7
125.7
111.8
100.5

108.8
98.5
104.0
104.6
103.0
128.8
112.6
98.1

110.2
100.5
105.3
107.4
102.4
132.1
113.5
103.6

143.7
125.9
129.1
134.1
122.1
164.3
147.9
136.2

144.4
126.1
128.3
132.7
122.2
165.9
149.1
136.7

145.2
126.3
127.5
131.2
122.3
167.4
150.4
137.2

146.0
126.5
126.7
129.8
122.4
168.9
151.6
137.7

74.2
78.2
79.2
77.4
81.9
74.3
74.7
67.3

75.0
76.7
79.2
76.6
83.3
75.8
75.0
73.5

74.9
78.0
81.5
79.7
84.3
76.9
74.9
71.5

75.5
79.5
83.1
82.7
83.7
78.2
74.8
75.2

99.3

96.8

94.9

93.7

140.4

140.9

141.5

142.1

70.8

68.7

67.1

65.9

14
15
16
17
18
19

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

109.8
104.3
105.8
113.6
124.4
107.7

110.9
106.2
106.7
116.8
129.7
109.2

111.6
106.6
108.2
118.0
132.4
106.9

112.3
107.0
107.4
119.2

135.6
119.2
119.9
144.3
150.5
121.5

136.5
119.7
120.5
145.1
152.2
121.6

137.4
120.2
121.1
146.0
121.7

81.5
87.9
88.7
79.2
83.7
88.7

81.7
89.0
89.0
81.0
86.2
89.9

81.8
89.1
89.8
81.3
87.0
87.9

81.7
89.0
88.7
81.6

110.1

134.8
118.8
119.3
143.4
148.7
121.4

90.5

97.9
107.0
109.7

98.9
107.4
110.3

99.2
109.4
113.2

99.6
109.4
112.5

114.7
129.5
125.6

114.7
129.8
126.0

114.8
130.1
126.4

114.8
130.4
126.8

85.3
82.6
87.3

86.2
82.7
87.6

86.5
84.1
89.5

86.8
83.9
88.7

Latest cycle 3

1991

Sept. r

Oct. r

Nov. r

Dec. p

2
3
4

20
21
22

Manufacturing

Mining
Utilities
Electric

Previous cycle 2
High

Low

High

Low

Dec.

1992

May

June

July

Aug.

Capacity utilization rate (percent)

1 Total industry
2
3
4

Manufacturing
Primary processing
Advanced processing

89.2

72.6

87.3

71.8

78.7

79.1

78.6

79.1

78.8

78.6

79.0

79.2

79.3

88.9

70.8

87.3

70.0

77.7

78.2

77.8

78.1

77.9

77.5

77.9

78.2

78.4

92.2
87.5

68.9
72.0

89.7
86.3

66.8
71.4

80.2
76.6

81.5
76.8

81.4
76.3

82.7
76.2

81.7
76.3

81.3
76.0

81.8
76.4

82.4
76.5

82.5
76.8

68.5
62.2
66.2
66.6
61.3
74.5
63.8
51.1

86.9
87.6
102.4
110.4
90.5
92.1
89.4
93.0

65.0
60.9
46.8
38.3
62.2
64.9
71.1
44.5

74.8
75.7
78.3
75.5
82.6
74.7
75.2
69.6

75.5
77.2
79.5
77.0
83.3
76.4
75.3
75.1

75.0
75.6
79.7
77.0
83.9
76.0
75.0
73.3

75.2
79.1
82.6
80.8
85.4
76.6
75.1
71.3

75.2
78.3
81.8
79.5
85.2
77.3
75.1
72.5

74.4
76.6
80.1
78.8
82.2
76.9
74.3
70.8

75.1
79.4
81.8
81.5
82.3
77.5
74.7
73.7

75.5
80.0
83.2
82.5
84.2
78.4
74.9
74.2

75.9
79.1
84.2
84.0
84.5
78.7
74.9
77.8

5
6
7
8
9
10
11
12
13

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment.

88.8
90.1
100.6
105.8
92.9
96.4
87.8
93.4
77.0

66.6

81.1

66.9

72.3

68.7

68.2

67.7

67.0

66.4

66.3

66.2

65.4

14
15
16
17
18
19

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

87.9
92.0
96.9
87.9
102.0
96.7

71.8
60.4
69.0
69.9
50.6
81.1

87.0
91.7
94.2
85.1
90.9
89.5

76.9
73.8
82.0
70.1
63.4
68.2

81.6
86.5
90.0
78.9
82.5
89.5

81.8
89.6
88.3
81.1
87.3
89.3

81.6
88.2
89.3
81.3
85.9
89.6

82.0
89.6
91.1
81.5
89.8
89.8

81.6
88.7
88.2
81.1
86.0
85.8

81.7
88.9
90.0
81.4
85.1
88.3

81.7
88.2
87.8
81.3
82.8
91.5

81.8
89.1
89.2
81.8

81.8
89.7
89.0
81.8

91.2

88.8

94.4
95.6
99.0

88.4
82.5
82.7

96.6
88.3
88.3

80.6
76.2
78.7

86.2
83.4
87.7

86.9
82.7
87.5

85.4
82.1
87.0

87.6
84.1
89.5

86.1
83.6
89.2

85.6
84.6
89.9

86.3
85.1
90.0

87.0
84.1
89.0

87.1
82.5
87.2

20
21
22

Mining
Utilities
Electric

1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover. For a detailed description of
the series, see "Recent Developments in Industrial Capacity and Utilization,"
Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35.




2. Monthly high, 1973; monthly low, 1975.
3. Monthly highs, 1978 through 1980; monthly lows, 1982.

Selected Measures
2.13 INDUSTRIAL PRODUCTION

A47

Indexes and Gross Value1

Monthly data seasonally adjusted

Group

1987
proportion

1991

1992

1992
avg.
Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept. r

Oct. r

Nov/

Dec."

Index (1987 = 100)
MAJOR MARKETS

100.0

108.7

107.4

106.6

107.2

107.6

108.1

108.9

108.5

109.4

109.1

108.9

109.7

110.1

110.5

2 Products
3 Final products
4
Consumer goods, total
5
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied g o o d s . . .
11
Other
12
Appliances, A/C, and TV
13
Carpeting and furniture
14
Miscellaneous home goods . . .
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
18
Chemical products
19
Paper products
20
Energy
21
Fuels
22
Residential utilities

60.8
46.0
26.0
5.6
2.5
1.5
.9
.6
1.0
3.1
.8
.9
1.4
20.4
9.1
2.6
3.5
2.5
2.7
.7
2.0

109.4
111.0
110.3
108.0
106.7
102.0
90.0
122.1
113.8
109.1
104.8
102.4
115.8
110.9
108.4
95.2
122.2
124.4
106.7
104.7
107.4

108.4
109.9
109.1
104.6
101.3
96.7
88.2
111.0
108.2
107.2
98.9
101.5
115.5
110.3
107.0
96.2
118.0
126.8
109.3
104.3
111.2

107.5
108.7
108.1
101.3
94.2
84.3
79.1
93.0
109.1
106.9
99.6
101.1
114.7
110.0
107.3
95.0
118.1
126.8
106.8
103.8
108.0

108.1
109.4
108.8
105.3
101.6
94.3
84.8
110.2
112.6
108.3
102.9
102.4
115.0
109.8
107.4
95.2
118.3
124.7
106.4
103.5
107.5

108.5
109.8
109.3
106.2
103.6
95.7
81.9
118.8
115.5
108.3
103.5
102.5
114.7
110.2
107.8
95.1
119.4
124.6
107.0
103.7
108.2

109.0
110.6
110.1
107.9
106.5
102.5
93.1
118.3
112.5
109.1
103.4
104.4
115.2
110.7
107.6
95.3
120.8
125.1
108.9
105.1
110.3

109.7
111.4
110.8
111.1
110.6
107.8
98.6
123.3
114.8
111.5
107.4
105.9
117.3
110.7
107.7
96.4
121.4
124.3
107.2
104.0
108.4

109.0
110.5
109.6
109.2
108.0
104.0
97.6
114.8
114.0
110.2
106.2
103.2
116.9
109.7
107.2
95.5
121.6
121.7
104.8
104.4
105.0

109.6
111.0
110.4
108.6
106.6
100.5
92.3
114.3
115.7
110.3
102.3
103.8
118.8
110.8
108.6
96.8
121.5
121.9
107.4
105.3
108.2

109.8
111.5
110.8
109.2
106.8
100.6
87.2
123.1
116.2
111.1
110.6
103.6
116.1
111.2
110.1
95.0
122.0
121.8
106.2
99.0
108.9

109.6
111.2
110.7
106.9
104.5
98.2
88.1
115.1
114.0
108.9
108.5
100.9
114.2
111.7
108.9
95.5
124.1
124.2
108.1
103.5
109.7

110.7
112.4
111.9
108.5
108.9
105.9
88.5
135.1
113.5
108.2
104.5
100.3
115.3
112.9
109.5
94.9
126.0
125.6
111.9
110.3
112.4

111.1
112.9
112.0
108.7
109.2
107.2
89.4
137.1
112.2
108.3
103.1
100.8
116.0
112.9
109.5
95.3
126.9
126.5
109.6
107.9
110.2

111.4
113.5
112.4
111.8
115.4
116.5
97.7
148.1
113.8
108.9
104.6
101.5
116.1
112.5
109.5
95.4
127.0
126.5
106.9
105.7
107.4

23
24
25
26
27
28
29
30
31
32
33

Equipment
Business equipment
Information processing and related . .
Office and computing
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes

20.0
13.9
5.6
1.9
4.0
2.5
1.2
1.9
5.4
.6
.2

112.0
124.5
141.1

110.9
121.4
134.0
159.1
102.3
129.5
96.1
114.1
88.1
75.8
87.9

109.4
119.9
134.1
160.6
100.7
124.2
84.9
113.1
86.7
71.8
98.4

110.2
121.0
134.6
162.4
101.3
129.2
94.7
112.2
86.2
73.9
99.7

110.4
121.5
136.0
164.9
101.3
128.9
95.0
112.2
85.6
76.2
98.7

111.3
123.0
137.9
168.2
101.7
131.7
101.3
113.2
84.7
79.2
100.7

112.3
124.5
139.2
170.5
103.4
133.3
105.6
115.0
84.2
79.2
100.3

111.6
124.1
140.4
174.0
102.9
131.8
101.7
111.5
83.6
74.6
97.1

111.8
124.4
141.9
178.0
103.4
128.7
98.1
112.2
82.7
78.6
112.0

112.5
125.9
143.5
182.0
102.7
132.6
101.3
114.4
81.8
75.0
106.1

111.9
125.4
143.5
184.0
101.6
130.4
99.1
115.8
81.1
74.4
111.2

113.0
126.8
145.6
187.0
102.0
133.2
105.6
116.1
80.5
80.2
119.9

114.1
128.3
147.3
190.0
103.9
133.7
107.7
116.8
80.0
85.2
127.1

114.9
129.4
148.2

34
35
36

Intermediate products, total
Construction supplies
Business supplies

14.7
6.0
8.7

104.4
97.4
109.3

103.8
95.0
110.0

103.9
95.5
109.9

104.0
96.0
109.6

104.4
96.7
109.7

103.9
96.5
109.0

104.4
97.8
109.0

104.4
97.2
109.4

105.1
98.6
109.7

104.4
98.5
108.5

104.5
97.1
109.6

105.4
98.6
110.2

105.4
98.8
110.1

105.1
98.4
109.8

37 Materials
38 Durable goods materials
39
Durable consumer parts
Equipment parts
40
41
Other
42
Basic metal materials
43
Nondurable goods materials
44
Textile materials
45
Pulp and paper materials
46
Chemical materials
47
Other
48
Energy materials
49
Primary energy
Converted fuel materials
50

39.2
19.4
4.2
7.3
7.9
2.8
9.0
1.2
1.9
3.8
2.1
10.9
7.2
3.7

107.5
109.9
100.8
116.2
108.9
108.6
109.7
102.7
109.6
110.4
112.4
101.3
100.6
102.6

105.8
108.1
97.0
114.2
108.4
108.1
107.1
98.5
109.6
107.0
109.7
100.4
100.4
100.5

105.2
107.0
95.3
114.1
106.7
105.1
107.3
98.9
107.4
107.6
111.2
100.4
100.5
100.2

105.8
108.1
97.1
115.2
107.5
107.3
107.1
101.5
106.8
106.6
111.2
100.5
100.6
100.4

106.1
108.3
97.9
115.1
107.5
106.3
108.9
102.0
107.8
109.3
112.7
100.1
98.2
103.8

106.8
108.7
99.3
114.7
108.1
106.3
109.4
103.2
109.2
109.9
112.2
101.3
99.8
104.1

107.7
110.4
102.5
116.2
109.2
108.3
109.7
102.9
107.8
111.2
112.4
101.3
99.7
104.3

107.6
110.2
102.9
116.2
108.7
107.7
110.4
102.3
110.8
110.9
113.4
100.6
99.6
102.6

109.0
111.2
101.8
117.5
110.2
111.5
111.7
103.9
111.8
113.4
112.8
102.9
102.3
104.1

108.1
111.1
103.9
117.0
109.5
110.9
110.3
102.9
108.9
111.9
112.6
100.9
101.4
100.0

107.9
109.9
102.3
116.4
108.1
108.1
110.5
103.9
112.7
110.9
111.5
102.0
101.8
102.5

108.2
110.8
102.6
117.3
109.2
108.3
109.6
102.7
109.6
110.3
112.1
102.3
102.5
102.0

108.7
111.7
102.8
118.1
110.4
111.1
110.7
104.0
111.0
111.2
113.2
101.6
101.4
102.1

108.9
112.4
103.3
118.9
111.3
111.9
110.8
104.7
110.5
111.5
113.0
101.2
101.2
101.1

97.3
95.3

108.9
109.2

107.7
108.0

107.3
107.6

107.6
107.8

107.9
108.2

108.3
108.6

109.0
109.2

108.6
108.8

109.6
109.9

109.3
109.6

109.2
109.5

109.8
110.1

110.2
110.5

110.3
110.6

1

Total index

102.3
131.4
101.3
114.2
83.0
78.3

104.4
137.0
114.4
117.5
79.4
88.5

SPECIAL AGGREGATES

51 Total excluding autos and trucks
52 Total excluding motor vehicles and p a r t s . . .
53 Total excluding office and computing
machines
54 Consumer goods excluding autos and
trucks
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding office and
computing equipment
58 Materials excluding energy




97.5

107.0

106.1

105.3

105.8

106.1

106.6

107.4

106.8

107.6

107.3

107.0

107.8

108.1

108.4

24.5
23.3

110.8
110.7

109.8
109.1

109.6
108.3

109.7
109.1

110.2
109.6

110.6
110.3

110.9
111.2

109.9
110.1

111.0
110.7

111.4
111.3

111.4

111.0

112.3
111.9

112.3
112.3

112.1
113.0

12.7

126.8

123.8

123.3

123.6

124.1

125.2

126.4

126.3

127.0

128.3

127.9

128.9

130.3

130.9

12.0
28.4

116.1
109.9

115.3
107.8

113.3
107.1

114.3
107.8

114.5
108.5

115.7
108.9

117.1
110.2

116.1
110.3

115.8
111.3

116.8
110.8

115.9
110.1

117.1
110.4

118.3
111.3

119.2
111.9

A48

Domestic Nonfinancial Statistics • March 1993

2.13—Continued
1987

oup

SIC
code

proportion

1991

1992

1992

avg.
Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept. r

Oct/

Nov. r

Dec."

Index (1987 = 100)
MAJOR INDUSTRIES
1 Total index

100.0

108.7

107.4

106.6

107.2

107.6

108.1

108.9

108.5

109.4

109.1

108.9

109.7

110.1

110.5

84.4
26.7
57.7

109.7
105.7
111.5

108.1
103.5
110.3

107.4
103.6
109.2

108.1
103.9
110.0

108.5
104.5
110.3

109.0
105.0
110.8

109.9
105.6
111.9

109.6
105.6
111.4

110.2
107.3
111.6

110.1
106.2
112.0

109.8
105.7
111.7

110.6
106.4
112.5

111.1
107.3
113.0

111.7
107.6
113.6

Durable goods
Lumber and products . . .
"24
Furniture and fixtures...
25
Clay, glass, and stone
products
32
Primary metals
33
Iron and steel
331,2
Raw steel
Nonferrous
333-6,9
Fabricated metal
products
34
Nonelectrical machinery.
35
Office and computing
machines
357
Electrical machinery
36
Transportation
equipment
37
Motor vehicles and
parts
371
Autos and light
trucks
Aerospace and miscellaneous transportation equipment.. 3 7 2 - 6 , 9
Instruments
38
Miscellaneous
39

47.3
2.0
1.4

108.5
98.5
100.4

107.1
95.2
100.6

105.8
97.4
98.7

107.0
98.8
98.1

107.0
99.2
98.6

107.6
97.2
101.1

109.1
97.4
103.3

108.5
95.4
100.3

109.0
99.8
101.0

109.2
98.9
101.7

108.2
96.7
100.5

109.5
100.3
100.4

110.2
101.1
100.1

100.1
100.9

2.5
3.3
1.9
.1
1.4

96.3
103.2
104.3

92.8
102.5
105.0
103.3
98.9

94.6
102.7
103.7
102.7
101.2

95.0
101.4
102.5
98.8
99.9

95.6
100.9
100.9
99.9
100.9

96.7
102.0
102.2
98.5
101.8

96.6
102.1
101.8
101.5
102.5

97.1
105.6
106.4
105.3
104.4

96.4
104.3
104.4
101.9
104.2

96.1
102.0
103.0
99.8
100.5

98.0
103.9
106.2
101.7
100.6

98.0
105.5
107.1
101.5
103.1

99.0
106.5
108.7

101.8

93.0
101.3
101.7
97.6
100.8

5.4
8.6

101.6
127.2

101.2
121.9

99.7
121.4

100.5
121.9

100.0
122.9

100.6
124.1

102.2
126.7

102.2
126.4

102.6
127.8

102.5
129.3

101.3
129.1

102.3
130.5

102.5
132.5

103.2
133.4

2.5
8.6

176.5
111.9

159.1
110.6

160.5
110.0

162.4
110.7

164.9
110.9

111.0

168.2

170.5
112.3

174.0
112.2

178.0
112.6

182.0
113.0

184.0
112.1

187.0
112.9

190.0
113.6

192.9
113.9

Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing . .
Chemicals and products .
Petroleum products
Rubber and plastic
products
Leather and products . . .

2 Manufacturing
3
Primary processing
4
Advanced processing
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 Mining
35
Metal
36
Coal
37
Oil and gas extraction
38
Stone and earth minerals . .
39 Utilities
40
Electric
41
Gas

111.0

ltois

9.8

97.4

98.0

93.8

96.8

96.5

98.0

99.6

98.2

96.7

97.0

95.6

97.5

97.9

99.8

4.7

98.7

94.6

87.1

93.8

94.2

98.5

102.7

100.4

97.7

99.4

97.2

101.3

102.1

107.3

2.3

100.2

95.5

83.5

92.9

93.7

101.1

106.5

103.0

99.3

98.6

96.7

103.3

104.6

113.7

5.1
3.3
1.2

96.1
118.3
119.7

101.2
119.0
121.0

99.8
118.3
121.2

99.6
118.6
120.0

98.6
118.6
120.0

97.4
119.0
118.9

96.8
119.8
118.4

96.3
118.5
117.8

95.7
118.5
120.4

94.9
118.2
118.2

94.1
118.1
118.6

94.1
117.6
119.5

94.0
117.6
121.9

93.0
117.7
121.5

37.2
8.8
1.0
1.8
2.4
3.6
6.4
8.6
1.3

111.2
110.0
105.4
106.0
97.7
107.0
113.3
117.1
108.5

109.5
109.6
94.7
102.5
99.0
107.0
114.5
112.6
108.6

109.5
109.2
98.8
103.1
97.5
107.1
114.8
112.7
106.6

109.6
109.6
99.4
104.7
97.7
104.6
114.4
113.4
106.9

110.4
110.2
101.3
105.3
97.8
105.8
113.8
114.8
109.7

110.7
109.6
101.0
106.3
98.0
107.0
113.7
115.8
110.3

110.9
109.3
102.5
106.8
99.0
105.8
113.4
117.0
108.5

111.0

"20
21
22
23
26
27
28
29

109.0
103.6
105.3
98.1
107.3
113.0
117.5
108.9

111.7
109.8
106.6
107.1
99.4
109.6
112.3
118.0
109.1

111.3
110.6
115.9
106.1
97.6
106.3
111.4
117.6
104.3

111.8
110.2
110.5
106.6
97.6
108.6
113.2
118.3
107.4

111.9
110.9
107.6
105.9
97.5
106.2
113.7
118.5
111.3

112.3
110.8
108.5
107.1
97.9
108.1
112.8
119.4
110.9

112.6
110.7
109.6
107.9
97.5
107.9
114.3
119.7
108.1

30
31

3.0
.3

117.2
85.6

113.0
83.2

113.2
83.0

114.0
81.4

115.4
82.9

116.5
84.1

117.1
86.2

117.3
86.2

118.5
87.1

119.0
84.8

117.3
86.4

118.2
87.0

119.3
88.9

120.0
87.1

11,12
13
14

7.9
.3
1.2
5.7
.7

98.9
158.2
105.6
93.4
105.8

98.8
154.0
107.6
93.0
106.4

97.8
144.2
107.3
92.4
104.8

98.4
152.9
107.9
92.7
103.5

97.5
155.8
103.0
91.9
107.4

99.1
154.2
104.0
94.2
105.9

99.7
166.4
107.6
93.4
108.0

98.0
154.0
98.6
93.9
105.6

100.6
163.7
112.0
94.0
106.2

98.8
165.6
107.5
92.4
106.4

98.3
158.6
103.7
93.0
105.2

99.1
155.8
103.9
94.2
104.8

99.8
164.9
107.0
94.0
105.9

100.0
163.5
107.7
94.3
104.8

7.6
6.0
1.6

107.9
96.1

107.9
109.9
100.5

106.8
109.3
97.5

106.4
109.0
96.9

107.7
110.7
96.7

108.2

49I,3PT
492,3PT

97.7

107.3
110.2
96.6

106.7
109.7
95.3

109.3
113.0
95.4

108.8
112.7
94.1

110.2
113.8
97.0

110.9
114.0
99.1

109.7
112.8
98.4

107.6
110.6
96.4

79.8

110.3

108.9

108.6

108.9

109.3

109.6

110.3

110.1

110.9

110.7

110.5

111.1

111.7

112.0

82.0

107.7

106.6

105.8

106.5

106.8

107.2

108.1

107.6

108.2

108.0

107.6

108.3

108.8

109.3

"lO

111.0

111.0

SPECIAL AGGREGATES
42 Manufacturing excluding

motor vehicles and
parts
43 Manufacturing excluding

office and computing
machines

Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKETS
44 Products, total

1,734.8 1,930.8 1,888.9 1,869.5 1,889.7 1,902.8 1,918.7 1,935.5 1,920.1 1,936.2 1,935.9 1,937.0 1,971.1 1,979.7 1,986.4

45 Final
46
Consumer goods
47
Equipment
48 Intermediate

1,350.9 1,528.7 1,488.0 1,468.7 1,490.8 1,501.5 1,518.2 1,532.1 1,519.1
833.4
894.5
907.0
877.6
890.2
896.2
905.6
912.4
901.3
517.5
621.7
593.5
591.1
600.6
605.3
612.7
619.7
617.8
384.0
401.0
402.1
400.7
398.9
401.2
400.5
403.4
401.1

1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover.
A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989




1,530.4 1,532.8 1 , 5 3 4 . 6 1,565.3 1,572.2 1,582.4
909.3
907.1
905.3
929.3
931.4
928.8
621.0
627.5
627.5
636.0
643.4
651.0
405.8
403.1
402.4
405.7
407.6
404.0

Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Standard industrial classification,

Selected Measures
2.14

A49

HOUSING A N D CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1992
Item

1989

1990

1991
Feb.

Mar.

Apr.

May

June

July

Aug. r

Sept. r

Oct. r

Nov.

Private residential real estate activity (thousands of units except as noted)
N E W UNITS

1
2
3
4
5
6
7
8
9
10
11
12
13

Permits authorized
One-family
Two-or-more-family
Started
One-family
Two-or-more-family
Under construction at end of period 1 ..
One-family
Two-or-more-family
Completed
One-family
Two-or-more-family
Mobile homes shipped

1,339
932
407
1,376
1,003
373
850
535
315
1,423
1,026
396
198

1,111
794
317
1,193
895
298
711
449
262
1,308
966
342
188

949
754
195
1,014
840
174
606
434
173
1,091
838
253
171

1,146
946
200
1,257
1,109
148
629
464
165
1,097
908
189
197

1,094
907
187
1,340
1,068
272
657
482
175
1,127
975
152
197

1,058
873
185
1,086
933
153
655
484
171
1,067
889
178
199

1,054
879
175
1,196
1,019
177
653
484
169
1,204
1,011
193
189

1,032
872
160
1,147
999
148
643
483
160
1,184
982
202
194

1,080
879
201
1,100
956
144
628
476
152
1,229
1,019
210
211

1,076
877
199
1,233
1,042
191
633
480
153
1,144
955
189
198

1,125
913
212
1,222
1,051
171
639
487
152
1,125
937
188
219

1,139
959
180
1,223
1,077
146
645
494
151
1,158
972
186
226

1,126
955
171
1,234
1,090
144
640
497
143
1,229
1,001
228
241

Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1 . . .

650
365

535
321

507
283

627
269

555
277

546
274

554
272

583
272

616
271

627
269

671
268

616
267

565
267

120.4
148.3

122.3
149.0

120.0
147.0

117.2
144.8

120.0
144.8

120.0
145.0

113.0
146.0

124.5
146.6

118.0
137.7

123.5
145.3

119.9
142.8

122.8
149.6

128.8
150.5

18 Number sold

3,346

3,211

3,219

3,490

3,510

3,490

3,460

3,350

3,450

3,310

3,300

3,640

3,830

Price of units sold (thousands
of dollars)
19 Median
20 Average

92.9
118.0

95.2
118.3

99.7
127.4

102.8
128.8

104.0
130.2

103.3
130.6

102.5
130.6

105.1
133.7

102.7
132.2

104.6
132.2

103.4
131.0

103.4
129.4

103.0
129.0

Price of units sold (thousands
of dollars)2
16 Median
17 Average
EXISTING UNITS ( o n e - f a m i l y )

Value of new construction (millions of dollars) 3
CONSTRUCTION

21 Total put in place

443,401

442,066

400,955

411,767

421,512

427,585

427,980

426,730 425,700'

419,598

429,291

432,788

441,813

22 Private
23
Residential
24
Nonresidential, total
Industrial buildings
25
26
Commercial buildings
Other buildings
27
28
Public utilities and other

345,327
196,551
148,776
20,412
65,4%
19,683
43,185

334,153
182,856
151,297
23,849
62,866
21,591
42,991

290,707
157,837
132,870
22,281
48,482
20,797
41,310

294,758
169,772
124,986
21,651
41,591
20,630
41,114

301,142
172,660
128,482
23,721
42,108
21,479
41,174

309,832
182,644
127,188
21,335
40,712
21,409
43,732

306,999
182,892
124,107
21,008
39,643
21,993
41,463

312,182 305,848r
184,630 181,162r
127,552 124,686r
20,285 20,594r
43,310 39,988r
21,991 22,228r
41,966 41,876r

301,984
184,201
117,783
17,862
37,010
21,518
41,393

308,813
186,343
122,470
19,019
39,333
22,068
42,050

314,414
190,758
123,656
18,611
40,277
21,738
43,030

319,644
193,456
126,188
19,009
40,488
23,794
42,897

98,071
3,520
28,837
5,009
60,705

107,909
2,664
31,154
4,607
69,484

110,247
1,837
29,918
4,958
73,534

117,009
2,206
32,744
5,283
76,776

120,370
2,548
30,895
6,197
80,730

117,753
2,329
31,447
5,818
78,159

120,981
2,668
32,633
5,767
79,913

114,548 119,853r
2,372r
2,503
31,496 32,682r
5,889
5,772r
74,660 79,027r

117,614
2,438
33,451
5,382
76,343

120,478
3,172
34,651
6,364
76,291

118,374
2,299
32,369
6,629
77,077

122,169
2,692
36,422
6,8%
76,159

29 Public
Military
30
31
Highway
32
Conservation and development...
Other
33

1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable
with data for previous periods because of changes by the Census Bureau in its
estimating techniques. For a description of these changes, see Construction
Reports (C-30-76-5), issued by the Census Bureau in July 1976.




SOURCE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 17,000 jurisdictions
beginning in 1984.

A50

Domestic Nonfinancial Statistics • March 1993

2.15 CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier

Change from 3 months earlier
(annual rate)

Change from 1 month earlier

1992

19921

Item
1991
Dec.

Index
level,
Dec.,
19921

1992
Dec.
Mar.

June

Sept.

Dec.

Aug.

Sept.

Oct.

Nov.

Dec.

CONSUMER PRICES 2

(1982-84=100)
1 All items

3.1

2.9

3.5

2.6

2.6

2.9

.3

.2

.4

.2

.1

141.9

1.9
-7.4
4.4
4.0
4.6

1.5
2.0
3.3
2.5
3.7

1.5
-6.9
4.8
5.3
4.8

-1.2
12.5
2.8
2.1
2.9

4.7
.4
2.5
2.1
2.6

.9
2.7
3.3
.6
4.7

.9
-.2
.2
.2

.4
.0
.2
.2
.1

.0
.5
.5
.3
.6

.0
.8
.3
.1
.3

.2
-.6
.1
-.2
.3

138.7
103.9
149.2
133.6
158.2

7 Finished goods
8
Consumer foods
9
Consumer energy
10 Other consumer goods
11
Capital equipment

-.1
-1.5
-9.6
3.4
2.5

1.6
1.5
-.1
2.1
1.6

1.0
.3
-7.0
3.6
3.5

3.3
-1.0
17.9
2.4
.9

1.6
3.6
-.5
1.2
.9

.0
3.3
-7.8
1.2
.6

.1
.9"
-,4r
-.2r
.2

.3
,2r
,3r
.0

.1
.1
1.4
-.1
-.2

-.2
-.5
-1.5
.2
.1

.2
1.2
-1.9
.2
.2

123.8
124.1
76.5
138.6
130.1

Intermediate materials
12 Excluding foods and feeds
13
Excluding energy

-2.7
-.8

1.2
1.1

.0
1.7

5.4
1.7

.3
1.0

-.7
.0

.R

-,lr
-.R

.0
-.2

-.2
.0

.0
.2

115.2
122.3

-5.8
-16.6
-7.6

2.8
1.5
5.6

11.8
-26.6
15.0

1.9
51.5
4.8

-6.2
16.4
2.5

4.3
-17.9
1.2

-.4
-1.6r
,4r

.6
4.4 r
-,6r

.6
-.5
-1.3

-.6
.6
-.9

1.1
-4.9
2.6

104.4
79.2
129.6

2 Food
3 Energy items
4 All items less food and energy
Commodities
5
6
Services

.3

PRODUCER PRICES

(1982=100)

Crude materials
14 Foods
15 Energy
16 Other

1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a
rental-equivalence measure of homeownership.




,2r

SOURCE. Bureau of Labor Statistics.

Selected Measures

A51

2.16 GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1991

Account

1989

1990

1992

1991
Q3

Q4

Ql

Q2

Q3 R

GROSS DOMESTIC PRODUCT
1

Total

By source
2 Personal consumption expenditures
i
Durable goods
4
Nondurable goods
5
Services
6
7
8
9
10
11
12
13

Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
Change in business inventories
Nonfarm

5,250.8

5,522.2

5,677.5

5,713.1

5,753.3

5,840.2

5,902.2

5,978.5

3,523.1
459.4
1,149.5
1,914.2

3,748.4
464.3
1,224.5
2,059.7

3,887.7
446.1
1,251.5
2,190.1

3,914.2
453.0
1,255.3
2,205.9

3,942.9
450.4
1,251.4
2,241.1

4,022.8
469.4
1,274.1
2,279.3

4,057.1
470.6
1,277.5
2,309.0

4,108.7
482.5
1,292.8
2,333.3

832.3
798.9
568.1
193.3
374.8
230.9

799.5
793.2
577.6
201.1
376.5
215.6

721.1
731.3
541.1
180.1
360.9
190.3

732.8
732.6
538.4
175.6
362.8
194.2

736.1
726.9
528.7
169.7
358.9
198.2

722.4
738.2
531.0
170.1
360.8
207.2

773.2
765.1
550.3
170.3
380.0
214.8

781.6
766.6
549.6
166.1
383.5
217.0

33.3
31.8

6.3
3.3

-10.2
-10.3

.2
-1.2

9.2
14.5

-15.8
-13.3

8.1
6.4

15.0
9.7

14
15
16

Net exports of goods and services
Exports
Imports

-79.7
508.0
587.7

-68.9
557.0
625.9

-21.8
598.2
620.0

-27.1
602.3
629.5

-16.0
622.9
638.9

-8.1
628.1
636.2

-37.1
625.4
662.5

-36.0
639.0
675.0

17
18
19

Government purchases of goods and services
Federal
State and local

975.2
401.6
573.6

1,043.2
426.4
616.8

1,090.5
447.3
643.2

1,093.3
447.2
646.0

1,090.3
440.8
649.5

1,103.1
445.0
658.0

1,109.1
444.8
664.3

1,124.2
455.2
669.0

20
21
22
23
24
25

By major type of product
Final sales, total
Goods
Durable
Nondurable
Services
Structures

5,217.5
2,063.6
891.2
1,172.5
2,642.2
511.7

5,515.9
2,160.1
920.6
1,239.5
2,846.4
509.4

5,687.7
2,192.8
907.6
1,285.1
3,030.3
464.7

5,712.9
2,194.9
910.8
1,284.1
3,053.6
464.4

5,744.2
2,188.4
905.7
1,282.7
3,090.3
465.5

5,855.9
2,233.6
923.6
1,310.0
3,142.2
480.1

5,894.1
2,233.2
932.3
1,300.8
3,173.4
487.6

5,963.5
2,258.4
943.8
1,314.6
3,217.8
487.3

26
27
28

Change in business inventories
Durable goods
Nondurable goods

33.3
25.2
8.1

6.3
-.9
7.2

-10.2
-19.3
9.0

.2
-7.0
7.2

9.2
-8.1
17.3

-15.8
-19.3
3.5

8.1
9.5
-1.4

15.0
2.7
12.3

29

Total GDP in 1987 dollars

4,838.0

4,877.5

4,821.0

4,831.8

4,838.5

4,873.7

4,892.4

4,933.7

MEMO

NATIONAL INCOME
30

Total

4,249.5

4,468.3

4,544.2

4,555.4

4,599.1

4,679.4

4,716.5

4,719.6

31
32
33
34
35
36
37

Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income

3,100.2
2,586.4
478.5
2,107.9
513.8
261.9
251.9

3,291.2
2,742.9
514.8
2,228.0
548.4
277.4
271.0

3,390.8
2,812.2
543.5
2,268.7
578.7
290.4
288.3

3,407.0
2,824.4
544.3
2,280.0
582.6
292.0
290.6

3,433.8
2,845.0
546.4
2,298.6
588.7
293.7
295.0

3,476.3
2,877.6
554.6
2,323.0
598.7
299.4
299.2

3,506.3
2,901.3
561.4
2,339.9
605.0
301.5
303.6

3,534.3
2,923.5
564.3
2,359.1
610.8
302.9
307.9

38
39
40

Proprietors' income 1
Business and professional
Farm 1

347.3
307.0
40.2

366.9
325.2
41.7

368.0
332.2
35.8

367.1
337.6
29.5

377.9
340.0
37.9

393.6
353.6
40.1

398.4
359.9
38.5

397.4
365.9
31.5

41

Rental income of persons 2

-13.5

-12.3

-10.4

-10.3

-6.6

-4.5

3.3

6.4

42
43
44
45

Corporate profits 1
Profits before tax 3
Inventory valuation adjustment
Capital consumption adjustment

362.8
342.9
-17.5
37.4

361.7
355.4
-14.2
20.5

346.3
334.7
3.1
8.4

341.2
336.7
-4.8
9.3

347.1
332.3
.7
14.1

384.0
366.1
-5.4
23.3

388.4
376.8
-15.5
27.0

374.1
354.1
-9.7
29.7

46

Net interest

452.7

460.7

449.5

450.5

446.9

430.0

420.0

407.3

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.

A52

Domestic Nonfinancial Statistics • March 1993

2.17 PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1991
Account

1989

1990

1992

1991
Q3

Q4

Ql

Q2

Q3 r

PERSONAL INCOME AND SAVING

1 Total personal income

4,380.3

4,664.2

4,828.3

4,846.2

4,907.2

4,980.5

5,028.9

5,062.0

2 Wage and salary disbursements
i
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7 Government and government enterprises

2,586.4
724.2
542.2
607.0
776.8
478.5

2,742.8
745.6
556.1
634.6
847.8
514.8

2,812.2
737.4
556.9
647.4
883.9
543.6

2,824.4
738.8
559.0
651.1
890.2
544.3

2,845.0
741.5
563.9
652.9
904.3
546.4

2,877.6
736.8
559.9
660.9
925.3
554.6

2,901.3
743.1
564.7
662.9
933.9
561.4

2,923.5
742.4
565.5
667.7
949.1
564.3

251.9
347.3
307.0
40.2
-13.5
126.5
668.2
625.0
325.1

271.0
366.9
325.2
41.7
-12.3
140.3
694.5
685.8
352.0

288.3
368.0
332.2
35.8
-10.4
137.0
700.6
771.1
382.0

290.6
367.1
337.6
29.5
-10.3
135.6
701.8
777.1
384.2

295.0
377.9
340.0
37.9
-6.6
134.3
703.3
799.8
390.6

299.2
393.6
353.6
40.1
-4.5
133.9
684.8
842.7
405.7

303.6
398.4
359.9
38.5
3.3
136.6
675.2
859.7
412.1

307.9
397.4
365.9
31.5
6.4
141.0
663.2
874.1
417.1

8 Other labor income
Proprietors' income 1
Business and professional
Farm 1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits . . .

Y

10
li
12
13
14
15
16
17

LESS: Personal contributions for social insurance

18 EQUALS: Personal income
19

LESS: Personal tax and nontax payments

211.4

224.8

238.4

240.1

241.5

246.8

249.3

251.5

4,380.3

4,664.2

4,828.3

4,846.2

4,907.2

4,980.5

5,028.9

5,062.0

593.3

621.3

618.7

618.6

622.3

619.6

617.1

628.8

20 EQUALS: Disposable personal income

3,787.0

4,042.9

4,209.6

4,227.6

4,284.9

4,360.9

4,411.8

4,433.2

21

LESS: Personal outlays

3,634.9

3,867.3

4,009.9

4,036.6

4,065.5

4,146.3

4,179.5

4,229.9

22 EQUALS: Personal saving

152.1

175.6

199.6

191.0

219.4

214.6

232.3

203.3

19,555.6
13,028.9
14,005.0

19,513.0
13,043.6
14,068.0

19,077.1
12,824.1
13,886.0

19,094.0
12,847.9
13,876.0

19,066.0
12,802.6
13,913.0

19,158.5
12,930.2
14,017.0

19,181.8
12,893.3
14,021.0

19,288.4
12,973.3
13,998.0

4.0

4.3

4.7

4.5

5.1

4.9

5.3

4.6

MEMO

Per capita (1987 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING

27 Gross saving

741.8

718.0

708.2

679.4

698.2

677.5

682.9

696.9

28 Gross private saving

819.4

854.1

901.5

884.9

934.8

950.1

968.1

992.1

29 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment

152.1
86.9
-17.5

175.6
75.7
-14.2

199.6
75.8
3.1

191.0
69.0
-4.8

219.4
78.3
.7

214.6
104.0
-5.4

232.3
97.7
-15.5

203.3
91.2
-9.7

Capital consumption
32 Corporate
33 Noncorporate

352.4
228.0

368.3
234.6

383.0
243.1

383.5
241.4

386.3
250.7

386.1
245.3

391.2
247.0

407.2
290.4

-77.5
-122.3
44.8

-136.1
-166.2
30.1

-193.3
-210.4
17.1

-205.6
-221.0
15.4

-236.6
-258.7
22.0

-272.6
-289.2
16.6

-285.2
-302.9
17.7

-295.2
-304.4
9.2

allowances

34 Government surplus, or deficit ( - ) , national income and
product accounts
Federal
State and local

35
36

37 Gross investment

742.9

723.4

730.1

709.9

714.6

706.5

713.8

732.0

38 Gross private domestic
39 Net foreign

832.3
-89.3

799.5
-76.1

721.1
9.0

732.8
-22.9

736.1
-21.5

722.4
-16.0

773.2
-59.4

781.6
-49.6

1.1

5.4

21.9

30.5

16.4

29.0

30.9

35.1

40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




SOURCE. U.S. Department of Commerce, Survey of Current

Business.

Summary Statistics
3.10 U.S. INTERNATIONAL TRANSACTIONS

A53

Summary

Millions of dollars; quarterly data seasonally adjusted except as noted1
1992
Item

1 Balance on current a c c o u n t . ,
2
Merchandise trade balance
Merchandise exports
Merchandise imports
Military transactions, net
Other service transactions, net
Investment income, net
U.S. government grants
U.S. government pensions and other transfers
Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )

1989

1990

-101,142
-115,668
361,697
-477,365
-6,837
32,604
14,366
-10,773
-2,517
-12,316

-90,428
-108,853
388,705
-497,558
-7,818
39,873
19,287
-17,597
-2,945
-12,374

-3,682
-73,436
415,962
-489,398
-5,524
50,821
16,429
24,487
-3,462
-12,9%

Q3

Q4

Ql

Q2

Q3 P

-11,087
-20,174
104,151
-124,325
-995
13,018
3,076
-1,986
-793
-3,233

-7,218
-18,539
107,851
-126,390
-540
13,676
2,458
78
-1,080
-3,271

-5,903
-17,222
107,946
-125,168
-624
14,468
4,474
-2,620
-858
-3,521

-17,802
-24,558
107,464
-132,022
-623
13,261
1,930
-3,085
-1,146
-3,581

-14,238
-26,538
110,812
-137,350
-548
16,173
3,551
-2,490
—%9
-3,417

1,271

2,304

3,397

3,180

-437

-38

-277

-385

12 Change in U.S. official reserve assets (increase, - ) .
13
Gold
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary F u n d .
16
Foreign currencies

-25,293

-2,158

5,763

3,877

1,225

-1,057

1,464

1,952

-535
471
-25,229

-192
731
-2,697

-177
-367
6,307

6
-114
3,986

-23
17
1,232

-172
111
-9%

-168

1,631

-173
-118
2,243

17 Change in U.S. private assets abroad (increase, - ) .
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchases of foreign securities, net.
21
U.S. direct investments abroad, net

-90,923
-51,255
11,398
-22,070
-28,996

-56,467
7,469
-2,477
-28,765
-32,694

-71,379
-4,753
5,526
-45,017
-27,135

-17,426
2,403
-298
-12,403
-7,128

-44,947
-23,219
1,269
-11,305
-11,692

-3,155
15,859
4,764
-8,703
-15,075

-1,150
10,943
3,137
-8,221
-7,009

-21,724
-440

22 Change in foreign official assets in United States (increase, +) . .
23
U.S. Treasury securities
24
Other U.S. government obligations
25
Other U.S. government liabilities
26
Other U.S. liabilities reported by U.S. banks 3
27
Other foreign official assets

8,489
149
1,383
146
4,976
1,835

33,908
29,576
667
1,866
3,385
-1,586

18,407
15,815
1,301
1,600
-1,668
1,359

4,115
5,624
474
654
-2,732
95

12,819
12,619
1,075
-344
-914
383

21,192
14,909
540
%
5,534
113

20,895
11,126
1,699
598
7,547
-75

-7,738
-323
912
875
-8,202

28 Change in foreign private assets ini 1United States (increase, + ) . .
29
U.S. bank-reported liabilities 3 .
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33
Foreign direct investments in United States, net

205,205
63,382
5,565
29,618
38,767
67,873

65,471
16,370
4,906
-2,534
1,592
45,137

48,573
-13,677
-405
16,241
34,918
11,498

18,818

36,110
23,465
725
1,408
4,832
5,680

-2,629
-4,474
1,942
-828
4,551
-3,820

26,520
-551
1,141
10,286
10,333
5,311

25,024
19,945

34 Allocation of special drawing rights
35 Discrepancy
36
Due to seasonal adjustment
37
Before seasonal adjustment

0

0

0

0

8,508
1,575
-1,306
10,012
29

0

0

0
1

0

-U.'MB"
-7,181

-1,000

"5,364
3,076
-3,361

0

0

0

0

2,394

0

0

0

0

47,370

-1,078

2,394

47,370

-1,078

-1,478
-6,137
4,659

2,447
613
1,835

-8,410
4,023
-12,433

-29,650
410
-30,060

17,109
-7,680
24,789

-25,293

-2,158

5,763

3,877

1,225

-1,057

1,464

1,952

8,343

32,042

16,807

3,461

13,163

21,0%

20,297

-8,613

10,738

1,707

-5,604

1,023

2,459

-2,125

3,061

MEMO

Changes in official assets
38 U.S. official reserve assets (increase, - )
39 Foreign official assets in United States, excluding line 25
(increase, + )
40 Change in Organization of Petroleum Exporting Countries
official assets in United States (part of line 22)

1. Seasonal factors not calculated for lines 12-16, 18-20, 22-34, and 38-40.
2. Data are on an international accounts basis. The data differ from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise trade data and are included in line 6.
3. Reporting banks include all types of depository institution as well as some
brokers and dealers.




-4,2

4. Associated primarily with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U . S . corporate stocks and in debt securities of
private corporations and state and local governments.
SOURCE. U . S . Department of Commerce, Survey of Current
Business.

A54
3.11

International Statistics • March 1993
U.S. FOREIGN TRADE1
Millions of dollars; monthly data seasonally adjusted
1992
Item

1 Exports of domestic and foreign
merchandise, (F.A.S. value),
excluding grant-aid shipments
2 General imports (customs value),
including merchandise for
immediate consumption plus entries
into bonded warehouses
3 Trade balance

1989

363,812

1990

393,592

1991

421,730

May

June

July

Aug.

Sept.

Oct. r

Nov."

35,718

38,165

37,806

35,799

37,882

39,072

37,970

473,211

495,311

487,129

42,903

44,957

45,127

44,7%

46,459

46,291

45,558

-109,399

-101,718

-65,399

-7,185

-6,792

-7,322

-8,997

-8,577

-7,219

-7,588

1. The Census basis data differ from merchandise trade data shown in table
3.10, lines 3-5, U.S. International Transactions Summary, because of coverage
and timing. On the export side, the largest difference is the exclusion of military
sales (which are combined with other military transactions and reported separately in table 3.10, line 6). On the import side, this table includes imports of gold,
ship purchases, imports of electricity from Canada, and other transactions;
military payments are excluded and shown separately in table 3.10, line 6. Since

Jan. 1, 1987, Census data have been released forty-five days after the end of the
month; the previous month is revised to reflect late documents. Total exports and
the trade balance reflect adjustments for undocumented exports to Canada.
Components may not sum to totals because of rounding.
SOURCE. FT900, Summary of U.S. Export and Import Merchandise Trade
(U.S. Department of Commerce, Bureau of the Census).

3.12 U.S. RESERVE ASSETS
Millions of dollars, end of period
1992
Asset

1 Total
2 Gold stock, including Exchange
Stabilization Fund 1
3 Special drawing rights '
4 Reserve position in International
Monetary Fund 2
5 Foreign currencies

1990

1991
June

July

Aug.

Sept.

Oct.

74,609

83,316

77,719

77,092

77,370

78,474

78,527

74,207

72,231

11,059
9,951

11,058
10,989

11,057
11,240

11,059
11,597

11,059
11,702

11,059
12,193

11,059
12,111

11,060
11,561

11,059
11,495

9,048
44,551

9,076
52,193

9,488
45,934

9,381
45,055

9,625
44,984

9,762
45,460

9,778
45,579

9,261
42,325

8,781
40,8%

1. Gold held "under earmark" at Federal Reserve Banks for foreign and
international accounts is not included in the gold stock of the United States; see
table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted
by the International Monetary Fund (IMF) in July 1974. Values are based on a
weighted average of exchange rates for the currencies of member countries. From
July 1974 through December 1980, 16 currencies were used; since January 1981,

5 currencies have been used. U.S. SDR holdings and reserve positions in the IMF
also have been valued on this basis since July 1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1
of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—
$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million;
plus net transactions in SDRs.
4. Valued at current market exchange rates.

3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1992
Asset

1989

1990

1991
June

1 Deposits
Held in custody
2 U.S. Treasury securities
3 Earmarked gold

Aug.

Sept.

Oct.

Nov.

Dec."

589

369

968

219

264

297

546

415

229

205

224,911
13,456

278,499
13,387

281,107
13,303

307,337
13,268

316,431
13,261

318,328
13,261

306,971
13,241

311,538
13,201

308,959
13,192

314,481
13,686

1. Excludes deposits and U.S. Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S.
Treasury securities payable at face value in dollars or foreign currencies.




July

3. Held for foreign and international accounts and valued at $42.22 per fine
troy ounce; not included in the gold stock of the United States.

Summary Statistics
3.14 FOREIGN BRANCHES OF U.S. BANKS

A55

Balance Sheet Data1

Millions of dollars, end of period
1992
Account
May

June

Aug.

Sept.

Oct/

Nov.

All foreign countries

ASSETS

1 Total payable in any currency

July

545,366

556,925

548,901

564,816

564,466

537,529

544,815

544,437

554,155

566,518

2 Claims on United States
Parent bank
3
4
Other banks in United States
Nonbanks
5
6 Claims on foreigners
7
Other branches of parent bank
8
Banks
9
Public borrowers
10 Nonbank foreigners
11 Other assets

198,835
157,092
17,042
24,701
300,575
113,810
90,703
16,456
79,606
45,956

188,4%
148,837
13,2%
26,363
312,449
135,003
72,602
17,555
87,289
55,980

176,301
137,509
12,884
25,908
303,934
111,729
81,970
18,652
91,583
68,666

182,554
145,974
11,640
24,940
314,569
115,407
86,029
19,194
93,939
67,693

183,933
147,626
10,418
25,889
311,990
115,398
84,534
20,162
91,8%
68,543

171,911
136,287
9,576
26,048
311,578
112,177
85,141
19,645
94,615
54,040

163,039
128,267
9,181
25,591
321,631
116,674
87,347
20,423
97,187
60,145

167,258
134,019
8,083
25,156
319,115
118,105
83,912
20,485
%,613
58,064

175,019
139,058
10,658
25,303
318,901
115,589
86,400
20,783
%,129
60,235

177,527
141,526
10,009
25,992
328,306
125,143
85,911
20,378
%,874
60,685

12 Total payable in U.S. dollars

382,498

379,479

363,941

370,290

369,561

349,145

340,819

346,633

363,759

374,195

13 Claims on United States
14 Parent bank
15 Other banks in United States
16 Nonbanks
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
20
Public borrowers
21
Nonbank foreigners
22 Other assets

191,184
152,294
16,386
22,504
169,690
82,949
48,396
10,961
27,384
21,624

180,174
142,962
12,513
24,699
174,451
95,298
36,440
12,298
30,415
24,854

169,662
133,476
12,025
24,161
167,010
78,114
41,635
13,685
33,576
27,269

177,311
142,874
11,012
23,425
167,054
76,949
42,061
12,994
35,050
25,925

177,638
144,287
10,016
23,335
168,586
76,700
43,307
13,723
34,856
23,337

166,507
133,120
9,135
24,252
162,843
72,250
41,718
13,320
35,555
19,795

157,405
124,737
8,876
23,792
161,500
70,693
40,350
13,661
36,796
21,914

161,302
130,346
7,476
23,480
166,360
72,116
42,281
13,965
37,998
18,971

169,323
136,274
9,335
23,714
173,138
76,106
45,276
13,941
37,815
21,298

172,022
138,408
9,281
24,333
182,061
83,902
45,756
13,995
38,408
20,112

United Kingdom
23 Total payable in any currency

161,947

184,818

175,599

174,925

171,027

159,317

165,832

161,157

168,063

168,333

24 Claims on United States
25
Parent bank
Other banks in United States
26
27
Nonbanks
28 Claims on foreigners
29
Other branches of parent bank
Banks
30
31
Public borrowers
32
Nonbank foreigners
33 Other assets

39,212
35,847
1,058
2,307
107,657
37,728
36,159
3,293
30,477
15,078

45,560
42,413
792
2,355
115,536
46,367
31,604
3,860
33,705
23,722

35,257
31,931
1,267
2,059
109,692
35,735
36,394
3,306
34,257
30,650

37,369
34,433
970
1,966
107,795
35,331
37,548
3,165
31,751
29,761

38,096
35,343
756
1,997
104,270
36,952
34,783
2,995
29,540
28,661

38,763
35,542
1,065
2,156
105,990
35,359
36,777
3,128
30,726
14,564

37,511
34,593
744
2,174
108,895
37,732
37,711
3,046
30,406
19,426

35,891
32,929
1,067
1,895
106,758
37,977
36,1%
3,371
29,214
18,508

39,558
36,413
1,400
1,745
109,919
40,594
36,701
3,692
28,932
18,586

38,358
35,027
925
2,406
113,193
45,092
34,559
3,370
30,172
16,782

34 Total payable in U.S. dollars

103,208

116,762

105,974

104,392

102,737

98,828

99,610

100,449

107,342

109,479

36,404
34,329
843
1,232
59,062
29,872
16,579
2,371
10,240
7,742

41,259
39,609
334
1,316
63,701
37,142
13,135
3,143
10,281
11,802

32,418
30,370
822
1,226
58,791
28,667
15,219
2,853
12,052
14,765

35,185
33,059
677
1,449
56,615
27,482
15,348
2,463
11,322
12,592

35,376
33,751
627
998
56,888
28,541
15,380
2,474
10,493
10,473

36,133
33,936
785
1,412
56,264
26,751
15,930
2,653
10,930
6,431

34,948
32,786
625
1,537
55,812
26,825
15,565
2,353
11,069
8,850

33,618
31,578
711
1,329
59,099
27,986
16,808
2,604
11,701
7,732

37,359
35,299
769
1,291
61,658
30,217
17,269
2,515
11,657
8,325

35,956
33,765
438
1,753
65,164
34,434
16,848
2,501
11,381
8,359

35 Claims on United States
36
Parent bank
37 Other banks in United States
Nonbanks
38
39 Claims on foreigners
Other branches of parent bank :
40
41
Banks
42
Public borrowers
43
Nonbank foreigners
44 Other assets

Bahamas and Cayman Islands
45 Total payable in any currency

176,006

162,316

168,326

167,139

168,963

153,691

144,089

145,450

153,853

155,974

46 Claims on United States
Parent bank
47
Other banks in United States
48
49
Nonbanks
50 Claims on foreigners
51
Other branches of parent bank
52
Banks
53
Public borrowers
54
Nonbank foreigners
55 Other assets

124,205
87,882
15,071
21,252
44,168
11,309
22,611
5,217
5,031
7,633

112,989
77,873
11,869
23,247
41,356
13,416
16,310
5,807
5,823
7,971

115,244
81,520
10,907
22,817
45,229
11,098
20,174
7,161
6,7%
7,853

115,633
84,041
9,729
21,863
42,828
9,311
19,658
6,459
7,400
8,678

114,467
83,316
y
9,118
22,033
45,600
9,392
21,548
7,084
7,576
8,8%

102,850
72,107
8,045
22,698
41,886
8,678
18,837
6,728
7,643
8,955

94,595
64,454
8,060
22,081
41,315
8,5%
17,570
7,125
8,024
8,179

%,750
68,209
6,562
21,979
41,712
7,753
18,412
7,102
8,445
6,988

102,619
72,185
8,174
22,260
42,514
7,287
19,680
7,120
8,427
8,720

104,219
73,840
8,272
22,107
43,981
8,238
19,947
7,209
8,587
7,774

56 Total payable in U.S. dollars

170,780

158,390

163,771

162,066

163,313

147,905

138,348

139,769

148,865

151,234

1. Since June 1984, reported claims held by foreign branches have been
reduced by an increase in the reporting threshold for "shell" branches from $50




million to $150 million equivalent in total assets, the threshold now applicable to
all reporting branches.

A56
3.14

International Statistics •

M a r c h 1993

FOREIGN BRANCHES OF U.S. BANKS

Balance Sheet Data1—Continued
1992

Account

1991
May

June

July

Aug.

Sept.

Oct.

All foreign countries

LIABILITIES

57 Total payable in any currency

545,366

556,925

548,901

564,816

564,466

537,529

544,815

544,437

554,155

566,518

58 Negotiable certificates of deposit (CDs)
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks

23,500
197,239
138,412
11,704
47,123

18,060
189,412
138,748
7,463
43,201

16,284
198,121
136,431
13,260
48,430

14,010
198,897
136,195
13,944
48,758

13,040
204,929
143,474
14,009
47,446

12,758
192,087
133,051
11,833
47,203

14,246
179,246
126,794*
10,959*
41,493

12,389
185,054*
127,573*
12,386*
45,095*

12,056
188,517
132,630
12,259
43,628

12,342
187,800
131,619
13,390
42,791

63 To foreigners
64
Other branches of parent bank . . .
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities

296,850
119,591
76,452
16,750
84,057
27,777

311,668
139,113
58,986
14,791
98,778
37,785

288,254
112,033
63,097
15,596
97,528
46,242

308,394
115,098
68,528
19,465
105,303
43,515

302,376
116,760
65,983
16,399
103,234
44,121

301,943
114,226
65,419
18,058
104,240
30,741

314.910
120,349
68,565
18,241
107,755
36,413

311,556*
119,634
68,537
16,724
106,661*
35,438

315,654
118,019
70,483
20,576
106,576
37,928

330,313
126,017
74,536
20,645
109,115
36,063

69 Total payable in U.S. dollars

396,613

383,522

370,561

373,679

374,506

354,666

346,377

346,344

364,787

372,117

70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks

19,619
187,286
132,563
10,519
44,204

14,094
175,654
130,510
6,052
39,092

11.909
185,286
129,669
11,707
43.910

9,643
187,438
130,007
12,840
44,591

8,475
192,792
136,273
13,251
43,268

8,531
179,395
125,647
10,816
42,932

8,755
166,377
119,339*
9,866*
37,172

7,628
170,757*
119,714*
11,095*
39,948*

6,710
175,548
125,122
11,387
39,039

7,503
175,654
124,472
12,244
38,938

75 To foreigners
76
Other branches of parent bank . . .
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities

176,460
87,636
30,537
9,873
48,414
13,248

179,002
98,128
20,251
7,921
52,702
14,772

158,993
76,601
24,156
10,304
47,932
14,373

162,011
76,973
24,090
13,102
47,846
14,587

158,532
77,604
23,474
10,119
47,335
14,707

155,352
73,699
22,955
11,543
47,155
11,388

157,475
74,037
22,973
10,713
49,752
13,770

155,018*
72,947
22,822
9,939
49,310*
12,941

166,126
77,353
25,209
12,097
51,467
16,403

175,292
82,956
28,404
12,342
51,590
13,668

United Kingdom
81 Total payable in any currency ..

161,947

184,818

175,599

174,925

171,027

159,317

165,832

161,157

168,063

168,333

82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks

20,056
36,036
29,726
1,256
5,054

14,256
39,928
31,806
1,505
6,617

11,333
37,720
29,834
1,438
6,448

8,458
33,236
25,637
1,638
5,961

7,612
36,660
28,201
1,326
7,133

7,731
37,164
29,104
1,315
6,745

8,083
35,527
27,695
1,632
6,200

7,266
35,885
27,528
1,670
6,687

6,064
35,399
27,427
1,341
6,631

5,636
34,532
26,471
1,689
6,372

87 To foreigners
88
Other branches of parent bank
89
Banks
9ft Official institutions
91
Nonbank foreigners
92 Other liabilities

92,307
27,397
29,780
8,551
26,579
13,548

108,531
36,709
25,126
8,361
38,335
22,103

98,167
30,054
25,541
9,670
32,902
28,379

106,603
30,429
27,549
12,732
35,893
26,628

100,340
31,464
25,315
10,167
33,394
26,415

100,738
30,205
25,155
11,091
34,287
13,684

104,892
31,234
26,435
10,699
36,524
17,330

101,082
29,839
25,823
9,131
36,289
16,924

109,358
33,696
28,792
11,687
35,183
17,242

113,395
35,560
30,609
11,438
35,788
14,770

93 Total payable in U.S. dollars

108,178

116,094

108,755

102,783

101,901

97,565

99,092

95,642

104,521

105,699

94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States
98
Nonbanks

18,143
33,056
28,812
1,065
3,179

12,710
34,697
29,955
1,156
3,586

10,076
33,003
28,260
1,177
3,566

6,967
28,936
24,435
1,184
3,317

5,750
32,300
26,720
1,084
4,496

6,139
32,178
27,351
857
3,970

5,890
30,357
25,873
1,088
3,396

5,689
30,330
25,700
992
3,638

4,213
31,266
26,021
866
4,379

4,494
30,204
25,160
906
4,138

99 To foreigners
100
Other branches of parent bank
101
Banks
102 Official institutions
103 Nonbank foreigners
104 Other liabilities

50,517
18,384
12,244
5,454
14,435
6,462

60,014
25,957
9,488
4,692
19,877
8,673

56,626
20,800
11,069
7,156
17,601
9,050

57,489
19,497
10,799
9,915
17,278
9,391

54,262
20,918
9,848
7,049
16,447
9,589

52,894
18,634
9,399
7,808
17,053
6,354

54,381
18,983
9,289
6,956
19,153
8,464

51,677
17,747
9,112
6,156
18,662
7,946

59,938
22,080
10,956
8,142
18,760
9,104

62,899
22,8%
13,050
8,459
18,494
8,102

Bahamas and Cayman Islands
105 Total payable in any currency ..

176,006

162,316

168,326

167,139

168,963

153,691

144,089

145,450

153,853

155,974

106 Negotiable CDs
107 To United States
108 Parent bank
109 Other banks in United States
110
Nonbanks

678
124,859
75,188
8,883
40,788

646
114,738
74,941
4,526
35,271

1,173
129,872
79,394
10,231
40,247

1,646
128,891
76,779
11,085
41,027

1,894
130,815
80,998
11,708
38,109

1,330
115,589
67,356
9,641
38,592

1,814
105,816
64,008r
8,522r
33,286

872
108,966r
63,057r
9,779*
36,130*

1,394
113,894
69,201
10,281
34,412

1,939
116,385
71,083
10,942
34,360

111 To foreigners
112 Other branches of parent bank
113
Banks
114
Official institutions
115
Nonbank foreigners
116 Other liabilities

47,382
23,414
8,823
1,097
14,048
3,087

44,444
24,715
5,588
622
13,519
2,488

35,200
17,388
5,662
572
11,578
2,081

35,021
16,842
6,346
731
11,102
1,581

34,637
16,799
6,075
770
10,993
1,617

35,136
17,668
6,390
862
10,216
1,636

34,878
17,315
6,242
935
10,386
1,581

34,054*
16,071
6,787
984
10,212*
1,558

34,889
15,441
6,987
1,058
11,403
3,676

35,411
16,287
7,574
932
10,618
2,239

117 Total payable in U.S. dollars . . .

171,250

157,132

163,603

162,280

163,951

148,744

138,864

148,881

151,325




139,963

Summary Statistics

A57

3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1992
Item

1 Total 1
2
3
4
5
6
7
8
9
10
11
12

By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable
U.S. securities other than U.S. Treasury securities 5
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Africa
,
Other countries 6

1991

1990

May

June

July

Aug.

Sept.

Oct.'

Nov. p

344,529

360,530r

394,690'

401,950'

404,162'

406,671'

393,758'

405,385

996,107

39,880
79,424

38,396r
92,692

47,452r
111,224

51,462'
109,278

48,879'
114,781

52,078
113,307

43,675
113,634

60,853
104,286

55,257
100,702

202,487
4,491
18,247

203,677
4,858
20,907

208,069
5,021
22,924

213,477'
4,625
23,108

212,710'
4,582
23,210

213,407'
4,476
23,403

208,924'
4,505
23,020

211,875
4,473
23,898

211,280
4,503
24,365

167,191
8,671
21,184
138,096
1,434
7,955

168,365
7,460
33,554
139,465
2,092
9,592r

185,406'
9,347
39,732
149,054'
2,792
8,357'

191,377'
9,302
39,433
150,207'
3,265
8,364

194,4651
9,876
39,146
150,043'
3,218
7,412

196,061'
9,990
38,356
151,785
2,860
7,617

186,434'
7,027
37,703
151,667
3,360
7,565

194,611
8,111
38,504
153,555
3,481
7,121

185,416
6,396
38,936
154,511
3,779
7,067

1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies; zero coupon bonds are included at
current value.

5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
SOURCE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States and on the 1984 benchmark survey of foreign portfolio
investment in the United States.

3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1
Payable in Foreign Currencies
Millions of dollars, end of period
1991
Item

1 Banks' liabilities
2 Banks' claims
3
Deposits
Other claims
4
5 Claims of banks' domestic customers 2

1988

74,980
68,983
25,100
43,884
364

1. Data on claims exclude foreign currencies held by U.S. monetary
authorities.




1989

67,835
65,127
20,491
44,636
3,507

1992

1990

70,477
66,796
29,672
37,124
6,309

Dec.'

Mar.'

June'

Sept.'

75,129
73,195
26,192
47,003
3,398

68,071
60,435
23,270
37,165
2,962

70,842
58,262
23,462
34,800
4,375

85,278
73,174
29,412
43,762
3,908

2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.

A58

International Statistics • March 1993

3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars

Reported by Banks in the United States1

Millions of dollars, end of period
1992
Item

1989
May

June

July

Aug.

Sept.

Oct. r

Nov.p

HOLDER AND TYPE OF LIABILITY

1 Total, all foreigners
2 Banks' own liabilities
3
Demand deposits
4
Time deposits
5
Other.
6
Own foreign offices 4
7 Banks' custodial liabilities 5
8
U.S. Treasury bills and certificates 6
9
Other negotiable and readily transferable
instruments
10
Other
11 Nonmonetary international and regional
organizations
12
Banks' own liabilities
13
Demand deposits
14
Time deposits
15
Other.
16
17
18
19

Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
9

20 Official institutions
21
Banks' own liabilities
22
Demand deposits
23
Time deposits
24
Other.
25
26
27
28

Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
10

29 Banks
30
Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits 2
34
Other.
35
Own foreign offices 4
36
37
38
39

Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other

40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
43
Time deposits
44
Other 3
45
46
47
48

759,634

756,066 R

784,837

786,700

777,058

768,819 R

793,159'

791,892

577,498
22,032
168,780
67,823
318,864

577,229
21,723
168,017
65,822
321,667

r

575,374
20,321
159,649
66,305 r
329,099r

583,972
19,606
150,295
82,901
331,170

587,899
20,930
151,965
85,656
329,348

571,516
19,739
148,254
82,953
320,570

564,071 r
21,698
144,119
86,61l r
311,643 r

585,806 r
22,474
143,768r
82,484 r
337,080 1

590,805
21,288
158,178
91,648
319,691

159,380
91,100

182,405
96,796

180,692r
110,734

200,865
130,392

198,801
128,672

205,542
135,579

204,748 r
135,744

207,353 r
134,894

201,087
127,993

19,526
48,754

17,578
68,031

18,664
51,294 r

18,995
51,478

18,020

52,109

19,339
50,624

18,541
50,463 r

19,341r
53,118 r

19,954
53,140

4,894
3,279
96
927
2,255

5,918
4,540
36
1,050
3,455

8,981
6,827
43
2,714
4,070

11,422
9,467
46
2,520
6,901

12,851
40
3,788
6,800

11,321
8,192
24
3,008
5,160

12,874r
9,767 r
21
2,630
7,116 r

10,810"^
8,173 r
24
2,527 r
5,622 r

10,755
7,029
73
1,952
5,004

1,616
197

1,378
364

2,154
1,730

1,955
1,461

2,223
1,687

3,129
2,602

3,107
2,654

2,637
1,991

3,726
3,085

1,417
2

1,014

424

494

0

534
2

527

453

646

641

113,481
31,108
2,196
10,495
18,417

119,303
34,910
1,924
14,359
18,628

131,088r
34,41 l r
2,626 r
16,504
15,281

158,676
43,548
1,319
19,018
23,211

160,740
47,574
1,630
17,570
28,374

163,660
45,334
1,372
18,129
25,833

165,385
48,526
1,676
18,098
28,752

157,309
40.524
1,761
16,238
22.525

165,139
57,145
1,723
19,703
35,719

82,373
76,985

84,393
79,424

96,677
92,692

115,128
111,224

113,166
109,278

118,326
114,781

116,859
113,307

116,785
113,634

107,994
104,286

5,028
361

4,766
203

3,879
106

3,717
187

3,602
286

3,459
86

3,466
86

2,922
229

3,595
113

515,275
454,273
135,409
10,279
90,557
34,573
318,864

540,805
458,470
136,802
10,053
88,541
38,208
321,667

522,265 r
459,335 r
130,236r
8,648 r
82,857
38,731 r
329,099r

527,253
461,025
129,855
9,230
77,068
43,557
331,170

526,453
459,987
130,639
9,705
40,816
329,348

514,526
448,210
127,640
8,442
77,229
41,969
320,570

501,804 r
435,147 r
123,504r
9,851
73,175
40,478 r
311,643 r

536,759 r
466,796 r
129,716r
10,443
74,447
44,826 r
337,080*

524,206
454,548
134,857
9,741
86,300
38,816
319,691

61,002

82,335
10,669

62,930 r
7,471

66,228
8,946

66,466
8,927

66,316
9,444

66,657 r
10,429

69,963 r
10,905

69,658
10,481

r

736,878

9,367

Banks' custodial liabilities
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other

0

80,118

0

0

0

0

5,124
46,510

5,341
66,325

5,694
49,765 r

7,044
50,238

6,647
50,892

7,129
49,743

6,920
49,308 r

7,373
51,685 r

7,276
51,901

103,228
88,839
9,460

93,732 r
74,801
9,004
57,574
8,223

87,486
69,932
9,011
51,689
9,232

86,656
69,710
9,555
50,489
9,666

87,551
69,780
9,901
49,888
9,991

88,756
70,631
10,150
50,216
10,265

88,281

12,577

93,608
79,309
9,711
64,067
5,530

70,313
10,246
50,556
9,511

91,792
72,083
9,751
50,223
12,109

14,389
4,551

14,299
6,339

18,93l r
8,841

17,554
8,761

16,946
8,780

17,771
8,752

18,125
9,354

17,968
8,364

19,709
10,141

7,958

6,457
1,503

8,667
1,423r

7,740
1,053

7,237
929

8,224
795

7,702
1,069

8,400
1,204

8,442
1,126

7,351

6,976

7,279

7,452 r

7,672

66,801
5

0

10,628

1,880

MEMO

49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
" O t h e r negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts due to own foreign branches and foreign
subsidiaries consolidated in Consolidated Report of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of
foreign banks, consists principally of amounts due to head office or parent foreign
bank, and foreign branches, agencies, or wholly owned subsidiaries of head office
or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.




7,456

6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, the
Inter-American Development Bank, and the Asian Development Bank. Excludes
"holdings of dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."

Nonbank-Reported

Data

3.17—Continued
1992
Item

1989

1990

1991
May r

June r

July r

Aug.

Sept.

Oct.*

Nov. p

AREA

1 Total, all foreigners
2 Foreign countries
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10 Greece
Italy
11
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20
Yugoslavia
21
Others in Western Europe"
22
U.S.S.R
23
Other Eastern Europe
24 Canada

759,634

756,066r

784,837r

786,700r

777,058r

768,819*

793,159*

791,892*

731,984

753,716

747,085

r

773,415

r

773,849""

765,737r

755,945r

782,349*

781,137*

790,284

237,501
1,233
10,648
1,415
570
26,903
7,578
1,028
16,169
6,613
2,401
2,418
4,364
1,491
34,4%
1,818
102,362
1,474
13,563
350
608

254,452
1,229
12,382
1,399
602
30,946
7,485
934
17,735
5,350
2,357
2,958
7,544
1,837
36,690
1,169
109,555
928
11,689
119
1,545

249,097r
1,193
13,337
937
1,341
31,808
8,619
765
13,541
7,161
1,866
2,184
11,391
2,222
37,238
1,598
100,292r
622
9,274
241
3,467

273,436
1,337
17,346
1,331
764
27,005
8,319
1,254
10,055
9,572
1,429
2,391
14,316
2,007
36,663
1,691
112,828
524
19,961
436
4,207

279,569*
1,490
16,740
1,263
843
30,132
8,068r
1,374
10,362
9,456
1,359
2,530
15,844
4,125
35,987
1,580
111,712
555
21,607r
440
4,102

283,144r
1,445
16,797
1,348
720
28,900
8,%7
998
10,164
9,653
1,421
2,659
15,313
3,710
39,568
1,789
lll,913 r
547
22,743
609
3,880

289,388
1,427
18,449
1,329
976
29,456
11,032
934
10,992
10,422
1,341
2,664
14,904
4,162
40,569
2,021
111,521
554
21,872
525
4,238

290,344r
1,456
17,942
1,760
685
32,153
14,739
1,069
12,236
10,397
1,851
2,245
15,589
3,194
39,314
2,087
115,747r
567
12,867
499
3,947

306,499*
1,584
21,177*
1,788
949
34,876*
13,810
872
11,104
9,334
1,577
2,258
14,602
5,313*
38,117
2,524
114,668*
577
26,978*
450
3,941

313,899
1,358
19,631
1,481
1,144
40,028
15,205
749
12,500
8,397
2,014
2,255
10,382
5,210
41,511
2,360
118,178
575
26,621
601
3,699

18,865

20,349

21,605

736,878

22,581r
r

800,109

20,358

22,350

20,410

22,668

21,378

22,052

25 Latin America and Caribbean
Argentina
26
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35 Guatemala
36 Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
Peru
40
41
Uruguay
42
Venezuela
Other
43

311,028
7,304
99,341
2,884
6,351
138,309
3,212
4,653
10
1,391
1,312
209
15,423
6,310
4,362
1,984
2,284
9,482
6,206

332,997
7,365
107,386
2,822
5,834
147,321
3,145
4,492
11
1,379
1,541
257
16,650
7,357
4,574
1,294
2,520
12,271
6,779

345,529
7,753r
100,622r
3,178
5,704r
163,620*
3,283r
4,661r
2
1,232
1,594
231
19,957
5,592
4,695
1,249
2,0% r
13,181
6,879r

339,386r
9,374r
100,035r
3,009
5,227r
158,227r
3,791r
4,901r
6
1,150
1,438
242
20,842
5,347
4,100
1,098
2,104r
11,705
6,790*

339,161r
9,698r
101,822r
3,598
5,397r
156,525r
3,701r
4,721
3
1,137
1,447
309
19,491
5,313
4,286
1,156
2,169r
11,448
6,940r

325,397r
10,041r
92,546r
4,848
5,311r
151,591r
3,605r
4,686r
12
1,074
1,420
271
19,642
5,085
4,457
1,131
2,163r
11,080
6,434r

310,989r
9,397
82,571r
4,782
5,283
148,164r
3,393
4,711
9
1,214
1,432
272
20,046
4,825
4,302
1,123
2,182
10,802
6,481

315,512*
9,065
76,295*
4,275r
5,393
159,703*
3,440
4,792
33
1,073
1,416
309
19,650
4,751
4,595
1,143
2,019
11,101
6,459

308,712*
9,387*
84,657*
5,889*
5,828
143,265*
3,253
4,767
10*
1,026
1,376
274
19,226
4,708
4,115
1,124
2,087*
11,470
6,250*

308,358
8,715
85,180
6,137
5,489
142,757
2,925
4,677
11
1,016
1,323
271
19,542
6,101
3,970
1,031
2,092
11,013
6,108

44

156,201

136,844

120,462r

128,100*

124,553r

124,905r

125,215*

144,145*

134,302*

136,089

1,773
19,588
12,416
780
1,281
1,243
81,184
3,215
1,766
2,093
13,370
17,491

2,421
11,246
12,754
1,233
1,238
2,767
67,076
2,287
1,585
1,443
15,829
16,%5

2,626
11,491
14,269
2,418
1,463
2,015
47,069r
2,587
2,449
2,252
15,752
16,071

2,364
10,265
17,885
1,671
1,133
3,432
46,200r
3,132
1,630
6,990
18,297
15,101

2,378
9,985
16,980
1,715
1,387
2,976
44,269r
2,839
1,813
4,586
18,983
16,642

2,292
10,277
16,840
1,567
1,256
2,850
45,826*
3,288
1,994
4,017
19,828
14,870

2,508
10,362
17,775
1,480
958
2,620
45,683r
3,644
1,920
4,624
18,938
14,703

2,480
9,430
17,991
1,372
1,507
2,613
64,651*
3,672
2,028
4,517
19,977
13,907

2,582
8,617*
17,488*
1,234
1,249*
2,208
56,070*
3,531
2,275
5,082
19,040
14,926

2,550
8,722
16,315
1,213
1,232
3,691
55,374
3,685
2,222
5,797
20,266
15,022

3,824
686
78
206
86
1,121
1,648

4,630
1,425
104
228
53
1,110
1,710

4,825
1,621
79
228
31
1,082
1,784

5,430
2,001
77
399
26
1,257
1,670

5,810
2,540
87
248
29
1,232
1,674

5,516
2,324
85
269
17
1,211
1,610

5,314
2,143
93
275
24
1,090
1,689

5,592
2,243
100
190
14
1,339
1,706

5,843
2,598
98
240
24
1,201
1,682

6,061
2,600
93
214
23
1,402
1,729

64 Other
65
Australia
66
Other

4,564
3,867
697

4,444
3,807
637

5,567
4,464
1,103

4,482
3,211
1,271

4,398
3,192
1,206

4,425
3,066
1,359

4,629
3,322
1,307

4,088
2,927
1,161

4,403
2,987
1,416

3,825
2,654
1,171

67 Nonmonetary international and regional
organizations
68
International
69
Latin American regional 16
70
Other regional

4,894
3,947
684
263

5,918
4,390
1,048
479

8,981
6,485
1,181
1,315

ll,422 r
8,400
2,012r
1,010

12,85 LR
9,7%
2,436r
619

ll,321 r
7,402r
2,699
1,220

12,874r
9,65 LR
2,319
904

10,810*
7,714*
2,289
807

10,755*
7,708*
2,139
908

9,825
6,665
2,257
903

45
46
47
48
49
50
51
52
53
54
55
56

China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries
Other

57
58
59
60
61
62
63

Egypt
Morocco
South Africa
Zaire
Oil-exporting countries
Other

11. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23.
12. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
14. Comprises Algeria, Gabon, Libya, and Nigeria.




15. Principally the International Bank for Reconstruction and Development.
Excludes "holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."

A59

A60

International Statistics • March 1993

3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1992
Area and country

1 Total, all foreigners
2 Foreign countries
3 Europe
4
Austria
Belgium and Luxembourg
5
Denmark
6
7
Finland
8
France
9
Germany
10 Greece
11
Italy
12 Netherlands
13 Norway
14
Portugal
15
Spain
16 Sweden
17
Switzerland
18 Turkey
19 United Kingdom
20
Yugoslavia
21
Others in Western Europe 2
22
U.S.S.R
23
Other Eastern Europe
24 Canada

1989

1990

1991
May

June

r

July

r

Aug/

Sept/

Oct/

511,543

514,339r

504,567r

511,801

502,941

479,705

485,349

493,457

530,630

506,750

508,056

r

499,766r

505,807

499,520

475,316

481,178

490,985

119,025
415
6,478
582
1,027
16,146
2,865
788
6,662
1,904
609
376
1,930
1,773
6,141
1,071
65,527
1,329
1,302
1,179
921

113,093
362
5,473
497
1,047
14,468
3,343
727
6,052
1,761
782
292
2,668
2,094
4,202
1,405
65,151
1,142
597
530
499

114,310*
327
6,158
686
l,907 r
15,112
3,371
553
8,242
2,546
669
344
1,881
2,335
4,540
1,063
60,395r
825
789
1,970
597

120,712r
456
6,487
994
1,536
14,031
4,044
492
10,284r
2,647r
731
398
2,687
2,982r
4,144
l,131 r
62,499r
735
894
2,948
592

126,187
433
6,166
1,436
1,516
14,440
3,311
506
10,621
2,272
722
367
3,880
6,720
3,974
988
63,917
697
771
3,035
415

124,453
647
6,475
951
1,269
14,154
3,870
590
10,508
2,042
731
382
3,730
5,%7
3,683
1,174
62,800
693
1,227
3,153
407

119,126
606
6,344
901
1,081
13,011
4,707
619
9,876
2,075
707
387
2,590
6,567
3,934
1,002
58,861
678
1,356
3,280
544

117,235
341
7,524
1,007
1,299
15,004
4,074
606
9,487
1,980
639
383
3,304
5,494
3,112
986
56,456
674
1,216
3,199
450

126,114
373
6,971
825
817
16,081
5,628
601
9,754
2,334
666
327
4,630
6,698
3,698
1,177
60,1%
668
964
3,190
516

15,451

16,091

15,113r

16,449r

r

534,492

16,370

17,429

15,151

15,902

16,826

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
36 Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
Other

230,438
9,270
77,921
1,315
23,749
68,749
4,353
2,784
1
1,688
197
297
23,376
1,921
1,740
771
929
9,652
1,726

231,506
6,967
76,525
4,056
17,995
88,565
3,271
2,587
0
1,387
191
238
14,851
7,998
1,471
663
786
2,571
1,384

246,137
5,869
87,138r
2,270r
ll,894 r
107,846r
2,805
2,425
0
1,053
228
158
16,567
1,207
1,560
739
599
2,516
1,263

238,457r
5,956
84,618r
4,283
12,183
100,337r
3,056r
2,328
0
939
171
143
16,910*
904
l,932 r
667r
717
2,046
l,267 r

243,472
5,3%
83,101
4,951
12,020
106,631
3,228
2,304
0
936
175
150
16,464
920
2,208
720
765
2,216
1,287

234,066
5,614
74,806
6,099
12,186
104,133
3,118
2,398
0
950
167
151
16,341
941
2,025
708
749
2,360
1,320

217,582
4,789
62,615
6,302
12,286
99,775
3,220
2,322
0
949
189
150
16,564
966
2,053
708
799
2,585
1,310

210,329
4,560
58,502
3,567
11,308
99,294
3,320
2,475
0
920
237
160
17,313
1,045
1,945
732
921
2,654
1,376

213,319
4,568
64,860
2,798
11,558
%,708
3,340
2,595
5
936
277
147
16,666
1,080
1,988
721
882
2,702
1,488

44 Asia . . . .
China
45
People's Republic of China
46
Republic of China (Taiwan)
47
Hong Kong
48
India
49
Indonesia
50
Israel
51
Japan
52
Korea (South)
53
Philippines
54
Thailand
55
Middle Eastern oil-exporting countries 4
56
Other

157,474

138,722

125,262r

117,225r

112,365

115,933

116,509

130,614

127,290

634
2,776
11,128
621
651
813
111,300
5,323
1,344
1,140
10,149
11,594

620
1,952
10,648
655
933
774
90,699
5,766
1,247
1,573
10,749
13,106

747
2,087
9,617
441
952
860
84,807r
6,048
1,910
1,713
8,284
7,7%

729
1,808
9,127
475
1,132
874
74,3% r
5,785r
1,618
l,714 r
13,453
6,114

685
1,778
8,272
458
1,085
891
69,231
5,910
1,648
1,767
14,505
6,135

642
1,965
9,103
512
1,090
901
71,120
6,063
1,635
1,716
14,323
6,863

6%
1,983
8,015
528
1,108
920
71,469
6,201
1,775
1,691
14,783
7,340

636
2,054
10,087
499
1,089
800
83,201
6,247
1,852
1,795
14,613
7,741

1,051
1,848
9,132
500
1,112
826
80,071
6,113
1,8%
1,764
15,488
7,489

57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries
63
Other

5,890
502
559
1,628
16
1,648
1,537

5,445
380
513
1,525
16
1,486
1,525

4,928
294
575
1,235
4
1,298
1,522

4,582
218
529
1,128
4
1,162
1,541

4,548
256
527
1,070
4
1,159
1,532

4,452
261
4%
1,047
4
1,157
1,487

4,455
243
483
1,066
4
1,130
1,529

4,333
256
467
1,055
4
1,067
1,484

4,303
229
452
1,036
4
1,056
1,526

64 Other
65
Australia
66
Other

2,354
1,781
573

1,892
1,413
479

2,306
1,665
641

2,341r
l,199 r
1,142

2,865
1,727
1,138

3,187
1,937
1,250

2,493
1,463
1,030

2,765
1,765
1,000

3,133
1,951
1,182

67 Nonmonetary intepational and regional
organizations

3,862

4,793

6,283

4,801

5,994

3,421

4,389

4,171

2,472

1. Reporting banks include all types of depository institutions, as well as some
brokers and dealers.
2. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23.
3. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.




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."

Nonbank-Reported

Data

3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1992
Claim

1989

1991r

1990

Mayr

June r

Jul/

Aug/

502,941
32,940
302,061
113,963
62,897
51,066
53,977

479,705
32,263
287,523
105,987
56,294
49,693
53,932

1 Total

593,087

579,044

579,683

2 Banks' claims
3 Foreign public borrowers
4 Own foreign offices
5 Unaffiliated foreign banks
6
Deposits
Other
7
8
All other foreigners

534,492
60,511
2%,011
134,885
78,185
56,700
43,085

511,543
41,900
304,315
117,272
65,253
52,019
48,056

514,339
37,126
318,800
116,602
69,018
47,584
41,811

58,594
13,019

67,501
14,375

65,344
15,280

53,520
17,098

66,786
15,348

30,983

41,333

37,125

24,114

38,258

14,592

11,792

12,939

12,308

13,180

12,899

13,628

8,974

7,584

8,505

45,767

44,638

39,111

9 Claims of banks' domestic customers 3 ...
11

Negotiable and readily transferable

12

Outstanding collections and other

565,321
504,567
34,641
308,254
116,789
70,093
46,696
44,883

511,801
35,950
314,599
111,971
63,521
48,450
49,281

Oct.

Nov."

493,457
31,982
297,656
112,128
60,877
51,251
51,691

492,312
30,876
291,361
113,409
62,231
51,178
56,666

34,050

n.a.

Sept/
552,135
485,349
31,426
297,590
105,7%
54,316
51,480
50,537

MEMO

14 Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States

33,432

1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are quarterly.
Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. For U.S. banks, includes amounts due from own foreign branches and
foreign subsidiaries consolidated in Consolidated Report of Condition filed with
bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due from head office or parent

33,440

34,712

33,223

34,026

foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
3. Assets held by reporting banks for the account of their domestic customers.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see Federal Reserve
Bulletin, vol. 65 (July 1979), p. 550.

3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1991
Maturity, by borrower and area

1 Total
2
3
4
5
6
7

8
9
10
11
12
13
14
15
16
17
18
19

By borrower
Maturity of one year or less2
Foreign public borrowers
All other foreigners
Maturity of more than one year,
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean .
Asia
Africa
Mother3
Maturity of more than one year 2
Europe
Canada
Latin America and Caribbean .
Asia
Africa
All other 3

1988

Dec/

Mar/

June r

233,184

238,123

206,903

195,302

194,455

196,874

172,634
26,562
146,072
60,550
35,291
25,259

178,346
23,916
154,430
59,776
36,014
23,762

165,985
19,305
146,680
40,918
22,269
18,649

162,573
21,050
141,523
32,729
15,859
16,870

161,456
20,231
141,225
32,999
16,189
16,810

162,402
20,492
141,910
34,472
15,147
19,325

55,909
6,282
57,991
46,224
3,337
2,891

53,913
5,910
53,003
57,755
3,225
4,541

49,184
5,450
49,782
53,258
3,040
5,272

51,835
6,444
43,597
51,059
2,549
7,089

52,790
6,907
48,582
43,645
2,486
7,046

54,955
7,935
49,138
41,412
2,142
6,820

4,666
1,922
47,547
3,613
2,301
501

4,121
2,353
45,816
4,172
2,630
684

3,859
3,290
25,774
5,165
2,374
456

3,878
3,595
18,277
4,459
2,335
185

4,360
3,284
18,196
4,729
2,191
239

6,793
3,153
16,915
5,007
2,341
263

1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.




1992

1989

2. Maturity is time remaining to maturity.
3. Includes nonmonetary international and regional organizations.

A61

A62

International Statistics • March 1993

3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1
Billions of dollars, end of period
1990
Area or country

1988

1991

1992

1989
Sept.

Dec.

Mar.

June

Sept.

Dec.

Mar.

June

Sept.

346.2r

338.8

331.5

317.8

325.3r

320.4r

335.7r

341.5

347.6 r

355.2r

342.2 r

152.7
9.0
10.5
10.3
6.8
2.7
1.8
5.4
66.2
5.0
34.9

152.9
6.3
11.7
10.5
7.4
3.1
2.0
7.1
67.2
5.4
32.2

143.6
6.5
11.1
11.1
4.4
3.8
2.3
5.6
62.6
5.0
31.3

132.1
5.9
10.4
10.6
5.0
3.0
2.2
4.4
60.8
5.9
23.9

129.9
6.2
9.7
8.8
4.0
3.3
2.0
3.7
62.3r
6.8
23.2

129.8r
6.1
10.5
8.3
3.6
3.3
2.5
3.3
59.5 r
8.2
24.6

134.0
5.8
11.1
9.7
4.5
3.0
2.1
3.9
64.9
5.8r
23.2

137.2r
6.0
11.0
8.3
5.6
4.7
1.9
3.4
68.5
5.8r
22.2

130.5r
5.3
10.0
8.4
5.4
4.3
2.0
3.2
64.8 r
6.5r
20.7

135.6
6.2
11.9
8.7
8.0
3.3
1.91
4.6
65.9
6.7
18.3

136.4
6.2
15.5
10.9
6.4
3.7
2.2
5.0
61.6
6.7
18.3

13 Other industrialized countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia

21.0
1.5
1.1
1.1
1.8
1.8
.4
6.2
1.5
1.3
2.4
1.8

20.7
1.5
1.1
1.0
2.5
1.4
.4
7.1
1.2
.7
2.0
1.6

23.0
1.6
1.1
.8
2.8
1.6
.6
8.4
1.6
.7
1.9
2.0

22.6
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
.9
1.8
1.8

23.1
1.4
.9
1.0
2.5
1.5
.6
9.0
1.7
.8
1.8
1.9

21.1
1.1
1.2
.8
2.4
1.5
.6
7.1
1.9
.9
1.8
2.0

21.8r
1.0
.9
.6r
2.3
1.4
.5
8.3
1.6
1.0
1.6
2.4

22.7
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.6
1.9
2.7

21.2
.8
.8
.8
2.3
1.5
.5
7.7
1.2
1.3
1.8
2.3

25.5 r
.8
1.3
.8
2.8
1.7
.5
10.1
1.5
1.9
1.7
2.3

24.9
.7
1.5
1.0
3.0
1.6
.5
9.8
1.5
1.4
1.7
2.3

25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries

16.6
1.7
7.9
1.7
3.4
1.9

17.1
1.3
7.0
2.0
5.0
1.7

14.2
1.1
6.0
2.3
3.1
1.7

12.8
1.0
5.0
2.7
2.5
1.7

17.1
.9
5.1
2.8
6.6
1.6

14.0
.9
5.3
2.6
3.7
1.5

15.6
.8
5.6
2.8
5.0
1.5

14.6
.7
5.4
2.8
4.2
1.5

15.8
.7
5.4
3.0
5.3
1.4

16.2
.7
5.3
3.0
5.9
1.4

15.9
.7
5.4
3.0
5.4
1.4

31 Non-OPEC developing countries

85.3

77.5

67.1

65.4

66.4

65.0

65.0

64.3

70.6

68^

73.8

9.0
22.4
5.6
2.1
18.8
.8
2.6

6.3
19.0
4.6
1.8
17.7
.6
2.8

5.0
15.4
3.6
1.8
12.8
.5
2.4

5.0
14.4
3.5
1.8
13.0
.5
2.3

4.7
13.9
3.6
1.7
13.7
.5
2.2

4.6
11.6
3.6
1.6
14.3
.5
2.0

4.5
10.5
3.7
1.6
16.2
.4
1.9

4.8
9.6 r
3.6
1.7
15.5
.4
2.1

5.0
10.8
3.9
1.6
18.2
.4
2.2

5.1
10.6
4.0
1.6
16.6r
.4
2.2

6.2
10.8
4.2
1.7
17.7
.5
2.5

1 Total
2 G-10 countries and Switzerland
Belgium and Luxembourg
3
4
France
Germany
5
6
Italy
7
Netherlands
Sweden
8
9
Switzerland
10 United Kingdom
11 Canada
12 Japan

32
33
34
35
36
37
38

Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other

39
40
41
42
43
44
45
46
47

Asia
China
Peoples Republic of China
Republic of China (Taiwan)
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia3

.3
3.7
2.1
1.2
6.1
1.6
4.5
1.1
.9

.3
4.5
3.1
.7
5.9
1.7
4.1
1.3
1.0

.2
4.0
3.6
.6
6.2
1.8
3.9
1.5
1.6

.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7

.4
3.6
3.5
.5
6.8
2.0
3.7
1.6
2.1

.6
4.1
3.0
.5
6.9
2.1
3.7
1.7
2.3

.4
4.1
2.8
.5
6.5
2.3
3.6
1.9
2.3

.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.4

.3
4.8
3.6
.4
6.9
2.5
3.6
1.7
2.7

.3
4.6
3.8
.4
6.9
2.7
3.0
1.9
3.1

.3
5.0
3.6
.4
7.4
3.0
3.3
2.2
3.3

48
49
50
51

Africa
Egypt
Morocco
Zaire
,
Other Africa 3

.4
.9
.0
1.1

.4
.9
.0
1.0

.4
.9
.0
.8

.4
.8
.0
1.0

.4
.8
.0
.8

.4
.7
.0
.8

.4
.7
.0
.8

.4
.7
.0
.7

.3
.7
.0
.7

.5
.7
.0
.6

.3
.6
.0
.9

52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other

3.6
.7
1.8
1.1

3.5
.7
1.6
1.3

2.7
.4
1.3
1.1

2.3
.2
1.2
.9

2.1
.3
1.0
.8

2.1
.4
1.0
.7

1.8
.4
.8
.7

2.4
.9
.9
.7

2.9
1.4
.8
.6

3.0
1.7
.7
.6

3.1
1.8
.7
.7

56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama
62
Lebanon
63
Hong Kong
64
Singapore
65
Other

44.2
11.0
.9
12.9
1.0
2.5
.1
9.6
6.1
.0

36.6
5.5
1.7
9.0
2.3
1.4
.1
9.7
7.0
.0

42.6
8.9
4.5
9.3
2.2
1.5
.1
8.7
7.5
.0

42.5
2.8
4.4
11.5
7.9
1.4
.1
7.7
6.6
.0

50.0*
8.3r
4.4
14.1
1.1
1.5
.1
11.6
8.9
.0

48.3
6.8
4.2
14.9
1.4
1.3
.1
12.4
7.2
.0

52.7r
6.7
7.1
13.8
3.9*
1.3
.1
12.1
7.7
.0

52.0r
11.9r
2.3 r
15.8r
1.2
1.3
.1
12.2
7.1
.0

58.5
14.0"
3.9
17.4
1.0
1.3
.1
12.2
8.5
.0

56.9
12.(y
5.1
18.0
.8
1.4
.1
13.0
6.4
.0

49.6 r
7.6 r
3.8
15.4
.7
1.6
.1
12.9
7.4
.0

66 Miscellaneous and unallocated 6

22.6

30.3

38.1

39.8

36.4

39.9

44.6

48.2

48.0

49.1

38.3

1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches).
Since June 1984, reported claims held by foreign branches have been reduced
by an increase in the reporting threshold for "shell" branches from $50 million to




$150 million equivalent in total assets, the threshold now applicable to all
reporting branches.
2. Organization of Petroleum Exporting Countries, shown individually; other
members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar,
Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally
members of OPEC).
3. Excludes Liberia.
4. Includes Canal Zone beginning December 1979.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional
organizations.

Nonbank-Reported

Data

A63

3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States1
Millions of dollars, end of period
1991
Type and area or country

1988

1989

June
1 Total

32,952

38,764

1992

1990*
Sept.

Dec.

Mar.

June

Sept."

46,169

41,774r

43,256r

43,244r

44,170*

44,231r

44,979

r

2 Payable in dollars
3 Payable in foreign currencies

27,335
5,617

33,973
4,791

40,912
5,257

37,258
4,516r

38,520*
4,736*

37,852*
5,392*

38,719*
5,451*

37,536*
6,695*

36,549
8,430

By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies

14,507
10,608
3,900

17,879
14,035
3,844

21,192
17,105
4,087

19,562r
16,202r
3,360*

21,690*
17,985*
3,705*

21,981*
17,869*
4,112*

22,339*
18,111*
4,228*

22,043
16,799
5,244

23,314
16,478
6,836

18,445
6,505
11,940
16,727
1,717

20,885
8,070
12,815
19,938
947

24,977
10,683
14,294
23,807
1,170

22,212
8,569
13,644
21,056
1,157

21,566
8,313
13,253
20,535
1,031

21,263
8,310
12,953
19,983
1,280

21,831
8,914
12,917
20,608
1,223

22,188*
9,516*
12,672
20,737*
1,451*

21,665
9,407
12,258
20,071
1,594

9,962
289
359
699
880
1,033
6,533

11,660
340
258
464
941
541
8,818

11,086
394
975
621
1,081
545
6,455

10,503r
355
937r
658
1,026
513r
6,018r

12,343*
397
2,164*
682*
1,050
497*
6,610*

12,002*
217
2,106*
682*
1,056
408*
6,513*

12,539*
174
1,997
666*
1,025
355
7,415*

13,091
194
2,324
836
979
490
7,392

14,083
256
2,830
956
1,211
466
7,522

7 Commercial liabilities
8 Trade payables
9
Advance receipts and other liabilities
10 Payable in dollars
11 Payable in foreign currencies

12
13
14
15
16
17
18

By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

19

Canada

388

610

229

293

305

267

283

337

320

20
21
22
23
24
25
26

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

839
184
0
0
645
1
0

1,357
157
17
0
724
6
0

4,153
371
0
0
3,160
5
4

3,808
375
12
0
2,816
6
4

3,883
314
0
6
2,961
6
4

4,307
537
114
6
3,047
7
4

4,047
3%
114
8
2,915
7
4

3,308
343
114
10
2,167
8
4

3,235
192
115
18
2,209
12
5

27
28
29

Asia
Japan
Middle East oil-exporting countries 2

3,312
2,563
3

4,151
3,299
2

5,313
4,077
5

4,947r
3,771r
4

5,155*
4,006*
19

5,347*
4,108*
13

5,375*
4,113*
13

5,218
4,122
10

5,586
4,553
17

30
31

Africa
Oil-exporting countries

2
0

2
0

2
0

9
7

3
2

6
4

7
6

0
0

5
0

Allother 4

4

100

409

2

1

52

88

89

85

7,319
158
455
1,699
587
417
2,079

9,071
175
877
1,392
710
693
2,620

10,310
275
1,218
1,270
844
775
2,792

8,607
245
1,185
1,040
729
580
2,289

8,084
225
992
911
751
492
2,217

7,808
248
830
944
709
488
2,310

7,491
256
671
878
574
482
2,444

32
33
34
35
36
37
38
39

Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

7,144*
240
659
702*
605
400
2,404

6,714
173
688
744
601
369
2,262

40

Canada

1,217

1,124

1,261

1,208

1,011

990

1,094

1,077

1,055

41
42
43
44
45
46
47

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

1,090
49
286
95
34
217
114

1,224
41
308
100
27
323
164

1,672
12
538
145
30
475
130

1,619
5
504
180
49
358
119

1,512
14
450
211
46
291
102

1,352
3
310
219
107
304
94

1,701
13
493
230
108
375
168

1,803
8
409
212
73
475
279

1,518
3
338
115
85
322
147

48
49
50

Asia
Japan
Middle Eastern oil-exporting countries •

6,915
3,094
1,385

7,550
2,914
1,632

9,483
3,651
2,016

8,752
3,411
1,657

8,855
3,363
1,780

9,330
3,720
1,498

9,889
3,548
1,591

10,439*
3,537*
1,778

10,988
3,899
1,813

51
52

Africa
Oil-exporting countries

576
202

886
339

844
422

596
226

836
357

713
327

644
253

775
389

674
337

1,328

1,030

1,406

1,431

1,268

1,070

1,012

950

716

53

Other

4

1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.

A64

International Statistics • March 1993

3.23 CLAIMS ON UNAFFILIATED FOREIGNERS
the United States1

Reported by Nonbanking Business Enterprises in

Millions of dollars, end of period
1991
Type, and area or country

1988

1989

1992

1990*
June

Sept.

Dec.*

Mar.*

June*

Sept.P

1 Total

33,805

33,173

35,348

37,101r

38,315*

42,635

42,203

41,884

38,443

2 Payable in dollars
i Payable in foreign currencies

31,425
2,381

30,773
2,400

32,760
2,589

35,014*
2,087

35,952*
2,363

40,068
2,567

39,563
2,640

38,915
2,%9

35,525
2,918

By type
4 Financial claims
5 Deposits
6
Payable in dollars
1
Payable in foreign currencies
8 Other financial claims
9
Payable in dollars
10
Payable in foreign currencies

21,640
15,643
14,544
1,099
5,997
5,220
777

19,297
12,353
11,364
989
6,944
6,190
754

19,874
13,577
12,552
1,025
6,297
5,280
1,017

20,881*
12,544*
11,758
786*
8,337*
7,632*
704*

22,536*
16,188*
15,182
1,006*
6,348*
5,611*
737*

25,463
17,218
16,343
875
8,245
7,365
880

25,355
16,964
15,803
1,161
8,391
7,644
747

24,640
15,116
13,829
1,287
9,524
8,799
725

21,347
12,535
11,477
1,058
8,812
7,780
1,032

11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
14 Payable in dollars
15
Payable in foreign currencies

12,166
11,091
1,075
11,660
505

13,876
12,253
1,624
13,219
657

15,475
13,657
1,817
14,927
548

16,220
14,120
2,100
15,623
597

15,779
13,429
2,350
15,159
620

17,172
14,447
2,725
16,360
812

16,848
14,243
2,605
16,116
732

17,244
14,743
2,501
16,287
957

17,0%
14,528
2,568
16,268
828

10,278
18
203
120
348
217
9,039

8,463
28
153
152
238
153
7,4%

9,645
76
371
367
265
357
7,971

11,873*
74
271
298
429
433
10,222

13,129*
76
255
434
420
580
10,997

13,546
13
312
342
385
591
11,251

14,207
12
277
290
727
682
11,631

13,207
25
786
381
732
779
8,773

11,229
16
809
321
766
602
7,707

16
17
18
19
20
21
22

By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

23

Canada

2,325

1,904

2,934

2,015*

2,163*

2,679

2,755

2,534

2,256

24
25
26
27
28
29
30

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

8,160
1,846
19
47
5,763
151
21

8,020
1,890
7
224
5,486
94
20

6,201
1,090
3
68
4,635
177
25

5,926
457
4
127
4,957
161
29

6,289
652
19
137
5,106
176
32

7,932
758
8
192
6,384
321
40

7,070
415
12
191
5,912
318
34

7,260
523
12
181
6,018
343
32

6,523
1,099
65
135
4,792
222
26

31
32
33

Asia
Japan
Middle East oil-exporting countries 2

623
354
5

590
213
8

860
523
8

742*
398
4

614*
277
3

957
385
5

966
380
3

1,280
712
4

995
481
4

34
35

Africa
Oil-exporting countries 3

106
10

140
12

37
0

64
1

61
1

57
1

60
0

57
0

66
1

148

180

195

261*

280*

292

297

302

278

5,181
189
672
669
212
344
1,324

6,209
242
964
6%
479
313
1,575

7,044
212
1,240
807
555
301
1,775

7,950
192
1,544
943
643
295
2,088

7,894
181
1,562
936
646
328
2,086

8,137
255
1,563
908
666
399
2,173

7,607
170
1,576
885
588
282
1,972

36
37
38
39
40
41
42
43

All other

4

Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

7,464
220
1,402
958
707
2%
1,817

6,884
190
1,330
858
641
258
1,807

44

Canada

983

1,091

1,074

1,241

1,232

1,174

1,176

1,131

1,168

45
46
47
48
49
50
51

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

2,241
36
230
299
22
461
227

2,184
58
323
297
36
508
147

2,375
14
246
326
40
661
192

2,433
16
247
309
43
710
195

2,494
8
255
385
37
741
1%

2,591
11
263
418
41
829
202

2,572
11
272
364
45
892
206

2,672
9
291
438
32
847
251

3,139
7
245
395
43
968
300

52
53
54

Asia
Japan
Middle Eastern oil-exporting countries 2

2,993
946
453

3,570
1,199
518

4,127
1,460
460

4,201
1,645
501

4,282
1,808
4%

4,563
1,869
621

4,351
1,780
635

4,462
1,786
609

4,310
1,797
512

55
56

Africa
Oil-exporting countries 3

435
122

429
108

488
67

428
63

431
80

418
95

418
75

422
73

427
66

333

393

367

454

456

476

437

420

445

57

Other

4

1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.

Securities Holdings and Transactions

A65

3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1992
Transaction and area or country

1990

1991
Jan.Nov.

May

June

July r

Aug/

Sept/

Oct/

Nov."

13,174
14,841

13,884
17,034

18,701
18,055

17,779
16,502

U.S. corporate securities
STOCKS

173,293
188,419

211,207 r
200,116

3 Net purchases or sales ( - )

-15,126

4 Foreign countries

1 Foreign purchases
2 Foreign sales

198,400
205,897

18,664
18,602

16,525
17,537

ll,091 r

-7,497

62

-1,012

-222

-1,667

-3,150

646

1,277

-15,197

10,522 r

-7,506

27

-1,170

-239

-1,622

-3,059

649

1,274

-8,479
-1,234
-367
-397
-2,866
-2,980
886
-1,330
-2,435
-3,477
-2,891
-63
-298

53 r
9
-63
-227
-131
-352r
3,845
2,177
-134
4,255
1,179
153
174

-6,483
-1,177
-226
-514
-78
-4,000
1,229
1,791
-157
-4,042
-3,796
17
139

278
-121
149
76
122
-11
230
43
85
-557
-401
20
-72

-1,184
-148
-4
-217
-10
-691
74
-109
51
141
35
-1
-142

-965
10
-14
-14
-55
-742
130
-24
4
370
172
-7
253

-1,089
-46
-26
-54
-150
-652
-59
-24
-14
-442
-301
-1
7

-1,683
-234
-112
-107
-189
-869
-278
-90
136
-1,064
-97
14
-94

57
-92
-52
-43
-124
363
-227
239
-58
778
191
-21
-119

345
-50
47
-29
-40
359
43
649
-217
386
230
-18
86

71

568

9

35

158

17

-45

-91

-3

3

118,764
102,047

153,096
125,637r

192,337
156,828

17,539
13,222

16,691
12,407

18,343
16,311

19,785
16,620

17,160
14,452

18,404
14,547

15,793
14,062

21 Net purchases or sales ( - )

16,717

27,459*

35,509

4,317

4,284

2,032

3,165

2,708

3,857

1,731

22 Foreign countries

17,187

27,59c

34,938

4,388

4,205

2,153

3,150

2,573

3,811

1,566

10,079
373
-377
172
284
10,383
1,906
4,328
3
1,120
727
%
-344

13,112r
847
1,577
482
656
8,93l r
1,623
2,672
1,787
8,459
5,767
52
-116

15,343
1,004
1,646
474
-618
11,299
274
8,359
2,821
8,118
-76
51
-28

1,920
-45
67
123
-40
1,496
-68
1,022
455
1,088
324
6
-35

1,420
364
11
64
-53
847
-111
619
376
1,904
740
-6
3

1,029
161
-37
177
-13
760
67
676
239
231
-710
22
-111

1,516
-5
-13
22
-94
1,447
-100
878
284
593
-1,229
1
-22

1,818
155
387
58
-51
1,319
48
548
-5
171
-590
-7
0

1,473
-4
-34
133
-23
1,041
198
911
314
967
470
-50
-2

-750
-7
-113
135
-260
-556
281
510
489
973
412
-5
68

-471

-131

571

-71

79

-121

15

135

46

165

-2,959
9,759
12,718
275
45,938
45,663

-2,854
13,580
16,434
-1,561
45,747
47,308

-4,185
12,292
16,477
-1,966
47,885
49,851

-3,554
11,533
15,087
-831
51,063
51,894

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
Japan
Africa
Other countries

18 Nonmonetary international and
regional organizations

18,547
18,769

BONDS 2

19 Foreign purchases
20 Foreign sales

23
24
25
26
27
28
29
30
31
32
33
34
35

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries

36 Nonmonetary international and
regional organizations

Foreign securities
37 Stocks, net purchases or sales ( - )
38
Foreign purchases
39
Foreign sales 3
40 Bonds, net purchases or sales ( - )
41
Foreign purchases
42
Foreign sales

-9,205
122,641
131,846
-22,412
314,645
337,057

-31,967
120,598
152,565
-14,828
330,311
345,139

-27,595
136,794
164,389
-15,594
442,757
458,351

-909""
13,915r
14,824r
-2,749*
33,514*
36,263*

68*
14,638*
14,570*
-1,681*
40,332*
42,013*

-3,244
13,4%
16,740
-4,280
43,301
47,581

43 Net purchases or sales ( - ) , of stocks and bonds

-31,617

-46,795

-43,189

—3,658*

-1,613*

-7,524

-2,684

-4,415

-6,151

-4,385

44 Foreign countries

-28,943

-46,711

-46,586

—3,684*

-1,997*

-8,383

-2,771

-4,436

-6,178

-4,473

-8,443
-7,502
-8,854
-3,828
-137
-180

-34,452
-7,004
759
-7,350
-9
1,345

-33,310
-5,402
-2,323
-4,810
-46
-695

-141*
-710
-1,278
-1,235
-99
-221

-1,494*
-852
-560*
374*
7
528

-5,333
-2,212
1,631
-2,461
14
-22

-1,244
207
-430
-1,376
11
61

-3,282
-136
308
-1,667
-14
355

-6,438
-1,015
1,092
773
-2
-588

-5,018
577
-1,653
1,578
42
1

-2,673

-84

3,397

859

87

21

27

88

45
46
47
48
49
50

Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries

51 Nonmonetary international and
regional organizations

1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities and securities of U.S.
government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments
abroad.




26

384

3. In a July 1989 merger, the former stockholders of a U.S. company received
$5,453 million in shares of the new combined U . K . company. This transaction is
not reflected in the data.

A66

International Statistics • March 1993

3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES
Millions of dollars

Country or area

1990

Foreign Transactions

1991
Jan.Nov.

May

June

July

Aug.

Sept/

Oct/

Nov."

Transactions, net purchases or sales ( - ) during period 1
1 Estimated total

18,927

19,865

39,365

-7,924

14,444 R

-1,862

6,458

-5,995

3,538

17,710

2 Foreign countries

18,764

19,687

38,214

-6,945

ll,754 r

-2,286

6,785

-6,204

4,343

17,723

18,455
10
5,880
1,077
1,152
112
-1,259
11,463
13
-4,627

8,663
523
-4,725
-3,735
-663
1,007
6,218
10,024
13
-3,019

16,391
2,009
1,178
-2,119
-461
268
21,245
-6,379
650
661

-7,302
289
329
-338
-3
-579
-5,867
-1,099
-34
2,627

3,828
-49
824
227
372
-mr
1,664
7or
200
47

-2,445
331
-829
-1,046
-26
-703
212
-581
197
2,520

3,450
80
255
367
-1,289
-87
3,681
428
15
900

-4,655
-25
900
-239
-843
292
16
-4,761
5
-4,281

4,682
229
-8
-40
202
769
4,075
-544
-1
458

7,180
369
-1,584
1,827
667
1,334
7,0%
-2,747
218
-1,087

14,734
33
3,943
10,757
-10,952
-14,785
313
842

10,285
10
4,179
6,097
3,367
-4,081
689
-298

1,143
528
-2,516
3,131
22,641
7,564
1,103
-3,725

-320
-1%
-2,472
2,348
-2,406
1,085
40
416

3,585r
-149
l,791 r
1,943
4,129
1,638
92
73

-2,869
216
-589
-2,4%
1,783
2,221
149
-1,424

-1,563
60
-758
-865
4,112
1,887
56
-170

-1,479
31
-2,537
1,027
4,004
2,448
59
148

-2,002
155
-3,315
1,158
1,495
-371
-37
-253

7,204
27
2,323
4,854
4,224
3,363
119
83

163
287
-2

178
-358
-72

1,151
942
436

-979
-747
-4

2,690
2,421
127

424
365
-68

-327
-133
-75

209
-31
201

-805
-903
219

-13
-38
-31

18,764
23,218
-4,453

19,687
1,190
18,4%

38,214
7,603
30,611

-6,945
-2,685
-4,260

11,754r
5,408r
6,346r

-2,286
-767
-1,519

6,785
697
6,088

-6,204
-4,483
-1,721

4,343
2,951
1,392

17,723
-595
18,318

-387
0

-6,822
239

4,186
11

-3,061
0

947
-56

856
0

1,093
0

750
4

-118
0

628
0

3 Europe
4
Belgium and Luxembourg
5 Germany
6
Netherlands
7
Sweden
8
Switzerland
9
United Kingdom
10 Other Western Europe
11 Eastern Europe
12 Canada
13 Latin America and Caribbean
14 Venezuela
15 Other Latin America and Caribbean
16 Netherlands Antilles
17
18 Japan
19
20 Other
21 Nonmonetary international and regional organizations
22
International
23
Latin American regional
MEMO

24 Foreign countries
25
Official institutions
Other foreign 2
26
Oil-exporting countries
27 Middle E a s t 2
28

1. Official and private transactions in marketable U.S. Treasury securities
having an original maturity of more than one year. Data are based on monthly
transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes
held by official institutions of foreign countries.




2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States),
3. Comprises Algeria, Gabon, Libya, and Nigeria,

Interest and Exchange Rates

A67

3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS 1
Percent per year
Rate on Jan. 31, 1993

Rate on Jan. 31, 1993
Country

Rate on Jan. 31, 1993

Country
Percent

Month
effective

7.88
7.5

Oct. 1992
Oct. 1992
Jan. 1993
Dec. 1991
Dec. 1992

Austria..
Belgium .
Canada..
Denmark
France ..

6.81

9.5
9.0

Country
Month
effective

Germany...
Italy
Japan
Netherlands

8.25

12.0

3.25
7.5

1. Rates shown are mainly those at which the central bank either discounts or
makes advances against eligible commercial paper or government securities for
commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood
that the central bank transacts the largest proportion of its credit operations.

Sept. 1992
Dec. 1992
July 1992
Jan. 1993

Norway
Switzerland
United Kingdom

Percent

Month
effective

17.0
5.5

Nov. 1992
Jan. 1993
Sept. 1992

12.0

2. Since Feb. 1981, the rate has been that at which the Bank of France
discounts Treasury bills for seven to ten days.

3.27 FOREIGN SHORT-TERM INTEREST RATES1
Averages of daily figures, percent per year
1992
Type or country

8 Italy

1990

8.16
14.73
13.00
8.41
8.71
8.57
10.20
12.11
9.70
7.75

1991

5.86
11.47
9.07
9.15
8.01
9.19
9.49
12.04
9.30
7.33

3 .Iff
r

9.56
6.76
9.42
7.67r
9.25r
10.14
13.91
9.31
4.39

1. Rates are for three-month interbank loans, with the following exceptions:
Canada, finance company paper; Belgium, three-month Treasury bills; and Japan,
CD rate.




1993

1992
July

Aug.

Sept.

Oct.

Nov.

Dec/

Jan.

3.40
10.10
5.58
9.69
8.67
9.50
10.11
15.54
9.54
4.32

3.33
10.27
5.15
9.79
8.09
9.73
10.27
15.27
9.71
3.87

3.15
9.86
5.33
9.37
7.20
9.23
10.51
17.54
9.44
3.89

3.30
8.23
7.57
8.85
6.28
8.63
10.82
15.52
8.70
3.85

3.67
7.16
7.63
8.84
6.44
8.66
9.58
14.38
8.64
3.77

3.50
7.11
7.93
8.93
6.13
8.55
10.75
13.60
8.65
3.76

3.22
6.88
7.03
8.50
5.52
8.00
11.69
12.56
8.19
3.70

A68

International Statistics • March 1993

3.28 FOREIGN EXCHANGE RATES1
Currency units per dollar except as noted
1992
Country/currency unit

1990

1991

Aug.
1
2
3
4
5
6
7
8
9
10

Australia/dollar^
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma

11
12
13
14
15
16
17
18
19
20

Hong Kong/dollar
India/rupee
Ireland/pound 2
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder 2
New Zealand/dollar
Norway/krone
Portugal/escudo

21
22
23
24
25
26
27
28
29
30

Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound 2

1993

1992
Sept.

Oct.

Nov.

Dec.

Jan.

78.069
11.331
33.424
1.1668
4.7921
6.1899
3.8300
5.4467
1.6166
158.59

77.872
11.686
34.195
1.1460
5.3337
6.4038
4.0521
5.6468
1.6610
182.63

73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81

72.479
10.199
29.824
1.1907
5.4417
5.5851
3.9773
4.9119
1.4475
179.12

72.255
10.214
29.917
1.2225
5.5048
5.6203
4.4764
4.9378
1.4514
182.70

71.481
10.436
30.581
1.2453
5.5486
5.7278
4.70%
5.0370
1.4851
192.50

68.984
11.168
32.661
1.2674
5.6134
6.1166
5.0615
5.3706
1.5875
206.48

68.974
11.130
32.545
1.2725
5.8106
6.1206
5.1444
5.3974
1.5822
209.48

67.297
11.368
33.239
1.2779
5.77%
6.2319
5.4242
5.4751
1.6144
215.97

7.7899
17.492
165.76
1,198.27
145.00
2.7057
1.8215
59.619
6.2541
142.70

7.7712
22.712
161.39
1,241.28
134.59
2.7503
1.8720
57.832
6.4912
144.77

7.7402
28.156
170.42
1,232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07

7.7318
28.464
183.26
1,100.00
126.23
2.4977
1.6322
54.057
5.7120
124.98

7.7298
28.476
181.90
1,176.21
122.60
2.5029
1.6348
54.112
5.8116
127.86

7.7298
28.477
177.19
1,309.64
121.17
2.5044
1.6717
53.943
6.0562
132.33

7.7348
28.474
166.17
1,364.45
123.88
2.5227
1.7862
51.9%
6.4714
141.71

7.7416
28.979
166.71
1,412.38
124.04
2.5710
1.7788
51.570
6.6804
142.05

7.7376
29.043
163.37
1,491.07
124.99
2.5985
1.8155
51.270
6.8721
145.36

1.8134
2.5885
710.64
101.96
40.078
5.9231
1.3901
26.918
25.609
178.41

1.7283
2.7633
736.73
104.01
41.200
6.0521
1.4356
26.759
25.528
176.74

1.6294
2.8524
784.58
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63

1.6077
2.7629
792.56
93.05
44.050
5.2745
1.2966
25.120
25.265
194.34

1.5988
2.8037
788.76
98.19
44.159
5.3685
1.2780
25.227
25.209
184.65

1.6081
2.8923
786.79
105.74
44.276
5.6006
1.3176
25.278
25.253
165.29

1.6338
2.9959
787.09
113.83
44.404
6.2528
1.4291
25.405
25.462
152.68

1.6397
3.0140
791.75
112.95
45.046
6.8903
1.4219
25.452
25.488
155.10

1.6527
3.0713
794.87
114.62
46.307
7.2536
1.4774
25.452
25.523
153.25

89.09

89.84

86.61

80.97

81.98

85.03

90.04

90.50

92.36

MEMO

31 United States/dollar 3

1. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) monthly statistical release.
For ordering address, see inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the
currencies of ten industrial countries. The weight for each of the ten countries is




the 1972-76 average world trade of that country divided by the average world
trade of all ten countries combined. Series revised as of August 1978 (see Federal
Reserve Bulletin, vol. 64, August 1978, p. 700).

A69

Guide to Statistical Releases and Special Tables
STATISTICAL

RELEASES—List Published Semiannually, with Latest BULLETIN Reference

Anticipated schedule of release dates for periodic releases

Issue
December 1992

Page
A78

SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest BULLETIN Reference
Title and Date

Issue

Page

Assets and liabilities of commercial banks
December 31, 1991
March 31, 1992
June 30, 1992
September 30, 1992

May
August
November
February

1992
1992
1992
1993

A70
A70
A70
A70

Terms of lending at commercial banks
February 1992
May 1992
August 1992
November 1992

September
September
November
February

1992
1992
1992
1993

A74
A78
A76
A76

Assets and liabilities of U.S. branches and agencies of foreign banks
December 31, 1991
March 31, 1992
June 30, 1992
September 30, 1992

May
September
November
February

1992
1992
1992
1993

A76
A82
A80
A80

Pro forma balance sheet and income statements for priced service operations
June 30, 1991
September 30, 1991
March 30, 1992
June 30,1992

November
January
August
October

1991
1992
1992
1992

A80
A70
A80
A70

Assets and liabilities of life insurance companies
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992

December
May
August
March

1991
1992
1992
1993

A79
A81
A83
A71

Special table follows.




Special Tables
4.33 ASSETS AND LIABILITIES

A71

Life Insurance Companies

Millions of dollars
1992

1991
Account
Ql

r

Q2r

Q3r

Q4

r

Qlr

Q2

Q3

Life insurance companies 1
1 Assets
2
3
4
5
6
7
8
9
10
11
12

Securities
Government
United States 2
State and local
Foreign 3
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets

n.a.

1,505,318

1,538,731

1,551,201

1,580,733

1,611,440

1,643,699

241,289
210,685
11,329
19,275
771,650
627,396
144,254

252,888
221,138
11,909
19,841
786,769
635,336
151,433

269,490
241,935
10,228
17,327
788,030
623,515
164,515

279,675
251,334
10,355
17,986
808,183
640,478
167,705

288,271
257,940
10,461
19,870
831,135
658,512
172,623

302,448
270,085
11,013
21,350
851,667
671,671
179,996

271,674
45,934
65,391
109,380

270,094
47,164
66,671
115,145

265,258
46,711
66,364
115,348

263,269
47,749
66,900
114,957

259,266
48,523
67,973
116,272

253,843
48,875
69,420
117,446

1. Data are no longer available on a monthly basis for life insurance companies.
2. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are included as "Business" securities.
3. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.




Source. Estimates by the American Council of Life Insurance for all life
insurance companies in the United States. Annual figures are annual-statement
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."

A72

Index to Statistical Tables
References are to pages A3-A71 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 21, 22
Assets and liabilities (See also Foreigners)
Banks, by classes, 19-22
Domestic finance companies, 35
Federal Reserve Banks, 11
Financial institutions, 27, 71
Foreign banks, U.S. branches and agencies, 23
Automobiles
Consumer installment credit, 38
Production, 47, 48
BANKERS acceptances, 10, 24, 25
Bankers balances, 19-22. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 25
Branch banks, 23, 55
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 34
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 19
Federal Reserve Banks, 11
Central banks, discount rates, 67
Certificates of deposit, 25
Commercial and industrial loans
Commercial banks, 17, 21
Weekly reporting banks, 21-23
Commercial banks
Assets and liabilities, 19-22
Commercial and industrial loans, 17, 19,20, 21, 22, 23
Consumer loans held, by type and terms, 38
Loans sold outright, 21
Nondeposit funds, 18
Real estate mortgages held, by holder and property, 37
Time and savings deposits, 4
Commercial paper, 24, 25, 35
Condition statements (See Assets and liabilities)
Construction, 44,49
Consumer installment credit, 38
Consumer prices, 44, 46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 34
Profits and their distribution, 34
Security issues, 33, 65
Cost of living (See Consumer prices)
Credit unions, 38
Currency in circulation, 5, 14
Customer credit, stock market, 26
DEBITS to deposit accounts, 16
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 19-23
Ownership by individuals, partnerships, and
corporations, 23




Demand deposits—Continued
Turnover, 16
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 19-22, 23
Federal Reserve Banks, 5, 11
Turnover, 16
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 34
EMPLOYMENT, 45
Eurodollars, 25
FARM mortgage loans, 37
Federal agency obligations, 5, 10, 11, 12, 30, 31
Federal credit agencies, 32
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 29
Receipts and outlays, 27, 28
Treasury financing of surplus, or deficit, 27
Treasury operating balance, 27
Federal Financing Bank, 27, 32
Federal funds, 7, 18, 21, 22, 23, 25, 27
Federal Home Loan Banks, 32
Federal Home Loan Mortgage Corporation, 32, 36, 37
Federal Housing Administration, 32, 36, 37
Federal Land Banks, 37
Federal National Mortgage Association, 32, 36, 37
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11, 12, 29
Federal Reserve credit, 5, 6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 32
Finance companies
Assets and liabilities, 35
Business credit, 35
Loans, 38
Paper, 24, 25
Financial institutions
Loans to, 21, 22, 23
Selected assets and liabilities, 27
Float, 51
How of funds, 39,41, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 22, 23
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5, 11, 21, 22
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 22, 54,55,57, 58,63,65,66

A73

GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 32, 36, 37
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 38
Insurance companies, 29, 37, 71
Interest rates
Bonds, 25
Consumer installment credit, 38
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 67
Money and capital markets, 25
Mortgages, 36
Prime rate, 24
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 34
Investments (See also specific types)
Banks, by classes, 19, 20, 21, 22, 23,27
Commercial banks, 4, 17, 19-22
Federal Reserve Banks, 11, 12
Financial institutions, 37
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 19-22
Commercial banks, 4, 17, 19-22
Federal Reserve Banks, 5, 6, 8,11,12
Financial institutions, 27, 37
Insured or guaranteed by United States, 36, 37
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 26
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 25
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 34
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 28
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 26
Prime rate, 24
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 34
REAL estate loans
Banks, by classes, 17, 21, 22, 37
Financial institutions, 27




Real estate loans—Continued
Terms, yields, and activity, 36
Type of holder and property mortgaged, 37
Repurchase agreements, 7, 18, 21, 22, 23
Reserve requirements, 9
Reserves
Commercial banks, 19
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 36
Retail credit and retail sales, 38, 39,44
SAVING
How of funds, 39, 41,42, 43
National income accounts, 51
Savings and loan associations, 37, 38, 39. (See also SAIF-insured
institutions)
Savings Association Insurance Funds (SAIF) insured institutions, 27
Savings banks, 27, 37, 38
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 32
Foreign transactions, 65
Life insurance companies, 70
New issues, 33
Prices, 26
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 21, 22
Holdings of U.S. government securities, 29
New security issues, 33
Ownership of securities issued by, 21, 22
Rates on securities, 25
Stock market, selected statistics, 26
Stocks (See also Securities)
New issues, 33
Prices, 26
Student Loan Marketing Association, 32
TAX receipts, federal, 28
Thrift institutions, 4. (See also Credit unions and Savings and
loan associations)
Time and savings deposits, 4, 14, 18, 19, 20, 21, 22, 23
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 27
Treasury operating balance, 27
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 19, 20, 21, 22
Treasury deposits at Reserve Banks, 5, 11, 27
U.S. government securities
Bank holdings, 19-22, 23, 29
Dealer transactions, positions, and financing, 31
Federal Reserve Bank holdings, 5, 11, 12, 29
Foreign and international holdings and
transactions, 11, 29, 66
Open market transactions, 10
Outstanding, by type and holder, 27, 29
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 36, 37
WEEKLY reporting banks, 21-23
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)

A74

Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
DAVID W . MULLINS, JR., Vice

OFFICE OF BOARD

WAYNE D . ANGELL
EDWARD W . KELLEY, JR.

Chairman

MEMBERS

JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant to the Board
THEODORE E. ALLISON, Assistant to the Board for

Federal

Reserve System Affairs
LYNN S. FOX, Special Assistant to the Board
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board

LEGAL

DIVISION OF INTERNATIONAL FINANCE
E D W I N M . T R U M A N , Staff Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
D A L E W . HENDERSON, Associate Director
DAVID H . HOWARD, Senior Adviser
D O N A L D B . A D A M S , Assistant Director
PETER HOOPER III, Assistant Director
K A R E N H . JOHNSON, Assistant Director
RALPH W . SMITH, JR., Assistant Director

DIVISION

J. VIRGIL MATTINGLY, JR., General Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel

DIVISION OF RESEARCH AND STATISTICS
MICHAEL J. PRELL, Director
EDWARD C . E T T I N , Deputy Director
WILLIAM R . JONES, Associate Director
THOMAS D . SIMPSON, Associate Director
LAWRENCE SLIFMAN, Associate

Director

Associate Director
M A R T H A B E T H E A , Deputy Associate Director
PETER A . TINSLEY, Deputy Associate Director
M Y R O N L . KWAST, Assistant Director
PATRICK M . PARKINSON, Assistant Director
M A R T H A S . S C A N L O N , Assistant Director
JOYCE K . ZICKLER, Assistant Director
DAVID J. STOCKTON,

OFFICE OF THE SECRETARY
WILLIAM W. WILES,

Secretary
JENNIFER J. JOHNSON, Associate
Secretary
BARBARA R. LOWREY, Associate
Secretary
ELLEN MALAND, Assistant
Secretary

DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN, Director
STEPHEN C . SCHEMERING, Deputy Director
D O N E . K L I N E , Associate Director
WILLIAM A . RYBACK, Associate Director
FREDERICK M . STRUBLE, Associate Director
HERBERT A . B I E R N , Deputy Associate Director
ROGER T. COLE, Deputy Associate Director
JAMES I. GARNER, Deputy Associate Director
HOWARD A . AMER, Assistant Director
GERALD A . EDWARDS, JR., Assistant Director
JAMES D . GOETZINGER, Assistant Director
L A U R A M . HOMER, Assistant Director
JAMES V. HOUPT, Assistant Director
JACK P. JENNINGS, Assistant Director
MICHAEL G . MARTINSON, Assistant Director
RHOGER H P U G H , Assistant Director
S I D N E Y M . SUSSAN, Assistant Director
MOLLY S . WASSOM, Assistant Director




JOHN J. MINGO,

Adviser

LEVON H . GARABEDIAN,

Assistant Director

(Administration )
DIVISION

OF MONETARY
AFFAIRS
Director
DAVID E . LINDSEY, Deputy Director
B R I A N F. M A D I G A N , Assistant Director
RICHARD D . PORTER, Assistant Director
DONALD L. KOHN,

NORMAND R.V. BERNARD, Special Assistant to the Board

DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L. GARWOOD,

Director

Associate Director
DOLORES S . SMITH, Associate Director
M A U R E E N P. ENGLISH, Assistant Director
IRENE SHAWN M C N U L T Y , Assistant Director
G L E N N E. LONEY,

JOHN P. LAWARE
LAWRENCE B . LINDSEY

SUSAN M . PHILLIPS

OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
S . DAVID FROST, Staff Director
WILLIAM SCHNEIDER, Special Assignment:
Project Director, National Information Center
PORTIA W . THOMPSON, Equal Employment Opportunity
Programs Officer

DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
CLYDE H . FARNSWORTH, JR., Director
DAVID L . ROBINSON, Deputy Director (Finance and
Control)
CHARLES W . BENNETT, Assistant Director
JACK DENNIS, JR., Assistant Director
EARL G . HAMILTON, Assistant Director
JEFFREY C . MARQUARDT, Assistant Director

DIVISION OF HUMAN
RESOURCES
MANAGEMENT
DAVID L . S H A N N O N , Director
JOHN R . WEIS, Associate Director
ANTHONY V. DIGIOIA, Assistant Director
JOSEPH H . HAYES, JR., Assistant Director
FRED HOROWITZ, Assistant Director
OFFICE OF THE CONTROLLER
Controller
STEPHEN J. CLARK, Assistant Controller (Programs and
Budgets)
DARRELL R . PAULEY, Assistant Controller (Finance)
GEORGE E . LIVINGSTON,

DIVISION OF SUPPORT SERVICES
ROBERT E . FRAZIER, Director
GEORGE M . LOPEZ, Assistant Director
DAVID L . WILLIAMS, Assistant Director
DIVISION OF INFORMATION
RESOURCES
MANAGEMENT
STEPHEN R . MALPHRUS, Director
BRUCE M . BEARDSLEY, Deputy Director
MARIANNE M. EMERSON, Assistant

Po K Y U N G

Director

Assistant Director
RAYMOND H . MASSEY, Assistant Director
EDWARD T. MULRENIN, Assistant Director
DAY W . RADEBAUGH, JR., Assistant Director
ELIZABETH B . RIGGS, Assistant Director
RICHARD C . STEVENS, Assistant Director
KIM,




JOHN H. PARRISH, Assistant

Director

Assistant Director
YOUNG, Assistant Director

LOUISE L . ROSEMAN,
FLORENCE M .

OFFICE OF THE INSPECTOR

GENERAL

BRENT L. BOWEN, Inspector
General
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General

76

Federal Reserve Bulletin • March 1993

Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET COMMITTEE
MEMBERS
A L A N GREENSPAN,

Chairman

E . GERALD CORRIGAN,

Vice Chairman

WAYNE D . ANGELL

EDWARD W . KELLEY, JR.

DAVID W . MULLINS, JR.

EDWARD G . BOEHNE

JOHN P. LAWARE

SUSAN M . PHILLIPS

SILAS KEEHN

LAWRENCE B . LINDSEY

GARY H . STERN

ROBERT D . MCTEER, JR.

ALTERNATE MEMBERS
J. ALFRED BROADDUS, JR.

JERRY L . JORDAN

ROBERT P. FORRESTAL

JAMES H . OLTMAN

ROBERT T. PARRY

STAFF
DONALD L. KOHN, Secretary
NORMAND R . V . BERNARD,

and

RICHARD W. LANG, Associate
Economist
Economist
DAVID E. LINDSEY, Associate
LARRY J. PROMISEL, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
KARL A. SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist

Economist

Deputy Secretary

JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
ERNEST T. PATRIKIS,

Deputy General Counsel

MICHAEL J. PRELL, Economist
EDWIN M. TRUMAN, Economist

RICHARD G. DAVIS, Associate

Economist

Manager of the System Open Market Account
Deputy Manager for Foreign Operations
Deputy Manager for Domestic Operations

WILLIAM J. MCDONOUGH,

MARGARET L . GREENE,
JOAN E . LOVETT,

FEDERAL ADVISORY COUNCIL
E. B. ROBINSON, JR.,
JOHN B . MCCOY,

N. CARTER, First District
S. SANFORD, JR., Second District
ANTHONY P. TERRACCIANO, Third District
JOHN B. MCCOY, Fourth District
EDWARD E . CRUTCHFIELD, JR., Fifth District
E.B. ROBINSON, JR., Sixth District

President

Vice President
Seventh District
HI, Eighth District
JOHN F. GRUNDHOFER, Ninth District
DAVID A . RISMILLER, Tenth District
CHARLES R . HRDLICKA, Eleventh District
RICHARD M . ROSENBERG, Twelfth District

MARSHALL

EUGENE A . MILLER,

CHARLES

ANDREW




B.

CRAIG,

HERBERT V. PROCHNOW, Secretary
WILLIAM J. KORSVIK, Associate
Secretary

All

CONSUMER ADVISORY

COUNCIL

DENNY

D.

Denver, Colorado, Chairman
Chicago, Illinois, Vice Chairman

DUMLER,

JEAN POGGE,

Charlottesville, Virginia
Madison, Wisconsin
GARY S. HATTEM, New York, New York
JULIA E. HILER, Marietta, Georgia
RONALD HOMER, Boston, Massachusetts
THOMAS L . HOUSTON, Dallas, Texas

BARRY A. ABBOTT, San Francisco, California
JOHN R. ADAMS, Philadelphia, Pennsylvania
JOHN

A.

BAKER,

BONNIE GUITON,

JOYCE HARRIS,

Atlanta, Georgia
Denver, Colorado

VERONICA E . BARELA,

MULUGETTA BIRRU, Pittsburgh, Pennsylvania
DOUGLAS

D.

St. Paul, Minnesota
Bronx, New York

BLANKE,

GENEVIEVE BROOKS,

HENRY JARAMILLO, Belen, N e w Mexico

TOYE L. BROWN, Boston, Massachusetts

EDMUND MIERZWINSKI, W a s h i n g t o n , D . C .

CATHY CLOUD, W a s h i n g t o n , D . C .

JOHN V. SKINNER, Irving, Texas

Yelm, Washington
St. Louis, Missouri
NORMA L. FREIBERG, New Orleans, Louisiana
LORI GAY, Los Angeles, California
DONALD A. GLAS, Hutchinson, Minnesota
MICHAEL

D.

LOWELL

EDWARDS,

THRIFT INSTITUTIONS ADVISORY

GRACE W. WEINSTEIN, Englewood, N e w Jersey
JAMES L. WEST,

COUNCIL

DANIEL

A.

Minneapolis, Minnesota
Davenport, Iowa
GEORGE R . GLIGOREA, Sheridan, Wyoming
THOMAS J. HUGHES, Merrifield, Virginia
RICHARD D. JACKSON, Atlanta, Georgia
COOPER,

PAUL L. ECKERT,




Tijeras, New Mexico

ROBERT O . ZDENEK, W a s h i n g t o n , D . C .

C.

Houston, Texas, President
Somerville, New Jersey, Vice President

ARNOLD,

BEATRICE D'AGOSTINO,

WILLIAM

N. SWANSON, Portland, Oregon
W. TIERNEY, Washington, D.C.

MICHAEL

MICHAEL FERRY,

Seattle, Washington
Cleveland, Ohio
ROBERT MCCARTER, New Bedford, Massachusetts
STEPHEN W. PROUGH, Irvine, California
THOMAS R . RICKETTS, Troy, Michigan
KERRY KILLINGER,

CHARLES JOHN KOCH,

A78

Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-138, Board of Governors of the Federal Reserve System,
Washington, DC 20551 or telephone (202) 452-3244 or FAX
(202) 728-5886. When a charge is indicated, payment should
accompany request and be made payable to the Board of
Governors of the Federal Reserve System. Payment from foreign residents should be drawn on a U.S. bank.

THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS.

1984. 120 pp.
ANNUAL REPORT.
ANNUAL REPORT: BUDGET REVIEW, 1991-92.
FEDERAL RESERVE BULLETIN. Monthly. $25.00

per year or
$2.50 each in the United States, its possessions, Canada,
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ANNUAL STATISTICAL DIGEST: period covered, release date,
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October 1982
239 pp.
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266 pp.
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October 1984
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254 pp.
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712 pp.
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215 pp.
SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES

OF CHARTS. Weekly. $30.00 per year or $.70 each in the
United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $.80 each.
THE FEDERAL RESERVE ACT and other statutory provisions
affecting the Federal Reserve System, as amended through
August 1990. 646 pp. $10.00.
REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
A N N U A L PERCENTAGE RATE TABLES (Truth in Lending—

Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp.
Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address,
$2.00 each.
Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or
more to one address, $1.25 each.
Federal Reserve Regulatory Service. Looseleaf; updated at
least monthly. (Requests must be prepaid.)




Consumer and Community Affairs Handbook. $75.00 per
year.
Monetary Policy and Reserve Requirements Handbook.
$75.00 per year.
Securities Credit Transactions Handbook. $75.00 per year.
The Payment System Handbook. $75.00 per year.
Federal Reserve Regulatory Service. 3 vols. (Contains all
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$200.00 per year.
Rates for subscribers outside the United States are as follows
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Each Handbook, $90.00 per year.
THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each.
WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp.
INDUSTRIAL PRODUCTION—1986 EDITION. December 1986.

440 pp. $9.00 each.
FINANCIAL FUTURES AND OPTIONS IN THE U . S . ECONOMY.

December 1986. 264 pp. $10.00 each.
FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALYSIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each.

CONSUMER EDUCATION PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies are
available without charge.
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
A Guide to Business Credit for Women, Minorities, and Small
Businesses
How to File A Consumer Credit Complaint
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
Organization and Advisory Committees
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Settlement Costs
A Consumer's Guide to Mortgage Refinancings
Home Mortgages: Understanding the Process and Your Right
to Fair Lending
Making Deposits: When Will Your Money Be Available?
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit

A79

STAFF STUDIES: Summaries Only Printed in the
Bulletin

1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y

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.

1 6 1 . A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,

Staff Studies 1-145 are out of print.

1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM
MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n

1 4 6 . THE ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by

1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR-

Gregory E. Elliehausen and John D. Wolken. September
1990. 35 pp.
1980-90, by Margaret Hastings Pickering. May 1991.
21pp.
A. Rhoades. February 1992. 11 pp.

Thomas F. Brady. November 1985. 25 pp.
1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, by Helen T. Farr

KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.

and Deborah Johnson. December 1985. 42 pp.
1 4 8 . THE MACROECONOMIC AND SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY TAX ACT: SOME SIMULATION

RESULTS, by Flint Bray ton and Peter B. Clark. December
1985. 17 pp.
1 4 9 . THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN
BANKING BEFORE AND AFTER ACQUISITION, b y S t e p h e n

REPRINTS OF SELECTED B u l l e t i n ARTICLES
Some Bulletin articles are reprinted. The articles listed below
are those for which reprints are available. Most of the articles
reprinted do not exceed twelve pages.
Limit of ten copies

A. Rhoades. April 1986. 32 pp.
1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING:
A REEXAMINATION AND AN APPLICATION, by John T.

Rose and John D. Wolken. May 1986. 13 pp.
1 5 1 . RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING
FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice

P. White, Paul F. O'Brien, and Mary M. McLaughlin.
January 1987. 30 pp.
1 5 2 . DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
REVIEW OF THE LITERATURE, by Mark J. Warshawsky.

April 1987. 18 pp.
1 5 3 . STOCK MARKET VOLATILITY, by Carolyn D. Davis and
Alice P. White. September 1 9 8 7 . 1 4 pp.
1 5 4 . T H E EFFECTS ON CONSUMERS AND CREDITORS OF
PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES,

by Glenn B. Canner and James T. Fergus. October 1987.
26 pp.
155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J.
Warshawsky. November 1987. 25 pp.
1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING

MARKETS, by James V. Houpt. May 1988. 47 pp.
1 5 7 . M 2 PER UNIT OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D.

Porter, and David H. Small. April 1989. 28 pp.
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE

PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, by Nellie Liang

and Donald Savage. February 1990. 12 pp.




Recent Developments in the Bankers Acceptance Market. 1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and U.S.
Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
Home Equity Lines of Credit. 6/88.
Mutual Recognition: Integration of the Financial Sector in the
European Community. 9/89.
The Activities of Japanese Banks in the United Kingdom and in
the United States, 1980-88. 2/90.
Industrial Production: 1989 Developments and Historical
Revision. 4/90.
Recent Developments in Industrial Capacity and Utilization.
6/90.
Developments Affecting the Profitability of Commercial Banks.
7/90.
Recent Developments in Corporate Finance. 8/90.
U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90.
The Transmission Channels of Monetary Policy: How Have
They Changed? 12/90.
Changes in Family Finances from 1983 to 1989: Evidence from
the Survey of Consumer Finances. 1/92.
U.S. International Transactions in 1991. 5/92.

A80

Maps of the Federal Reserve System

1
j i i i i l 8 i i i ® 3 l »

ijiiiii

BOSTON
MINNEAPOLIS!1

2
7

iff

—

1 8 8 1 CHICAGO •
p t f i ^ s i j i i ^ l ^ ^ ^ l ^ p j i ifilji

12

•
•

CLJLMD

• SAN FRANCISCO

"
N E W YORK

PHILADELPHIA

Q

10
KANSAS CITYB

•

LLCHMOND

ST. Louis
8

?•

5

ZR

11

ATLANTA

^

ALASKA

HAWAII

LEGEND

Both

pages

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

Facing

page

• Federal Reserve Branch city
— Branch boundary

NOTE

The Federal Reserve officially identifies Districts
by number and Reserve Bank city (shown on both
pages) and by letter (shown on the facing page).
In the 12th District, the Seattle Branch serves
Alaska, and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as follows: the New York Bank serves the



Commonwealth of Puerto Rico and the U.S. Virgin
Islands; the San Francisco Bank serves American
Samoa, Guam, and the Commonwealth of the
Northern Mariana Islands. The Board of Governors
revised the branch boundaries of the System most
recently in December 1991.

A81

1-A

3-C

2-B

5_£

4-D

Baltimore^

Pittsburgh

/

NH
Buffalo

MA|

CT

•

Charlotte
• Cincinnati

^

NJ

NY

NEW YORK

BOSTON

PHILADELPHIA
7-G

• Nashville

RICHMOND

CLEVELAND
8-H

W1

ML

Louisville

Detroit •

IA

ILB

Jacksonville

Memphis

IN

New Orleans

F

y

\

MS

Rock
Miami
CHICAGO

ATLANTA

ST. LOUIS

9-1
Helena

MINNEAPOLIS
10-J

12-L

WY

/ NE
CO

Omaha •

•

> tin

/

ALASKA

•

Denver

•

Seattle

/-

—

Portland
Oklahoma• City

OR

OK

<

CA

KANSAS CITY

/
N V 7

UT

11-K
•

A

/

Salt Lake City

AZ

• I

San Antonio/

Houston

• Los Angeles

•
HAWAII

DALLAS



SAN FRANCISCO

'

A82

Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
Chairman
branch, or facility
Zip
Deputy Chairman

President
First Vice President

BOSTON*

02106

Richard F. Syron
Cathy E. Minehan

NEW YORK*

10045

Jerome H. Grossman
To be announced

Ellen V. Futter
Maurice R. Greenberg
14240 Herbert L. Washington

E. Gerald Corrigan
James H. Oltman

PHILADELPHIA

19105

Edward G. Boehne
William H. Stone, Jr.

CLEVELAND*

44101

Buffalo

Cincinnati
Pittsburgh
RICHMOND*

Jane G. Pepper
James M. Mead

ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans

Jerry L. Jordan
Sandra Pianalto

23219

J. Alfred Broaddus, Jr.
Jimmie R. Monhollon

30303
35283
32231
33152
37203
70161

CHICAGO*

60690

Detroit

48231

ST. LOUIS

63166

Little Rock
Louisville
Memphis

72203
40232
38101

MINNEAPOLIS

55480

Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
SAN FRANCISCO
Los Angeles
Portland
Salt Lake City
Seattle

James O. Aston

A. William Reynolds
To be announced
45201 Marvin Rosenberg
15230 Robert P. Bozzone

Anne Marie Whittemore
Henry J. Faison
Baltimore
21203 To be announced
Charlotte
28230 Anne M. Allen
Culpeper Communications
and Records Center 22701

59601
64198
80217
73125
68102

Edwin A. Huston
Leo Benatar
Donald E. Boomershine
Joan D. Ruffier
R. KirkLandon
James R.Tuerff
Lucimarian Roberts

Robert P. Forrestal
Jack Guynn

Richard G. Cline
Robert M. Healey
J. Michael Moore

Silas Keehn
William C. Conrad

Robert H. Quenon
Janet McAfee Weakley
Robert D. Nabholz, Jr.
John A. Williams
Seymour B. Johnson

Thomas C. Melzer
James R. Bowen

Delbert W. Johnson
Gerald A. Rauenhorst
James E. Jenks

Gary H. Stern
Thomas E. Gainor

Burton A. Dole, Jr.
Herman Cain
Barbara B. Grogan
Ernest L. Hollo way
Sheila Griffin

Thomas M. Hoenig
Henry R. Czerwinski

Charles A. Cerino1
Harold J. Swart1

Ronald B. Duncan1
Walter A. Varvel1
John G. Stoides1

Donald E. Nelson1
FredR. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso

Roby L. Sloan1

Karl W. Ashman
Howard Wells
John P. Baumgartner

John D. Johnson

Kent M. Scott
David J. France
Harold L. Shewmaker

Leo E. Linbeck, Jr.
Cece Smith
79999 W. Thomas Beard, III
77252 Judy Ley Allen
78295 Erich Wendl

Robert D. McTeer, Jr.
Tony J. Salvaggio

94120 James A. Vohs
Judith M. Runstad
90051 Donald G. Phelps
97208 William A. Hilliard
84125 Gary G. Michael
98124 George F. Russell, Jr.

Robert T. Parry
Patrick K. Barron

75201

Vice President
in charge of branch

Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson

John F. Moore1
E. Ronald Liggett1
Andrea P. Wolcott
Gordon Werkema1

•Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New
York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines,
Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.




Publications of Interest
FEDERAL RESERVE CONSUMER CREDIT

PUBLICATIONS

The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects
as how the Equal Credit Opportunity Act protects
women against discrimination in their credit dealings,
how to use a credit card, and how to resolve a billing
error.
The Board also publishes the Consumer Handbook
to Credit Protection Laws, a complete guide to consumer credit protections. This forty-four-page booklet
explains how to shop and obtain credit, how to maintain a good credit rating, and how to dispute unfair
credit transactions.

Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage Lock-Ins,
A Consumer's Guide to Mortgage Refinancings, and
A Consumer's Guide to Mortgage Settlement Costs.
These booklets were prepared in conjunction with the
Federal Home Loan Bank Board and in consultation
with other federal agencies and trade and consumer
groups.
Copies of consumer publications are available free
of charge from Publications Services, mail stop 138,
Board of Governors of the Federal Reserve System,
Washington, DC 20551. Multiple copies for classroom use are also available free of charge.

Business
Credit

A Consumer's
Quid* to
Mortgage
Lock-Ins




far Women,
Minorities, and
Smalt B u s i n e s s e s

Consumer Handbook
to Credit Protection
k

Laws

Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve
System makes some of its statistical releases available to the public through the U.S. Department of
Commerce's economic bulletin board. Computer
access to the releases can be obtained by sub-

scription. For further information regarding a
subscription to the economic bulletin board,
please call 202-377-1986. The releases transmitted
to the economic bulletin board, on a regular basis,
are the following:

Reference
Number

Statistical release

Frequency of release

H.3

Aggregate Reserves

Weekly/Thursday

H.4.1

Factors Affecting Reserve Balances

Weekly/Thursday

H.6

Money Stock

Weekly/Thursday

H.8

Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions

Weekly/Monday

H.10

Foreign Exchange Rates

Weekly/Monday

H.15

Selected Interest Rates

Weekly/Monday

G.5

Foreign Exchange Rates

Monthly/end of month

G.17

Industrial Production and Capacity Utilization

Monthly/midmonth

G.19

Consumer Installment Credit

Monthly/fifth business day

Z.7

Flow of Funds

Quarterly




Publications of Interest
FEDERAL RESERVE REGULATORY SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf service
containing all Board regulations as well as related
statutes, interpretations, policy statements, rulings,
and staff opinions. For those with a more specialized
interest in the Board's regulations, parts of this service are published separately as handbooks pertaining
to monetary policy, securities credit, consumer affairs,
and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains
citation indexes and a subject index.

The Monetary Policy and Reserve Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.

The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with related statutes, Board interpretations, rulings,
and staff opinions. Also included are the Board's list

of marginable OTC stocks and its list of foreign
margin stocks.

The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, and BB, and
associated materials.
The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation
CC, Regulation J, the Expedited Funds Availability
Act and related statutes, the official Board commentary on Regulation CC, and policy statements on risk
reduction in the payment system.
For domestic subscribers, the annual rate is $200
for the Federal Reserve Regulatory Service and $75
for each Handbook. For subscribers outside the
United States, the price including additional air mail
costs is $250 for the Service and $90 for each Handbook. All subscription requests must be accompanied
by a check or money order payable to the Board of
Governors of the Federal Reserve System. Orders
should be addressed to Publications Services, mail
stop 138, Board of Governors of the Federal Reserve
System, Washington, DC 20551.

US. MONETARY POLICY AND FINANCIAL MARKETS
U.S. Monetary Policy and Financial Markets by AnnMarie Meulendyke offers an in-depth description of
the way monetary policy is developed by the Federal
Open Market Committee and the techniques employed to implement policy at the Open Market Trading Desk. Written from her perspective as a senior
economist in the Open Market Function at the Federal
Reserve Bank of New York, Ann-Marie Meulendyke
describes the tools and the setting of policy, including
many of the complexities that differentiate the process
from simpler textbook models. Included is an account
of a day at the Trading Desk, from morning
information-gathering through daily decisionmaking
and the execution of an open market operation.
The book also places monetary policy in a broader




context, examining first the evolution of Federal
Reserve monetary policy procedures from their beginnings in 1914 to the end of the 1980s. It indicates how
policy operates most directly through the banking
system and the financial markets and describes key
features of both. Finally, the book turns its attention to
the transmittal of monetary policy actions to the U.S.
economy and throughout the world.
The book is $5.00 a copy for U.S. purchasers and
$10.00 for purchasers outside the United States. Copies are available from the Public Information Department, Federal Reserve Bank of New York, 33 Liberty
Street, New York, NY 10045. Checks must accompany orders and should be payable to the Federal
Reserve Bank of New York in U.S. dollars.