Full text of Federal Reserve Bulletin : March 1995
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VOLUME 8 1 •
NUMBER 3 •
MARCH 1 9 9 5
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman
The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed
except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction
of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
219 MONETARY
CONGRESS
POLICY REPORT
TO THE
The economy turned in a strong performance
in 1994. Output rose substantially, unemployment fell, and inflation remained subdued.
Looking ahead to 1995, the members of the
Board of Governors and the Reserve Bank
presidents anticipate continued expansion of
real gross domestic product, but at a more
moderate pace than in 1994. The unemployment rate is expected to hold at about the low
levels of recent months. Inflation in 1995 is
expected to run a little higher than in 1994.
244 TREASURY AND FEDERAL
RESERVE
FOREIGN EXCHANGE
OPERATIONS
During the fourth quarter of 1994, the dollar
fell 0.1 percent against the German mark but
rose 0.5 percent against the Japanese yen and
1.0 percent on a trade-weighted basis. Over
the period, U.S. monetary authorities purchased dollars against both the mark and the
yen. In other operations, U.S. and Mexican
monetary authorities activated their $6 billion
swap facility after Mexico announced on
December 22 that the peso would be allowed
to float.
248 INDUSTRIAL
PRODUCTION
AND CAPACITY
UTILIZATION
FOR JANUARY
1995
Industrial production rose 0.4 percent in January, about half as much as in November and
December. Capacity utilization edged up
0.1 percentage point, to 85.5 percent, its highest level since October 1979.
251 STATEMENTS
TO THE
CONGRESS
Alan Greenspan, Chairman, Board of Governors, discusses issues involving municipal,
corporate, and individual users of derivative
products and highly leveraged investment
strategies and focuses on the relationship
between dealers in financial markets and their
customers; he says that the Board has suggested steps that institutions should take to
control their risk from financial market transactions and has also issued guidance for banks
that act as dealers in sophisticated riskmanagement instruments that encourages
them to ensure that the counterparties understand the nature of, and the risks inherent in,
the agreed transactions, before the Senate
Committee on Banking, Housing, and Urban
Affairs, January 5, 1995.
253 Chairman Greenspan expresses his views on
some of the most important issues involved in
producing the budget of the U.S. government
and says that in addressing the problem of the
long-run structural deficit, the focus should be
on how fiscal actions affect the potential of the
economy to produce greater output and taxable income on a sustained, ongoing basis;
although full dynamic estimates of individual
budget initiatives should be the goal, the analytical tools required to achieve these estimates are deficient, and we must avoid resting
key legislative decisions on controversial estimates of revenues and outlays, before a Joint
Hearing of the Senate and House Committees
on the Budget, January 10, 1995.
255 Chairman Greenspan reviews the current condition of the economy and says that although
its recent performance has been encouraging,
much of the improvement is in the nature of
cyclical developments and that the central role
of the Federal Reserve is to ensure that the
economy remains on a sustainable, noninflationary path, before the Senate Committee on
Finance, January 25, 1995.
258 Chairman Greenspan offers an economic and
fiscal backdrop for policy discussions and says
that the United States must sustain higher
levels of investment to achieve healthy
increases in productivity and to be successful
in competing internationally; to support investment we need to raise the level of domestic saving or, absent a rise in private saving,
eliminate the structural deficit in the federal
budget, before the Senate Committee on the
Budget, January 26, 1995.
261 Chairman Greenspan reviews the Mexican
economic and financial situation and says that
unless Mexico's efforts to restore economic
stability and financial market confidence succeed, years of economic reforms in Mexico
will be threatened by pressures to reimpose
controls in many areas of its economy and to
reestablish governmental interference in its
increasingly vibrant private sector; also, a
reversal of Mexico's economic reforms and
a spread of its financial difficulties to other
emerging markets could halt, or even reverse,
the global trend toward market-oriented reform and democratization, before the Senate
Committee on Foreign Relations, January 26,
1995. (Chairman Greenspan presented identical testimony before the House Committee on
Banking and Financial Services, January 25,
1995, and before the Senate Committee on
Banking, Housing, and Urban Affairs, January 31, 1995.)
265
ANNOUNCEMENTS
Change in the discount rate.
Adoption of a procedure for disclosing policy
decisions of the Federal Open Market
Committee.
Increase in the reciprocal currency arrangement with the Bank of Mexico.
Appointment of new members to the Consumer Advisory Council.
Proposal to amend the capital adequacy guidelines for state member banks and bank holding
companies with regard to the regulatory capital treatment of certain transfers of assets with
recourse.
Publication of the Examination Manual for
U.S. Branches and Agencies of Foreign Banking Organizations.
Availability of revised lists of OTC stocks
and of foreign stocks subject to margin
regulations.
Change in Board staff.
271 LEGAL
DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and
pending cases.
AI FINANCIAL
AND BUSINESS
STATISTICS
These tables reflect data available as of
January 27, 1995.
A3 GUIDE TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A45 Domestic Nonfinancial Statistics
A53 International Statistics
A67 GUIDE TO STATISTICAL
SPECIAL TABLES
RELEASES
A68 INDEX TO STATISTICAL
TABLES
A 7 0 BOARD OF GOVERNORS
AND
All
AND
STAFF
FEDERAL OPEN MARKET
COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A 7 4 FEDERAL RESERVE
PUBLICATIONS
BOARD
A 7 6 MAPS OF THE FEDERAL
SYSTEM
A78 FEDERAL RESERVE
AND OFFICES
BANKS,
RESERVE
BRANCHES,
Monetary Policy Report to the Congress
Report submitted to the Congress on February 21,
1995, pursuant to the Full Employment and Balanced Growth Act of 19781
MONETARY
ECONOMIC
POLICY AND THE
OUTLOOK FOR 1995
The U.S. economy turned in a strong performance
in 1994. Real gross domestic product increased
4 percent over the four quarters of the year. The
employment gains associated with this rise in production outpaced growth of the labor force by a
sizable margin, and the unemployment rate thus
declined substantially. Price increases picked up in
some sectors of the economy in 1994 as labor and
product markets tightened, but broader measures of
price change showed inflation holding fairly steady:
The consumer price index increased about 23A percent over the year, the same as the rise during 1993.
Signs that growth is moderating have emerged in
the past month or so, but the bulk of the evidence
suggests that the economy continues to advance at
an appreciable pace.
Federal Reserve policy during 1994 and early
1995 was aimed at fostering a financial environment conducive to sustained economic growth. As
the economy moved back toward high rates of
resource utilization, pursuit of this aim necessitated
acting to prevent a buildup of inflationary pressures. Federal Reserve policy had remained very
accommodative in 1993 in order to offset factors
that had been inhibiting economic growth. By early
1994, however, the expansion clearly had gathered
momentum, and maintenance of the prevailing
stance of policy would eventually have led to rising
inflation that, in turn, would have jeopardized
economic and financial stability. Taking account of
anticipated lags in the effects of policy changes, the
1. The charts for the report are available on request from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551.
Federal Reserve began to firm money market conditions last February. The Federal Reserve continued to tighten policy over the course of the year
and into 1995, as economic growth remained
unexpectedly strong, eroding remaining margins of
unused resources and intensifying price increases
at early stages of production. Developments in
financial markets—for example, easier credit availability through banks and a decline in the foreign
exchange value of the dollar—may have muted the
effects of the tightening of monetary policy.
Short-term interest rates have increased about
3 percentage points since the start of 1994, with the
federal funds rate rising from 3 percent to 6 percent. Other market interest rates have risen between
IV2 percentage points and 3 percentage points, on
net, with the largest increases coining at intermediate maturities. Through much of the year,
intermediate- and long-term rates were lifted by
more rapid actual and expected economic growth,
fears of a pickup in inflation, and market expectations of additional policy moves. However, a further substantial tightening in November and some
tentative signs of moderation in economic activity
around year-end and in early 1995 appeared to
reduce market concerns about increased inflation
pressures and additional Federal Reserve policy
actions. As a result, long-term rates declined, on
net, from mid-November through mid-February.
The foreign exchange value of the dollar in
terms of other Group of Ten (G-10) currencies
declined almost 6V2 percent last year, even as the
economy picked up and interest rates rose. The
positive effects on the dollar that would normally
have been expected from higher U.S. interest rates
were offset in large part by upward movements in
long-term interest rates abroad. Indeed, foreign
long-term rates increased as much on average as
U.S. rates during 1994, owing to much more rapid
than expected growth abroad, especially in Europe.
Concerns about U.S inflation may have contributed
to the weakness in the dollar in the middle part of
last year; late in the year, the dollar rallied for a
220
Federal Reserve Bulletin • March 1995
time, as tighter monetary policy apparently reduced
investors' inflation fears. The dollar weakened
again, however, in early 1995, perhaps reflecting
the emerging indicators of moderating growth in
the United States. In addition, financial markets
were roiled early this year by severe financial difficulties in Mexico. A sharp depreciation of the peso
had adverse effects not only in Mexico but also in a
number of other countries, and these developments
also may have contributed to the weakness of the
dollar.
Despite the rise in U.S. interest rates in 1994,
private-sector borrowing, abetted in part by more
aggressive lending by intermediaries, picked up in
support of increased spending. The debts of both
households and businesses grew at their fastest
rates in five years. The step-up in growth of private
debt was accompanied by changes in its composition. Businesses shifted toward short-term funding
sources as bond yields rose, increasing their bank
borrowing and commercial paper issuance, while
cutting back on new bond issues. Similarly, households turned increasingly to adjustable-rate mortgages as rates on fixed-rate mortgages increased
substantially. Banks encouraged the shift of households and businesses to bank borrowing by easing
lending standards and not allowing all of the rise in
market rates to show through to loan rates. By
contrast, federal borrowing was slowed in 1994 by
policies adopted in previous years to narrow the
federal deficit, as well as by the effects of the
strong economy on tax receipts and spending.
Taken together, the debt of all nonfinancial sectors
expanded 5 VA percent, about the same as the
increase of a year earlier and a figure that was in
the middle portion of the 1994 monitoring range of
4 percent to 8 percent.
Growth in the broad monetary aggregates
remained subdued in 1994. M3 expanded about
IV2 percent, well within its 0 percent to 4 percent
target range and slightly more than its increase in
1993. M3 was buoyed by growth of more than
7 percent in large time deposits, as banks turned to
wholesale markets to fund credit expansion. For
the year, M2 rose only 1 percent, an increase that
was at the lower bound of its 1 percent to 5 percent
target range. In contrast to 1992 and 1993, the slow
growth in M2, and the resulting further substantial
increase in its velocity (the ratio of nominal GDP
to the money stock), was not a consequence of
unusually large shifts from M2 deposits to bond
and stock mutual funds. Rather, it seemed to reflect
behavior similar to that in earlier periods of rising
short-term market interest rates. During such periods, changes in the rates available on retail deposits
usually lag changes in market rates, providing an
incentive to redirect savings from these deposits to
market instruments. These shifts tend to have an
especially marked effect on Ml because yields on
its components either cannot adjust or adjust quite
slowly to shifts in market rates. Ml growth last
year was 2VA percent; it had been IOV2 percent in
1993. Only continued strong growth in currency,
much of which likely reflected increased use
abroad, supported Ml.
Money and Debt Ranges for 1995
At its most recent meeting, the Federal Open
Market Committee (FOMC) reaffirmed the 1995
growth ranges for money and debt that were
chosen on a provisional basis last July. The money
ranges—1 percent to 5 percent for M2 and 0 percent to 4 percent for M3—are consistent with the
Committee members' expectations of a slowing of
nominal income growth as the expansion moves to
a more sustainable pace but also rest on the anticipation of further increases in the velocities of these
aggregates. The velocity of M2 is likely to be
boosted by lagged effects of the increases in shortterm interest rates during 1994 and early 1995 and
possibly by increased flows from M2 deposits into
long-term mutual funds, as investor concerns about
capital market volatility recede. The M2 range also
provides an indication of the longer-run growth
that could be expected under conditions of reasonable price stability if that aggregate's velocity
resumes its historical pattern of no long-term trend.
M3 velocity has been on a steep upward path in
1.
R a n g e s for growth o f monetary and debt a g g r e g a t e s 1
Percent
Aggregate
M2
M3
Debt 2
1993
1994
1995
1-5
0-4
4-8
1-5
0-4
4-8
1-5
0-4
3-7
1. Change from average for fourth quarter of preceding year to average
for fourth quarter of year indicated.
2. Monitoring range for debt of domestic nonfinancial sectors.
Monetary Policy Report to the Congress
recent years, but the rate of increase might be
expected to slow in the near term. Part of the
increase in M3 velocity in the early 1990s resulted
from weak growth of bank credit, in part reflecting
substantial loan losses and consequent capital
impairment, and the contraction of the thrift sector
as failed institutions were liquidated. However, the
recent strength in bank credit and the end of the
contraction in thrift sector credit suggest that M3
growth could pick up, perhaps appreciably, and its
velocity could begin to level out. The resumption
of a more normal relationship between M3 and
nominal income might call for a technical adjustment of the target range for M3 at mid-year or in
1996.
The monitoring range for growth in the debt
aggregate in 1995 is 3 percent to 7 percent. This
range is 1 percentage point lower than the monitoring range in 1994, reflecting the more moderate
path anticipated for expansion in nominal spending and borrowing. Private-sector debt growth
will likely remain fairly strong in the coming year,
boosted by substantial capital investment as well as
merger and acquisition activity. Credit availability
is unlikely to constrain private-sector borrowing, as
banks continue to be eager to lend and as quality
spreads in financial markets remain relatively narrow. The outlook for the federal deficit suggests
that Treasury borrowing will be comparable to that
in 1994.
The monetary and debt aggregates will continue
to be among the variables monitored by the Committee to inform its policy deliberations. Given the
uncertainties about the behavior of the velocities of
the aggregates, however, the Committee will also
need to continue assessing a wide variety of other
financial and economic indicators.
221
GDP over the four quarters of 1995 to be in a range
of 2 percent to 3 percent.
Effects of the past year's increases in interest
rates probably will show through more strongly in
the coming year, reflecting the typical lags between
Federal Reserve policy actions and changes in the
pace of economic growth. Residential building,
especially of single-family units, is the part of the
economy in which those effects are likely to
emerge earliest and stand out most clearly, but
reactions to the higher rates probably will be showing up in other interest-sensitive sectors as well.
Other influences also will be working to moderate the rate of growth. For example, large increases
in real outlays for consumer durables over the past
three years, partly financed in recent quarters by
unsustainably rapid growth in the volume of consumer credit, probably have exhausted most of the
pent-up demand that had accumulated when the
economy was sluggish early in the 1990s. Similarly, business investment in new equipment has
been rising extremely rapidly for some time and
has moved to quite a high level; businesses likely
will be shifting to more moderate rates of spending
growth before too long. Inventory investment
seems likely to moderate as well, as sustained
additions to stocks at the pace of recent quarters
would almost surely generate an unwanted backup
of inventories at some point.
In other areas, however, increased strength may
be forthcoming. Nonresidential construction, which
often tends to lag other sectors of the economy
over the course of the business cycle, now appears
2.
Economic projections for 1995
Percent
Federal Reserve Governors
and Reserve Bank presidents
Economic Projections for 1995
The members of the Board of Governors and the
Reserve Bank presidents, all of whom participate
in the deliberations of the Federal Open Market
Committee, expect the economy to settle into a
pattern of more moderate expansion in 1995, after
a burst of growth that has brought rates of resource
utilization to the highest levels since the latter part
of the 1980s. Most of the Board members and
Reserve Bank presidents expect the rise in real
Indicator
Change, fourth quarter
to fourth quarter1
Nominal GDP
Real GDP
Consumer price index 2 . .
Average level,
fourth quarter
Unemployment rate
Administration
Ranee
g
Central
tendency
4 3 /4-6'/ 2
2-31/4
2 3 /4-3%
5-6
2-3
3-3 ^
5V4-6
About 5Yi
5.4
2.4
3.2
5.5-5.8 3
1. Change from average for fourth quarter of preceding year to average
for fourth quarter of 1995.
2. All urban consumers.
3. Annual average.
222
Federal Reserve Bulletin • March 1995
to be picking up steam. In addition, net exports
may be a less negative factor in coming quarters
than they were in 1994. Many foreign industrial
economies entered the new year with considerable
forward momentum; that should keep real exports
of goods and services on a solid uptrend, even
allowing for lower exports to Mexico as a consequence of the peso's devaluation and the likelihood
of little or no growth in that country in 1995.
Imports, meanwhile, should begin to slow as
growth of demand in this country eases.
The Board members and Reserve Bank presidents expect that output growth of the magnitude
they anticipate will be accompanied by moderate
increases in employment and little change in the
unemployment rate. Forecasts of the unemployment rate for the fourth quarter of 1995 are tightly
clustered around 5lA percent.
An especially encouraging development in 1994
was that inflation remained relatively quiescent
even as the economy moved to high rates of resource utilization. However, the costs of materials
and components have been rising rapidly, squeezing profit margins in some sectors, and anecdotal
reports of pressures on wages and finished goods
prices have proliferated in recent months; increases
in average hourly earnings and consumer prices
picked up in January. Assessing the prospects,
members of the Board of Governors and the
Reserve Bank presidents think that the most likely
outcome for this year is that inflation will run
somewhat higher than in 1994. Such an outcome
would be consistent with patterns of price change
during earlier periods when the economy was operating at levels of resource utilization like those
seen recently. The central tendency of the Federal
Reserve officials' CPI forecasts, measured in terms
of the change from the final quarter of 1994 to the
final quarter of 1995, spans a range of 3 percent to
3V2 percent.
The economic prospects anticipated by the
governors and Reserve Bank presidents for 1995
appear to be closely in line with those of the
Administration. The Administration's forecasts of
real GDP growth and inflation are in the middle of
the Federal Reserve's central tendency ranges, and
the Federal Reserve forecasts of the unemployment
rate are centered near the low end of the annual
range that was published in the Economic Report
of the President.
Over the coming year, the Federal Reserve will
seek to foster continued economic expansion while
avoiding the provision of so much liquidity that the
expected near-term step-up in inflation develops
sustained momentum. Much progress has been
made over the past couple of business cycles in
reducing the role that inflation plays in the economic decisions of households and businesses.
Moving ahead, the challenge will be to preserve
and extend this progress, given that the Federal
Reserve can best contribute to long-run prosperity
by establishing an environment of effective price
stability.
Economic prospects for the long run will be
further enhanced if the Congress and the Administration succeed in making further progress in reducing the federal budget deficit. An improved outlook
for the federal deficit over the remainder of this
decade and beyond could have significant, favorable effects in financial markets, including a shift in
long-term interest rates to a trajectory lower than
that which would otherwise prevail. Such a shift in
long-term rates would be an essential part of a
process in which a larger share of the nation's
limited supply of savings would be channeled to
productivity-improving investment, thereby boosting growth in output and living standards.
THE PERFORMANCE OF THE ECONOMY
The economy recorded a third year of strong
expansion in 1994. Real GDP grew 4 percent over
the four quarters of the year, industrial output rose
nearly 6 percent, and the number of jobs on nonfarm payrolls increased about V/i million, the largest gain in ten years. Labor and product markets
tightened appreciably. Price pressures intensified in
the markets for materials, but broader measures of
price change showed inflation holding steady.
As in 1992 and 1993, the economic advance
during 1994 was driven mainly by sharp increases
in the real expenditures of households and businesses. Consumer purchases of motor vehicles rose
further in 1994, and purchases of other consumer
durables increased even faster than they had in the
two previous years. Residential investment posted
a small gain, on net, over the four quarters of the
year, despite sharp increases in mortgage interest
rates. Business investment in office and computing
Monetary Policy Report to the Congress
equipment slowed from the spectacular pace of
1993 but continued to rise rapidly nonetheless, and
business investment in other types of equipment
accelerated. Real outlays for nonresidential construction, which had been a weak sector of the
economy in previous years, picked up in 1994;
outlays for office construction ended a long slide
that had stretched well back into the 1980s. Business investment in inventories, which had been
quite restrained in previous years of the expansion, increased appreciably in 1994. Much of the
inventory buildup apparently was intentional and
reflected the desires of firms to stock up in anticipation of continued strength in sales or to build
stronger buffers against potential delays in supply.
In contrast to the strength in private expenditures, government purchases of goods and services
edged down on net over the four quarters of 1994.
Federal purchases of goods and services, which
had declined sharply in 1993, fell further in 1994 as
a consequence of actions taken in recent years to
reduce the size of the federal deficit. Meanwhile,
the real purchases of state and local governments
rose only modestly. Although the expanding economy has provided states and localities with a stronger revenue base, many of these jurisdictions are
striving to hold spending in check; a number of
states have chosen to cut taxes.
As in the two previous years, a significant portion of the rise in domestic spending in 1994 went
for imports of goods and services, which increased
about 15 percent in real terms during the year.
Meanwhile, growth of real exports of goods and
services picked up noticeably, with gains cumulating to about 10 percent over the year. Foreign
economies strengthened in 1994, and the price
competitiveness of this country's products in world
markets was aided by a subdued rate of rise in
production costs and a somewhat lower exchange
value of the U.S. dollar.
Labor and product markets tightened in 1994.
After ticking up in January of last year in conjunction with the introduction of a new labor market
survey, the civilian unemployment rate fell sharply
over the remainder of the year, to 5.4 percent in
December. The level of the unemployment rate in
January of this year—5.7 percent—was a full percentage point below that of a year earlier. In manufacturing, gains in production exceeded the growth
of capacity by a sizable margin during 1994, and
223
the rate of capacity utilization climbed nearly 3 percentage points. Its level in recent months has been
essentially in line with the highest level achieved
during the economic expansion of the 1980s.
Inflation pressures picked up in some markets in
1994. Prices of raw industrial commodities rose
even more rapidly than in 1993, and price increases
for intermediate materials accelerated sharply,
especially after midyear. However, the inflation
impulse in these markets did not carry through with
any visible force to the consumer level, probably
because unit labor costs, which make up by far the
largest part of value added in production and
marketing, continued to rise at a modest rate. The
employment cost index of hourly compensation in
private nonfarm industries actually slowed noticeably from the pace of 1993, and productivity gains
in 1994 held close to the pace of the previous year.
As for retail prices, 1994 was the fourth year in a
row in which the rise in the total CPI has been
around 3 percent. The CPI excluding food and
energy rose just 2.8 percent over the four quarters
of 1994, after an increase of 3.1 percent in 1993;
the rate of rise in this index, which is widely used
as an indicator of underlying inflation trends, fell
almost half from 1990 to 1994.
The Household
Sector
Real personal consumption expenditures advanced
nearly
percent over the four quarters of 1994,
about in line with the average pace of the two
previous years. Support for the rise in spending
came from rapid income growth, and, according to
surveys, sharp increases in consumer confidence.
Outlays for durable goods continued to rise especially rapidly, seemingly little affected by rising
interest rates. Nor did spending appear to be much
affected, in the aggregate, by poor performance of
the stock and bond markets, which cut into the real
value of household assets. Credit generally was
readily available during 1994, and growth of consumer installment debt picked up substantially, to a
pace comparable with some of the larger increases
that were observed during the expansions of the
1970s and 1980s.
Real consumer expenditures for durable goods
increased about 8 percent in 1994, bringing the
cumulative rise in these outlays over the past three
224
Federal Reserve Bulletin • March 1995
years to nearly 30 percent. The stock of durable
goods that households wish to hold apparently continued to rise quite rapidly in 1994, and at least
some households probably were still making up for
purchases that had been put off earlier in the 1990s
when the economy was sluggish and concerns
about job prospects were widespread. Real expenditures for motor vehicles moved up an additional
3 percent over the four quarters of 1994, after gains
of about 9 percent in each of the two preceding
years; increases in sales of vehicles in 1994 might
have been a bit stronger still but for capacity constraints and various supply disruptions that sometimes limited the availability of certain models.
Real outlays for durable goods other than motor
vehicles rose about IIV2 percent over the four
quarters of 1994, a pickup from the already rapid
rates of expansion of the two previous years. Purchases of personal computers and other electronic
equipment continued to surge in 1994, and spending on furniture and household appliances moved
up further.
Consumer expenditures for nondurables and services exhibited mixed patterns of change in 1994.
Real outlays for nondurables increased 3 percent
over the year, a pickup from the subdued rate of
growth recorded in the previous year and, for this
category, a larger-than-average advance by historical standards. By contrast, real expenditures for
services increased roughly 2XA percent, a slightly
smaller gain than that of 1993; growth of outlays
for services was held down, to some degree, by a
decline in real outlays for energy, as warm weather
late in 1994 reduced the amount of fuel needed for
heating.
Real disposable personal income rose 4V4 percent during 1994. Except for a couple of occasions
in previous years when income growth was boosted
temporarily by special factors, the rise in real disposable income in 1994 was the largest increase
since the 1983-84 period. Growth of wages and
salaries accelerated in 1994 in conjunction with the
step-up of employment growth. Income from capital also rose: Dividends moved up along with corporate profits, and interest income turned back up
after three years of decline. By contrast, transfer
payments, the growth of which tends to slow as the
economy strengthens, registered the smallest
annual increase since 1987. The net income of
nonfarm proprietors appears to have about kept
pace with the average rate of growth in other types
of income. Farm income rose moderately on an
annual average basis, as an increase in the volume
of output more than offset the effects of sharp
declines in farm output prices that developed over
the course of the year.
Consumers' perceptions of economic and financial conditions brightened considerably during
1994. By year-end, the composite measures of consumer confidence that are prepared by the Conference Board and the University of Michigan Survey
Research Center had both moved to new highs for
the current business expansion. Consumers became
more optimistic over the year in regard to both
current and future economic conditions. Perceptions of employment prospects also improved, with
a growing proportion of respondents saying that
jobs were plentiful and a reduced proportion saying
that jobs were hard to find. Surveys taken early this
year indicate that confidence remains high.
In contrast to most other indicators for the household sector of the economy, household balance
sheets—which had strengthened appreciably in previous years—showed no further improvement in
1994. According to preliminary data, the aggregate
net worth of households appears to have recorded a
relatively small increase in nominal terms over the
year, and, in real terms, net worth probably
declined slightly. Household assets rose only moderately in nominal terms, and the growth of nominal liabilities picked up somewhat, as a result of the
sharp increase in use of consumer credit. Early this
year, stock and bond prices have risen, on net,
giving some renewed lift to household wealth.
With personal income growing faster than net
worth during 1994, the ratio of wealth to income
fell over the course of the year. In the past, declines
in this ratio sometimes have prompted households
to boost the proportion of current income that is
saved, in an attempt to restore wealth to more
desirable levels, and this same tendency may have
been at work, to some extent, in 1994. After dipping in the first quarter of the year to the lowest
level of the current expansion, the personal saving
rate rose a full percentage point over the remainder
of the year, to a fourth-quarter level of 4.6 percent.
Even then, however, the saving rate remained quite
low by historical standards. Rising levels of income
and employment and increased confidence in the
outlook apparently convinced consumers to push
Monetary Policy Report to the Congress
ahead with increases in outlays, most notably
those on consumer durables. In addition, although
improvement in household balance sheets apparently flagged, signs of outright stress in household
financial conditions were not much in evidence:
Delinquency rates on mortgages and other household loans generally remained quite low relative to
their historical ranges.
Residential investment held up remarkably well
in 1994 in the face of sharp increases in mortgage
interest rates. Preliminary data indicate that, in real
terms, these investment outlays were up about
2 percent, on net, over the four quarters of the year,
after gains of 17 percent and 8 percent, respectively, in 1992 and 1993. Although starts and sales
of single-family houses fell back from the exceptionally high peaks that were reached briefly in late
1993, they remained at elevated levels. In total,
1.20 million single-family units were started in
1994, topping, very slightly, the highest annual
total of die 1980s. Sales of existing homes were
about the same as the previous annual peak, set in
1978, and although sales of new homes remained
well short of previous highs, their annual total was
closely in line with the brisk pace of 1993. Only in
the past month or so have indications of a weakening in housing activity started to show up more
consistently in the incoming data.
Declines in the starts and sales of single-family
houses in early 1994 basically reversed the huge
gains of late 1993. Whatever tendency there may
have been for these indicators to exhibit at least
a temporary setback after a period of unusual
strength was probably reinforced by the initial reactions of builders and homebuyers to increases in
mortgage interest rates that had begun in the final
quarter of 1993. Exceptionally severe winter
weather in the Northeast and Midwest early in
1994, coming on the heels of favorable conditions
in late 1993, probably also helped to account for
the sharpness of the downturn. In any event, starts
of single-family homes ticked back up a bit in the
second quarter of the year, sales of existing homes
flattened out, and the rate of decline in sales of new
homes slowed.
In the second half of the year, the signals were
mixed: Sales of existing homes trended down at a
moderate pace during this period; however, singlefamily starts and sales of new single-family homes
changed little, on net, from the second quarter to
225
the fourth quarter. Sizable gains in employment
and income and rising optimism about the future of
the economy apparently helped to blunt the effects
of increases in interest rates during the second half
of the year. In addition, the availability of a widening variety of alternative mortgage instruments and,
perhaps, some easing of loan qualification standards may have permitted some buyers who otherwise would not have been able to obtain financing
to go ahead with their purchases.
Late in 1994 and in early 1995, a softer tone
seems to have taken hold in key indicators of
single-family housing activity. Sales of new homes
tailed off toward the end of last year, and the ratio
of the number of unsold homes to the number of
sales, which had turned up early in 1994, continued
to rise. The ratio in December was slightly to the
high side of the long-run average for this series.
Starts of new single-family houses, which had
increased in November and December, fell sharply
in January, to a level noticeably below the lower
bound of the range of monthly readings reported
during 1994.
Various measures of house prices showed smallto-moderate increases in 1994. The median transaction prices of new and existing homes that were
sold in the first half of the year were roughly
3Vi percent above the level of a year earlier, and a
similar rise was reported during that period in price
indexes that adjust for changes in the quality and
regional mix of homes that are sold. After midyear, the four-quarter changes in transaction prices
slowed, but the rate of rise in the quality-adjusted
indexes picked up somewhat. All told, prices have
been firmer in the past couple of years than they
were earlier in the 1990s.
After falling to exceptionally low levels in late
1992 and early 1993, construction of multifamily
housing units increased throughout 1994. Although
the level of activity in this part of the housing
sector was not especially high, gains during the
year were large in percentage terms: Starts of these
units moved up about 65 percent from the fourth
quarter of 1993 to the fourth quarter of 1994, at
which point they were more than double the
lows of a couple years ago. The national average
vacancy rate for multifamily rental units remained
relatively high in 1994, but markets in some areas
of the country had tightened enough to make construction of new multifamily units economically
226
Federal Reserve Bulletin • March 1995
attractive. Reauthorization in August 1993 of a tax
credit on low-income housing units also provided
some incentive for new construction. The financing
of multifamily projects was facilitated through
more ready availability of credit and increased
equity investment.
The Business Sector
Robust expansion was evident in 1994 in most of
the economic indicators for the business sector of
the economy. Real output of nonfarm businesses
increased about 4lA percent over the four quarters
of the year, nearly matching the large gain of 1993.
For a second year, business investment in fixed
capital advanced exceptionally rapidly. Inventory
investment also picked up appreciably, spurred
by large, sustained increases in sales. Business
finances remained on a sound footing: Investment
expenditures continued to be financed predominantly with internal funds, and signs of financial
stress were largely absent.
Industry entered 1994 with considerable momentum, and expansion was maintained at a rapid pace
throughout the year. Industrial production rose
nearly 6 percent over the four quarters of 1994, a
rate of expansion exceeded in only one of the past
ten years. The production of business equipment
advanced especially rapidly, buoyed by rising
investment in the domestic economy and further
large increases in exports of capital goods. Production of intermediate products—which consist
mainly of supplies used in business and
construction—also moved up substantially during
1994, as did the output of materials, especially
those used as inputs in the production of durable
goods. The industrial sector also appears to have
had a strong start in 1995, as industrial production
rose 0.4 percent in January.
The rate of capacity utilization in industry
increased about 2Vi percentage points over the
twelve months of 1994. In manufacturing, the operating rate rose about 3 percentage points during the
year. By year-end, utilization rates in some industries had moved to exceptionally high levels. Most
notably, the average operating rate among manufacturers engaged in primary processing (basically,
the producers of materials) had climbed to the
highest level since the end of 1973, surpassing, by
small margins, the peaks of the late 1970s and late
1980s.
After rising 23 V2 percent over the four quarters
of 1993, corporate profits increased another 4 percent over the first three quarters of 1994. The
profits earned by nonfinancial corporations from
their domestic operations increased about IV2 percent over the first three quarters of 1994, after a
gain of 21V2 percent in 1993. Although the 1994
gain in these profits was partly the result of
increased volume, profits per unit of output also
rose. In the second and third quarters, before-tax
profits of nonfinancial corporations amounted to
nearly 11 percent of the gross domestic output of
those businesses—the highest that this measure of
the profit share has been since the late 1970s. A
shift in the capital structure of corporations toward
reduced reliance on debt, as well as cyclical recovery of the economy, has helped to push the profit
share to this high level. In contrast to the experience of nonfinancial corporations, the profits of
private financial institutions from their domestic
operations fell about 7 percent on net over the first
three quarters of the year, as net interest margins
narrowed. The decline reversed some of the large
rise in profits that these institutions had reported in
1993.
Business fixed investment increased 13 percent
in real terms over the four quarters of 1994, after a
gain of 16 percent during 1993. Outlays for office
and computing equipment, which had registered an
astonishing gain in 1993, slowed in 1994, but the
rise in these outlays still amounted to nearly 20 percent in real terms. Meanwhile, the growth of real
expenditures for most other types of business
equipment picked up.
Business investment in motor vehicles rose about
I8V2 percent over the four quarters of 1994. With
the gains of 1994 coming on the heels of big
increases in each of the two previous years, annual
business outlays for vehicles reached a level about
one-third higher than the peak year of the 1980s.
Outlays for communications equipment also scored
an especially big gain in 1994, more than 25 percent in real terms. Business purchases of industrial
equipment advanced about 13 percent during 1994,
one of the larger gains of the past two decades. By
contrast, commercial aircraft once again was a
notable area of weakness; the investment cycle
in that sector has been sharply out of phase with
Monetary Policy Report to the Congress
those of most other industries, owing to persistent
excess capacity and poor profitability in the airline
business.
Business investment in nonresidential structures
rose about 4 percent during 1994, after an increase
of IV2 percent in 1993 and declines in each of the
three years preceding 1993. Investment in industrial structures rose for the first time since 1990,
more than likely a response to high—and rising—
rates of capacity utilization. Investment in office
buildings also turned up in 1994, after a long string
of declines that, in total, had brought spending on
these structures down about 60 percent from the
peak of the mid-1980s; declining vacancy rates and
a firming of property values provided additional
evidence of improvement in this sector of the economy in 1994. The investment data for other types
of structures showed a mix of pluses and minuses:
Expenditures on commercial structures other than
offices moved up further, after large gains in 1992
and 1993; however, outlays for drilling declined for
a fourth year, to the lowest level since the early
1970s.
Because a large share of the growth in business
fixed investment in recent years has gone for items
that depreciate relatively quickly—computers
being a prime example—net additions to the stock
of productive capital have not been as impressive
as the data on gross investment expenditures might
seem to indicate. Nonetheless, with the further
increase in gross investment in 1994, net additions
to the capital stock appear to have become more
substantial. Still unclear is the degree to which
these increases in the capital stock will ultimately
translate into higher rates of increase in output per
worker and faster rates of increase in living standards; as discussed in more detail below, the trend
of growth in labor productivity, which is affected
by the amount and quality of capital that workers
have available, seems to have picked up in recent
years but by a relatively small amount.
Business investment in inventories picked up
sharply in 1994. Earlier in the expansion, firms had
refrained from building stocks, even as the economy strengthened. Increased reliance on "just-intime" systems of inventory control reduced the
level of stocks that firms needed to maintain their
normal operations, and, with a degree of slack still
present in the economy, businesses usually were
able to obtain goods quickly from their suppliers
227
and thus were probably reluctant to hold stocks in
house. At the end of 1993, the level of real inventories in the nonfarm business sector was only
2 percent larger than it had been at the start of the
recovery in early 1991.
Circumstances changed in 1994, however. Markets tightened as demand continued to surge, and
supplies became more difficult to obtain on a timely
basis. Anticipation of further growth in demand
and increased concern about possible bottlenecks
apparently prompted businesses to begin investing
more heavily in inventories. Some firms may also
have been trying to stock up on materials in
advance of anticipated price increases. For the year
as a whole, accumulation of nonfarm inventories
was more than twice what it had been in 1993. This
additional accumulation brought to a halt the previous downtrend in the ratio of nonfarm inventories
to business sales, but the ratio remained quite low
by the standards of the past quarter-century.
Inventory accumulation in the farm sector of the
economy also picked up in 1994. Stocks of farm
products had been drawn down in 1993, when farm
production fell sharply because of floods in the
Midwest and droughts in some other regions of the
country. However, crop conditions in 1994 were
unusually favorable throughout the year, and the
output of some major crops climbed to levels considerably above previous peaks. With the demand
for farm output rising much less rapidly than production, inventories of crops increased sharply.
Livestock production also rose appreciably in 1994;
inventories of livestock, which consist mainly of
the cattle and hogs on farms and ranches, continued
to expand.
The Government
Sector
Federal purchases of goods and services, the part
of federal spending that is included in GDP, fell
6.2 percent in real terms over the four quarters of
1994. Real outlays for defense remained on a sharp
downtrend, and nondefense outlays, which had
risen rapidly early in the 1990s, declined moderately for a second year.
Total federal outlays, measured in nominal dollars in the unified budget, increased 3.7 percent in
fiscal 1994, after a rise of 2.0 percent the previous
fiscal year. These increases are among the smallest
of recent decades. Nominal outlays for defense
228
Federal Reserve Bulletin • March 1995
fell again in fiscal 1994. In addition, the growth
of outlays for income security (a category that
includes the expenditures on unemployment compensation and welfare benefits) slowed further as
the economy continued to strengthen. Increases in
social security outlays also slowed somewhat in
fiscal 1994; the rise was about 1 percentage point
less than that of nominal GDR Outlays for Medicaid slowed as well, but the rate of rise in those
expenditures continued to exceed the growth of
nominal GDP by a large margin.
Federal receipts were up 9 percent in fiscal 1994,
the largest rise in several years. With rapid expansion of the economy giving a strong boost to
almost all types of income, the major categories of
federal receipts all showed sizable gains. Combined receipts from individual income taxes and
social insurance taxes increased a bit more than
7 percent in fiscal 1994, after moving up 5.4 percent in the previous fiscal year. Receipts from taxes
on corporate profits increased nearly 20 percent,
slightly more than the gain of 1993.
The federal budget deficit declined to $203 billion in fiscal 1994, an amount that was equal to
3.1 percent of nominal GDP. Earlier in the 1990s,
when the economy was sluggish, the federal deficit
had climbed to a cyclical peak of 4.9 percent of
nominal GDP. The previous cyclical low in the
ratio of the deficit to nominal GDP, 2.9 percent,
was reached in fiscal 1989. Since fiscal 1989,
defense spending as a share of GDP has dropped
appreciably, but this source of deficit reduction has
been essentially offset by increased outlays for
health and social insurance. Thus, the ratio of total
federal outlays to GDP has changed little, on net; it
was about 22 percent in both fiscal 1989 and fiscal
1994. The ratio of federal receipts to nominal GDP
was about 19 percent in both of those fiscal years.
The stronger economy of recent years has provided state and local governments with a growing
revenue base and a broadening set of fiscal options.
Some governments have responded to these developments by cutting taxes, in most cases by small
amounts. Effective tax rates of state and local
governments appear to have edged down a bit, on
average, over the four quarters of 1994, and nominal receipts apparently rose somewhat less rapidly
than nominal GDP over that period.
Many states and localities also have been trying
to restrain the growth of expenditures, but success
on that score has been difficult to achieve because
of increased outlays for entitlements and rising
demand for many of the public services that traditionally have been provided by state and local
governments. Transfers of income from state and
local governments to persons rose about 9 percent
in nominal terms over the four quarters of 1994,
roughly the same as the rise during 1993 but less
than the increases of previous years; from 1988 to
1992, the average compound rate of growth in
these transfers was about 15 percent a year. In
categories other than transfers, increases in spending have been fairly restrained in recent years;
nominal purchases of goods and services (which
account for about 80 percent of the total expenditures of state and local governments) have been
trending up less rapidly than nominal GDP since
the early 1990s.
In real terms, the 1994 rise in purchases of goods
and services by state and local governments
amounted to just 2 percent. Compensation of
employees, which accounts for about two-thirds of
total state and local purchases, increased IV2 percent in real terms over the four quarters of 1994, a
gain that was roughly in line with the growth of
state and local employment over that period. Construction outlays declined slightly in real terms
during 1994, as gains over the final three quarters
of the year were not sufficient to offset a firstquarter plunge. Nonetheless, real outlays for structures remained at high levels; a strong uptrend in
construction expenditures over the past ten or
twelve years has more than reversed a long contraction that began in the latter half of the 1960s and
bottomed out in the first half of the 1980s.
The deficit in the combined operating and capital
accounts of all state and local governments (a
measure that excludes the surpluses in state and
local social insurance funds) amounted to about
0.6 percent of nominal GDP in calendar 1994, little
changed from the corresponding figure for 1993
and down only slightly from a cyclical peak of
0.8 percent in 1991. The recent cyclical peak in this
measure was larger than the peaks reached in recessions of the 1970s and 1980s, and declines in the
deficit during this expansion have not been as large
as the declines that occurred during other recent
expansions. Historically, the combined operating
and capital accounts of state and local governments
have been in deficit more often than they have been
Monetary Policy Report to the Congress
in surplus; as a share of nominal GDP, the annual
surpluses and deficits since World War II have
averaged out to a deficit of 0.3 percent.
The External Sector
When adjusted for differing rates of increase in
consumer prices, the trade-weighted average foreign exchange value of the U.S. dollar declined
5Vi percent against the currencies of the other G-10
countries in 1994. This depreciation was slightly
smaller than the almost 6V2 percent nominal depreciation of the dollar, as U.S. inflation exceeded
foreign inflation by a small amount. An index of
exchange rates that also includes the currencies of
several of the major U.S. trading partners in Latin
America and East Asia showed about the same
degree of real depreciation as did the index for the
currencies of the G-10 countries. In the first few
weeks of 1995, the dollar has weakened, on balance, in nominal terms against the currencies of the
G-10 countries, but it has moved up in terms of the
Mexican peso.
Growth of real GDP in the major foreign industrial countries rebounded sharply during 1994, significantly exceeding the pace of recovery widely
expected at the start of the year. In the United
Kingdom and Canada, where recovery was already
well established, growth continued to be vigorous.
In Germany, France, and other continental European countries, where activity had been sluggish
during 1993, strong expansion of real GDP resumed and strengthened as the year progressed.
Recovery was evident in Japan as well, but the
pace of expansion there remained somewhat subdued relative to that of the other industrial countries. Although most of these economies clearly
had moved past the troughs of their recessions,
considerable slack remained. As a result, consumer
price inflation remained low and, in some cases,
fell further. On average, in the ten major foreign
industrial countries, consumer prices rose 2 percent
during the year, even less than the price increase in
the United States.
Economic growth in the major developing countries in 1994 continued at about the strong pace of
1993. In Asia, the newly industrializing economies
grew rapidly, as external demand was sustained by
lagged effects of depreciation of their currencies
229
against the yen and by recovery in the industrial
countries. Growth in China, although still quite
rapid, was somewhat slower than that in 1992-93,
as credit conditions were tightened somewhat further and various controls were imposed to damp
demand.
In Mexico, real GDP growth rose markedly during the second and third quarters of 1994 from its
near-zero rate in 1993, in part because of fiscal
stimulus. However, the economic policy program
put in place at the end of the year in response to the
peso crisis is likely to restrain growth once again
in the coming year. The Mexican macroeconomic
stabilization program is designed to maintain wage
restraint, reduce government spending and development bank lending, and result in significant
improvement in the current account deficit in 1995.
The program includes guidelines on increases in
wages, guidelines on increases in final energy product prices to consumers and to industry, net cuts
in public expenditures, and a reduction of lending
by development banks. Mexico has committed to
maintain the current floating exchange rate regime,
and the Bank of Mexico has agreed to restrain
the growth of money. Structural reform measures
include continued privatization and lessened
restrictions on foreign investment. Further measures could be required if inflation and the
exchange rate do not respond as projected.
The nominal U.S. trade deficit in goods and
services increased to about $110 billion in 1994,
compared with $75 billion in 1993. Imports grew
noticeably faster than exports, as U.S. growth about
equaled that of U.S. trading partners and as the
lagged effects of dollar appreciation during 1993
continued to be felt. The current account deficit
averaged about $150 billion at an annual rate over
the first three quarters. Net investment income
moved from a small positive to a moderately negative figure in 1994, reflecting recovery of foreign
earnings on direct investment in the United States
and the effects of higher interest rates on high and
rising U.S. net external indebtedness.
Based on initial estimates for the fourth quarter,
exports of goods and services grew 10 percent in
real terms during 1994. Computer exports continued to rise rapidly in real terms, about 30 percent
for the year; this gain contributed significantly to
the double-digit growth in total exports. After
declining in 1993, agricultural exports bounced
230
Federal Reserve Bulletin • March 1995
back last year; the much-improved harvest of 1994
eased supply constraints that previously had been
limiting shipments of farm products. Other categories of merchandise exports averaged more than
8 percent real growth during the year, as the
pace of activity in the economies of U.S. trading
partners improved significantly. Geographically,
the increase in U.S. merchandise exports was
accounted for by increased shipments both to
developing countries in Latin America and Asia
and to Canada and Japan.
Imports of goods and services rose about 15 percent in real terms over the four quarters of 1994,
reflecting the vigorous growth of U.S. income during the year. Imports of computers continued to
expand extremely rapidly in real terms. Of the
other import categories, imports of machinery and
automotive products were particularly buoyant.
Import prices rose about 4 percent in 1994, influenced by depreciation of the U.S. dollar, increases
in world commodity prices, and a rebound in oil
prices, which had declined in 1993 and early 1994.
In the first three quarters of 1994, recorded net
capital inflows were substantially larger than those
of 1993, an increase that coincided not only with
the growing current account deficit, but also with a
sharp swing in unrecorded transactions in the U.S.
international accounts, from a positive figure in
1993 to a negative one in the first three quarters of
1994.2
Among the recorded capital flows, increases in
foreign official assets in the United States were
substantial in 1994 but were somewhat smaller
than in 1993. In particular, the large reserve accumulations in 1993 by certain developing countries
in Latin America experiencing massive private
capital inflows were not repeated in 1994.
U.S. net purchases of foreign securities, particularly bonds, fell sharply from record 1993 levels.
Private foreign net purchases of U.S. securities also
fell, but only slightly. Rising interest rates on bonds
denominated in dollars and many other major cur-
2. In effect, recorded net capital inflows in the first three quarters
of 1994 were larger than necessary to balance the rising current
account deficit. Moreover, outflows of currency to foreigners, an
item that is not reflected in recorded transactions and, therefore, is a
part of unrecorded net inflows in the international accounts,
increased substantially in 1994, suggesting that the other unrecorded outflows of capital may have been even larger than the
published data on errors and omissions indicate.
rencies produced capital losses for U.S. holders of
long-term bonds and resulted in flows out of U.S.
global bond funds. In the first three quarters of
1994, U.S. investors made heavy net purchases of
stocks in Japan; Japan alone accounted for more
than one-third of all U.S. net foreign stock purchases. In developing countries, those that received
the largest net equity inflows from U.S. investors in
1993 (Hong Kong, Mexico, Argentina, Brazil, and
Singapore) were less favored by investors in 1994,
while interest picked up in a wide assortment of
other developing countries, including South Korea,
Chile, Indonesia, China, India, and Peru.
The first three quarters of 1994 also witnessed a
revival of foreign direct investment in the United
States while U.S. direct investment abroad remained at near-record levels. The direct investment
inflow was swelled by takeovers of U.S. companies
and by the revival of profits and reinvested earnings reported by affiliates of foreign companies in
the United States.
Labor Markets
Employment rose substantially in 1994. The total
number of jobs in the nonfarm sector of the economy increased 3.5 million over the twelve months
ended in December, after a gain of 2.3 million
during 1993.3 About a quarter of a million of the
rise in jobs during 1994 was in the government
sector, mostly at the local level. Job growth in the
private nonfarm sector amounted to 3.2 million, the
largest gain since 1984. Increases in employment at
nonfarm establishments were sizable in each quarter of 1994. A further gain in payroll employment,
smaller than the average increase of the past year,
was reported in January of this year; however, total
labor input rose considerably faster than employment in January as the workweek lengthened.
Producers of goods boosted employment more
than half a million in 1994. The job count in
construction increased about 300,000 over the year;
employment at general building contractors rose
3. The Bureau of Labor Statistics has announced that the level
of nonfarm payroll employment in March 1994 will be raised
760,000 when revised estimates are released this summer. The
revision may lead to larger estimates of job growth in both 1993
and 1994.
Monetary Policy Report to the Congress
briskly for a second year, as did the number of jobs
at firms involved in special trades related to construction. The number of jobs in manufacturing
increased about 275,000 during 1994, after five
years of decline. Producers of durables accounted
for most of the rise in manufacturing employment;
among these producers, job gains were widespread.
Employment at factories that produce nondurables
rose slightly in total, as advances in some
industries—such as printing and publishing and
rubber and plastics—were partly offset by continued secular declines in the number of jobs in industries such as apparel, tobacco, and leather goods.
The average workweek in manufacturing, which
had stretched out in 1992 and 1993 when factory
employment was declining, lengthened further in
1994, rising to new highs for the postwar period.
The high fixed costs that are associated with adding
new workers probably continued to be an important
factor in firms' decisions to rely still more heavily
on a longer workweek as a way to boost labor
input. Growth of factory output surpassed the rise
in labor input by a sizable amount in 1994, a
reflection of substantial gains in productivity that
were realized in this sector of the economy in the
most recent year.
Employment in the private service-producing
sector rose nearly 2% million during 1994, after a
gain of 2 million in 1993. The number of jobs in
retail trade increased about 800,000 over the year.
Auto dealers, stores that sell building materials,
and those that sell general merchandise were
among the retail outlets that reported impressive
gains. Hiring at eating and drinking places also
moved up briskly; after three years of slow growth
around the start of the decade, hiring at these
establishments has increased substantially in each
of the past three years. Employment at firms that
supply services to other businesses rose about
710,000 in 1994, even more than in 1993. Once
again, job growth within this category was especially rapid at personnel supply firms—those
that essentially lease the services of their workers
to other employers, often on a temporary basis.
Employment at businesses that supply health services increased a quarter of a million in 1994,
about the same as the gain in 1993; hiring at
hospitals has flattened out over the past couple of
years, but elsewhere in the health sector job growth
has continued at a rapid clip.
231
Strength also was evident in 1994 in data from
the monthly survey of households. After ticking up
in January 1994, when a redesigned household
survey was implemented and new population estimates were introduced, the civilian unemployment
rate turned back down in February and declined in
most months thereafter. The rate increased last
month, to 5.7 percent, but was still a full percentage point below that of a year earlier.4 Appreciable
net declines in unemployment rates have been
reported over the past year for nearly all occupational and demographic groups.
Data on the reasons why individuals are unemployed seem to be tracing out patterns fairly similar
to those seen in previous business cycles. Most
notably, the number of persons who are unemployed because they lost their last job has declined
sharply, on net, over the past year. The number of
individuals in this category had soared earlier in
the 1990s, when the economy was struggling to
gain momentum and many large companies were
restructuring their operations. However, with the
more recent decline, the number of these "job
losers," measured as a percentage of the labor
force, has moved back toward the lows of the late
1980s. Much of the decline in the number of job
losers this past year has been among workers who
were permanently separated from their previous
jobs. The number of persons unemployed for reasons other than the loss of a job (that is, the sum
of "job leavers" and new entrants or re-entrants
unable to find work) has also declined over the past
year. As in other business cycles, the number of
these individuals, measured relative to the size of
the labor force, has been displaying a cyclical
pattern considerably more muted than that of job
losers.
Growth of the civilian labor force—which consists of the individuals who are employed and those
who are seeking employment but have not yet
found it—picked up a bit in the second half of 1994
and in early 1995. However, even with these
4. Research undertaken by the Bureau of Labor Statistics suggests that the unemployment rate would have run about two-tenths
of a percentage point lower in 1994 but for the changes that were
introduced in January of last year. Other series from the household
survey were also affected by the introduction of the new survey and
the revised population estimates; therefore, data for the period
starting in January 1994 are not directly comparable with those for
the period ended in December 1993.
232
Federal Reserve Bulletin • March 1995
increases, the cumulative rise in the labor force in
the current business expansion has been relatively
small compared with the gains recorded in other
recent expansions; growth of the working-age
population has been slower this decade than it was
in the expansions of the 1970s and 1980s, and the
share of the population participating in the labor
force, which trended up in earlier expansions, has
changed little, on net, during this one.
According to preliminary data, output per hour
of labor input in the nonfarm business sector
increased 1.4 percent over the four quarters of
1994, after a rise of 1.8 percent in 1993 and still
larger gains in 1992 and 1991. Over the business
cycle, productivity gains typically are largest in the
early years of expansion, and, in that regard, the
recent experience does not appear to be unusual.
Abstracting from cyclical variation, the trend of
productivity growth in recent years seems to have
picked up somewhat from the unusually sluggish
pace that prevailed through much of the 1970s and
1980s, but, at the same time, the pickup has not
been nearly so large as some anecdotal reports
might appear to suggest. For example, from late
1988 to late 1994, an interval of time that is long
enough to capture all the phases that productivity
goes through during the business cycle, the average
rate of rise in output per hour in the nonfarm
business sector amounted to slightly more than
VA percent, up only modestly from an average rate
of rise of about 3A percent during most of the 1970s
and 1980s.5
The rate of increase in hourly compensation
moved down another notch in 1994. The employment cost index for private industry, a measure of
hourly labor costs that comprises both wages and
benefits, rose 3.1 percent during the twelve months
5. Whether even this small degree of improvement in the productivity trend will stand up through future revisions of the data is
not clear. For example, among the many difficult issues that are
involved in the measurement of productivity is the choice of an
appropriate set of prices to be used in valuing the output of goods
and services. Currently, aggregate output is tallied by using the
prices of 1987, but some major changes in relative prices have
taken place since then, the most notable of which is a huge decline
in the price of office and computing equipment. Using the prices of
a more recent year to gauge real output would result in less weight
being given to office and computing equipment and, in turn, a
smaller contribution from this rapidly growing category to growth
of real output. All else equal, the growth of productivity would also
be negatively affected by switching to the prices of a more recent
year.
ended in December 1994, after increases of 3.6 percent in 1993 and 3.5 percent in 1992. The rise in
the wage component of compensation was slightly
less than that of 1993, and the rate of increase in
hourly benefits slowed appreciably. Increases in
benefits were restrained, in large part, by another
year of deceleration in health care costs and a
further slowing in workers' compensation insurance costs. The rise in nominal compensation per
hour in 1994 was the smallest yearly increase in the
fifteen-year history of the series, the previous low
of 3.2 percent having come midway through the
expansion of the 1980s. Toward the end of that
decade, as bidding for labor resources intensified,
increases in compensation moved up for a time to
around 5 percent a year.
Unit labor costs in the nonfarm business sector
rose 2.0 percent over the four quarters of 1994,
after an increase of just 0.6 percent over the four
quarters of 1993. In manufacturing, a sector of the
economy in which productivity has advanced quite
rapidly in recent years, a rise in output per hour of
4.6 percent during 1994 more than offset a modest
increase in hourly compensation, and unit labor
costs declined noticeably for a second year.
Price
Developments
Although price increases picked up in some parts
of the economy in 1994, the broader measures of
price change continued to yield readings that were
quite favorable. The rise in the total CPI was about
23/4 percent in 1994, the same as the increase
during 1993. The CPI excluding food and energy
also rose about 23A percent over the four quarters
of 1994, after increasing slightly more than 3 percent in 1993. The producer price index for finished
goods increased VA percent during 1994, after
edging up just lA percent during the previous year.
As in 1992 and 1993, the past year's increases in
all these price indexes were among the lowest
readings of the past quarter-century. Measures of
inflation expectations held steady in 1994, but continued to show readings that were somewhat higher,
on average, than the actual rates of price increase.
Price data for January of this year were less favorable than those of 1994: The total CPI moved up
0.3 percent last month, and the CPI excluding food
and energy jumped 0.4 percent, the largest monthly
rise in that measure since late 1992.
Monetary Policy Report to the Congress
The pickup of price increases last year was
confined largely to markets for materials. Prices of
primary industrial inputs, which had moved up
sharply during 1993, continued to surge in 1994,
and price increases for intermediate materials
accelerated as the year progressed. Prices of
imports also picked up somewhat, influenced by
the depreciation in the exchange value of the dollar; as was true in the domestic economy, the
largest price increases for imported goods were
those for materials. Gains in productivity apparently enabled manufacturers of finished goods to
absorb these increases in the costs of domestically
produced and imported materials without raising
their own prices very much.
Early this year, materials prices continued to
surge. The producer price index for crude materials
other than food and energy jumped 3 percent in
January, to a level about HVi percent above that of
a year earlier. Further along in the production
chain, the PPI for intermediate materials other than
food and energy rose 1 percent last month; the
index has moved up 6 percent during the past
twelve months, the largest such rise since the late
1980s, when the twelve-month rate of increase in
intermediate materials prices topped out at slightly
more than 7 percent. By contrast, the PPI for
finished goods other than food and energy again
showed only a modest increase in January. Since
mid-January, the prices of a number of industrial
commodities have backed away from earlier highs,
but, given the volatility that these prices sometimes
exhibit, the experience of a few weeks may not
signal the emergence of a new trend.
In the CPI, the prices of commodities other than
food and energy rose IV2 percent over the four
quarters of 1994, about the same as the rise of
1993. Prices of new cars and new trucks, responding to strong demand and, at times, shortages in the
supply of some models, moved up faster than prices
in general; prices of used cars rose especially rapidly for a third year. The prices of tobacco products, which had fallen sharply in 1993 when producers made steep one-time price reductions,
turned back up in 1994, rising moderately over the
four quarters of the year. By contrast, prices of
home furnishings changed little over the year, and
the CPI for apparel fell noticeably. In January
1995, the CPI for goods other than food and energy
jumped 0.4 percent; this rise followed a string
233
of months in which the index had increased very
slowly.
The CPI for non-energy services, a category that
accounts for about half of the total CPI, rose
slightly less than 3V2 percent over the four quarters
of 1994, after an increase of about 33A percent in
1993. The increase in these prices in 1994 was just
a bit more than half the rise that was recorded in
1990, when CPI inflation hit its most recent peak.
Prices of medical services continued to slow in
1994, and airline fares, which have been an especially volatile category in the CPI in recent years,
fell appreciably after having risen sharply the previous year. However, auto finance charges turned up,
and the rate of rise in owners' equivalent rent, a
category that has a weight of nearly 20 percent in
the total CPI, rose slightly faster over the four
quarters of 1994 than it had during the corresponding period of 1993. Like the prices of goods, the
CPI for non-energy services accelerated sharply in
January of this year.
In 1994, for a fourth year, neither food prices nor
energy prices provided much impetus to the inflation process. The consumer price index for food
rose a shade more than 2Vi percent over the four
quarters of 1994, about the same as the rise of
1993. Food prices in 1994 were restrained, in part,
by sharp declines in the prices of domestically
produced farm products, which, in turn, were
pulled down by the huge increases in crop
and livestock production noted previously. With
beef and pork prices declining over the year, the
CPI for meats, poultry, fish, and eggs changed little
in total. Retail prices of dairy products rose only a
small amount. Prices of foods that are more heavily
influenced by the costs of nonfarm inputs also
showed only small to moderate advances in 1994:
The increase in the CPI for prepared foods
amounted to about 2 V2 percent, slightly less than
the previous year's increase, and, for a third year,
the rise in the price index for food away from home
was less than 2 percent. Coffee was the only item
in the CPI for food to show sustained price acceleration; freeze damage to the crop in Brazil caused
world prices of raw coffee to surge and led to a
price rise of more than 50 percent at retail over the
four quarters of 1994. Fresh vegetable prices,
which tend to be especially sensitive to short-run
supply developments, took a jump toward year-end
after Hurricane Gordon had damaged crops in
234
Federal Reserve Bulletin • March 1995
Florida, but the run-up was partly reversed last
month.
The CPI for energy rose about IV2 percent during 1994, after edging down V2 percent in 1993.
Gasoline prices increased 4V6 percent over the four
quarters of 1994, reversing the decline of the previous year. Much of the increase in gasoline prices
came in the third quarter and followed, with a short
lag, a second-quarter rise in crude oil prices, which
were moving back up from the low levels of late
1993 and early 1994. Prices of other energy products exhibited brief periods of rapid increase, but
sustained upward pressures in these prices did not
materialize. Fuel oil prices shot up temporarily
early in 1994, when stocks were pulled down for a
time by cold weather in the Midwest and the Northeast; later in the year, however, stocks were replenished and the earlier price increases were more
than reversed. Natural gas prices followed a pattern
similar to the price of fuel oil, rising sharply in the
first quarter of the year but falling back thereafter,
to a fourth-quarter level that was about 2XA percent
lower than that of a year earlier. Electricity prices
rose only slightly during the year. In January of
this year, energy prices were up moderately in the
CPI.
With the favorable inflation performance of the
past year, the average rate of rise in the total CPI
since the business cycle trough in early 1991 has
been 2.9 percent at an annual rate. Excluding food
and energy, the rate of rise has been 3.3 percent at
an annual rate. Inflation rates lower than these have
not been sustained through the first few years of
any business expansion since that of the 1960s,
when both the CPI and the CPI excluding food and
energy showed average rates of increase of less
than 1.5 percent during the first four years after the
business cycle trough of early 1961. Average rates
of price increase during the current expansion have
been much smaller than those reported during the
expansion that began in the mid-1970s. They also
have been somewhat smaller than those reported
during the first few years of the expansion that
began in late 1982, a period when price increases
were braked in part by unusually steep declines in
oil prices. In measuring the progress that has been
made toward bringing the economy closer to the
goal of long-run price stability, the ratcheting down
of the rate of price advance from cycle to cycle
since the 1970s is perhaps an even more meaning-
ful indicator than the favorable trends in the annual
price data of recent years.
MONETARY
AND FINANCIAL
DEVELOPMENTS
With the economy generally strong, financial markets in 1994 and early 1995 have been characterized by somewhat more rapid growth in private
debt and by higher interest rates. The increase in
interest rates reflected, in part, the policy actions of
the Federal Reserve. Concerned about inflationary
pressures resulting from rapid economic growth
and dwindling margins of available resources, the
Federal Reserve firmed policy on seven occasions.
These actions were taken to foster a financial environment more likely to be consistent with sustained
economic growth and low inflation. In total, the
policy tightenings raised the federal funds rate by
a cumulative 3 percentage points between early
February 1994 and early February 1995. Other
short-term rates rose by similar amounts. Over this
span, the Board of Governors hiked the discount
rate on four occasions by a total of 2XA percentage
points.
Longer-term rates increased 1V2 percentage
points to 3 percentage points on balance since
January 1994, with the largest increases posted at
intermediate maturities. In addition to the policy
actions, these rates were boosted through much of
1994 by greater-than-expected underlying strength
in the economy and the resulting higher demand
for credit, as well as by upward revisions to expectations in financial markets about the policy tightenings that would be required to counter an incipient increase in inflation. Since late last fall,
however, the extent of Federal Reserve actions,
along with incoming data suggesting some moderation in the pace of expansion, have calmed inflation
fears and trimmed estimates of the eventual rise in
short-term interest rates. As a consequence, longerterm rates have retraced some of their earlier
upward movements.
Increases in intermediate- and long-term rates
over the course of the year caused significant capital losses for some investors. Well-publicized
losses at a number of investment funds in the first
half of the year, along with substantial portfolio
reallocations in view of the changed economic
and financial outlook, may have contributed to
Monetary Policy Report to the Congress
increased financial market volatility at that time.
On the whole, however, risk premiums remained
modest, and volatility ebbed over the course of the
year. Late in the year, the tax-exempt securities
market dipped following the bankruptcy of Orange
County that resulted from mounting losses in
its investment fund, but the effects, beyond those
on the fund's investors, proved to be small and
short-lived.
One consequence of the higher and more volatile
long-term interest rates was a shift in business
borrowing away from the capital markets and
toward shorter-term sources, such as banks. This
shift, which reversed the move toward long-term
financing that occurred as bond yields fell in 1992
and 1993, was marked by the first annual increase
in bank business loans in several years. Consumer
lending also accelerated in 1994, as the improved
economic outlook encouraged increased use of consumer credit. Higher interest rates likely held down
household mortgage debt growth, in that the resulting decline in refinancing activity limited the ability of households to "cash out" some of the equity
in their homes. Higher rates also encouraged households to shift to adjustable-rate mortgages, which
offered lower initial interest costs. The debt of all
nonfinancial sectors increased 5lA percent in 1994,
about the same increase as in 1993, as the pickup in
business and household borrowing was offset by
lower growth in government debt. The effects of
the strong economy on government expenditures
and receipts, policy moves to reduce the federal
deficit, and retirements of tax-exempt securities
that had been advance-refunded all contributed to
the slowdown in government borrowing.
Banks funded much of the pickup in their loans
with nondeposit funds and, in the second half of
the year, with sales of securities. As a result, the
doubling of loan growth was not reflected in
significantly stronger expansion of the monetary
aggregates. M3, which was boosted by relatively
heavy issuance of large CDs, rose 1V2 percent, a
somewhat larger increase than in 1993. With banks
pricing savings and small time deposits unaggressively as market interest rates rose, M2 grew 1 percent over the year, somewhat below its l3A percent
pace in 1993. The increase in market interest rates
relative to rates on transaction deposits slowed the
growth of Ml to just 2lA percent from the doubledigit increases posted in 1992 and 1993.
235
The foreign exchange value of the dollar declined in terms of the other G-10 currencies last
year, even as the U.S. economy expanded briskly
and interest rates rose. In part, the weakness was
the result of unexpectedly strong growth abroad,
especially in Europe, where the recovery in many
countries was more rapid than had been anticipated. As a result, long-term interest rates in many
of the other G-10 countries increased by amounts
similar to rates in the United States. Heightened
concerns about inflation prospects in the United
States may also have contributed to the weakness
of the dollar. Indeed, the dollar rebounded late in
the fall when tighter monetary policy evidently
eased those concerns. The dollar declined, however, in early 1995 amid the signs of slower U.S.
growth and concerns about the implications for the
United States of turmoil in Mexican financial
markets.
The Course of Policy and Interest Rates
In early 1994, short-term interest rates remained at
the very low levels reached in late 1992, with the
federal funds rate fluctuating around 3 percent—
roughly in line with the rate of inflation. The Federal Reserve had maintained an accommodative
policy stance throughout 1993. This stance was
unusual so far into the expansion phase of a business cycle, but it was believed to be necessary
because of a number of extraordinary factors that
seemed to be inhibiting growth. These factors
included efforts by households, firms, and financial
intermediaries to repair strained balance sheets,
business restructuring activities, and the fiscal contraction associated, in part, with the downsizing of
defense industries.
During the recovery and expansion, however,
considerable progress had been made by households and businesses in decreasing their debtservice burdens, and lending institutions had succeeded in rebuilding their capital positions. By late
1993, the economy was expanding rapidly, and
incoming data early last year suggested that much
of that momentum had likely carried over into
1994. In the circumstances, continued accommodative policy risked pushing the demands on productive resources to levels that ultimately would be
associated with increased inflation. Consequently,
236
Federal Reserve Bulletin • March 1995
the FOMC, at its meeting in early February 1994,
agreed that policy should be moved to a less stimulative stance.
The pace at which the adjustment to policy
should be made was less clear: A rapid shift in
policy stance would minimize the risk of allowing
inflation pressures to build, while a more gradual
move would allow financial markets time to adjust
to the changed environment. Although many market participants seemed to anticipate a firming
move fairly soon, it would be the first tightening in
many years, and some investors would undoubtedly reconsider their portfolio strategies, possibly
causing sharp movements in bond and stock prices.
In addition, a slower initial shift would allow more
time to assess the strength of the economy and the
effects of the change in policy.
In the event, the Committee tightened policy
gradually through the winter and early spring. Pressures on reserve positions were increased by relatively small amounts in February, March, and
April; once market participants seemed to have
made substantial adjustments to the new direction
of policy, a larger tightening move was implemented in May. Taken together, the four policy
actions raised the federal funds rate about 1 lA percentage points. The May policy action was accompanied by an increase of V2 percentage point in the
discount rate, voted by the Board of Governors.
Other interest rates moved up between 1 percentage point and 2 percentage points as a result of
these policy moves, with the largest increases coming at intermediate maturities. Besides the effect of
the policy actions, longer-term rates were boosted
by incoming data suggesting continued robust
growth, which heightened market concerns about a
pickup in inflation and expectations of further tightening by the Federal Reserve. In addition, uncertainty about the timing and magnitude of future
policy actions, as well as the capital losses that
followed the tightenings, encouraged investors to
shorten the maturity of their investments and
reduce their degree of leverage. The resulting
portfolio adjustments likely contributed to increased market volatility and may have intensified the upward pressure on longer-term interest
rates.
Incoming data in the late spring and early
summer suggested that the economy continued to
expand significantly, led by sales of business equip
ment, a rebound in nonresidential construction following bad weather earlier in the year, and a pickup
in inventory investment. Inflation was of growing
concern, as commodity prices increased rapidly,
and measures of slack suggested that the economy
was entering a range in which pressures on broad
price indexes might begin to build. In part reflecting this concern, long-term rates moved up, and the
dollar weakened. Given the relatively large policy
action in May, however, the Committee decided to
take no action at the July meeting and to wait for
more information on the performance of the economy. The Committee saw the possible need for
tighter policy, however, and issued an asymmetric
directive to the Federal Reserve Bank of New York
suggesting that policy would respond promptly to
evidence of increased inflation pressures.
In the interval between the Committee meetings
in early July and mid-August, the economy continued to expand robustly, and, coming into the
August meeting, it appeared that the markets
expected a small further increase in reserve pressures. At its meeting, the Committee agreed that a
prompt further tightening move was needed to provide greater assurance that inflationary pressures in
the economy would remain subdued, and the members chose a tightening action somewhat larger
than had been expected by the markets. A rise of
V2 percentage point in the discount rate, voted by
the Board of Governors, was allowed to show
through fully to the federal funds rate. Short-term
market rates rose following the policy move, while
long-term yields declined slightly, perhaps as a
result of downward revisions to expectations of
future tightening.
In advance of the meeting in late September,
most market rates increased as incoming economic
data were seen in the market as raising the likelihood of higher inflation and the resulting need for
tighter reserve conditions. The data suggested that
the economy had not yet been greatly affected by
the tightening in monetary policy: Employment
was growing strongly, and final sales, especially of
consumer goods, appeared to have firmed. Manufacturing activity had continued to expand rapidly,
boosted in part by an increase in motor vehicle
production. Given the uncertain duration of lags
between changes in monetary policy and the resulting effects on the economy, however, it was not
clear whether the effects of the earlier interest rate
Monetary Policy Report to the Congress
increases were smaller than had been expected
or were still in train. Another possibility was that
the underlying momentum of the expansion was
greater than had been evident earlier. Given these
uncertainties, the Committee took no immediate
tightening action at its September meeting. As in
July, however, the Committee agreed to an asymmetric directive suggesting that the likely direction
of any move over the intermeeting period was
toward additional restraint.
Broad measures of inflation remained moderate
through the fall in spite of continued substantial
economic growth in an economy that was running
close to its estimated potential. Nonetheless, strong
economic data and continued upward pressure on
prices at earlier stages of production apparently
heightened investors' inflation concerns, as well as
expectations of future policy tightenings. Consequently, most market interest rates rose appreciably
between the September and November meetings,
with the largest increases occurring at intermediate
maturities. At the November meeting, the Committee members agreed that the stance of policy was
not sufficiently restrained given the clear risks of
higher inflation. As a result, they chose a sizable
firming of monetary policy, tightening reserve conditions in line with the increase of % percentage
point in the discount rate approved by the Federal
Reserve Board.
The yield curve flattened appreciably in response
to the larger-than-expected policy action. The
increase in the federal funds rate pushed up most
short-term interest rates. Long-term rates increased
initially, but in late November and early December
these rates more than reversed the earlier increases.
Evidently, market participants ultimately interpreted the substantial policy tightening as demonstrating the Committee's intention to take the
actions necessary to contain inflation at relatively
low levels. By contrast, intermediate-term rates
increased over the weeks following the November
meeting as a variety of incoming data indicated
that the economy's growth had accelerated further
in the fourth quarter and additional tightenings
might be required to slow growth to a more sustainable pace. By the time of the December meeting,
rates on two-year Treasury notes were only a
little below those on thirty-year Treasury bonds,
although both yields remained well above shortterm rates.
237
Financial markets were focused in early December on the failure of an investment fund run by
Orange County, California, and the subsequent
bankruptcy of the county itself. The municipal
securities market bore the brunt of these developments, with rates rising for a time relative to those
on comparable Treasury issues. The failure had a
substantial effect on the finances of the municipalities that had invested in the fund. In addition,
investors had to consider the likelihood of other
state and local governments having similar investment difficulties. Over the following days and
weeks, however, only a few other problem situations emerged, and they were on a much smaller
scale.
In the period leading up to the December meeting, incoming data continued to show robust
growth and subdued inflation. The Committee felt
that the effects on economic activity of the policy
actions during the year, and especially the substantial tightening moves in the second half of the year,
were not yet visible, owing to the lags in the effects
of monetary policy on the economy. As a result, the
Committee decided to take no further policy action
at the meeting, and to await additional information
on the underlying strength in the economy and the
effects of the earlier policy actions. This decision
was reinforced by concerns that the financial markets might be somewhat unsettled owing both to
the usual year-end adjustments and to uncertainty
about the effects and incidence of the sizable market losses sustained by some investors over the
year. In view of the substantial strength evident in
the incoming data, however, the Committee again
chose an asymmetric directive pointing toward
further restraint.
In advance of the Committee meeting at the end
of January, broad measures of inflation remained
modest, although anecdotal reports suggested that
some firms intended to raise prices early in the new
year. Incoming data on production and employment continued to be upbeat, with healthy growth
reported in virtually all industries and regions.
Some indicators, however, raised the possibility of
a slowing in the pace of the expansion. Nonetheless, output growth in the fourth quarter was the
fastest of the year, and the Committee felt that,
with output and employment at or even beyond
estimates of their sustainable levels, the risks of
rising inflation were still considerable. As a result,
238
Federal Reserve Bulletin • March 1995
the Board of Governors voted an increase of Vi percentage point in the discount rate, and the Committee agreed to allow the increase to be fully
reflected in the federal funds rate. Because it had
been widely anticipated in the financial markets,
other interest rates and the foreign exchange value
of the dollar were little affected by the policy
action. Interest rates turned down subsequently, as
additional information on the economy seemed to
reinforce the possibility that a slowdown was in
process.
At the same meeting, the Committee also formally adopted two practices that had been followed
on a provisional basis during 1994. First, the Committee voted to continue to announce any change
in the stance of policy on the day the decision is
made. These announcements, which had followed
each of the policy tightenings agreed to in 1994,
are intended to minimize any confusion and uncertainty about the stance of policy. In addition, a
public announcement ensures that all financial market participants have the same access to information regarding changes in monetary policy. Second,
the Committee agreed to continue releasing the
transcripts of Committee meetings with a five-year
delay. The published minutes of Committee meetings, which are available soon after the subsequent
meeting, provide a relatively complete summary
of the arguments presented and the reasons for a
policy choice. The transcripts provide additional
information, however, that may be of use to those
interested in the details of the policy process. The
Committee decided that a five-year delay struck an
appropriate balance between the right of interested
members of the public to obtain this added detail
and the Committee's need to debate policy issues
openly and without the sort of restraint that more
rapid disclosure might generate.
Credit and Money Flows in 1994
The debt of all nonfinancial sectors grew 5LA percent in 1994, somewhat below the middle of its
monitoring range of 4 percent to 8 percent, and
about the same increase as that of a year earlier.
More rapid growth of private-sector debt was offset
by slower growth of public-sector debt. As longterm rates rose well above their late 1993 lows,
private-sector borrowing shifted toward shorter
term sources of funds. In part as a result of this
shift, financial intermediaries supplied a larger
share of new debt than they had for several years.
Much of the depository credit growth was funded
with nondeposit funds, however, and growth in the
broad monetary aggregates, which consist primarily of deposits, remained subdued.
Debt growth both in the federal and in the state
and local government sectors slowed last year.
Growth of federal government debt was smaller
because of the narrowing of the federal budget
deficit. The outstanding volume of state and local
government debt actually declined as bonds that
previously had been refunded in advance of their
earliest call date were retired. Much of the bulge in
tax-exempt issues in 1993 had been for the advance
refunding of higher-cost debt issued in the 1980s.
These offerings subsided early in 1994, as the
amount of bonds eligible for advance refunding
dwindled and borrowing costs rose.
Household debt growth increased modestly in
1994, as an acceleration in consumer credit was
partly offset by slower growth in mortgage debt.
The pickup in consumer debt reflected, in part,
increased demand for consumer durables. In addition, responses to Federal Reserve surveys of banks
indicated that many respondents were more willing
to extend credit to households last year, which may
have led them to ease terms and standards on
consumer loans. Indeed, spreads between consumer
loan rates and market rates narrowed significantly
last year, as increases in loan rates lagged those in
market interest rates. Consumer credit may also
have been boosted somewhat by the increased use
of credit cards offering rebates or other incentives.
Rising mortgage rates in 1994 greatly reduced the
volume of mortgage refinancings from the very
high levels reached in 1993. The refinancings had
contributed to an increase in mortgage debt because
some households had taken the opportunity
afforded by refinancing to cash out a portion of the
equity in their properties. Higher rates on fixed-rate
mortgages also induced many borrowers to shift to
adjustable-rate mortgages that carried much lower
initial rates. Concessional starting rates and the
growing use of adjustable-rate contracts with initial
fixed-rate periods lasting several years also may
have contributed to this shift. Over the last few
months of the year about half of all new home
mortgages were of the adjustable-rate variety. The
Monetary Policy Report to the Congress
shift to adjustable-rate mortgages and the sluggish
adjustment of consumer loan rates mitigated the
effect of higher market interest rates on household
debt-service burdens.
The debt of nonfinancial businesses expanded in
1994 after three years of stagnation. Earlier efforts
to restructure balance sheets by increasing equity
capital and refinancing higher-cost credit appeared
to leave businesses in a better position to increase
debt in 1994, as the sector's debt-service burden
had fallen about one-third from its peak five years
earlier. A decline in equity issuance, perhaps resulting from the lackluster performance of the stock
market, may also have boosted business borrowing.
Business financing needs were strengthened by
increased spending on capital and inventories, as
well as merger and acquisition activity. The total
value of mergers and acquisitions increased substantially last year, and the share of such activity
requiring cash payments to shareholders—rather
than swaps of shares—rose sharply, although it
remained below the levels reached in the late
1980s.
Rising and more volatile long-term interest rates
encouraged businesses to rely more heavily on
short-term debt in 1994. This shift was reinforced
by changes in supply conditions in various markets. Capital losses early in the year likely caused
some of those supplying long-term funds to
become more cautious; for example, some savers
backed away from bond mutual funds. At the same
time, banks were loosening terms on business loans
as well as easing their underwriting standards.
Banks attributed the easing of loan terms and standards to increased competition for business customers from other banks and also from nonbank lenders. The competitive posture of banks likely
reflected, in part, the high level of profits earned
by banks in recent years and the resultant strengthening of their balance sheets. As a result of these
factors, bank business loans increased more than
9 percent, their first annual increase in several
years. Other sources of short-term business finance,
including commercial paper and finance company
loans, also expanded over the year.
The effect of the pickup in business and consumer loans on bank credit growth was partially
offset by slower growth in bank securities holdings.
Early in the year, banks purchased a significant
volume of government securities, and reported
239
levels of other securities holdings were boosted by
an accounting change.6 Much of this growth was
reversed later in the year, however, as banks used
sales of securities to fund loan growth. Reported
securities growth was also damped by declining
securities prices.7
In 1994 thrift sector credit expanded for the first
time in several years, as the Resolution Trust Corporation virtually completed its liquidation of insolvent thrift institutions. In part, the increase in thrift
sector credit also likely reflected the shift by households toward adjustable-rate mortgages. Thrift
institutions and banks find holding adjustable-rate
mortgages less risky than holding fixed-rate mortgages, and so adjustable-rate loans are less likely to
be securitized and sold.
With bank credit growth picking up and thrift
sector credit rising, growth of depository credit in
1994 nearly matched that of total nonfinancial debt.
Thus, the share of credit provided by these intermediaries stabilized last year after having declined
substantially since 1988. Despite the growth in
depository credit, the broad monetary aggregates
continued to expand sluggishly. Domestic banks
funded much of their credit expansion from nondeposit sources, such as borrowings from their
foreign offices, that are not included in the monetary aggregates. Funds from these sources are not
subject to deposit insurance premiums, which may
help account for their recent rise. The broadest
monetary aggregate, M3, did pick up a bit as banks
turned, in part, to large time deposits to fund asset
growth. M3 expanded about IV2 percent, well
above the lower bound of its 0 percent to 4 percent
annual range and a somewhat larger increase than
that in 1993. Growth in large time deposits topped
7 percent for the year, marking the first annual
increase in this component since 1989. Much of the
increase in large time deposits was in senior bank
notes, which are not subject to deposit insurance
premiums.
6. New Financial Accounting Standards Board rules, effective at
the start of the year, limited the ability of banks to net off-balancesheet items for reporting purposes. The new rules affected items
such as swaps and options, the cash values of which are reported on
balance sheets in the other securities category.
7. A Financial Accounting Standards Board rule implemented at
the start of the year required each bank to divide its investment
account securities into those that it intended to hold to maturity,
which could be reported at book value, and those that were available for sale, which had to be marked to market.
240
Federal Reserve Bulletin • March 1995
M2 grew 1 percent in 1994—the lower bound
of its annual range. The slow growth reflected, in
part, relatively sluggish upward adjustment of
retail deposit rates. Rates on savings accounts
and other checkable deposits (OCDs), including
NOW accounts, responded about as slowly as
they have in the past to the increase in market
rates, while the response of rates on small time
deposits was sluggish relative to historical
norms. Evidently, banks believed that generating increased retail deposits would be more
expensive than raising wholesale funds given that
higher retail rates would have to be paid on existing liquid deposits and on time deposits as they
were rolled over, as well as on any new deposits.
Increasing retail deposits would also require higher
advertising, administrative, and deposit insurance
costs.
In contrast to the previous several years, M2
behavior in 1994 was roughly consistent with its
long-run historical relation with movements in
nominal income and opportunity costs as traditionally defined—that is, the difference between rates
on short-term instruments (for example, Treasury
bills) and those offered on retail balances. This
consistency suggests that, unlike the past few
years, the slow growth in M2 last year was not the
3.
result of portfolio shifts toward bond and equity
mutual funds. Indeed, the growth in M2 plus longterm mutual funds ran slightly below the 1 percent
pace of M2 growth. Net sales of equity mutual
funds continued at a high level in 1994, although
the pace of sales slowed somewhat late in the
year. Equity fund sales were partly offset, however, by outflows from bond mutual funds in
the last three quarters of the year. Apparently,
falling bond prices and greater market uncertainty, and, perhaps, reports of derivatives losses
at some funds, led households to scale back their
holdings of bond mutual funds in favor of investments that posed less risk of capital loss. With
deposit rates lagging, however, these outflows
did not translate into faster M2 growth. Some
of the withdrawals from bond funds may have
been invested directly in Treasury securities.
Reflecting such portfolio shifts, net noncompetitive tenders for Treasury bills, which had
been negative in 1993, totaled more than
$16 billion last year, and net noncompetitive
tenders for Treasury notes also increased
substantially.8
8. The Treasury permits noncompetitive bids at its auctions to
make it easier for smaller, less sophisticated bidders to participate.
G r o w t h o f m o n e y and debt
Percent
Ml
M2
M3
Domestic
nonfinancial debt
Year1
1980
1981
1982
1983
1984
7.4
5.4 (2.5 J )
8.8
10.4
5.5
8.9
9.3
9.2
12.2
8.1
9.6
12.4
9.9
9.9
10.9
9.1
9.9
9.6
11.8
14.4
1985
1986
1987
1988
1989
12.0
15.5
6.3
4.3
.6
8.7
9.3
4.3
5.3
4.8
7.6
8.9
5.7
6.3
3.8
14.1
13.5
10.2
9.0
8.0
1990
1991
1992
1993
1994
4.2
7.9
14.3
10.5
2.3
4.0
2.9
2.0
1.7
1.0
1.7
1.2
.5
1.0
1.4
6.5
4.6
4.7
5.2
5.3
Quarter (annual rate)3
1994: 1
2
3
4
5.5
2.6
2.4
-1.2
1.8
1.7
.8
-.4
.6
1.3
2.0
1.7
5.3
5.6
4.4
5.5
Period
1. From average for fourth quarter of preceding year to average for fourth
quarter of year indicated.
2. Adjusted for shifts to NOW accounts in 1981.
3. From average for preceding quarter to average for quarter indicated.
Monetary Policy Report to the Congress
Consistent with its historical behavior, Ml
growth slowed sharply last year in response to
widening differentials between market interest rates
and those offered on transaction deposits. Ml
expanded only 2lA percent—down substantially
from the double-digit increases recorded the previous two years. Following the typical pattern,
demand deposits and OCDs were especially
responsive to the rise in short-term interest rates.
On balance, demand deposits edged up only Vi percent, compared with growth of 131A percent in
1993, as higher market rates encouraged deposit
holders to economize on these non-interest-earning
assets. In addition, the turnaround reflected the
decline in home mortgage refinancing activity last
year: Demand deposits had been boosted in 1993
because prepayments of securitized mortgages
were held primarily in such deposits for a time
before they were distributed. The rates offered on
OCD accounts adjusted slowly to higher market
rates last year, encouraging households to shift
funds into higher-yielding assets. OCD growth also
was depressed by the introduction of sweep
account programs at some large banks. In these
programs, the portion of customers' OCD balances
in excess of a predetermined level are swept into
money market deposit accounts at the end of each
day.
Those submitting noncompetitive tenders are assured of receiving
the security, and the yield on the security they obtain is the average
issue rate established at the auction. The level of net noncompetitive tenders during a period is the dollar volume of securities
purchased under noncompetitive tenders less the volume of repayments of maturing securities that had been purchased under noncompetitive tenders.
4.
Net sales of shares in long-term mutual funds 1
Millions of dollars (monthly average)
Total
Equity
funds
Bond
funds
Year
1991
1992
1993
1994
10,820
16,844
23,445
9,674
3,821
7,268
11,832
11,073
7,000
9,576
11,634
-1,399
Quarter
1994: 1
2
3
4
17,438
10,128
9,826
1,306
13,744
10,935
11,166
8,447
3,694
-808
-1,340
-7,141
Period
1. Gross sales of shares less redemptions.
SOURCE. Investment Company Institute.
241
In contrast to transaction deposits, the currency
component of Ml continued to register strong
growth last year. Currency increased 10V4 percent,
the same rise as 1993 and close to the record
increase in 1990. As has been the case since 1990,
much of the currency growth appeared to reflect
rapid expansion in U.S. currency circulating
abroad. Informal reports suggest that foreign
demand was particularly strong in 1994 in Russia
and the other former Soviet republics.
Foreign Exchange
Developments
The trade-weighted foreign exchange value of the
dollar in terms of the other G-10 currencies
declined nearly 6V2 percent on balance from
December 1993 to December 1994. After displaying some strength at the start of 1994, the weightedaverage foreign exchange value of the dollar fell
about 10 percent from February through early
November. Although U.S. growth continued to be
stronger than expected, market perceptions about
the strength of economic activity in the other industrial countries were also revised sharply higher as
the year progressed. These changed perceptions led
market participants to raise their expectations of
market interest rates abroad, which, together with
increased concerns over potential inflation pressures in the U.S. economy, put downward pressure
on the dollar against most foreign currencies. The
dollar rebounded somewhat at the end of the year
as the greater-than-expected tightening action by
the Federal Reserve in November reassured market
participants that U.S. inflation risks were being
addressed. In early 1995, however, with U.S.
growth appearing to moderate and the turmoil in
Mexican financial markets raising concerns about
possible implications for the United States, the
dollar declined on balance, nearly reaching its fall
1994 low.
Long-term interest rates in major foreign industrial countries generally rose during the year. On
average, yields on foreign government issues with
maturities of ten years increased 200 basis points in
the twelve months to December, about the same
as in the United States. In Japan, where the evidence for a buoyant recovery remained somewhat
mixed, long-term rates rose less. In contrast to
242
Federal Reserve Bulletin • March 1995
long-term rates, foreign short-term rates were little
changed on average and even declined slightly in
several countries, including France and Germany.
Major exceptions were Canada, where short-term
market rates rose about 300 basis points, and the
United Kingdom, where they rose 100 basis points.
In both countries, official lending rates were
increased during the year to contain inflation risks
in the face of vigorous economic growth. During
the first few weeks of this year, foreign long-term
rates on average rose slightly further, but they have
since retraced most of that rise.
During 1994, the dollar depreciated 8 percent
in terms of the mark and declined by similar
amounts in terms of the other currencies in the
exchange rate mechanism (ERM) of the European
Monetary System. The German economy expanded
over the year, and the growth of the targeted
monetary aggregate, M3, remained above target
until the very end of the year. Market participants
trimmed their expectations of further declines in
official Bundesbank lending rates, and German
long-term interest rates rose. The dollar depreciated by lesser amounts in terms of sterling and
the lira, both of which had been withdrawn from
the ERM in 1992. The persistent strength of the
U.K. recovery raised concerns of renewed inflation pressures there, and the political uncertainties
in Italy and, to a lesser extent, in the United Kingdom held back market enthusiasm for the two
currencies.
The dollar also depreciated about 8 percent in
terms of the yen during the year. At times, the
dollar-yen rate fluctuated in response to developments in U.S.-Japanese trade talks. The dollar
reached a historic low of 96.11 yen in November
and was very weak against the German mark as
well, and the Federal Reserve joined the U.S. Treasury in intervention purchases of dollars against
yen and marks at that time. Subsequently, the dollar rebounded somewhat in terms of the yen and
European currencies. In early 1995 the dollar weakened further, especially against the mark, in part
because that currency attracted funds from markets
upset by the peso crisis.
In contrast to its experience in terms of the ERM
currencies and the yen, the dollar appreciated in
terms of the Canadian dollar nearly 4V6 percent
during 1994. The relative weakness of the Canadian currency appeared to reflect pressures arising
from the increases in U.S. short-term rates, concerns over the large fiscal deficits of the central
government and the provinces, and, at times, perceived risks associated with possible secession by
Quebec. In the first few weeks of 1995, the Canadian dollar weakened further, as markets apparently became more concerned about the large outstanding Canadian federal and provincial debt and
the persistent federal government deficit. As a
result, market interest rates have risen further, and
the Bank of Canada has moved up overnight rates
several times, including an increase to match the
upward shift in the U.S. federal funds rate following the most recent FOMC meeting. In response,
the Canadian dollar strengthened but, more
recently, has given up some of these gains.
The dollar depreciated nearly 5 percent in 1994
against the currencies of major U.S. trading partners in Latin America and East Asia when adjusted
for relative changes in consumer prices. The dollar
appreciated sharply against the Mexican peso, however, first in March and more significantly during
the final two weeks of the year and in early 1995.
In response to continuing downward pressures
on the peso and sizable losses of international
reserves over the course of 1994, the Bank of
Mexico announced on December 20 a 13 percent
change in the lower bound of the range that it
unilaterally had set for the peso-dollar exchange
rate. The peso immediately fell to the new lower
limit, from about 3.5 to 4 pesos per dollar, and
reserve losses continued. As a consequence, the
Bank of Mexico on December 22 permitted the
peso to float and activated the North American
Swap Facility, which provides up to $6 billion of
short-term funds to the Bank of Mexico, evenly
split between the Federal Reserve and the Treasury,
and an additional C$1 billion from the Bank of
Canada.
During the following days the peso remained
volatile on exchange markets, fluctuating in a range
between 5 and nearly 6 pesos to the dollar. On
January 2, a package was announced totaling
$18 billion in international financial support for
Mexico, including an increase from $6 billion to
$9 billion in the swap facilities extended by the
United States (again split between the Federal
Reserve and the Treasury), an additional
C$500 million in the swap facility of the Bank of
Canada, $5 billion in credit supported by other
Monetary Policy Report to the Congress
central banks acting through the Bank for International Settlements (BIS), and $3 billion in credit
from commercial banks. On January 6 the IMF
began talks with Mexico on a standby arrangement
in support of Mexico's economic reform program,
and on January 12, against the background of
increased turbulence in international capital markets, the Clinton Administration, with the support
of the bipartisan leadership of the Congress,
announced a proposal to provide $40 billion in
guarantees on securities to be issued by Mexico in
an effort to restore investor confidence.
Subsequently, the peso weakened further as support within the Congress for the guarantee proposal
appeared to decline. The Mexican stock market
also continued to slide, and short-term peso interest
rates rose sharply. In late January the peso reached
a new low of 6.55 pesos to the dollar amid signs
that problems in Mexico were having effects on
financial markets in other countries. In particular,
equity markets in Argentina and Brazil had
declined in volatile trading. More generally, investors appeared to be retreating from investments in
a variety of emerging market economies, some of
which have substantial current account deficits,
while others maintain fixed exchange rates that
pose the risk of becoming overvalued. On January 31 the Administration withdrew the request
for approval of the guarantee program and, with the
243
support of the bipartisan leadership of the Congress, announced a new plan to provide $20 billion
to support financial stabilization in Mexico using
the resources of the Exchange Stabilization Fund
(ESF) and, in the short run, the Federal Reserve.
On February 1, the Federal Reserve's swap line
with the Bank of Mexico was increased further to
$6 billion as part of this package. The package
will consist of short-term swaps, which will be
provided by the Federal Reserve and the ESF, and
swaps with maturities of three to five years and
securities guarantees with maturities of five to ten
years provided by the ESF. Repayment will be
assured from the proceeds of exports of Mexican
oil. Additional multilateral support for Mexico
included an increase from $7.8 billion to $17.8 billion in the funds provided by the International
Monetary Fund under a standby arrangement that
was approved on February 1 and an increase from
$5 billion to $10 billion in the short-term credit
supported by the central banks of a number of
major industrial countries acting through the BIS.
The peso rebounded during the week following
the announcement of the January 31 program and,
on net, has since held most of that gain in volatile
trading. Through mid-February, the dollar on balance has appreciated substantially against the peso
since December 19, the day before the peso's
devaluation.
•
244
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report describes Treasury and System foreign exchange operations for the period
from October through December 1994. It was prepared by Peter R. Fisher, Executive Vice President,
Federal Reserve Bank of New York, and Manager
for Foreign Operations, System Open Market
Account. Carol Osier was primarily responsible for
preparation of the report.1
During the fourth quarter of 1994, the dollar fell
0.1 percent against the German mark but rose
0.5 percent against the Japanese yen and 1.0 percent on a trade-weighted basis.2 On November 2,
the U.S. monetary authorities purchased $800 million against the German mark and an equal amount
against the Japanese yen, and Treasury Secretary
Lloyd Bentsen issued a statement affirming the
Administration's support for a stronger dollar. On
November 3, the U.S. monetary authorities intervened again, this time purchasing $500 million
against the German mark and an equal amount
against the Japanese yen. In other operations, the
U.S. and Mexican monetary authorities activated
their $6 billion swap facility after Mexico
announced, before the market opened on December 22, that the peso would be allowed to float.
THE DOLLAR
DECLINES
DURING
OCTOBER
Having closed the previous period at DM1.5510,
the dollar traded fairly steadily against the German
mark. Against the Japanese yen, the dollar rose
briefly from ¥99.10, its close at the end of the
1. The charts for the report are available on request from Publications Services, Mail Stop 127, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
2. The dollar's movements on a trade-weighted basis in terms of
other Group of Ten (G-10) currencies are measured using an index
developed by staff at the Board of Governors of the Federal
Reserve System.
previous quarter after a partial trade agreement
between the United States and Japan was
announced on October 1. Soon thereafter, however, the dollar started to decline against both
currencies.
Early in the period, continued signs of robust
growth in the U.S. economy led market participants
to question the Federal Reserve's decision not to
raise rates at its September 27 meeting, and concern that the stance of monetary policy was inadequate to contain price pressures began to grow. At
the same time, market participants perceived shortterm and long-term U.S. rates as too low relative to
comparable foreign rates and found in these differentials an explanation for the dollar's weakness
during the year and a reason for further dollar
weakness.
Against the mark, the dollar started to decline
sharply on October 13. This decline occurred as
expectations rose that the coalition government of
Chancellor Helmut Kohl would be returned to
office in Germany's October 16 federal elections
and as German bond and stock markets rallied. The
dollar's downward movement accelerated as it
breached a number of important technical points.
From its closing level of DM1.5405 on October 12,
the dollar fell to DM1.4937 on October 17. After
this abrupt decline, market discomfort with the
level of U.S. interest rates grew more pronounced
and market participants began to express the view
that the U.S. Administration was becoming less
concerned about the dollar. At the same time, the
dollar also began to decline against the yen,
particularly as a result of heavy dollar sales by
Japanese exporters.
By October 25, the dollar had declined to ¥96.40
and a period low of DM1.4860. The release on
October 28 of gross domestic product data containing encouraging news about the U.S. price deflator
provided a brief respite, but as November began,
pressure on the dollar intensified once again.
245
U.S. MONETARY
MARKET
MARK
TO BUY
AND
THE
AUTHORITIES
DOLLARS
ENTER
AGAINST
THE
THE
YEN
On the morning of Wednesday, November 2, the
dollar fell to a new postwar low of ¥96.11 and was
trading at DM1.4910. Shortly after 11:00 a.m., the
Federal Reserve Bank of New York's Foreign
Exchange Desk entered the market, purchasing dollars for the U.S. monetary authorities. During the
course of the day, the Desk purchased $800 million
against the mark and $800 million against the yen.
As the intervention began, Treasury Secretary
Bentsen issued the following statement:
I believe that recent movements in the dollar are inconsistent with the fundamentals of a strong investment-led
recovery in the United States and the greatly enhanced
ability of U.S. firms to compete around the world. This
Administration is committed to sound economic policies
that expand the e c o n o m y ' s capacity and sustain recovery with low inflation. Continuation of recent foreign
exchange trends would be counterproductive for the
United States and the world economy. A stronger dollar
will reduce inflation pressures, improve American living
standards, and promote investment. We will continue to
monitor developments closely in cooperation with our
G-7 (Group of Seven) partners.
Later that day Bundesbank President Hans Tietmeyer expressed support for the U.S. operation,
saying "I welcome the fact that the American
monetary authorities have clearly expressed their
interest in a stronger dollar and want to back this
with an appropriate policy. This statement (by Secretary Bentsen) is likely to contribute to bringing
the value of the dollar on markets more into line
with the fundamental data." After reaching intraday highs of DM1.5220 and ¥98.00, the dollar
closed at DM1.5149 and ¥97.60.
Shortly after 11:00 a.m. on Thursday, November 3, with the dollar trading at DM1.5145 and
¥97.65, the Desk intervened a second time on
behalf of the U.S. monetary authorities. During the
course of the day, the Desk purchased $500 million
against the mark and $500 million against the yen.
The dollar reached intraday highs of DM1.5260
and ¥98.30 before closing at DM1.5185 and
¥97.73.
On both days of intervention, the yen operations
of the U.S. monetary authorities were coordinated
with the operations of the monetary authorities of
another country. All the dollar purchases of the
U.S. monetary authorities were divided equally
between the Federal Reserve and the Exchange
Stabilization Fund (ESF) of the Department of the
Treasury.
THE
DOLLAR
DURING
CONTINUES
TO
STRENGTHEN
NOVEMBER
After the intervention, the dollar continued to rise
against the mark as market participants became
increasingly confident that the Federal Reserve
would raise official U.S. interest rates at the
November 15 meeting of the Federal Open Market
Committee (FOMC). On November 9, in Asian
and early European trading hours, the dollar rose
abruptly in response to the results of the previous
day's U.S. elections, in which the Republican party
took control of both the House and the Senate.
From its closing levels the day before, the dollar
rose nearly two pfennigs to DM1.5265 and about
half a yen to ¥97.70 by the time the New York
market opened on November 9, then traded around
these levels for the rest of the day.
By the eve of the November 15 FOMC meeting,
the dollar had risen further, reaching DM1.5441
and ¥98.28. In the event, the Federal Reserve's
decision to raise the federal funds and discount
rates 75 basis points surprised many market participants, who had generally expected the Federal
Reserve to raise rates only 50 basis points. The
dollar spiked higher in response. The perceived
aggressiveness of the action also encouraged some
market participants to anticipate additional tightening in December.
The dollar's rally continued through the end of
November, as the notable widening of short-term
1.
Foreign exchange holdings of U.S. monetary
authorities at period-end
Millions of dollars
Item
Federal
Reserve
U.S. Treasury
Exchange
Stabilization Fund
German marks
Japanese yen
13,405.2
8,510.0
7,500.6
11,801.0
Total
21,915.2
19,301.6
NOTE. Figures may not sum to totals because of rounding.
246
Federal Reserve Bulletin • March 1995
interest rate differentials encouraged market participants to accumulate dollar positions. Market behavior began to reflect the perception that the Federal
Reserve would bring short-term interest rates to
levels that were high enough to restrain incipient
inflationary pressures. Indeed, the dollar rose on
stronger-than-expected U.S. data on consumer confidence, third-quarter GDP, and November nonfarm
payrolls. Market participants also came to view
U.S. rates as sufficiently high to compensate investors for the continued risk of dollar decline. For
example, three-month U.S. rates, which had only
moved above equivalent German rates in September, had come to surpass German rates by about
100 basis points. For foreign exchange market participants, the stability and subsequent decline of
long-term U.S. bond yields during late November
also helped to support the dollar because these
developments suggested good demand for longterm U.S. paper. The dollar closed the month at
DM1.5692 and ¥98.90, up 4.4 percent and 2.1 percent respectively over its values at the end of
October.
THE DOLLAR TRADES
QUIETLY
AGAINST THE MARK AND YEN
DURING MOST OF
DECEMBER
The dollar's rise came to an end in early December
and, with the volume of transactions reduced by the
holiday season, the currency traded for most of the
month around the DM1.57 and ¥100 levels. Expectations among some market participants that the
Federal Reserve would raise interest rates in late
December—a view partly based on Chairman
Greenspan's December 7 testimony before Congress, in which he characterized U.S. growth as
stronger than expected—helped support the dollar.
At the same time, however, strong German GDP
data for the third quarter and volatility in U.S.
interest rate markets, caused by the liquidation of
the financing positions of the Orange County
investment pool and of other portfolios, appeared
to limit the dollar's upside. At its December 20
meeting, the Federal Reserve left U.S. interest rates
unchanged, a decision that had no immediate
impact on the dollar. By the end of the period,
however, the dollar was nearly three pfennigs and
about half a yen lower, with most of the decline
coming on December 28 in thin market conditions.
The dollar closed the quarter at DM1.5490 and
¥99.55.
THE CANADIAN
DOLLAR
DECLINES
STEADILY
After opening at C$1.3450, the Canadian dollar
weakened steadily against the U.S. currency and
finished the quarter at C$1.4025, down 4.2 percent.
International investors were discouraged from purchasing Canadian dollars by short-term interest rate
differentials that, for much of the period, favored
the U.S. currency, especially after the midNovember rise in U.S. short-term rates. These
investors also expressed concern about large Canadian government budget deficits at the federal and
provincial levels, and about political uncertainty
stemming from Quebec's quest for sovereignty.
MEXICAN AUTHORITIES
THE PESO TO FLOAT
ALLOW
Over the quarter, the peso declined 30 percent
against the dollar from its initial level of 3.3930
new pesos (NP) per dollar. The move began as a
gradual depreciation within the permissible range
set by the government. The peso remained within
its band through November and for a few weeks
past President Zedillo's December 1 inauguration,
despite considerable financial market pressures and
increasing concern among market participants
about possible inconsistencies within the Mexican
economic strategy. The view increasingly took hold
2.
Net profits or losses (-) on U.S. Treasury
and Federal Reserve foreign exchange operations,
based on historical cost-of-acquisition exchange rates
Millions of dollars
Period and item
Valuation profits and losses on
outstanding assets and liabilities
as of Sept. 30, 1994
Realized profits and losses,
Sept. 30, 1994-Dec. 31, 1994 . . .
Valuation profits and losses on
outstanding assets and liabilities
as of Dec. 31, 1994
NOTE. Data are on a value-date basis.
Federal
Reserve
U.S. Treasury
Exchange
Stabilization
Fund
4,973.4
4,356.7
313.7
270.9
4,577.6
4,054.1
Treasury and Federal Reserve Foreign Exchange Operations 247
3.
Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
Dec. 31, 1994
Drawings
during period
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
Deutsche Bundesbank
Bank of Italy
Bank of Japan
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
3,000
500
250
300
4,000
Bank for International Settlements
Dollars against Swiss francs
Dollars against other authorized
European currencies
600
r
1,250
0
32,400
0
Total
0
ik
that, even at the lower limit of the band, the peso
was overvalued given Mexico's past inflation and a
current account deficit estimated at nearly 8 percent
of the country's GDP. Nevertheless, investors
remained hopeful that Mexico would not ultimately
be required to change its exchange rate policy.
From the start of the quarter through Monday,
December 19, the peso declined 2 percent to reach
3.4632. On the morning of December 20, the Mexican financial authorities, in agreement with representatives of labor and business, changed the
peso's lowest permissible value against the dollar
by 0.53 pesos, to NP4.0016 from NP3.4712 the
previous day. Market participants reacted negatively, and the peso was quickly pushed to its new
limit. The peso's value against the dollar dropped
12.5 percent on the day. With pressure on the peso
continuing unabated, the Mexican financial authorities announced before the market opened on
December 22 that "the supply and demand for
currency would freely determine the exchange rate
until the exchange market stabilized." It was also
announced that Mexican and U.S. monetary
authorities had jointly activated a pre-existing swap
facility of $6 billion. The peso closed the day at
NP4.70, 15.7 percent below its close on December 20.
During the rest of December the peso remained
volatile as foreign investors continued to reduce
their peso exposure. The peso closed the year at
NP4.85 per dollar.
TREASURY AND FEDERAL
EXCHANGE
RESERVES
RESERVE
FOREIGN
The U.S. monetary authorities intervened twice during the period, purchasing a total of $2,600 million
against German marks and Japanese yen. This
amount was divided equally between the Federal
Reserve and the Treasury Department's Exchange
Stabilization Fund (ESF). The Federal Reserve
and the ESF realized profits of $313.7 million and
$270.9 million respectively on this intervention
activity. These profits are based on historical costof-acquisition exchange rates.
At the end of the period, the current values of the
foreign exchange reserve holdings of the Federal
Reserve and the ESF were $21.9 billion and
$19.3 billion respectively. The U.S. monetary
authorities regularly invest their foreign currency
balances in a variety of instruments that yield
market-related rates of return and have a high
degree of liquidity and credit quality. A portion of
the balances is invested in securities issued by
foreign governments. As of December 31, the Federal Reserve and the ESF held, either directly or
under repurchase agreement, $9.2 billion and
$12.5 billion respectively in foreign government
securities.
•
248
Industrial Production and Capacity Utilization
for January 1995
Released for publication February 14
Industrial production rose 0.4 percent in January,
about half as much as in November and December.
The slowing was widespread in manufacturing.
In contrast, with the arrival of more normal winter
temperatures, the output at utilities rose after some
recent weakness. Industrial production in January
was at 121.9 percent of its 1987 average and
6.2 percent higher than it was in January 1994.
Industrial production indexes
Twelve-month percent change
Twelve-month percent change
10
10
5
5
Materials
Products
Nondurable
manufacturing
I
1989
1990
1991
1992
I
1993
1994
1989
1995
1990
1991
1992
1993
1994
1995
Capacity and industrial production
Ratio scale, 1987 production = 1 0 0
— Total industry
Capacity
Ratio scale, 1987 production = 100
140
^
^
-
— Manufacturing
Capacity
.
120
-
140
-
120
100
100
Production
Production
80
80
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Percent of capacity
1
1
1
Manufacturing
90
Utilization
J
1983
1
Percent of capacity
Total industry
1981
1
1985
I
I
1987
L
1989
J
1991
1
1993
L
1995
80
80
70
70
J
1981
I
I
1983
I
I
1985
L
1987
All series are seasonally adjusted. Latest series, January. Capacity is an index of potential industrial production.
90
Utilization
J
1989
1991
I
I
1993
L
1995
249
Industrial production and capacity utilization, January 1995
Industrial production, index, 1987=100
Percentage change
Category
1994
1995
1994
Oct/
Nov/
Dec/
Jan.p
Total
119.5
120.4
121.4
121.9
Previous estimate
119.4
120.3
121.4
Major market groups
Products, total 2
Consumer goods
Business equipment
Construction supplies
Materials
116.9
113.0
150.9
109.7
123.4
117.6
113.9
151.4
109.7
124.6
118.5
115.0
153.1
110.6
125.9
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
121.5
128.0
114.2
99.2
117.2
122.6
129.2
115.3
98.4
116.9
123.8
131.0
115.9
99.9
116.0
Oct/
1
Nov/
1995
Dec/
Jan.?
6.2
.4
.7
1.0
118.9
115.4
154.5
110.7
126.4
.4
.0
1.0
1.1
.4
.6
.8
.3
.0
1.0
.8
1.0
1.1
.8
1.1
.4
.3
.9
.1
.4
5.1
3.6
10.1
7.5
7.9
124.2
131.9
115.7
100.2
117.6
.5
.6
.4
-.9
.5
1.0
.9
1.0
-.8
-.2
1.0
1.4
.5
1.5
-.7
.3
.6
-.2
.3
1.3
7.3
9.0
5.2
2.4
-2.2
MEMO
Capacity utilization, percent
1994
Average,
1967-94
Total
82.0
Low,
1982
71.8
81.3
80.7
82.5
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.2
83.5
89.0
86.5
92.6
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
Capacity utilization edged up 0.1 percentage point,
to 85.5 percent, its highest level since October
1979.
When analyzed by market group, the data show
that the output of both durable and nondurable
consumer goods slowed noticeably. The production of durable consumer goods rose 0.6 percent,
compared with 2.2 percent in December; the
production of automotive products, which had
risen a total of more than 5 percent over the preceding two months, advanced 0.7 percent. The
output of other consumer durables rose 0.6 percent, half as much as in December; in particular,
the output of appliances fell back. The production of consumer nondurables gained 0.3 percent as declines in clothing, paper products, and
gasoline partly offset gains in residential utilities,
1995
Capacity,
percentage
change,
Jan. 1994
to
Jan. 1995
Jan.
Oct/
Nov/
Dec/
Jan.p
82.7
84.4
84.8
85.4
85.5
2.8
84.3
84.7
85.4
83.8
82.1
88.3
89.0
86.4
84.4
82.4
89.4
88.3
86.1
85.0
83.0
90.2
89.6
85.4
85.1
83.2
89.7
89.9
86.4
3.1
3.6
2.1
.0
1.2
Previous estimate
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
1994
High,
1988-89
84.9
Jan. 1994
to
Jan. 1995
81.8
80.1
85.9
87.7
89.5
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
foods and tobacco products, and drugs and
medicines.
The production of business equipment increased
0.9 percent, a growth rate roughly in line with
those of the past few months and the past year.
With the notable exception of the commercial aircraft industry, the advances in business equipment
continued to be quite broadly based. The output of
defense and space equipment, which had recovered
a bit in November and December, edged down
0.1 percent; the cumulative drop over the past
twelve months was 7.3 percent.
The output of construction supplies edged up,
while that of business supplies fell 0.4 percent
because paper business supplies and job printing
had weakened somewhat. The production of materials, which had risen about 1 percent in November
250
Federal Reserve Bulletin • March 1995
and again in December, increased 0.4 percent. The
output of durable goods materials and energy materials rose roughly 0.7 percent, while nondurable
materials declined nearly as much. Within durable
goods materials, the production of semiconductors
and inputs for consumer goods rose again, but the
output of steel fell.
When analyzed by industry group, the data show
that manufacturing output rose 0.3 percent, to a
level 7.3 percent higher than that of January 1994.
The production in nondurable manufacturing industries declined 0.2 percent; among these, the output
of only the chemicals and tobacco products industries rose noticeably. The strength in durable manufacturing continued to be centered in machinery,
equipment, and motor vehicles. The output of steel
and lumber fell back after gains in December,
while the long decline in aerospace and miscellaneous transportation equipment resumed.
Factories operated at 85.1 percent of capacity,
still just below the recent cyclical peak reached in
January 1989. Although the utilization rate in the
primary-processing industries fell 0.5 percentage
point, to 89.7 percent, it remained above the cyclical high reached in January 1989 and equaled the
high of November 1978. Utilization for advancedprocessing industries rose 0.2 percentage point, to
83.2 percent, but remained 0.3 percentage point
below the January 1989 high.
With the end of unusually mild weather, operating rates at utilities rebounded 1 percentage point,
to 86.4 percent, a level still below the 1994 average
of 87.2 percent. Operating rates at mines rose, with
gains in coal, metal ores, stone and earth minerals,
and oil and gas well drilling.
•
251
Statements to the Congress
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, January 5, 1995
I am pleased to be here today with the other members
of the President's Working Group on Financial Markets to discuss issues involving municipal, corporate,
and individual users of derivative products and highly
leveraged investment strategies. Over the past year,
losses by some institutions, including corporations
and governmental units, have attracted considerable
attention. Much of this attention has been on so-called
"derivative" instruments, although that term is poorly
defined, and it is by no means clear that these losses
have been attributable solely, or in some cases, even
primarily, to financial instruments that would typically be called derivatives.
We need to view these issues in a broad context.
The decline in the value of many portfolios has been
a consequence of the rise in interest rates over the past
year. This rise was a by-product of a strong economic
expansion and of the efforts by the Federal Reserve to
foster conditions that will sustain the expansion.
Many investors and borrowers had established positions that were especially vulnerable to higher rates.
These positions were taken during a prolonged period
of recession and subpar economic growth in which
interest rates were relatively low and declining and
the yield curve was steeply upward sloped. Furthermore, interest rate volatility was relatively low
throughout this period. This unusual environment
encouraged some investors to adopt riskier positions
to boost the returns they were getting or to reduce the
costs of borrowing. These positions often rested on
the presumption that the unusual configuration of
yields and subdued volatility would persist. Even
experienced investors forgot the axiom that all investment yields in excess of the short-term riskless rate of
interest are, by definition, risky.
That derivatives have been implicated in many
recent losses should not be surprising. Losses to
holders of bonds amounted to many hundreds of
billions of dollars in 1994. Derivatives transfer risk
from one market participant to another, and in such a
market they inevitably will be involved in large gross
losses. Of necessity, they also accounted for large
gross gains because contracts tend to cancel each
other, net, but the gains are less newsworthy.
Although the convenience and low cost of using
derivative instruments to meet portfolio objectives
may have facilitated some investors reaching for more
unconventional and possibly riskier strategies, it
would be a serious mistake to respond to these
developments by singling out derivative instruments
for special regulatory treatment. Such a response
would create artificial incentives to structure transactions on the basis of regulatory rules rather than of the
economic characteristics of the transactions themselves. For example, restrictions on investments in
derivative instruments could be circumvented by investing in other financial instruments that provide
similar returns and entail similar risks, though presumably at somewhat higher transaction costs. A shift
to the use of less efficient instruments as a substitute
for derivatives would mean greater cost to hedgers as
well as speculators and a net loss in market efficiency.
You have raised several issues regarding derivatives, leverage, and related issues. As I have described
in detail in previous testimony and correspondence
with members of the Congress, the Federal Reserve
has been addressing many of these issues in its role as
supervisor of state member banks and bank holding
companies. In the remainder of my testimony today, I
would like to focus on one aspect of the market for
financial transactions that has drawn considerable
attention in the wake of recent losses—the relationship between dealers in financial markets and their
customers.
Markets function most efficiently when both parties
tofinancialtransactions are free to enter into transactions at their own discretion, unhampered by any
perceived need to serve the interests of their counterparties. To date, losses in the financial markets have
not led to broader systemic problems. Moreover, both
252
Federal Reserve Bulletin • March 1995
dealers and their customers, somewhat shaken by the
volatility of recent markets, are responding to these
events by exercising greater caution. If discipline
from incurring losses from mistakes were mitigated,
vigilance would be relaxed, the market's natural
adaptive response would be blunted, and the value of
decentralized market decisions as allocators of scarce
capital resources would be reduced. I believe that we
should start with the principle that parties to financial
transactions are responsible for their own decisions
and only use regulation to adjust the balance of
responsibilities between the parties cautiously after
the benefit has been clearly established.
We are not saying that financial markets should
operate without rules or that any and all behavior in
the sales or marketing of transactions is acceptable.
Misrepresentation or fraud in financial transactions
cannot be tolerated. Moreover, in some cases, a dealer
in financial transactions may assume responsibilities
beyond the role of a mere counterparty. For example,
a dealer that provides its customers with advisory
services may have a duty to ensure that its advice is
not tainted by its own profit or loss in any transactions
it undertakes with those customers.
In addition, there may be cases in which certain
customers can, in principle, use complex instruments
to reduce risk or enhance yield but, in practice, cannot
reasonably be expected to understand the instruments
and the risks sufficiently well to achieve these objectives without assistance. For such customers, a way
must be found to ensure that transactions are used
effectively for the purposes for which they are intended. The approaches to ensuring safe and efficient
use of the financial markets by the unsophisticated
vary and include restricting their access to certain
markets, providing guidance for their investment and
risk management practices, encouraging them to obtain independent advice, encouraging diversification
of their portfolios, and shifting some of the risk of loss
from the unsophisticated customers to the dealer by
establishing special responsibilities for dealers' transactions with their less sophisticated customers. Each
of these approaches has its own costs and benefits; the
approach that may appear easiest, however—placing
additional responsibilities on the dealer community—
may entail considerable indirect costs to the economy
in terms of interfering with liquid and efficient markets. Rules that create a duty on the part of dealers in
derivative instruments to ensure that these transactions are being appropriately used by their customers
may serve as a means for customers to shift the risks
of the transaction back to the dealer retroactively
through legal actions. If such legal risks are exacerbated, dealers will likely charge an additional premium to compensate them for the uncertainties of
future legal claims, and some dealers may move their
activities offshore or withdraw from the market—in
any case causing their investments to incur higher
costs.
With these considerations in mind, the Federal
Reserve, in its role as a supervisor of banking institutions, has recently taken several actions that bear on
relationships between dealers and their customers.
The Board has had long-standing risk-management
guidance for banks that are users of sophisticated
instruments. In the wake of losses on investments in
structured notes, the Board recently reiterated the
applicability of this guidance to investments in such
instruments. Although the Board has suggested steps
that institutions should take to control their risk from
financial market transactions, it has not prohibited the
use of any types of transactions and leaves the
institution responsible for choosing specific transactions.
The Board has also issued guidance for banks
that act as dealers in sophisticated risk-management
instruments. The primary purpose of this guidance
is to assure that dealing in financial market transactions is conducted safely and soundly. The guidance encourages dealers to ensure that the counterparties understand the nature of, and the risks
inherent in, the agreed transactions. When the
counterparties are unsophisticated, either generally
or with respect to a particular type of transaction,
the guidance encourages additional steps to ensure
that counterparties are made aware of the risks
attendant in the specific type of transaction. The
guidance notes that counterparties are ultimately
responsible for the transactions that they choose to
enter into, but when a bank recommends specific
transactions for an unsophisticated counterparty,
the guidance encourages the bank to ensure that it
has adequate information regarding its counterparty
on which to base its recommendation.
In an action consistent with this guidance, the
Federal Reserve recently entered into a written supervisory agreement with Bankers Trust Corporation.
The agreement focuses on Bankers Trust's policies
and procedures for marketing practices and affiliate
transactions in its leveraged derivative transaction
Statements to the Congress
253
business. Basically, the agreement reflects our conclusion that Bankers Trust had not put in place adequate
procedures and controls to ensure that its employees'
dealings with its customers met applicable standards
and would not damage the company's business by
detracting from its reputation as a reliable financial
intermediary. This action was specific to Bankers
Trust and was based on a particular group of the
transactions in which Bankers Trust had engaged and
the practices followed in these transactions. Thus, the
provisions of the Bankers Trust agreement should not
be taken as new general guidelines for the derivatives
dealers. Rather, this action should be viewed as
implementing existing guidance in the context of this
institution's particular circumstances. Each institution
needs to have effective procedures and controls tailored to that institution's own products and practices.
Finally, as you are aware, the Government Securities Act Amendments of 1993 gave the Board the
authority to adopt sales practice rules for state member banks that are government securities brokers or
dealers. Many of the recent losses in the financial
markets, particularly losses by governmental entities,
have involved investments in securities issued by
government-sponsored enterprises, which are defined
as government securities for the purposes of this act.
Although we have no evidence of sales practice
abuses involving these securities by state member
banks, we are currently exploring with the other bank
regulators the possible adoption of sales practice rules
for these dealers. In this process, we will be carefully
assessing the benefits of adopting rules that parallel
the rules currently under development for nonbank
brokers and dealers.
•
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before a
Joint Hearing of the Senate and House Committees on
the Budget, January 10, 1995
namic over the years, and estimating techniques have
improved. What is still generally not taken into
account, however, is the effect of fiscal initiatives on
macroeconomic variables like gross domestic product, total labor compensation, and aggregate investment. Concerns that current estimating procedures do
not fully track the effects of changes in behavior on
aggregate economic activity, and hence on overall
budget receipts and outlays, are justified. The current
method is admittedly incomplete, especially for policy initiatives with broad economic impacts.
One central issue with respect to a more dynamic
scoring is whether cyclical, aggregate demand effects
of fiscal changes should be taken into account—or
only permanent effects on aggregate supply. There are
a number of ways of looking at this, but I would
suggest that including aggregate demand effects
would be confusing, if not misleading, in many
contexts. Among other things, the scope for realizing
such demand effects on economic activity would be a
function of the particular phase of the business cycle
and could be viewed in a sense as transitory. Particularly when we are addressing the problem of the
long-run structural deficit, the focus should be on how
fiscal actions affect the potential of the economy to
produce greater output and taxable income on a
sustained, ongoing basis. Thus, if a more dynamic
scoring were to be adopted, I would recommend
limiting the analysis to appropriate supply-side effects.
I am pleased to appear here today to address some of
the most important issues involved in producing the
budget of the U.S. government. The views I will be
expressing are my own and not necessarily those of
the Federal Reserve Board.
The budget process has improved significantly in
recent years. The caps on discretionary spending and
the pay-as-you-go rules have restrained deficitexpanding programs far better than many had anticipated. Budget scoring is crucial to this process. Unless
estimates of the outlays and revenues from budget
initiatives are credible, the current system cannot
work effectively. This joint hearing of the Congress's
budget committees, unprecedented in my experience,
attests to the importance of budget scoring.
Accurate estimates of the effects of tax and spending policies on the budget are difficult to make, some
more than others. In particular, concern has been
raised that current methods are too "static." As other
witnesses have indicated, current scoring procedures
already allow for some response in the spending,
saving, and investment behavior of individuals and
firms. Indeed, although it is difficult to measure, the
budget-scoring process has become increasingly dy-
254
Federal Reserve Bulletin • March 1995
Apart from that consideration, full dynamic estimates of individual budget initiatives should be our
goal. Unfortunately, the analytical tools required to
achieve it are deficient. In fact, the goal ultimately
may be unreachable. The estimation of full dynamic
effects requires a model that both captures microeconomic and macroeconomic processes and produces
reliable long-run forecasts of economic outcomes.
Unfortunately, no such model exists. Indeed, no
model currently in use can predict macroeconomic
developments without substantial ad hoc adjustments
that effectively override the internal structure of the
model. We should not assume that models can capture
the long-run dynamic effects of specific tax and outlay
changes any better than they can forecast the economy.
Even current procedures require relatively sophisticated techniques to determine the budget consequences of particular tax and outlay programs.
Changes in the tax structure alter economic incentives
in ways that may be extraordinarily complex. For
entitlement programs, one has to assess, for example,
how greater public awareness of the existence of such
a program will affect participation and how behavior
will change to take advantage of the entitlement. The
disappointing history of projections for Medicare and
Medicaid attests to the difficulty of pinning down such
responses. The assumptions required for realistic estimates, in many instances, constitute little more than
informed guesses, largely because accurate information is scarce and our understanding of human behavior is limited. Not surprisingly, objective analysts
often reach quite different conclusions about the
impact of a specific outlay or tax program, even
without trying to trace the feedback effects on the
budget estimates from resulting changes in GDP and
other macroeconomic variables.
This does not mean we have no judgments about
the dynamic effect of various policy proposals. Martin
Feldstein and others have already made useful contributions to our understanding of the long-run effects of
the tax structure on work, saving, and federal revenues. Thus, we may know, or suspect, the direction of
a long-run response. But our knowledge of its magnitude and timing is imprecise. For example, although
the empirical evidence is admittedly mixed, I strongly
suspect that the elimination of, or a major reduction
in, the rate of taxation on capital gains would entail
little, if any, loss of total tax revenue over the long
run. However, it is currently not possible to estimate
with any degree of precision the impact of such a
proposal on the deficit within the horizon of the
current budget process.
If, as many advocate, outlays are reduced well
below current service levels in the years ahead, the
debate over scoring will likely move off center stage.
This will occur because the outlay cuts will free up
significant revenues for tax cuts, regardless of
whether the current or a more dynamic scoring is
employed. And, if total revenues turn out to be greater
than current procedures project, deficits will trend
lower than estimated. If we inadvertently produce a
budget surplus by such miscalculations, the implications will be positive for long-run economic growth.
More to the point, if we fail to achieve adequate
reductions in outlays, budget scoring will not substitute for hard political choices.
Clearly, our political process has a bias toward
deficit spending. Accordingly, we should be especially cautious about adopting technical scoring procedures that might be susceptible to overly optimistic
assessments of the budgetary consequences of fiscal
actions. Currently, real long-term interest rates remain
relatively high, partly because of the expected growth
of budget deficits later in this decade and thereafter.
Upward revisions to market expectations of deficits
resulting from a perception that tax and outlay choices
were being driven by optimistic scoring would only
exacerbate this trend, with negative consequences for
financial stability and economic growth. In current
circumstances, the risks of more conservative assessments, which might overstate the loss in revenues, for
example, seem modest. Moreover, should the budget
deficit turn out smaller than expected, the resultant
favorable effect on real interest rates would tend to
stimulate private investment.
We must avoid resting key legislative decisions on
controversial estimates of revenues and outlays.
Should financial markets lose confidence in the integrity of our budget-scoring procedures, the rise in
inflation premiums and interest rates could more than
offset any statistical difference between so-called
static and more dynamic scoring.
In summary, the current, relatively straightforward
scoring system has served us well in many regards. In
particular, its very straightforwardness may limit the
possibilities for major estimating differences. Nevertheless, current scoring does fail to reflect potentially
important long-term structural supply-side benefits
and accordingly unfavorably biases the choice of
Statements to the Congress
fiscal programs. At a minimum, these supply-side
effects should be estimated. Thus, even if not officially
scored, they might influence policy choices. The
Congress may choose to pass a tax cut with highly
favorable supply-side effects on the economy and be
willing to cut spending to accommodate it. In any
event, in the longer run, we should seek to find a way
to embody such effects in our official scoring.
Let me reiterate that, although scoring is a major
factor in the budget process, process does not mean
much if real deficit control is not achieved. I do not
intend to get into the deeper programmatic issues
involved in deficit reduction—and I probably could
not add very much to the knowledge of these committees in that regard. I would, however, like to
comment briefly on the sensitivity of deficits to the
particular cost-of-living measure used to index entitlement programs and the income tax structure. Many
difficulties have arisen in the past and doubtless will
continue to arise in the future. For example, as you
may know, the Bureau of Labor Statistics made a
significant change in how it calculates the consumer
price index (CPI) in 1983, when it shifted from a
method in which the price index for housing was
constructed as if each household were paying the
current home price and mortgage rate on its residence
to one that is a more realistic measure of the cost of
home occupancy. Because of the run-up in house
prices and interest rates between the late 1960s and
early 1980s, the official CPI rose about 9 percent more
than indicated by the newer, superior measure. By the
time the index was changed, this overstatement had
added substantially to the level of outlays in the large
255
indexed federal programs—social security, Supplemental Security Income, veterans' pensions, military
retirement, and civilian pensions. Once the additional
interest outlays required to finance the cumulatively
higher federal debt are added in, a rough estimate
suggests that, all else equal, the deficit for fiscal year
1994 would have been smaller by $50 billion if the
overindexing had not occurred.
Although little can be done to remedy errors of the
past, greater efforts should be made in the future to
ensure that the indexing of spending and tax programs
accurately reflects trends in the cost of living. In that
regard, concerns have been raised that, for a variety of
reasons, the official CPI may currently be overstating
the increase in the true cost of living by perhaps Vi
percent to Wi percent per year. To be sure, the
overstatement may be a little less for retirees, whose
spending patterns differ from those of younger age
groups and who are the main recipients of indexed
federal benefits. But even for this group, it doubtless
remains significant. Thus, when the Congress reviews
the methods of indexing spending programs and
taxes, attention should be given to the biases in the
price indexes that are used. Removing the bias in the
CPI would have a very large impact on the deficit. For
example, if the annual inflation adjustments to indexed programs and taxes were reduced 1 percentage
point—and making the admittedly strong assumption
that there are no other changes in the economy—the
level of the deficit will be lower by about $55 billion
in the fifth year, including the effects of lower debt
levels. The cumulative five-year savings, I might add,
would approximate $150 billion.
•
Statement by Alan Greenspan, Chairman, Board of
I perhaps should begin with a brief review of the
Governors of the Federal Reserve System, before the current condition of the economy. There is no quesCommittee on Finance, U.S. Senate, January 25, 1995tion that the past year was one of remarkable progress
along many dimensions of macroeconomic perforI am pleased to be able to appear here today, to offer
mance. The official estimates for the fourth quarter are
my thoughts on the economic backdrop for your
not yet available, but it is clear that real gross
policy discussions.
domestic product expanded about 4 percent over the
The U.S. economy has recorded some notable
course of 1994—the best gain in some time, and one
achievements over the past few years, but there is
that surpassed most expectations. Importantly, we saw
nonetheless much left to be accomplished. The fiscal an accelerated expansion of employment as well.
decisions made by the Congress in the next several
Cumulatively, payrolls have now increased roughly 6
months will play a critical role in determining the
million over the past couple of years, belying in
economic welfare of our citizens over the years—
dramatic fashion the notion that had developed earlier
indeed, the decades—to come.
in this decade that our economy had lost its job-
256
Federal Reserve Bulletin • March 1995
generating ability. With the rapid growth of employment, the national unemployment rate has fallen
sharply, to less than 5Vi percent this past month.
The economic gains have been broad. They have
encompassed almost all major segments of industry
and all parts of the country. The expansion in recent
quarters has been paced by growth of business investment and exports, and, as a consequence, we have
seen not only a continuation of robust increases in
service sector employment but also a significant
upturn in job creation in the manufacturing sector.
Manufacturing output increased 6.8 percent last year,
and measured factory employment rose almost
300,000. I say "measured" because it has been true
for some time now that manufacturers have relied to
an increasing degree on workers supplied by temporary help firms, which are recorded separately in the
service industry. But it is clear that last year saw a
significant gain in the overall factory work force.
Moreover, I would note the reports in the recent
"Beige Book" survey assembled by our regional
Reserve Banks that manufacturers now are expressing
a greater inclination to add workers directly to their
payrolls. This is a sign of the greater confidence that
firms now have that future levels of activity will
remain high.
Geographically, contractions in some sectors such
as defense andfinancehave left their negative imprint
on certain locales, but rising activity and improving
job opportunities have characterized most areas of the
country. Notably, California—accounting for roughly
one-eighth of the nation's economy—appears to be in
the process of turning around. Unemployment rates
have fallen in all regions and are now lower in most
than they were at the peak of the last business cycle
expansion. Moreover, the gains in employment have
benefited all major demographic segments of the labor
force as well.
Of crucial importance to the sustainability of these
gains, they have been achieved without a deterioration
in the overall inflation rate. The consumer price index
(CPI) rose 2.7 percent last year, the same as in 1993.
Inflation at the retail level, as measured by the CPI,
has been a bit less than 3 percent for three years
running now—the first time that has occurred since
the early 1960s. This is a signal accomplishment, for
it marks a move toward a more stable economic
environment in which households, businesses, and
governmental units can plan with greater confidence
and operate with greater efficiency. When we consider
the probable upward bias of the CPI, it would appear
that we have gotten close to achieving effective price
stability, though we are not there yet.
In 1994, we had a difficult reversal in monetary
policy to navigate. The overhang of debt and the
strains that emerged among our financial intermediaries, especially out of the commercial real estate
collapse of the late 1980s, required a heavy dose of
monetary ease beginning in 1989 to alleviate a significant credit crunch. The danger of overstaying that
policy of ease was clear, particularly as we moved
through 1993, but the right time to change course was
difficult to determine. Judging from the developments
of the past year, it appears that our policy reversal last
February was timely—but we will not know for sure
except in retrospect.
As I have stated many times in congressional
testimony, I believe firmly that a key ingredient in
achieving the highest possible levels of productivity,
real incomes, and living standards is the achievement
of price stability. Thus, I see it as crucial that we
extend the recent trend of low and, hopefully, declining inflation in the years ahead. The prospects in this
regard are fundamentally good, but there are reasons
for some concern, at least with respect to the nearer
term. Those concerns relate primarily to the fact that
resource utilization rates already have risen to high
levels by recent historical standards. The current
unemployment rate, for example, is comparable to the
average of the late 1980s, when wages and prices
accelerated appreciably. The same is true of the
capacity utilization rate in the industrial sector.
Clearly, one factor in judging the inflationary risks
in the economy is the potential for expansion of our
productive capacity. If "potential GDP" is growing
rapidly, actual output can also continue to grow
rapidly without intensifying pressures on resources. In
this regard, many commentators, myself included,
have remarked that there is something of a more-thancyclical character to the evident improvement of
America's competitive capabilities in recent years.
Our dominance in computer software, for example,
has moved us back to a position of clear leadership in
advanced technology after some faltering in the
1970s. But, although most analysts have increased
their estimates of America's long-term productivity
growth, it is still too soon to judge whether that
improvement is a few tenths of a percentage point
annually, or even more, perhaps moving us much
closer to the more vibrant pace that characterized the
Statements to the Congress
early post-World War II period. It is fair to note,
however, that the fact that labor and factory utilization
rates have risen as much as they have in the past year
or so does argue that the rate of increase in potential
is appreciably below the 4 percent growth rate of
1994.
Knowing in advance our true growth potential
obviously would be useful in setting policy because
history tells us that economies that strain labor force
and capital stock limits tend to engender inflationary
instabilities, which undermine growth. Moreover, in
such an environment asset prices can begin to rise
unsustainably, contributing to an unstable financial
and economic environment. It is true, however, that in
modern economies output levels may not be so rigidly
constrained in the short run as they used to be when
large segments of output were governed by facilities
such as the old open hearth steel furnaces that had
rated capacities that could not be exceeded for long
without breakdown. Rather, the appropriate analogy is
a flexible ceiling that can be stretched when pressed,
but as the degree of pressure increases, the extent of
flexibility diminishes. It is possible for the economy
to exceed "potential" for a time without adverse
consequences by extending workhours, by deferring
maintenance, and by forgoing longer-term projects.
Moreover, as world trade expands, access to foreign
sources of supply augments to a degree the flexibility
of domestic productive facilities for goods and some
services.
Aggregative indicators, such as the unemployment
rate and capacity utilization, may be suggestive of
emerging inflation and asset price instability problems. But, they cannot be determinative. History
shows clearly that given levels of resource utilization
can be associated with a wide range of inflation rates.
Accordingly, policymakers must monitor developments on an ongoing basis to gauge when economic
potential actually is beginning to become strained—
irrespective of where current unemployment rates or
capacity utilization rates may lie. If we are endeavoring to fend off instability before it becomes debilitating to economic growth, direct evidence of the emerging process is essential. Consequently, one must look
beyond broad indicators to gauge the inflationary
tendencies in the economy.
In this context, aggregate measures of pressure in
labor and product markets do seem to be validated by
finer statistical and anecdotal indications of tensions.
In the manufacturing sector, for example, purchasing
257
managers report slower supplier deliveries and increasing shortages of materials. Indeed, firms appear
to have been building their inventories of materials in
recent months so as to ensure that they will have
adequate supplies on hand to meet their production
schedules. These pressures have been mirrored in a
sharp rise over the past year in the prices of raw
materials and intermediate components. There are
increasing reports that firms are considering marking
up the prices of final goods to offset those increased
costs. In the labor market, anecdotal reports of "shortages" of workers have become more common—as
indicated, for example, in our Beige Book last week—
and there are vague signs of upward pressures on
wages. To be sure, increased wages are a good thing
if they can be achieved without commensurate acceleration in prices, but they are not beneficial if they are
merely a part of a general pickup in inflation. A
hopeful sign in this regard, however, is that to date the
trends in money and credit expansion have remained
subdued. They do not suggest that what I have
referred to elsewhere as the "financial tinder" needed
to support an ongoing inflation process is in place.
That kind of ongoing process also would be expected to involve a different expectational climate
than seems to prevail today. Despite the marked
improvement in consumer confidence overall, the
survey readings on consumers' views of whether jobs
are easy to get fall far short of the previous cyclical
peak in 1989. Moreover, there is evidence that the
number of people voluntarily leaving their jobs is
subnormal currently. This suggests that the deepseated fear of job insecurity has not fully dissipated
despite ample evidence of strong job growth recently.
Some analysts attribute this phenomenon to workers' concerns about losing health insurance and, for
some, pension coverage if they change jobs. Whatever
the cause, the lingering sense of insecurity doubtless
has been a factor damping wage growth and overall
labor costs. Because the latter, on a consolidated
basis, account for roughly two-thirds of overall costs
in our economy, slower wage growth combined with
strong cyclical productivity growth has restrained
increases in unit labor costs and hence in prices of
final goods and services.
As overall output growth of necessity slows in an
environment of high resource utilization, however, so
will cyclical productivity growth. Moreover, if labor
market tightness assuages fears of job insecurity,
pressures to raise wages will intensify and unit labor
258
Federal Reserve Bulletin • March 1995
costs could accelerate. In the later stages of previous
business cycles, profit margins were squeezed, but
some of the increases in the underlying unit labor cost
were nonetheless passed through into final goods
prices and inflation picked up. Thus far in the current
cycle, any tendency toward the emergence of this kind
of process has been muted by a prevailing concern
among firms that, despite capacity pressures, enough
slack and subdued unit costs remain in the system to
foster competitive inroads on those who try to price
above the market. But this form of discipline may also
become less effective as pressures on resources persist. Consequently, it may be that these pressures will
lead to some deterioration in the price picture in the
near term, but any such deterioration should be
contained if the Federal Reserve remains vigilant.
The actions of the Congress and the Administration
in the fiscal sphere will also be important in maintaining public confidence that inflation will be subdued.
There can be no doubt that the persistence of large
federal budget deficits represents in the minds of
many individuals a potential risk. Although we clearly
have avoided it in recent years, history is replete with
examples of fiscal pressures leading to monetary
excesses and then to greater inflation. Currently, I
strongly suspect that investors here and abroad are
exacting from issuers of dollar-denominated debt an
extra inflation risk premium that reflects not their
estimate of the most likely rate of price level increase
over the life of the obligation but the possibility that
it could prove to be significantly greater. This inflation
risk premium is costly because it raises the hurdle that
must be surpassed when looking at the expected
returns on possible investment projects.
But the influence of the fiscal imbalance of the
federal government on capital formation is broader
than that. The federal deficit drains off a large share of
a regrettably small pool of domestic private saving,
thus contributing further—and perhaps to an even
greater degree—to the elevation of real rates of
interest in the economy. Admittedly, there is some
uncertainty about the causes of what seem to be
relatively high real long-term rates around the world,
as was noted by leaders of the largest industrial
nations at their summit meeting last year. But the vast
majority of analysts would agree that in the United
States the current sizable federal deficits, and the
projected growth of those deficits over the decades
ahead, are a significant element in the story.
In sum, the recent performance of the macroeconomy has been encouraging. But much of the
improvement is in the nature of cyclical developments, and we all have our work cut out for us if we
are to extend these gains and foster long-term trends
that enhance the welfare of all of our citizens. The
central role of the Federal Reserve today is to ensure
that our economy remains on a sustainable, noninflationary path. For the Congress, a crucial focus should
be continuing the process of fiscal consolidation and
rectifying the secular shortfall in domestic saving that
is limiting the growth of our nation's productive
potential.
•
Statement by Alan Greenspan, Chairman, Board of
I perhaps should begin with a brief review of the
Governors of the Federal Reserve System, before the current condition of the economy. In 1994, we had a
Committee on the Budget, U.S. Senate, January 26, difficult reversal in monetary policy to navigate. The
1995
overhang of debt and the strains that emerged among
our financial intermediaries, especially out of the
commercial real estate collapse of the late 1980s,
I am pleased to be able to appear here today to offer
required a heavy dose of monetary ease beginning in
my thoughts on the economic and fiscal backdrop for
1989 to alleviate a significant credit crunch. The danger
your policy discussions.
of overstaying that policy of ease was clear, particularly
The U.S. economy has recorded some notable
as we moved through 1993, but the right time to change
achievements over the past few years, but there is
course was difficult to determine. Judging from the
nonetheless much left to be accomplished. The fiscal developments of the past year, it appears that our policy
decisions made by the Congress in the next several
reversal last February was timely—but we will not know
months will play a critical role in determining the
for sure except in retrospect.
economic welfare of our citizens over the years—
There is no question that the past year was one of
indeed, the decades—to come.
remarkable progress along many dimensions of mac-
Statements to the Congress
roeconomic performance. The official estimates for
the fourth quarter are not yet available, but it is clear
that real gross domestic product expanded 4 percent
over the course of 1994—the best gain in some time
and one that surpassed most expectations. Importantly, we saw an accelerated expansion of employment as well. Cumulatively, payrolls have now increased roughly 6 million over the past couple of
years, belying in dramatic fashion the notion that had
developed earlier in this decade that our economy had
lost its job-generating ability. With the rapid growth
of employment, the national unemployment rate has
fallen sharply, to less than 5Vi percent this past month.
Of crucial importance to the sustainability of these
gains, they have been achieved without a deterioration
in the overall inflation rate. The consumer price index
(CPI) rose 2.7 percent last year, the same as in 1993.
Inflation at the retail level, as measured by the CPI,
has been a bit less than 3 percent for three years
running now—the first time that has occurred since
the early 1960s. This is a signal accomplishment, for
it marks a move toward a more stable economic
environment in which households, businesses, and
governmental units can plan with greater confidence
and operate with greater efficiency. When we consider
the probable upward bias of the CPI, it would appear
that we have made considerable progress toward
achieving price stability.
I have stated many times in congressional testimony that I believe firmly that a key ingredient in
achieving the highest possible levels of productivity,
real incomes, and living standards is the achievement
of price stability. Thus, I see it as crucial that we
extend the recent trend of low and, hopefully, declining inflation in the years ahead. The prospects in this
regard are fundamentally good, but there are reasons
for some concern, at least with respect to the nearer
term. Those concerns relate primarily to the fact that
resource.utilization rates already have risen to high
levels by recent historical standards. The current
unemployment rate, for example, is comparable to the
average of the late 1980s, when wages and prices
accelerated appreciably. The same is true of the
capacity utilization rate in the industrial sector. It may
be that these pressures will lead to some deterioration
in the price picture in the near term, but any such
deterioration should be contained if the Federal Reserve remains vigilant.
The actions of the Congress and the Administration
in the fiscal sphere will also be important to the
259
outlook for prices and the economy. There can be no
doubt that the persistence of large federal budget
deficits represents in the minds of many individuals a
potential risk. Although we clearly have avoided it in
recent years, history is replete with examples of fiscal
pressures leading to monetary excesses and then to
greater inflation. Currently, I strongly suspect that
investors here and abroad are exacting from issuers of
dollar-denominated debt an extra inflation risk premium that reflects not their estimate of the most likely
rate of price level increase over the life of the
obligation but the possibility that it could prove to be
significantly greater. This inflation risk premium is
costly because it raises the hurdle that must be
surpassed when looking at the expected returns on
possible investment projects.
But the influence of the fiscal imbalance of the
federal government on capital formation is broader
than that. The federal deficit drains off a large share of
a regrettably small pool of domestic private saving,
thus contributing further—and perhaps to an even
greater degree—to the elevation of real rates of
interest in the economy. Admittedly, there is some
uncertainty about the causes of what seem to be
relatively high real long-term rates around the world,
as was noted by leaders of the largest industrial
nations at their summit meeting last year. But the vast
majority of analysts would agree that in the United
States the current sizable federal deficits, and the
projected growth of those deficits over the decades
ahead, are a significant element in the story.
I am sure that you are aware of the general picture
with respect to the flows of saving and investment in
the economy, but it may be worth spending a few
minutes to review the recent data. I have attached a
couple of charts to my statement to aid you in
following my description.1 As you can see in the
upper chart, there has been a dramatic decline over the
past couple of decades in the ratio of net domestic
nonfederal saving to net domestic product. The ratio
last year, based on data for the first three quarters of
the year, was about 6 percent, as compared with more
than 9 percent, on average, during the 1960s and the
1970s. In the past few years, net business saving has
moved up, as corporate profitability has experienced a
cyclical improvement, but the personal saving rate has
1. The attachment to this statement is available from Publications
Services, Board of Governors of the Federal Reserve System,
Washington, DC 20551.
260
Federal Reserve Bulletin • March 1995
been running at its lowest levels in nearly half a
century. The causes of the low private saving rate are
hotly debated by economists, and it is fair to say that
it is not yet understood. Americans have not always
been low savers, but—for whatever reasons—that has
been the pattern recently and it is a reality with
important implications for the financial markets.
If we were a high-saving nation, we might be in a
position to better tolerate the federal fiscal imbalance.
But the federal deficit has generally been absorbing
half or more of the available domestic saving since the
early 1980s. Even with the decline in the federal
deficit last year, it amounted to almost 45 percent of
domestic nonfederal saving.
How then, one might ask, has it been possible for
the United States to experience the impressive growth
in business fixed investment that it has of late? There
are several arithmetic components to the answer, but I
shall focus on two particularly central points. The first
is that while gross investment has been rising rapidly
and has been accounting for a substantial share of
GDP, net investment has only recently reached appreciable dimensions. The difference between gross and
net investment is, of course, depreciation, and the fact
is that depreciation has been rising steeply because of
the shift in the composition of the capital stock toward
equipment—especially computers—with shorter useful lives. Another ingredient in the reconciliation of
the domestic saving and investment balance is saving
from abroad. Our nation has been running persistent
and often sizable deficits in its current account position vis a vis the rest of the world; once a leading
provider of capital to other nations, we have become
a net importer of capital.
In today's more open and integrated international
capital markets, it is easier to finance investment
abroad. And economic efficiency may be served by
the tendency for capital to flow across borders to
where the potential returns on real investment appear
highest and the risks the lowest. But this does not
mean that we should view the pattern of U.S. external
deficits as sustainable in the long run. Looking back at
the history of the past century or more, the record
would suggest that nations ultimately must rely on
their domestic savings to support domestic investment.
The challenge for the United States over the coming decades is clear. We must sustain higher levels of
investment if we are to achieve healthy increases in
productivity and be strong and successful competitors
in the international marketplace. To support that
investment, we shall need to raise the level of domestic saving. Absent a rise in private saving, it will be
necessary to eliminate the structural deficit in the
federal budget. Indeed, it has long been my judgment
that it would be wise to target achievement of at least
a modest surplus down the road.
If the Congress were to pass a balanced budget
amendment, the need for aiming at a structural surplus
would become even more important. Unless there
were a surplus to provide some cushion, the inevitable
cyclical fluctuations in economic activity would create pressures either to set aside the requirements of the
amendment or to take budgetary actions that are
inimical to economic stability. It should not be necessary to raise taxes or cut spending in response to a
transitory weakening of the economy.
I recognize that the achievement of structural balance, let alone surplus, is no small political challenge.
Moreover, as the Kerrey-Danforth entitlement commission recently documented, the problem that must
be addressed is not one with a 2002 endpoint. The
outlook is for a mounting fiscal imbalance during the
twenty-first century, given current programs and
likely population and labor force trends. We should
not be seduced by the mounting trust fund surpluses
today into thinking that we can postpone dealing with
the entitlement gap; the cost of waiting is going to be
far more painful adjustments, which could be avoided
by moderate actions legislated today to become effective after the turn of the century.
This longer-range perspective obviously has relevance for the tax and spending measures the Congress
will be considering. Some basic economic principles
must be observed if you are to maximize the federal
government's contribution to the fostering of high
real incomes and to alleviating the entitlement problem. Most importantly, not all taxes or expenditures
are equal in terms of their influence on the productive
capacity of the economy. Although, as I testified
recently, I would caution against major changes in
budget-scoring techniques at this time, I do not mean
that the Congress should not give a good deal of
attention to the effects of its fiscal actions on the
incentives faced by private decisionmakers.
In sum, the recent performance of the macroeconomy has been encouraging. But much of the
improvement is in the nature of cyclical developments, and we all have our work cut out for us if we
are to extend these gains and foster long-term trends
Statements to the Congress
that enhance the welfare of all of our citizens. The
central role of the Federal Reserve today is to ensure
that our economy remains on a sustainable, noninflationary path. For the Congress, a crucial focus should
261
be continuing the process of fiscal consolidation and
rectifying the secular shortfall in domestic saving that
is limiting the growth of our nation's productive
potential.
•
Statement by Alan Greenspan, Chairman, Board of ward significant improvement in its economic and
Governors of the Federal Reserve System, before the financial structure. As a consequence, Mexico has
Committee on Foreign Relations, U.S. Senate, Januarybeen able to broaden its participation in the global
26, 1995
economic and financial environment.
Over the past decade Mexico has made major
strides. It has shed what was an inflation-prone, highly
I am pleased to appear before this committee today to
unstable economic structure with excessive governreview the Mexican economic and financial situation
ment involvement and has taken on the characteristics
and the important efforts under way to avoid a major
of a vibrant economy oriented toward open markets.
international financial disruption and to restore marAs a result, in 1990 Mexico was able to reenter the
ket confidence in Mexico.
international credit markets on a significant scale.
Mexico's current financial difficulties are best unForeign investors began voluntarily lending to Mexderstood in the context of much broader trends in
ico substantial amounts for the first time since 1982.
international finance during the past ten to fifteen
Shortly thereafter, as is characteristic of the new
years—the globalization of finance—in which Mexglobal financial system, foreign capital investment in
ico in recent years has participated and from which it
Mexico began to accelerate. Indeed, in 1992 and 1993
has benefited. As a result of very rapid increases in
the inflow of capital was so considerable that the Bank
telecommunications and computer-based technologies
of Mexico had to buy dollars on a substantial scale to
and products, a dramatic expansion infinancialflows
prevent the peso from becoming too strong. As a
across borders and within countries has emerged. The
consequence, Mexico's international reserves inpace has become truly remarkable. These positive
creased to well over $25 billion at their peak in early
technology-based pressures have affected the behav1994 from under $10 billion in 1990. Nonetheless,
ior of markets to a point where governments, even
Mexico's trade deficit soared, and its current account
reluctant ones, increasingly felt compelled to deregudeficit reached approximately 6 percent of gross
late and free up internal credit and financial markets.
domestic product in 1993.
Although there can be little doubt that these exAs part of efforts to accelerate its move toward
traordinary changes in global finance have, on balstatus as an industrial country, the government of
ance, been beneficial in facilitating significant imMexico endeavored to link the peso to the U.S. dollar.
provements in economic structures and living
It adopted a complex exchange rate regime through
standards throughout the world, they also have some
which the Mexican peso was linked to the U.S. dollar
potential negative consequences. In fact, although the
via a moving exchange rate band. Like many nations
speed of transmission of positive economic events has
that have tried to "import" the anti-inflationary polibeen an important plus for the world in recent years,
cies of another country by locking their exchange
it is becoming increasingly obvious—and Mexico is
rates, to a greater or lesser extent, to the currency of a
the first major case—that significant mistakes in
major trading partner, Mexico hoped to gain quick
macroeconomic policy also reverberate around the
benefits through significant reductions in inflation.
world at a prodigious pace. In any event, progress—
And indeed, Mexico was remarkably successful for
and indeed developments affecting the emerging
several years. The inflation rate fell sharply from
global financial system are truly that—is not reversalmost 160 percent in 1987 to 7 percent by 1994, but
ible. We must learn to live with it.
at the same time Mexico was losing international
competitiveness and its current deficit widened.
Mexico, which had been hobbled for a number of
years after the debt crisis of 1982, has more recently
However, the exchange rate policy adopted by
gone through a major economic metamorphosis toMexico was risky, with little tolerance for policy error
262
Federal Reserve Bulletin • March 1995
or capacity to absorb shocks. This fact is especially
relevant in the context of a world in which portfolio
investments can shift rapidly into and out of a country.
At a minimum, a close adherence to the monetary
policy of the host nation is required. The breakdown
of the Exchange Rate Mechanism of the European
Monetary System in 1992 was a particularly striking
case of trying to lock exchange rates together when
comparable economic forces were not close to being
identical among the countries.
Moreover, a considerable part of the surge of
capital into Mexico in the 1990s has been in portfolio
investments, which may move in quite rapidly but
also can try to move out just as rapidly, as has been
demonstrated in recent months.
Investors' appreciation of the momentum behind
Mexico's transformation began to wane in early 1994,
at least in substantial part as a consequence of
noneconomic events—the Chiapas uprising, political
assassination, and the August election. Foreign investors at times became somewhat hesitant. Such hesitation presented problems because Mexico needed to
continue tofinancethe large excess of its imports over
its exports, which emerged initially as a consequence
of the earlier spontaneous capital inflows. Moreover,
Mexico needed not only to attract new portfolio and
direct investments but also to hold on to the portfolio
investments it already had. Direct investment by its
very nature, of course, is largely immobile, but
portfolio investments are less so. In this context,
simply allowing the trade balance to adjust precipitously to the reversals of capital inflows could well
destabilize Mexico's economic and trading relations.
As 1994 progressed, private foreign investment
inflows slowed. In their endeavor to support the
exchange rate and to finance the very large current
account deficit, the Mexican authorities drew down
Mexico's foreign exchange reserves. At the same
time, Mexico borrowed short term in dollars and in
Tesobonos, which are debt obligations the peso value
of which is linked to the peso-dollar exchange rate.
Mexican authorities evidently believed, or fervently
hoped, that the reduction in foreign investor interest
was temporary and that after the uncertainty of the
August election was behind them, confidence and
private capital inflows would reemerge. If so, they
were tragically mistaken.
Meanwhile, it became increasingly clear to many
observers during the autumn that the prevailing level
of Mexico's exchange rate could not be sustained
short of a significant further tightening of monetary
policy. But by then it was by no means clear that the
degree of tightening required to support the peso was
consistent with economic growth. Mexican authorities
were apparently loath to risk recession, hoping instead
for a spontaneous return of foreign confidence and
capital. But in retrospect it is clear that even if private
capital inflows had again accelerated, it was unrealistic to expect them to match the pace of 1993, which
was arguably unsustainable. The chosen alternative to
a dramatically tightened monetary policy—borrowing
via Tesobonos and drawing on reserves to intervene in
the foreign exchange market—had a limit. Indeed,
that limit was reached on December 20, and the
defense of the peso came to an abrupt end.
Had the adjustment of the peso been made much
earlier in the context of a much tighter monetary
regime, it would likely have resulted in a more limited
decline rather than in the abrupt collapse that Mexico
experienced.
I suspect that if this episode had played out, say a
couple of decades ago, when the global financial
system was far less sophisticated, the immediate
decline in the peso's value would have been far
smaller than the more than 30 percent decline experienced since December 20. The ability of foreign
and, no doubt, domestic portfolio capital to flee into
dollars was far less twenty years ago. Conversely, it
probably would not have been possible for Mexico to
have attracted so much foreign portfolio capital in the
first place.
Looking back, the moving exchange rate band for
the peso apparently failed to compensate fully for
the widening differential in prices of tradable goods
denominated in dollars compared to such prices
denominated in pesos. Accordingly, the peso exchange rate at 3.5 to the U.S. dollar was arguably
not sustainable indefinitely—short of an unrealistically massive increase in domestic saving in Mexico or a continuation of the very large foreign
capital inflows of 1992 and 1993 with such inflows
being heavily invested in cost-reducing capital
formation. It is imaginable that such a continuation
of private flows could have sustained the exchange
rate while bringing the underlying Mexican cost
structure into line with 3.5 pesos to the dollar. But
the needed level of private capital inflows that
would have to have been invested in capital formation—rather than being devoted to increased consumption—could not credibly be sustained. In the
Statements to the Congress
end, Mexico's high-risk exchange rate strategy
failed.
As a consequence of Mexico'sfinancialdifficulties,
and the potential movement of vastfinancialresources
around the world, the problem that we now face is that
there have been withdrawals of capital from a number
of widely dispersed nations—industrial as well as
developing. If economically advanced Mexico is having difficulties, it is being argued, perhaps the outlook
for other nations dependent on foreign capital inflows
is more suspect generally. Financial markets in Brazil
and Argentina have already felt the repercussions of
Mexico's problems. There is also some evidence that
similar pressures have emerged in other developing
countries, those not even remotely related to Mexico,
for example, in Asia and in central Europe, as well as
in a few industrial countries.
Financial officials both here and abroad initially
thought it possible that the difficulties in Mexico
would reach a climax and resolve themselves and that
market adjustments would quickly be made, removing
the threat of widespread contagion affecting the international financial system. Mexican financial markets
and the peso continued to fester and showed no
evidence of stabilizing, and we at the Treasury and the
Federal Reserve concluded that a resolution of the
situation was not imminent, short of more dramatic
action to confront Mexico's confidence problem.
The situation had moved beyond one capable of
being addressed by short-term lending facilities provided by the Exchange Stabilization Fund of the U.S.
Treasury, the swap arrangement of the Federal Reserve System, and other central banks acting through
the Bank for International Settlements. The decision
to implement the type of guarantees of credit market
borrowings by Mexico that now appears to be necessary has broad implications that can only be addressed
appropriately by the political leadership of this country.
The objective of the proposed guarantee program is
to halt the erosion in Mexico's financing capabilities
before it has dramatic impacts far beyond those
already evident around the world. This program, in
my judgment, is the least worst of the various initiatives that present themselves as possible solutions to a
very unsettling international financial problem. Our
concerns are not so much with potential losses to the
U.S. taxpayer, which we believe will be minimized,
but with what economists call moral hazard—when
the active involvement of an external guarantor dis
263
torts the incentives perceived by investors. Thus,
appropriate conditionally must be associated with the
guarantees to underline the fact that they are being
provided at high cost and on rigorous terms in
exceptional circumstances. Moreover, Mexico's economic policies are the key to ensuring that the
guarantee facility actually does help to stabilize the
Mexican economic and financial situation; ultimately
only sound policies that are sustained over time will
restore investors' confidence in Mexico. External
guarantees can only offer temporary support. Nonetheless, I see no viable alternative to the type of
program that is being presented to the Congress if the
financial erosion is to be stanched before it threatens
to become a wider problem.
I want to emphasize that once the Mexican situation
is stabilized, it will be important for the authorities of
leading governments to examine closely the lessons to
be learned from this latest episode in international
finance, and to determine how to deal with similar
emerging financial problems that have implications
for the health of our free market-based international
financial system.
I have no doubt that, as a consequence of the
Mexican episode, other developing nations have become sensitized to the problems of depending too
heavily on large inflows of foreign portfolio capital.
This tendency of the new global financial system
should, as a consequence, become largely selfcorrecting in much the same manner that recent losses
on derivative instruments have helped to condition
those markets.
What happens to Mexico is of particular importance to the United States. Because of the extensive
interchanges across our common border, our economic destinies are closely intertwined. Mexico is the
third largest market for U.S. exports and the third
largest source of U.S. imports, with about $50 billion
shipped each way last year. Illegal immigration from
Mexico is inversely related to economic growth and
progress in Mexico. It is important to the United
States politically as well as economically, therefore,
that Mexico succeed in reestablishing sustained noninflationary growth. To achieve this, market confidence in Mexico's economic potential and financial
stability must be restored.
However, what happens in Mexico must also be
viewed from a larger, historical perspective. The
developments of recent weeks also need to be evaluated in the context of the Cold War and its aftermath.
264
Federal Reserve Bulletin • March 1995
It became particularly evident to developing countries
over the past decade that the economic and political
regime that characterized the Soviet Union was fatally
flawed and that the economic structure of the United
States and the rest of the industrial world based on
free markets and private ownership was clearly a
superior model for developing nations to emulate.
Indeed, in recent years there has been a remarkable
trend in that direction characterized by pervasive
privatization, price and wage decontrol, and the development of financial structures as developing countries endeavored to replicate elements of the advanced
free-market economies.
The model of economic and political transition
from a rigid state-directed system toward a freemarket structure was perceived to be Mexico.
Starting from a low base in the mid-1980s, Mexico
managed to turn itself around in such an extraordinary way that many of the finance ministers and
central bankers of the developing nations looked to,
and consulted with, their counterparts in Mexico to
learn the mechanisms that the Mexican authorities
had employed to achieve near-first-world status.
Indeed, in 1994 Mexico was admitted to the Organization for Economic Cooperation and Development, the organization of industrial nations, a de
facto badge of first-world status.
Unless Mexico's efforts to restore economic stability and financial market confidence succeed, years of
economic reforms in Mexico would be threatened by
pressures to reimpose controls in many areas of its
economy and to reestablish governmental interference
in Mexico's increasingly vibrant private sector. In
addition, a reversal of Mexico's economic reforms
and a spread of Mexico's financial difficulties to other
emerging markets could halt, or even reverse, the
global trend toward market-oriented reform and democratization. This would be a tragic setback not only
for these countries but for the United States and the
rest of the world as well.
•
Chairman Greenspan presented identical testimony before the Committee on Banking and Financial Services,
U.S. House of Representatives, January 25, 1995, and before the Committee on Banking, Housing, and
Urban Affairs, U.S. Senate, January 31, 1995.
265
Announcements
CHANGE IN THE DISCOUNT
RATE
The Federal Reserve Board approved on February 1, 1995, an increase in the discount rate from
43A percent to 5LA percent, effective that day.
In a related move, the Federal Open Market
Committee agreed that this increase should be reflected fully in interest rates in the reserve markets.
Despite tentative signs of some moderation in
growth, economic activity has continued to
advance at a substantial pace, while resource utilization has risen further. In these circumstances, the
Federal Reserve views these actions as necessary to
keep inflation contained, and thereby foster sustainable economic growth.
In taking the discount action, the Board
approved requests submitted by the Boards of
Directors of the Federal Reserve Banks of Boston, New York, Richmond, Chicago, St. Louis,
Kansas City, and San Francisco. Subsequently, the
Board approved actions by the Boards of Directors
of the Federal Reserve Banks of Philadelphia,
Atlanta, Minneapolis, and Dallas, effective February 2, and by the Federal Reserve Bank of Cleveland, effective February 9, increasing the discount
rates of those banks from 43A percent to 5LA percent. The discount rate is the interest rate that is
charged depository institutions when they borrow
from their District Federal Reserve Banks.
ADOPTION OF PROCEDURE
FOR DISCLOSING POLICY
DECISIONS
BY THE FEDERAL OPEN MARKET
COMMITTEE
The Federal Reserve announced on February 2,
1995, adoption of formal procedures for disclosing
policy decisions made by the Federal Open Market
Committee (FOMC) and for the release of transcripts of future FOMC meetings.
Procedures adopted by the Committee are the
same as those followed on a provisional basis dur-
ing the past year. These procedures, now standard,
are the following:
1. Announce each change in the stance of monetary policy, including intermeeting changes, on
the day they are made. When no change is made
at a meeting, the Committee will normally just
announce when the meeting ended and that there
are no further announcements. However, in some
infrequent circumstances, the Committee might
decide to issue a statement even when no policy
action is taken.
2. Transcripts of FOMC meetings for an entire
year will be released with a five-year lag. Transcripts will be lightly edited, as they are now,
to enhance readability and redact confidential
material.
No change was made in the procedure for release
of FOMC minutes, which will continue to be available, with dissenting statements, at 4:30 p.m. on
the Friday after the next meeting.
INCREASE IN THE RECIPROCAL
CURRENCY
ARRANGEMENT WITH THE BANK OF MEXICO
The Federal Reserve announced on February 1,
1995, that its reciprocal currency "swap" arrangement with the Bank of Mexico had been increased
from $4.5 billion to $6 billion. This temporary
increase is part of the Multilateral Program to
Restore Financial Stability in Mexico.
A swap arrangement is a renewable, short-term
facility under which a central bank agrees to
exchange on request its own currency for the currency of the other party up to a specified amount
over a limited period of time.
In all swap arrangements, the Federal Reserve
Bank of New York acts on behalf of the Federal
Reserve under the direction of the Federal Open
Market Committee.
266
Federal Reserve Bulletin • March 1995
APPOINTMENT OF NEW MEMBERS
CONSUMER ADVISORY
COUNCIL
TO THE
The Federal Reserve Board on January 13, 1995,
named thirteen new members to its Consumer
Advisory Council to replace those members whose
terms had expired and designated a new Chairman
and Vice Chairman of the council for 1995.
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.
James L. West, President of Jim West Financial
Group, Inc. in Tijeras, New Mexico, was designated Chairman. His term will run through December 1995. Katharine W. McKee, Transition Director for the Community Development Financial
Institutions Fund in Washington, D.C., was designated Vice Chairman. She is the former Associate
Director of the Center for Community Self-Help in
Durham, North Carolina. Her term on the council
expires in December 1996.
The thirteen new members are the following:
Thomas R. Butler
Riverwoods, Illinois
Mr. Butler is President and Chief Operating Officer of
Discover Card Services. He oversees marketing, sales,
operations, and credit policy administration for Discover
Card, which is the credit and financial services card
issued by Dean Witter, Discover & Co. Mr. Butler also
serves as chairman of Greenwood Trust Company in
Greenwood, Delaware, the issuing bank for the Discover
Card.
Robert A. Cook
Baltimore, Maryland
Mr. Cook is a partner in the law firm of Venable, Baetjer
and Howard, where he concentrates in the areas of
banking and consumer financial transactions. Mr. Cook
chairs the Truth in Lending Subcommittee of the American Bar Association's Committee on Consumer Financial Services. He has served as chairman of the Consumer Credit Committee of the Maryland State Bar
Association.
Emanuel Freeman
Philadelphia, Pennsylvania
Mr. Freeman is President of the Greater Germantown
Housing Development Corporation, which was founded
in 1977 to revitalize local urban neighborhoods by rehabilitating or constructing safe, affordable housing units
for lower-income families and individuals. Under
Mr. Freeman's leadership, the corporation identifies and
develops affordable housing properties and offers an
array of home ownership and employment counseling
services to prospective residents of those properties. The
corporation also recently developed the Freedom Square
Shopping Center, a 20,000-square-foot retail center,
which has provided jobs and shopping opportunities for
neighborhood residents.
David C. Fynn
Cleveland, Ohio
Mr. Fynn is Senior Vice President of National City Bank
and Manager of Regulatory Risk for National City
Corporation, a $31 billion bank holding company with
offices in Ohio, Kentucky, and Indiana. He manages the
regulatory compliance responsibilities of the corporation, including its performance under the Community
Reinvestment Act. He has also served for six years
as treasurer of Neighborhood Housing Services in
Cleveland.
Robert G. Greer
Houston, Texas
Mr. Greer is Chairman of the Board of Tanglewood
Bank, a financial institution with $220 million in assets
located in the Tanglewood and Memorial sections of
Houston. The bank recently has developed affordable,
low-to-moderate-income mortgage and home improvement products and continues to support the programs of
area schools. Mr. Greer co-chairs the Development
Board of "I Have a Dream-Houston," a group that
tutors, mentors, and provides college scholarships for
minority children in Houston's inner city. Mr. Greer has
served as a director of the Federal Reserve Bank of
Dallas and as a member of its Advisory Council on
Financial Institutions. He is also a past president of the
Texas Bankers Association.
Kenneth R. Harney
Chevy Chase, Maryland
Mr. Harney is a journalist associated with the Washington Post Writers Group and for the past fifteen years has
written a nationally syndicated, consumer-oriented
column called "The Nation's Housing." Since 1982, he
has also managed an independent business that offers
services in connection with continuing education programs and seminars—typically involving fair lending,
community development, and real estate issues—for the
legal, accounting, commercial and residential housing,
and mortgage finance industries. Mr. Harney is writing a
book about the American system of consumer credit.
Announcements
Gail K. Hillebrand
San Francisco, California
Ms. Hillebrand is Litigation Counsel for the West Coast
Regional Office of Consumers Union of U.S., Inc. She
oversees litigation and directs and performs legislative and administrative advocacy efforts for low- and
moderate-income consumers in the areas of credit,
finance, banking, the Commercial Code, and the impact
on consumers of changes to the legal system. Ms. Hillebrand also is involved in negotiating for commitments
by financial institutions in connection with their performance under the Community Reinvestment Act and in
monitoring their progress in implementing those commitments. Ms. Hillebrand is a founding incorporator and
serves on the executive committee of the California
Reinvestment Committee. She also serves as a fellow
to the American Bar Association's Committee on Consumer Financial Services and as an observer to the
Drafting Committees on Articles 2 and 9 of the National
Conference on Uniform State Laws.
Terry Jorde
Cando, North Dakota
Ms. Jorde is President and Chief Executive Officer of
Towner County State Bank, a $24 million bank in an
agricultural community of about 1,600 residents.
Ms. Jorde serves on the executive committee of the
Independent Bankers Association of America and on
North Dakota's State Banking Board. She is also a past
president of the Independent Community Bankers of
North Dakota.
Eugene I. Lehrmann
Madison, Wisconsin
Mr. Lehrmann is President of the American Association
of Retired Persons (AARP), a national membership
group for individuals aged fifty and over that is headquartered in Washington, D.C. The AARP provides legislative advocacy, research, informative programs, and
community services through a network of local chapters
and volunteers around the country. Mr. Lehrmann has
testified, on behalf of AARP, before numerous congressional committees representing the interests of older
Americans. Until his retirement in 1979, Mr. Lehrmann
was a teacher of vocational education and a school
administrator.
Ronald A. Prill
Minneapolis, Minnesota
Mr. Prill is Vice President, Credit, for Mervyn's, a
280-store retail chain that operates in fifteen states. He
oversees all aspects of Mervyn's credit card marketing,
credit standards, and credit operations. Later this year,
Mr. Prill will assume responsibility for all credit card
operations of the Dayton Hudson Corporation. He will
head up an office in Minneapolis that will manage the
267
accounts for about 7 million active credit cards issued
for Target, Mervyn's, Dayton's, Hudson's, and Marshall
Field's stores around the country.
Lisa Rice-Coleman
Toledo, Ohio
Ms. Rice-Coleman is Executive Director of the Fair
Housing Center, which was created in 1975 to eliminate
discriminatory housing practices in the Toledo area. She
oversees all complaint investigations, administrative
filings, and complaint litigation by the center. Ms. RiceColeman also provides consulting and educational services on behalf of the center to both housing professionals and individuals seeking housing. As the center's
general operating manager, she handles fiscal management matters and fund-raising activities. Ms. RiceColeman is a member of the board of directors for the
National Fair Housing Alliance and serves on its Legal
Issues Committee. She has also been appointed by Governor Voinovich to the Ohio Housing Trust Fund Advisory Committee.
John R. Rines
Detroit, Michigan
Mr. Rines is President of General Motors Acceptance
Corporation, one of the largest financial services companies in the United States. He oversees GMAC's activities
worldwide, including its insurance and mortgage subsidiaries. Mr. Rines joined General Motors in 1970 and held
a succession of positions until being named President of
GMAC in 1992 and elected as a Vice President of
General Motors last year.
Julia M. Seward
Richmond, Virginia
Ms. Seward is Vice President and Corporate Community
Reinvestment Officer for Signet Bank, a $10.8 billion
bank with 250 branches in Virginia, Maryland, and the
District of Columbia. She coordinates all aspects of the
bank's performance under the Community Reinvestment
Act. Ms. Seward also co-chairs the Community Reinvestment Committee of the Consumer Bankers Association and chairs the Virginia Bankers Community Reinvestment Task Force. Previously she was a staff member
of the Richmond Urban Institute and worked as a private
community reinvestment consultant to both financial
institutions and community groups.
Other council members, whose terms continue
through 1995 and 1996, are listed below, together
with the expiration date of each one's term of
office.
D. Douglas Blanke, Director of Consumer Policy,
Office of the Attorney General, St. Paul, Minnesota,
December 31, 1995
268
Federal Reserve Bulletin • March 1995
Alvin J. Cowans, President and CEO, McCoy Federal
Credit Union, Orlando, Florida, December 31, 1996
Michael Ferry, Staff Attorney, Consumer Unit, Legal
Services of Eastern Missouri, Inc., St. Louis, Missouri,
December 31, 1995
Elizabeth G. Flores, Senior Vice President, Laredo
National Bank, Laredo, Texas, December 31, 1996
Norma L. Freiberg, Community Activist, New Orleans, Louisiana, December 31, 1995
Lori Gay, Executive Director, Los Angeles Neighborhood Housing Services, Los Angeles, California,
December 31, 1995
Ronald A. Homer, Chairman and CEO, Boston Bank
of Commerce, Boston, Massachusetts, December 31,
1995
Thomas L. Houston, Executive Director, The Dallas
Black Chamber of Commerce, Dallas, Texas, December 31, 1995
Anne B. Shlay, Associate Director, Institute for Public
Policy Studies, Temple University, Philadelphia, Pennsylvania, December 31, 1996
Reginald J. Smith, President, United Missouri Mortgage Company, Kansas City, Missouri, December 31,
1996
John E. Taylor, President and CEO, The National
Community Reinvestment Coalition, Washington, D.C.,
December 31, 1996
Lorraine VanEtten, Vice President and Community
Lending Officer, Standard Federal Bank of Troy, Troy,
Michigan, December 31, 1996
Grace W. Weinstein, Financial Writer and Consultant,
Englewood, New Jersey, December 31, 1995
Lily K. Yao, Chairman and CEO, Pioneer Federal
Savings Bank, Honolulu, Hawaii, December 31, 1996
Robert O. Zdenek, Senior Program Officer, Annie E.
Casey Foundation, Greenwich, Connecticut, December 31, 1995.
PROPOSED
ACTION
The Federal Reserve Board on January 26, 1995,
requested public comment on a proposal to amend
its capital adequacy guidelines for state member
banks and bank holding companies (banking organizations) with regard to the regulatory capital
treatment of certain transfers of assets with recourse. Comments are requested by February 27,
1995.
PUBLICATION
OF THE EXAMINATION
M A N U A L FOR U . S . B R A N C H E S A N D
AGENCIES OF FOREIGN B A N K I N G
ORGANIZATIONS
The 1995 Examination Manual for U.S. Branches
and Agencies of Foreign Banking Organizations
has been published by the Board's Division of
Banking Supervision and Regulation and is now
available for purchase by the public. The Manual
will serve as a primary reference source of uniform
guidelines and procedures to be used by examiners
at U.S. state and federal banking agencies in conducting examinations of foreign bank branches and
agencies operating in the United States.
The Manual provides a comprehensive overview
of the broad range of banking activities that are
conducted by foreign bank branches and agencies
and specific guidance on how to evaluate these
activities at a branch and agency in the context of
the foreign banking organization of which it is an
integral part. It includes the newly adopted ROCA
rating system that examiners will use to assess the
condition of foreign bank branches and agencies
and to identify and address any of the unique
supervisory issues raised by these offices.
The Manual may be obtained from Publications
Services, Mail Stop 127, Board of Governors of the
Federal Reserve System, Washington, DC 20551,
at a cost of $40.00. Charge orders paid by Visa and
Mastercard may be sent by fax to (202) 728-5886.
Updates will be available periodically at a cost to
be determined at the time they become available.
AVAILABILITY
OF REVISED LISTS OF
STOCKS AND OF FOREIGN STOCKS
TO MARGIN
REGULATIONS
OTC
SUBJECT
The Federal Reserve Board published on January
27, 1995, a revised list of over-the-counter (OTC)
stocks that are subject to its margin regulations
(OTC List). The Board also published a revised list
of foreign equity securities (Foreign List) that meet
the margin criteria in Regulation T (Credit by
Brokers and Dealers). The lists are published for
the information of lenders and the general public.
The lists were effective February 13, 1995, and
supersede the previous lists that were effective
November 14, 1994. The next revision of these
lists is scheduled to be effective in May 1995.
Announcements
The changes that have been made to the revised
OTC list, which now contains 4,074 OTC stocks,
are as follows:
• One hundred forty-three stocks have been
included for the first time, 110 under National
Market System (NMS) designation.
• Fifty-three stocks previously on the list have
been removed for substantially failing to meet the
requirements for continued listing.
• Seventy-two stocks have been removed for
reasons such as listing on a national securities
exchange or involvement in an acquisition.
The OTC list is composed of OTC stocks that
have been determined by the Board to be subject to
margin requirements in Regulations G (Securities
Credit by Persons Other Than Banks, Brokers, or
Dealers), T, and U (Credit by Banks for the Purpose of Purchasing or Carrying Margin Stocks). It
includes OTC stocks qualifying under Board criteria and also includes all OTC stocks designated as
NMS securities. Additional NMS securities may be
added in the interim between quarterly Board publications; these securities are immediately marginable upon designation as NMS securities.
269
The foreign list specifies those foreign equity
securities that are eligible for margin treatment at
broker-dealers. There are no additions to, and only
one deletion from, the foreign list, which now
contains 687 foreign equity securities.
CHANGE IN BOARD STAFF
The Board of Governors has approved the appointment of Sheila Clark to the position of EEO Programs Director. Ms. Clark succeeds Portia Thompson who was assigned the new position of Equal
Employment Opportunity Programs Adviser,
Office of Board Members. Ms. Clark assumed her
duties with the Board on February 13, 1995. She
will have overall responsibility for the Board's
Equal Employment Opportunity (EEO) and Affirmative Action (AA) planning programs.
Ms. Clark had been employed since 1987 by
Dow Jones and Company, New York, with responsibility for work/family, college recruiting, and
EEO/AA programs. She holds a B.A. in Management from Marymount College, Tarrytown,
New York.
•
271
Legal Developments
FINAL RULE—AMENDMENTS TO REGULATIONS G, T,
U, AND X
Continental Savings of America, A Federal Savings Bank:
Series A, noncumulative convertible preferred
CPI Aerostructures, Inc.: Warrants (expire 0 9 - 1 6 - 9 5 )
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;
List of Foreign Margin Stocks). The List of Marginable
OTC Stocks (OTC List) is composed 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) is composed of 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 deletions from the previous Foreign List.
Effective February 13, 1995, accordingly, pursuant to the
authority of 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 one deletion from the Foreign List.
Jackpot Enterprises, Inc.: Warrants (expire 0 1 - 3 1 - 9 6 )
JB Oxford Holdings Inc.: $.01 par common
Deletions from the List of Marginable OTC Stocks
Kendall Square Research Corp.: $.01 par common
Stocks R e m o v e d for Failing Continued Listing
Requirements
Media Vision Technology, Inc.: Convertible subordinated
debentures due 2003
Menley & James, Inc.: $.01 par common
Microcarb, Inc.: $.01 par common
MPTV, Inc.: $.005 par common
MRV Communications, Inc.: Warrants (expire 12-07-97)
Absolute Entertainment, Inc.: No par common
Applied Carbon Technology, Inc.: No par common
Delphi Information Systems, Inc.: $.10 par common
Digital Products Corporation: $.025 par common; Class A,
Warrants (expire 02-07-95); Class B, Warrants (expire
02-07-97)
Enzon, Inc.: Warrants (expire 11-01-94)
Equivest Finance, Inc.: $.05 par common
Erox Corporation: No par common
Gateway Industries, Inc.: No par common
Genzyme Corporation: Warrants (expire 12-31-94)
Global Spill Management, Inc.: $.001 par common
Great American Recreation, Inc.: $1.00 par common
Greenwich Pharmaceuticals, Inc.: $.10 par common
Highwood Resources Ltd.: No par capital
Hoenig Group Inc.: Class A, Warrants (expire 10-31-94)
Inotek Technologies Corporation: $.01 par common
Baker Hughes Incorporated: Warrants (expire 0 3 - 3 1 - 9 5 )
Base Ten Systems, Inc.: Series B, rights expire 11-10-94
Breakwater Resources, Ltd.: No par common
C-Tec Corporation: Transferable subscription rights
Centocor, Inc.: Warrants (expire 12-31-94)
Nahama & Weagant Energy Company: No par common
National Convenience Stores, Inc.: Warrants (expire
03-09-98)
National Diagnostics, Inc.: No par common; Warrants
(expire 0 9 - 1 9 - 9 7 )
NYCAL Corporation: No par common
Communications & Entertainment Corporation: Class A,
$.05 par common
Opto Mcchanik, Inc.: $.10 par common
Community Health Computing Corp.: $.01 par common
Computer Concepts Corporation: $.0001 par common
Comstock Bank (Nevada): $.50 par common
P & F Industries, Inc.: $10.00 par cumulative convertible
preferred
272
Federal Reserve Bulletin • March 1995
Price Reit, Inc., The: $.01 par common
Puroflow Incoprorated: $.06-2/3 par common
SGI International: No par common
Sports/Leisure, Inc.: $.01 par common
TAT Technologies Ltd.: Class A, Warrants (expire
03-30-95)
Telios Pharmaceuticals, Inc.: Warrants (expire 09-26-96)
TJ Systems Corporation: Series A, $.01 par convertible
preferred
U.S. Capital Group, Inc.: $.10 par common
United States Exploration, Inc.: $.0001 par common
Galey & Lord, Inc.: $.01 par common
Gencare Health Systems, Inc.: $.02 par common
General Atlantic Resources, Inc.: $.01 par common
Germantown Savings Bank (Pennsylvania): $.10 par common
Grenada Sunburst System Corporation: $1.00 par common
Home Federal Savings Bank (Washington, D.C.): $.01 par
common
IDB Communications Group, Inc.: $.01 par common
Information America, Inc.: $.01 par common
Input/Output, Inc.: $.01 par common
Intergroup Healthcare Corporation: $.001 par common
Ithaca Bancorp, Inc. (New York): $1.00 par common
Vest, H.D., Inc.: Class B; Warrants (expire 11-21-94)
Stocks Removed for Listing on a National
Securities Exchange or Being Involved in an
Acquisition
Agnico-Eagle Mines Limited: No par common
Amerifed Financial Corporation (Illinois): $.01 par common
Amity Bancshares, Inc. (Illinois): $.01 par common
Amvestors Financial Corp.: No par common
Anchor Bancorp, Inc. (New York): $.01 par common
Associated Communications Corp.: Class A, $.10 par common; Class B, $.10 par common
Babbage's, Inc.: $.10 par common
Banyan Mortgage Investors L.P.: Depositary units of limited partnership interest
Barrett Resources Corporation: $.01 par common
Biosurface Technology, Inc.: $.01 par common
Brock Candy Company: Class A, $.01 par common
Carenetwork, Inc.: $.01 par common
Carson Pirie Scott & Co.: $.01 par common
Central Indiana Bancorp: No par common
Central Jersey Bancorp: $2.50 par common
Charter FSB Bancorp Inc.: $.01 par common
Coastal Healthcare Group, Inc.: $.01 par common
Commerce Bank (Virginia): $2.50 par common
Corrections Corporation of America: $1.00 par common;
Warrants (expire 09-14-97)
Datasouth Computer Corporation: $.01 par common
Digidesign, Inc.: $.001 par common
Eastover Corporation: No par shares of beneficial interest
F & C Bancshares, Inc. (Florida): $1.00 par common
F & M National Corporation: $2.00 par common
First Western Financial Corporation: $1.00 par common
Jones Spacelink, Ltd.: Class A, $.01 par common
Keptel, Inc.: No par common
Kirschner Medical Corporation: $.10 par common
Knowledge ware, Inc.: No par common
Koll Management Services, Inc.: $.01 par common
Laser Precision Corporation: $.10 par common
LCI International, Inc.: $.01 par common; 5% cumulative
convertible exchangeable preferred
Medstat Group, Inc., The: $.01 par common
National Convenience Stores, Inc.: $.01 par common
Orthomet, Inc.: $.10 par common
Palmer Tube Mills Limited: American Depositary Receipts
Premiere Page, Inc.: $.01 par common
Price Reit, Inc., The: Series B, $.01 par common
Providential Corporation: $.0001 par common
Purolator Products Company: $.01 par common
Quincy Savings Bank (Massachusetts): $.10 par common
Relife, Inc.: Class A, $.01 par common
RHNB Corporation: $2.50 par common
Rock Financial Corporation: $3.33-1/3 par common
Scott's Liquid Gold, Inc.: $.10 par common
Seagate Technology, Inc.: $.01 par common; 6-3A% convertible subordinated debentures
Services Fracturing Company: $1.00 par common
Snapple Beverage Corporation: $.01 par common
Soricon Corporation: $.01 par common
Summit Bancorp, Inc. (Washington): $.01 par common
Synergen, Inc.: $.01 par commom
Synoptics Communications, Inc.: $.01 par common
Legal Developments
Trico Products Corporation: No par common
Triconex Corporation: No par common
UNSL Financial Corp.: $1.00 par common
273
Conestoga Enterprises, Inc.: $5.00 par common
Covenant Bank for Savings (New Jersey): $5.00 par common
Covenant Transport, Inc.: Class A, $.01 par common
Crocker Realty Investors, Inc.: $.001 par common
Winston Furniture Company, Inc.: $.01 par common
Zenith Laboratories, Inc.: No par common
D & K Wholesale Drug, Inc.: $.01 par common
Diplomat Corporation: Warrants (expire 11-04-98)
Duckwall-Alco Stores, Inc.: $.0001 par common
Additions to the List of Marginable OTC Stocks
7th Level, Inc.: $.01 par common
Aber Resources Ltd.: No par common
Adia S.A.: American Depositary Receipts
Alabama National Bancorporation: $1.00 par common
Amerco: $.25 par common
American Cinema Stores, Inc.: $.001 par common
American Resources of Delaware, Inc.: $.00001 par common
American Sensors, Inc.: No par common
Andyne Computing Ltd.: No par common
Apollo Group, Inc.: Class A; No par common
Applied Voice Technology, Inc.: $.01 par common
Applix, Inc.: $.0025 par common
Arel Communications & Software Ltd.: Ordinary shares;
Series A; Warrants (expire 12-01-96)
Ark Restaurants Corporation: $.01 par common
Aspen Technology, Inc.: $.01 par common
Associated Group, Inc., The: Class A, $.10 par common;
Class B, $.10 par common
Avert, Inc.: No par common; Warrants (expire 12-22-95)
B.U.M. International, Inc.: $.02 par common
Barry's Jewelers, Inc.: No par common; Warrants (expire
07-01-2002)
Bitwise Designs, Inc.: $.001 par common
Bolle America, Inc.: $.01 par common
Bonso Electronics International, Inc.: $.0005 par common;
Warrants (expire 12-16-99)
Bridgeport Machines, Inc.: $.01 par common
BTG, Inc.: No par common
Cameo Financial Corporation: $1.00 par common
Cannondale Corporation: $.01 par common
Carver Federal Savings Bank (New York): $.01 par common
Century Communications Corporation: Class A, $.01 par
common
Cincinnati Microwave, Inc.: Warrants (expire 12-31-98)
Clucker's Wood Roasted Chicken, Inc.: $.01 par common
Community Financial Holding Corp.: $5.00 par common
Community Savings, F.A. (Florida): $1.00 par common
Concordia Paper Holdings, Ltd.: American Depositary
Shares
East Texas Financial Services, Inc.: $.01 par common
Edelbrock Corporation: $.01 par common
Elron Electronic Industries, Ltd.: Warrants (expire
09-01-98)
Emcare Holdings Inc.: $.01 par common
Epic Design Technology, Inc.: No par common
Equity Corporation: $.01 par common
FB&T Financial Corporation: $1.25 par common
Family Golf Centers, Inc.: $.01 par common
Fidelity Southern Corporation: No par common
First American Health Concepts, Inc.: No par common
First Savings Bank of New Jersey, S.L.A.: $.10 par common
FirstFederal Financial Services Corporation: Series B, 6-V2
No par cumulative convertible preferred
Flores & Rucks Inc.: $.01 par common
Florsheim Shoe Company, The: No par common
FPA Medical Management, Inc.: $.001 par common
FSB Financial Corporation: $.01 par common
Genzyme Corproation (Tissue Repair): $.01 par common
Goran Capital, Inc.: No par common
Gyrodyne Company of America, Inc.: $1.00 par common
Harcor Energy Company: $.10 par common
Haskel International, Inc.: Class A, No par common
Health-Mor Inc.: $1.00 par common
Herzfeld Caribbean Basin Fund, Inc., The: $.001 par common
ICC Technologies, Inc.: $.01 par common
Innovative Tech Systems, Inc.: $.001 par common
International Verifact, Inc.: No par common; Warrants
(expire 01-05-98)
Interstate National Dealer Services, Inc.: $.01 par common
Isolyser Company, Inc.: $.001 par common
ITI Technologies, Inc.: $.01 par common
IWI Holding, Limited: No par common
JP Foodservice, Inc.: $.01 par common
KFX Inc.: $.001 par common
Knight Transportation, Inc.: $.01 par common
KS Bancorp, Inc. (North Carolina): No par common
274
Federal Reserve Bulletin • March 1995
LIN Television Corporation: $.01 par common
LTX Corporation: 13-'/2% convertible debentures
Sport-Haley, Inc.: No par common
Stillwater Mining Company: $.01 par common
Manhattan Bagel Company: No par common
Medcath Incorporated: $.01 par common
Medplus, Inc.: No par common
Micrel, Incorporated: No par common
Micrion Corporation: No par common
Microtec Research, Inc.: $.001 par common
Mid-States PLC: American Depositary Receipts
Multi-Market Radio, Inc.: Class A, $.01 par common;
Class A, Warrants (expire 03-23-99); Class B, Warrants
(expire 0 3 - 2 3 - 9 9 )
Tele-Matic Corporation: $.01 par common
Telemundo Group, Inc.: Series A, $.01 par common
Telewest Communications PLC: American Depositary
Receipts
Teltronics, Inc.: $.001 par common
Thompson PBE, Inc.: $.01 par common
TMBR/Sharp Drilling, Inc.: $.10 par common
Tower Semiconductor Ltd.: Ordinary Shares (NIS $1.00)
Trans World Gaming Corporation: $.001 par common;
Warrants (expire 12-15-99)
Transport Corporation of America, Inc.: $.01 par common
National Gaming Corporation: $.01 par common
Netcom On-Line Communication Services, Inc.: $.01 par
common
New England Community Bancorp, Inc.: Class A, $.10 par
common
New England Realty Assoiates Limited Partnership: Depositary Receipts
Northwest Savings Bank (Pennsylvania): $.01 par common
Novametrix Medical Systems, Inc.: Class A, Warrants
(expire 12-08-97); Class B, Warrants (expire 12-08-99)
Unitech Industries, Inc.: No par common
Veeco Instruments, Inc.: $.01 par common
Videonics, Inc.: No par common
Wavephore, Inc.: No par common
Wescast Industries, Inc.: Class A, No par common
Williams, Controls, Inc.: $.01 par common
Xenova Group PLC: American Depositary Shares
OIS Optical Imaging Systems, Inc.: $.01 par common
Old York Road Bancorp, Inc. (Pennsylvania): $1.00 par
common
Orbit Semiconductor, Inc.: $.001 par common
Ortel Corporation: $.001 par common
Orthodontic Centers of America, Inc.: $.01 par common
Owosso Corporation: $.01 par common
Panda Project, Inc., The: $.01 par common
Phamis, Inc.: $.0025 par common
Physicial Reliance Network, Inc.: No par common
Pinnacle Systems, Inc.: No par common
Plasma-Therm, Inc.: $.01 par common
Price Enterprises, Inc.: $.0001 par common
Pulaski Bank, A Savings Bank: $1.00 par common
Quality Semiconductor, Inc.: $.001 par common
Republic Bank (Florida): $2.00 par common
Ride Snowboard Company: No par common
Santa Fe Financial Corporation: $.10 par common
Security Dynamics Technologies, Inc.: $.01 par common
Shiva Corporation: $.01 par common
Singing Machine Company, Inc., The: $.01 par common;
Warrants (expire 11-10-99)
SMC Corporation: No par common
Sparta Pharmaceuticals, Inc.: $.001 par common
Specialty Teleconstructors, Inc.: Warrants (expire
11-02-99)
Young Broadcasting, Inc.: Class A, $.01 par common
Deletion from the List of Foreign Margin Stocks
Jefferson Smurfit Group, PLC: Ordinary shares, par value
.25L
FINAL RULE—AMENDMENT TO RULES REGARDING
ACCESS TO PERSONAL INFORMATION UNDER THE
PRIVACY ACT
The Board of Governors is amending 12 C.F.R. Part 261a,
its Rules Regarding Access to Personal Information Under
the Privacy Act, as part of its regulatory review and improvement process.
Effective February 16, 1995, 12 C.F.R. Part 261a is
amended as follows:
Part 261a—Rules Regarding Access to Personal
Information Under the Privacy Act of 1974
Subpart A—General Provisions
Section 261a.l—Authority, purpose and scope.
Section 261a.2—Definitions.
Section 261a.3—Custodian of records; delegations
authority.
Section 26 la.4—Fees.
of
Legal Developments
Subpart B—Procedures for Requests by Individual
to Whom Record Pertains
Section 261a.5—Request for access to record.
Section 261a.6—Board procedures for responding
request for access.
to
Section 261a.7—Special procedures for medical records.
Section 26la.8—Request for amendment to record.
Section 261a.9—Agency review of request for amendment
of record.
Section 26la. 10—Appeal of adverse determination of
request for access or amendment.
Subpart C—Disclosure to Person Other than
Individual to Whom Record Pertains
Section 26la. 11—Restrictions on disclosure.
Section 261 a. 12—Exceptions.
Subpart D—Exempt Records
Section 26la. 13—Exemptions.
Authority: 5 U.S.C. 552a.
Subpart A—General Provisions
Section 261a.l—Authority, purpose and scope.
(a) Authority. This part is issued by the Board of Governors
of the Federal Reserve System (the Board) pursuant to the
Privacy Act of 1974 (5 U.S.C. 552a).
(b) Purpose. The purpose of this part is to implement the
provisions of the Privacy Act of 1974 (5 U.S.C. 552a) with
regard to the maintenance, protection, disclosure, and
amendment of records contained within systems of records
maintained by the Board.
(c) Scope. This part covers requests for access to, or amendment of, records concerning individuals that are contained
in systems of records maintained by the Board.
Section 261a.2—Definitions.
For the purposes of this part, the following definitions
apply:
(a) Business day means any day except Saturday, Sunday or
a legal Federal holiday.
(b) Designated system of records means a system of records
maintained by the Board that has been listed in the Federal
Register pursuant to the requirements of 5 U.S.C. 552a(e).
(c) Guardian means the parent of a minor, or the legal
guardian of any individual who has been declared to be
incompetent due to physical or mental incapacity or age by
a court of competent jurisdiction.
275
(d) Individual means a natural person who is either a citizen
of the United States or an alien lawfully admitted for
permanent residence.
(e) Maintain includes maintain, collect, use, disseminate, or
control.
(f) Record means any item, collection, or grouping of information about an individual maintained by the Board that
contains the individual's name, or the identifying number,
symbol, or other identifying particular assigned to the individual, such as a fingerprint, voice print, or photograph.
(g) Routine use means, with respect to disclosure of a
record, the use of such recori for a purpose that is compatible with the purpose for whic i it was collected or created.
(h) System of records means i group of any records under
the control of the Board from vhich information is retrieved
by the name of the indiviuual or by some identifying
number, symbol, or other identifying particular assigned to
the individual.
Section 26la.3—Custodian of records; delegations
of authority.
(a) Custodian of records. The Secretary of the Board is the
official custodian of all records of the Board in the possession or control of the Board.
(b) Delegated authority of Secretary. With regard to this
regulation, the Secretary of the Board is delegated the
authority to:
(1) Respond to requests for access or amendment to
records contained in a system of records, except for such
requests regarding systems of re ords maintained by the
Board's Office of the Inspector General (OIG);
(2) Approve the publication of revv systems of records
and amend existing systems of records, except systems of
records exempted pursuant to sections 26la. 13(b), (c)
and (d);
(3) File the biennial reports required by the Privacy Act.
(c) Delegated authority of designee. Any action or determination required or permitted by this part to be done by the
Secretary of the Board may be done by an Associate Secretary or other responsible employee of the Board who has
been duly designated for this purpose by the Secretary.
(d) Delegated authority of Inspector General. With regard
to systems of records maintained by the OIG, the Inspector
General is delegated the authority to respond to requests for
access or amendment.
Section 261a.4—Fees.
(a) Copies of records. Copies of records requested pursuant
to section 261a.5 of this part shall be provided at the same
cost charged for duplication of records and/or production of
computer output under the Board's Rules Regarding Availability of Information, section 261.10 of this part.
276
Federal Reserve Bulletin • March 1995
(b) No fee. Documents may be furnished without charge
where total charges are less than $5.
(c) Waiver of fees. In connection with any request by an
employee, former employee, or applicant for employment,
for records for use in prosecuting a grievance or complaint
of discrimination against the Board, fees shall be waived
where the total charges (including charges for information
provided under the Freedom of Information Act) are $50 or
less; but the Secretary may waive fees in excess of that
amount.
Subpart B—Procedures for Requests by Individual
to Whom Record Pertains
Section 261a.5—Request for access to record.
(a) Procedures for making request. (1) Any individual (or
guardian of an individual) other than a current Board
employee desiring to learn of the existence of, or to gain
access to, his or her record in a designated system of
records shall submit a request in writing to the Secretary
of the Board, Board of Governors of the Federal Reserve
System, 20th and Constitution Avenue, N.W., Washington, DC 20551.
(2) A request by a current Board employee for that
employee's own personnel records may be made in person during regular business hours at the Division of
Human Resources, Board of Governors of the Federal
Reserve System, 20th and Constitution Avenue, N.W.,
Washington, DC 20551.
(3) A request by a current Board employee for information other than personnel information may be made in
person during regular business hours at the Freedom of
Information Office, Board of Governors of the Federal
Reserve System, 20th and Constitution Avenue, N.W.,
Washington, DC 20551.
(4) Requests for information contained in a system of
records maintained by the Board's OIG shall be submitted in writing to the Inspector General, Board of Governors of the Federal Reserve System, 20th and Constitution Avenue, N.W., Washington, DC 20551.
(b) Contents of request. A request made pursuant to paragraph (a) of this section shall include the following:
(1) A statement that it is made pursuant to the Privacy
Act of 1974;
(2) The name of the system of records expected to
contain the record requested or a concise description of
such system of records.
(3) Necessary information to verify the identity of the
requester pursuant to paragraph (c) of this section; and
(4) Any other information that may assist in the rapid
identification of the record for which access is being
requested {e.g., maiden name, dates of employment, etc.).
(c) Verification of identity. The Board shall require proof of
identity from a requester and reserves the right to determine
the adequacy of such proof. In general, the following shall
be considered adequate proof of identity:
(1) For a current Board employee, his or her Board
identification card; or
(2) For an individual other than a current Board employee, either:
(i) Two forms of identification, one of which has a
picture of the individual requesting access; or
(ii) A notarized statement attesting to the identity of
the requester.
(d) Verification of identity not required. No verification of
identity shall be required of individuals seeking access to
records that are otherwise available to any person under
5 U.S.C. 552, Freedom of Information Act.
(e) Request for accounting of previous disclosures. An
individual making a request pursuant to paragraph (a) of
this section may also include a request for an accounting
(pursuant to 5 U.S.C. 552a(c)) of previous disclosures of
records pertaining to such individual in a designated system
of records.
Section 261a.6—Board procedures for responding to
request for access.
(a) Compliance with Freedom of Information Act. Every
request made pursuant to section 261a.5 of this part shall
also be handled by the Board as a request for information
pursuant to the Freedom of Information Act (5 U.S.C. 552),
except that the time limits set forth in paragraph (b) of this
section and the fees specified in section 261a.4 of this part
shall apply to such requests.
(b) Time limits. Every request made pursuant to section
261a.5 of this part shall be acknowledged or, where practicable, substantially responded to within 10 business days
from receipt of the request.
(c) Disclosure. (1) Information to be disclosed pursuant to
this part and the Privacy Act, except for information
maintained by the Board's OIG, shall be made available
for inspection and copying during regular business hours
at the Board's Freedom of Information Office.
(2) Information to be disclosed that is maintained by the
Board's OIG shall be made available for inspection and
copying at the OIG.
(3) When the requested record cannot reasonably be put
into a form for individual inspection (e.g., computer
tapes), or when the requester asks that the information be
forwarded, copies of such information shall be mailed to
the requester.
(4) Access to or copies of requested information shall be
promptly provided after the acknowledgement as provided in paragraph (b) of this section, unless good cause
for delay is communicated to the requester.
Legal Developments
(d) Other authorized presence. The requester of information
may be accompanied in the inspection of that information
by a person of the requester's own choosing upon the
requester's submission of a written and signed statement
authorizing the presence of such person.
(e) Denial of request. A denial of a request made pursuant
to section 261a.5 of this part shall include a statement of the
reason(s) for denial and the procedures for appealing the
denial.
Section 261a.7—Special procedures for medical
records.
Medical or psychological records requested pursuant to
section 261a.5 of this part shall be disclosed directly to the
requester unless such disclosure could, in the judgment of
the Privacy Officer, in consultation with the Board's physician, have an adverse effect upon the requester. Upon such
determination, the information shall be transmitted to a
licensed physician named by the requester, who will disclose those records to the requester in a manner the physician deems appropriate.
Section 26la.8—Request for amendment of record.
(a) Procedures for making request. (1) An individual desiring to amend a record in a designated system of records
that pertains to him or her shall submit a request in
writing to the Secretary of the Board (or to the Inspector
General for records in a system of records maintained by
the OIG) in an envelope clearly marked "Privacy Act
Amendment Request."
(2) Each request for amendment of a record shall:
(i) Identify the system of records containing the record
for which amendment is requested;
(ii) Specify the portion of that record requested to be
amended; and
(iii) Describe the nature of and reasons for each requested amendment.
(3) Each request for amendment of a record shall be
subject to verification of identity under the procedures set
forth in section 261a.5(c) of this part, unless such verification has already been made in a related request for
access or amendment.
(b) Burden of proof. The request for amendment of a record
shall set forth the reasons the individual believes the record
is not accurate, relevant, timely, or complete. The burden of
proof for demonstrating the appropriateness of the requested amendment rests with the requester, and the requester shall provide relevant and convincing evidence in
support of the request.
277
Section 261a.9—Board review of request for
amendment of record.
(a) Time limits. The Board shall acknowledge a request for
amendment of a record within 10 business days of receipt of
the request. Such acknowledgement may request additional
information necessary for a determination on the request for
amendment. To the extent possible, a determination upon a
request to amend a record shall be made within 10 business
days after receipt of the request.
(b) Contents of response to request for amendment. The
response to a request for amendment shall include the
following:
(1) The decision to grant or deny, in whole or in part, the
request for amendment; and
(2) If the request is denied:
(i) The reasons for denial of any portion of the request
for amendment;
(ii) The requester's right to appeal any denial; and
(iii) The procedures for appealing the denial to the
appropriate official.
Section 26la. 10—Appeal of adverse determination
of request for access or amendment.
(a) Appeal. A requester may appeal a denial of a request
made pursuant to section 261a.5 or section 261a.8 of this
part to the Board, or any official designated by the chairman
of the Board, within 10 business days of issuance of notification of denial. The appeal shall:
(1) Be made in writing to the Secretary of the Board, with
the words "PRIVACY ACT APPEAL" written prominently on the first page;
(2) Specify the previous background of the request; and
(3) Provide reasons why the initial denial is believed to
be in error.
(b) Determination. The Board or an official designated by the
Chairman of the Board shall make a determination with respect to such appeal not later than 30 business days from its
receipt, unless the time is extended for good cause shown.
(1) If the Board or designated official grants an appeal
regarding a request for amendment, the Board shall take
the necessary steps to amend the record, and, when
appropriate and possible, notify prior recipients of the
record of the Board's action.
(2) If the Board or designated official denies an appeal, the
Board shall inform the requester of such determination, give
a statement of the reasons therefor, and inform the requester
of the right of judicial review of the determination.
(c) Statement of disagreement. (1) Upon receipt of a denial
of an appeal regarding a request for amendment, the
requester may file a concise statement of disagreement
with the denial. Such statement shall be maintained with
the record the requester sought to amend, and any disclo-
278
Federal Reserve Bulletin • March 1995
sure of the record shall include a copy of the statement of
disagreement.
(2) When practicable and appropriate, the Board shall
provide a copy of the statement of disagreement to any
person or other agency to whom the record was previously disclosed.
Subpart C—Disclosure to Person Other than
Individual to Whom Record Pertains
Section 26la. 11—Restrictions on disclosure.
No record contained in a designated system of records shall
be disclosed to any person or agency without the prior
written consent of the individual to whom the record pertains unless the disclosure is authorized by section 26la. 12
of this part.
Section 261 a. 12—Exceptions.
The restrictions on disclosure in section 261 a. 11 of this part
do not apply to any disclosure:
(a) To those officers and employees of the Board who have
a need for the record in the performance of their duties;
(b) That is required under the Freedom of Information Act
(5 U.S.C. 552);
(c) For a routine use listed with respect to a designated
system of records;
(d) To the Bureau of the Census for purposes of planning or
carrying out a census or survey or related activity pursuant
to the provisions of title 13 of the United States Code;
(e) To a recipient who has provided the Board with advance
adequate written assurance that the record will be used solely
as a statistical research or reporting record, and the record is to
be transferred in a form that is not individually identifiable;
(f) To the National Archives of the United States as a record
that has sufficient historical or other value to warrant its continued preservation by the United States government, or for
evaluation by the administrator of General Services or his
designee to determine whether the record has such value;
(g) To another agency or to an instrumentality of any
governmental jurisdiction within or under the control of the
United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the
agency or instrumentality has made a written request to the
Board specifying the particular portion desired and the law
enforcement activity for which the record is sought;
(h) To a person pursuant to a showing of compelling circumstances affecting the health or safety of an individual if
upon such disclosure notification is transmitted to the last
known address of such individual;
(i) To either House of Congress, or, to the extent of matter
within its jurisdiction, any committee or subcommittee
thereof, any joint committee of Congress or subcommittee
of any such joint committee;
(j) To the Comptroller General, or any of his authorized
representatives, in the course of the performance of the
duties of the General Accounting Office;
(k) Pursuant to the order of a court of competent jurisdiction; or
(1) To a consumer reporting agency in accordance with
31 U.S.C. 3711(f).
Subpart D—Exempt Records
Section 261 a. 13—Exemptions.
(a) Information compiled for civil action. Nothing in this
regulation shall allow an individual access to any information compiled in reasonable anticipation of a civil action or
proceeding.
(b) Law enforcement information. Pursuant to section (k)(2)
of the Privacy Act of 1974 (5 U.S.C. 552a(k)(2)), the Board
has deemed it necessary to exempt certain designated systems of records maintained by the Board from the requirements of the Privacy Act concerning access to accountings
of disclosures and to records, maintenance of only relevant
and necessary information in files, and certain publication
provisions, respectively, 5 U.S.C. 552a(c)(3), (d), (e)(1),
(e)(4)(G), (H) and (I), and (f), and sections 261a.5, 261a.7
and 26la.8 of this part. Accordingly, the following designated systems of records are exempt from these provisions,
but only to the extent that they contain investigatory materials compiled for law enforcement purposes:
(1) BGFRS-1 Recruiting and Placement Records.
(2) BGFRS-2 Personnel Background Investigation Reports.
(3) BGFRS-4 General Personnel Records.
(4) BGFRS-5 EEO Discrimination Complaint File.
(5) BGFRS-9 Consultant and Staff Associate File.
(6) BGFRS-16 Regulation G Reports.
(7) BGFRS-18 Consumer Complaint Information System.
(8) BGFRS-21 Supervisory Tracking and Reference System.
(9) BGFRS/OIG-1 OIG Investigatory Records.
(c) Confidential references. Pursuant to section (k)(5) of the
Privacy Act of 1974 (5 U.S.C. 552a(k)(5)), the Board has
deemed it necessary to exempt certain designated systems
of records maintained by the Board from the requirements
of the Privacy Act concerning access to accountings of
disclosures and to records, maintenance of only relevant
and necessary information in files, and certain publication
provisions, respectively 5 U.S.C. 552a(c)(3), (d), (e)(1),
(e)(4)(G), (H) and (I), and (f), and sections 261a.5, 261a.7
and 261a.8 of this part. Accordingly, the following systems
of records are exempt from these provisions, but only to the
extent that they contain investigatory material compiled to
determine an individual's suitability, eligibility, and qualifications for Board employment or access to classified information, and the disclosure of such material would reveal the
Legal Developments
identity of a source who furnished information to the Board
under a promise of confidentiality.
(1) BGFRS-1 Recruiting and Placement Records.
(2) BGFRS-2 Personnel Background Investigation Reports.
(3) BGFRS-4 General Personnel Records.
(4) BGFRS-9 Consultant and Staff Associate File.
(5) BGFRS-10 General File on Board Members.
(6) BGFRS-11 Official General Files.
(7) BGFRS-13 General File of Examiners and Assistant
Examiners at Federal Reserve Banks.
(8) BGFRS-14 General File of Federal Reserve Bank and
Branch Directors.
(9) BGFRS-15 General Files of Federal Reserve Agents,
Alternates and Representatives at Federal Reserve Banks.
(10) BGFRS/OIG-2 OIG Personnel Records.
(d) Criminal law enforcement information. Pursuant to
5 U.S.C. 552a(j)(2), the Board has determined that portions
of the OIG Investigatory Records (BGFRS/OIG-1) shall be
exempt from any part of the Privacy Act (5 U.S.C. 552a),
except the provisions regarding disclosure, the requirement
to keep an accounting, certain publication requirements,
certain requirements regarding the proper maintenance of
systems of records, and the criminal penalties for violation
of the Privacy Act, respectively, 5 U.S.C. 552a(b), (c)(1),
and (2), (e)(4)(A) through (F), (e)(6), (e)(7), (e)(9), (e)(10),
(e)( 11) and (i). This designated system of records is maintained by the OIG, a Board component that performs as its
principal function an activity pertaining to the enforcement
of criminal laws. The exempt portions of the records consist
of:
(1) Information compiled for the purpose of identifying
individual criminal offenders and alleged offenders;
(2) Information compiled for the purpose of a criminal
investigation, including reports of informants and investigators, and associated with an identifiable individual; or
(3) Reports identifiable to an individual compiled at any
stage of the process of enforcement of the criminal laws
from arrest or indictment through release from supervision.
Company Act ("BHC Act"), has applied under section
3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire
up to 100 percent of the voting shares of The ChicagoTokyo Bank, Chicago, Illinois ("Bank"). 1
Notice of the application, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 12,927 (1994)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set
forth in section 3 of the BHC Act.
BOT, with total consolidated assets equivalent to approximately $271.9 billion, is the 16th largest banking organization in Japan and the 23d largest banking organization in the
world. 2 In the United States, BOT controls banks in New
York, New York, and San Francisco, California. In addition, BOT operates branches in Portland, Oregon; Seattle,
Washington; and Chicago, Illinois; agencies in New York,
New York; Atlanta, Georgia; Coral Gables, Florida; Dallas,
Texas; Honolulu, Hawaii; and Los Angeles and San Francisco, California; and representative offices in Houston,
Texas; and Washington, D.C. BOT also engages directly
and through subsidiaries in permissible nonbanking activities in the United States and abroad.
Douglas Amendment
Orders Issued Under Section 3 of the Bank Holding
Company Act
The Bank of Tokyo, Ltd.
Tokyo, Japan
Order Approving an Application
Bank
to Acquire a
Commercial
The Bank of Tokyo, Ltd., Tokyo, Japan ("BOT"), a bank
holding company within the meaning of the Bank Holding
Analysis
For purposes of section 3(d) of the BHC Act
(12 U.S.C. § 1842(d)), the Douglas Amendment, BOT is a
California bank holding company because its subsidiary
bank in California is its largest U.S. bank. California also is
BOT's home state under section 5 of the International
Banking Act (12 U.S.C. § 3103) ("IBA"). The Board previously has determined that the interstate banking statutes of
Illinois permit a California bank holding company to acquire banking organizations located in Illinois. 3 In addition,
the Illinois Commissioner of Banks and Trust Companies
has approved this transaction. Accordingly, based on all the
facts of record, consummation of this proposal is not prohibited by the Douglas Amendment or the IBA.
Competitive
ORDERS ISSUED UNDER BANK HOLDING COMPANY
ACT
279
Considerations
BOT and Bank both operate in the Chicago, Illinois, banking market, where each has a relatively small market share.4
Based on all the facts of record, consummation of this
proposal would not have a significantly adverse effect on
competition in the Chicago, Illinois, banking market or any
other relevant banking market.
1. BOT currently owns approximately 4.93 percent of Bank's total outstanding voting shares.
2. Asset data are as of March 31, 1994. Ranking data are as of December
1994.
3. See BankAmerica Corporation, 80 Federal Reserve Bulletin 832 (1994).
4. The Chicago, Illinois, banking market is approximated by Cook,
Du Page, and Lake Counties, all in Illinois.
280
Federal Reserve Bulletin • March 1995
Supervisory
Considerations
In order to approve an application by a foreign bank to
acquire a U.S bank or bank holding company, the BHC Act
and the Board's Regulation Y require the Board to determine that the foreign bank is subject to comprehensive
supervision or regulation on a consolidated basis by its
home country supervisor.5 The Board also must determine
that the foreign bank has provided adequate assurances that
it will make available to the Board such information on its
operations and activities and those of its affiliates that the
Board deems appropriate to determine and enforce compliance with applicable law. 6
The Board considers a foreign bank to be subject to
comprehensive supervision or regulation on a consolidated
basis if the Board determines that its home country supervisor receives sufficient information on the foreign bank's
worldwide operations, including the bank's relationship to
any affiliate, to assess the bank's overall financial condition
and compliance with law and regulation.7 In making its
determination on this application, the Board considered the
following information.
The Ministry of Finance (the "MOF") is BOT's lead
regulator and has extensive regulatory authority over the
bank under the banking laws of Japan. The MOF is
responsible for licensing banks, approving branch openings, approving the formation of and investments in
subsidiaries (both in Japan and abroad), providing administrative guidance on legal and regulatory matters, and
inspecting financial institutions and their affiliated companies. The MOF provides administrative guidance,
which banks are required to follow, regarding the establishment of branches, the scope of business activities,
and the conduct of banking business. The Bank of Japan
(the "BOJ"), which is the central bank of Japan, also
monitors and supervises banks that use its services. The
BOJ gives guidance to banks within the private sector
regarding lending policies and related matters. In addition, in its capacity as the central bank, the BOJ main-
5. See 12 U.S.C. § 1842(c)(3)(B); 12 C.F.R.225.13(b)(5).
6. See 12 U.S.C. § 1842(c)(3)(A); 12 C.F.R.225.13(b)(4).
7. In assessing this standard, the Board considers, among other factors, the
extent to which the home country supervisor:
(i) Ensures that the foreign bank has adequate procedures for monitoring
and controlling its activities worldwide;
(ii) 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;
(iii) Obtains information on the dealings and relationships between the
foreign bank and its affiliates, both foreign and domestic;
(iv) 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;
and
(v) Evaluates prudential standards, such as capital adequacy and risk asset
exposure, on a worldwide basis.
These are indicia of comprehensive, consolidated supervision. No single
factor is essential, and other elements may inform the Board's determination.
tains communications with almost all major financial
institutions with respect to domestic and inter-bank settlements and money transfers for these financial institutions. The MOF's and BOJ's supervision of BOT is
conducted on a consolidated basis and consists of on-site
examinations and the review of required periodic financial reports.
The MOF has primary examination authority for Japanese banks and examines Japanese banks once every
three to four years and as deemed necessary. Examination powers extend to foreign branches and wholly
owned subsidiaries of BOT, both domestic and foreign,
and include on-site examinations of such operations. The
primary objective of MOF examinations is an evaluation
of management's ability to manage risk. Examinations
and inspections focus on capital adequacy, asset quality,
management, earnings, liquidity, compliance with applicable laws, and risk management. Examinations and inspections also involve an assessment of foreign trade and
foreign exchange transactions.
The BOJ also conducts examinations of BOT on a regular basis. The BOJ's examination powers extend to BOT's
wholly owned subsidiaries, both domestic and foreign, and
include on-site examinations of such subsidiaries. Like
those of the MOF, the BOJ examinations evaluate management's ability to manage risk.
The MOF and BOJ also review BOT's operations
through the periodic receipt of consolidated financial
reports and the MOF may request financial information
from banks and their wholly owned subsidiaries whenever deemed necessary. Annual reports submitted by
BOT to the MOF and the BOJ include balance sheets and
income statements on both a parent-only and a consolidated basis. 8 Semiannually, BOT submits to the MOF
and the BOJ a report that includes an unconsolidated
balance sheet, an income statement, information on major shareholders, and information detailing profits, losses,
loan loss reserves, expenses, trading account securities,
and capital. 9
BOT's transactions with its affiliates 10 are monitored
by the MOF and the BOJ through reporting requirements
and lending restrictions. BOT submits annual reports to
the MOF and the BOJ on its domestic related parties 11
8. The consolidated financial statements include the accounts of BOT and
all of its majority-owned subsidiaries, including its subsidiary banks, Bank of
Tokyo Trust Company, New York, New York, and Union Bank, San Francisco, California. All of BOT's affiliates which are 20 percent to 50 percent
owned are accounted for by the equity method of accounting.
9. While not consolidated, these semiannual reports include data on losses
at all bank affiliates, both foreign and domestic.
10. "Affiliates" as used in this section refers to domestic "related parties"
and controlled off-shore entities, as described below.
11. "Related parties" for the purposes of these reports include wholly
owned domestic subsidiaries whose activities are incidental to the business
of banking, and "associated" companies whose activities are considered to
be peripheral to the business of banking (e.g., leasing, venture capital,
Legal Developments
which include information on the total amount of revenue the affiliate derives from its transactions with BOT,
as well as the balance and terms of the affiliate's borrowings from BOT. BOT also submits annual reports to the
MOF for all foreign entities in which BOT holds a
majority interest or otherwise exercises management authority. In addition, transactions with affiliates are reviewed as part of the examination process. Examinations
may include a review of all aspects of such transactions,
including fund placement, lending, and securities purchases and sales between the bank and its affiliated
companies. The MOF may use a variety of administrative
sanctions against Japanese banks to ensure compliance
with applicable law or regulation.
The MOF and the BO J ensure that BOT has adequate
procedures for monitoring and controlling its activities
worldwide through their review of BOT's internal controls and procedures as part of their regular examinations. BOT monitors its worldwide activities through
several divisions of its head office which perform on-site
inspections of its offices, provide internal consulting
services to its offices to ensure the maintenance of proper
operational procedures, and monitor expenses, asset quality, funding and foreign exchange operations, portfolio
investments, and internal controls. Internal audits of all
offices are conducted by the auditing department of that
office or by the auditing department of a larger BOT
office in the region. Furthermore, all of BOT's offshore
affiliates must submit to the head office annual financial
statements that are audited by independent certified public accountants.
Based on all the facts of record, the Board concludes that
BOT is subject to comprehensive supervision on a consolidated basis by its home country supervisor.
The Board has reviewed relevant provisions of Japanese
law and has communicated with the appropriate government authorities concerning access to information about
BOT's operations. BOT has committed that it will make
available to the Board information on the operations of
BOT, and any affiliate of BOT, that the Board deems necessary to determine and enforce compliance with the IBA, the
BHC Act, as amended, and other applicable federal law. To
the extent that the provision of such information to the
Board may be prohibited or impeded by law, BOT has
committed to cooperate with the Board in obtaining any
necessary consents or waivers that might be required from
third parties for disclosure. In light of these commitments
and other facts of record, and subject to the conditions of
this order, the Board concludes that BOT has provided
adequate assurances of access to any necessary information
the Board may request.
Other
281
Considerations
The Board also considers the financial condition of a foreign bank involved in a section 3 application. 12 BOT must
comply with capital standards that conform to the Basle
Accord, as implemented by Japan. BOT's capital exceeds
these minimum standards, and is equivalent to capital that
would be required of a U.S. banking organization.
Based on the foregoing and all facts of record, the
Board has determined that the financial and managerial
resources and future prospects of BOT, its subsidiaries,
and Bank, and the other supervisory factors the Board
must consider under section 3 of the BHC Act, are
consistent with approval of the proposal. In addition, the
convenience and needs of the communities to be served,
the supervision of BOT, and the Board's access to information, are all consistent with approval of BOT's proposal.
Conclusion
Based on all the facts of record, the Board has determined
that this application should be, and hereby is, approved. The
Board's approval is specifically conditioned on compliance
by BOT with all the commitments and conditions made in
connection with this application. For purposes of this action, these commitments and conditions will both be considered conditions imposed in writing and, as such, may be
enforced in proceedings under applicable law.
This acquisition shall not be consummated before the
fifteenth 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 San
Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 30, 1995.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Battle Creek State Company
Battle Creek, Nebraska
Order Approving
Company
the Formation of a Bank Holding
Battle Creek State Company, Battle Creek, Nebraska
("Battle Creek"), has applied under section 3 of the Bank
management consulting). Japanese banks' investments in such associated
companies are limited to 5 percent of the company's equity.
12. See 12 C.F.R. 225.13(b)(1).
282
Federal Reserve Bulletin • March 1995
Holding Company Act (12 U.S.C. § 1842 et seq.) ("BHC
Act"), to become a bank holding company by acquiring
80.7 percent of the voting shares of Battle Creek State
Bank, Battle Creek, Nebraska ("Bank").
Notice of the application, affording interested persons
an opportunity to submit comments, has been published
(59 Federal Register 60,361 (1994)). 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.
Battle Creek is a nonoperating company formed for the
purpose of acquiring Bank. Bank is the 290th largest commercial banking organization in Nebraska, controlling deposits of $11.9 million, representing less than 1 percent of
total deposits in commercial banking organizations in the
state.1 Based on all the facts of record, the Board believes
that consummation of the proposal would not result in any
significantly adverse effects on competition or concentration of banking resources in any relevant banking market.
Accordingly, the Board concludes that competitive considerations are consistent with approval of this application.
A minority shareholder of Bank ("Protestant") alleges
that consummation of this proposal would have a detrimental effect on the financial condition of Bank. 2 The Board has
carefully reviewed this comment in light of all the facts of
record, including relevant reports of examination, information provided by Bank's primary federal supervisor, the
Federal Deposit Insurance Corporation ("FDIC"), and information provided by Battle Creek.
The Board notes that Battle Creek would be formed
through an exchange of shares, and that no debt would be
incurred as part of this transaction. The Board has considered the level of dividends payable on the preferred shares
that would be issued as part of this proposal, and Battle
Creek's commitment to pay no dividend that would jeopardize the capital position of Bank. The Board also notes that
the Nebraska Director of Banking and Finance has ap-
1. All banking data are as of June 30, 1993.
2. Protestant also alleges that this proposal would substantially dilute the
influence of Bank's minority shareholders over Bank's operations and management, enrich some principal shareholders through excessive exchange
ratios for their Bank stock, and diminish Protestant's opportunities to persuade holding company shareholders to support Protestant's positions on
issues involving Bank. Protestant also asserts that Protestant was excluded
from participating in the bank holding company formation and in the pricing
of Bank's shares prior to the share exchange. Battle Creek responds that
Protestant was offered the same price as other Bank shareholders under the
terms of the share exchange, and that issues related to the management
structure effected by the holding company formation were presented to
Bank's shareholders at the time they approved the transaction.
The courts have determined that the Board is precluded from considering
stock pricing, exchange ratios, and similar matters except as they relate to a
factor specifically enumerated in the BHC Act. See Western Bancshares, Inc.
v. Board of Governors, 480 F.2d 749 (10th Cir. 1973). In this case, the
matters questioned by Protestant have been resolved by the majority vote of
Bank's shareholders. Based on this, and after considering the other facts of
record, including relevant examination reports and other information, the
Board concludes that these matters do not reflect adversely on factors that the
Board is required to consider under the BHC Act. See id.
proved this proposal, and the FDIC has indicated that it has
no objection to consummation of this proposal. In this light,
and based on all the facts of record, including the financial
condition of Bank and relevant examination information,
the Board concludes that considerations relating to the
financial and managerial resources and future prospects of
Battle Creek and Bank are consistent with approval of this
proposal. The Board also concludes that considerations
relating to the convenience and needs of the community to
be served and other supervisory factors the Board is required to consider under section 3 of the BHC Act also are
consistent with approval.
Based on the foregoing and all the facts of record, the
Board has determined that this application should be, and
hereby is, approved. 3 The Board's approval is specifically
conditioned on compliance with all the commitments made
by Battle Creek in connection with this application. For
purposes of this action, the commitments and conditions
relied on in reaching this decision are deemed to be conditions imposed in writing by the Board and, as such, may be
enforced in proceeding under applicable law.
The transaction should not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Kansas City,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 30, 1995.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
3. Protestant has requested that the Board hold a public meeting or hearing
on this application. Section 3(b) of the BHC Act does not require the Board
to hold a public hearing or meeting on an application unless the appropriate
supervisory authority for the bank to be acquired makes a timely written
recommendation of denial of the application. No supervisory agency has
recommended denial of the proposal.
Generally, under its 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). In the Board's view, all interested parties
have had ample opportunity to submit their views, and substantial written
submissions have been received. Protestant supports this request for a
hearing by posing several questions and providing conclusory statements
without identifying disputed material facts necessary to resolve these issues.
Protestant also identifies written materials and unspecified oral testimony
that would be produced at a hearing. In the Board's view, Protestant has
failed to demonstrate why the issues raised in Protestant's request for a
hearing cannot be resolved with written submissions in lieu of a hearing as
required by the Board's rules. 12 C.F.R. 225.14(f) and 262.3(e). For these
reasons, and based on all 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, Protestant's
request for a public hearing or meeting on this application is denied.
Legal Developments
Coal City Corporation
Coal City, Illinois
283
Manufacturers National Corporation
Chicago, Illinois
the facts of record, the Board concludes that consummation
of this proposal is not likely to result in significantly adverse effects on competition or the concentration of banking
resources in the Chicago banking market or any other
relevant banking market.
Order Approving the Acquisition of a Bank
Convenience and Needs
Coal City Corporation, Coal City, Illinois ("CCC") and its
subsidiary, Manufacturers National Corporation, Chicago,
Illinois ("MNC") (together "Applicant"), bank holding
companies within the meaning of the Bank Holding Company Act ("BHC Act"), have applied under section 3 of the
BHC Act (12 U.S.C. § 1842) to acquire at least 82.35 percent of the voting shares of Peterson Bank, Chicago, Illinois.
In acting on applications to acquire a depository institution,
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
institutions," and to take that record into account in its
evaluation of these applications.4
Notice of the application, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 52,792 (1994)). 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.
Applicant is the 63d largest commercial banking organization in Illinois, controlling deposits of $286.5 million,
representing less than 1 percent of total deposits in commercial banks in the state.1 Peterson Bank is the 125th largest
commercial banking organization in Illinois, controlling
approximately $153.4 million in deposits, representing less
than 1 percent of total deposits in commercial banks in the
state. Upon consummation of the proposal, Applicant would
become the 44th largest commercial banking organization
in Illinois, controlling approximately $439.9 million in deposits, representing less than 1 percent of total deposits in
commercial banks in the state.
Applicant and Peterson Bank compete directly in the
Chicago, Illinois, banking market.2 After consummation of
this proposal, numerous competitors would remain in the
market, the market would remain unconcentrated, and the
increase in market concentration, as measured by the
Herfindahl-Hirschman Index ("HHI"), would not exceed
the Department of Justice merger guidelines.3 Based on all
1. Deposit and state data are as of June 30, 1993.
2. The Chicago banking market is approximated by Cook, Du Page, and
Lake Counties in Illinois.
3. 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
less than 1000 is considered to be unconcentrated. In such markets, the
Justice Department is unlikely to challenge a merger. The Justice Department
has informed the Board that a bank merger or acquisition generally will not
be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger increases
the HHI by more than 200 points. The Justice Department has stated that the
higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose
lenders and other non-depository financial entities. In this case, the HHI for
the Chicago banking market would not increase as a result of this transaction,
and the post-merger HHI would remain at 595.
Considerations
The Board has reviewed comments submitted by an
individual ("Protestant") criticizing the record of Applicant's subsidiary bank, Manufacturers Bank, Chicago, Illinois, under the CRA. Protestant alleges that Manufacturers
Bank has insufficient lending in its delineated community;
lacks participation in government-sponsored programs; engages in a low level of lending to low- and moderateincome and minority residents; and provides insufficient
mortgage funding. Protestant also questions whether Allied
Bank of Coal City, N.A., Coal City, Illinois ("Allied
Bank"), which is owned by Applicant, and Peterson Bank
meet the credit needs of their respective communities. 5
The Board has carefully reviewed the entire CRA performance record of Applicant's subsidiary banks, Allied Bank,
and Manufacturers Bank, as well as Peterson Bank, all
comments received on these applications, Applicant's re-
4. 12 U.S.C. § 2903.
5. Protestant also alleges that Applicant did not comply with the representations and commitments it made in its 1992 application to acquire MNC. In
particular, Protestant alleges that Manufacturers Bank represented in 1992
that it would expand its mortgage lending and participation in the secondary
mortgage market.
Since 1992, the Federal Reserve Bank of Chicago has monitored compliance by Applicant with the commitments made in connection with the 1992
application to acquire MNC. The record indicates that Manufacturers Bank
has expanded its mortgage lending activities, and Applicant has participated
in the secondary market for mortgage loans through Allied Bank. In addition,
in June 1993, the bank's primary supervisor, the Federal Deposit Insurance
Corporation ("FDIC"), examined the bank and determined that the bank's
CRA performance is satisfactory. Based on the examination report, Applicant's compliance reports, and other facts of record, the Board believes
Applicant is in compliance with the representations and commitments that it
made to the Board in the 1992 application.
284
Federal Reserve Bulletin • March 1995
sponse to these comments, and all 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").6
A. Record of CRA Performance
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. 7 The Board notes that Applicant's subsidiary banks
each received a "satisfactory" rating at their most recent
examination for CRA performance. Allied Bank received a
"satisfactory" rating for its CRA performance from the
Office of the Comptroller of the Currency ("OCC") dated
October 25, 1991, and, as noted above, Manufacturers Bank
received a "satisfactory" CRA rating from the FDIC in
June 1993 ("1993 Examination"). In addition, Peterson
Bank received a "satisfactory" rating from its primary
regulator, the FDIC, at its most recent examination as of
March 22, 1993.
B. Lending Activities
Manufacturers Bank is a relatively small bank, with approximately $316 million in total assets, and operates in the
Chicago, Illinois, banking market, primarily as a commercial lender. The record indicates that the bank has extended
commercial loans throughout its community, including in
predominantly minority and low- and moderate-income areas. Between December 31, 1992, and September 30, 1994,
Manufacturers Bank increased the number of loans that it
extended to borrowers in its delineated community from 50
to 88 and the dollar volume of these loans increased from
$9.9 million to $26.7 million. Approximately 75 percent of
these commercial loans were to borrowers in predominantly
minority census tracts and approximately 90 percent
were extended to borrowers in low- and moderate-income
census tracts. More than 90 percent of the loans are
extended to small businesses that operate in Manufacturers Bank's community. 8
In 1993, Manufacturers Bank began to offer consumer
loans. More than $1 million in consumer loans have been
made since 1993. Manufacturers Bank has actively marketed these loans in its delineated community and has
originated such loans in 17 low- and moderate-income
tracts. Manufacturers Bank also developed a used-car loan
6. 54 Federal Register 13,742 (1989).
7. Id. at 13,745.
8. Applicant defines a small business as one with annual sales of less than
$5 million.
program, and offers student loans in cooperation with a
third-party lender.
The Board has carefully reviewed the data filed by Manufacturers Bank under the Home Mortgage Disclosure Act
(12 U.S.C. § 2801 et seq.) ("HMDA") from 1991 through
1994, in light of Protestant's allegations that the bank
engages in low levels of lending for low- and moderateincome individuals, minorities, and affordable housing. The
HMDA data indicate that there are some disparities in the
application and denial rates for low- and moderate-income
and minority mortgage loan applicants compared with other
groups.9
The Board is concerned when the record of an institution
indicates disparities in lending to applicants in minority
communities, and it believes all banks are obligated to
adopt and implement lending practices that ensure not only
safe and sound lending, but also equal access to credit by
creditworthy applicants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community.
The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other
information, for conclusively determining whether an institution has engaged in illegal discrimination in making lending decisions.
The 1993 examination of Manufacturers Bank found no
evidence of illegal discrimination or of practices intended to
discourage credit applications. The examination concluded
that Manufacturers Bank was in compliance with antidiscrimination laws and regulations. The examinations for
Allied Bank and Peterson Bank did not find any discriminatory practices on the part of either bank, and the examinations indicate that both banks are active lenders in all areas
of their communities.
Although Manufacturers Bank is primarily a commercial
lender,10 it has taken steps to enhance its levels of housingrelated lending in the low- and moderate-income community. From June 1993 to June 1994, Manufacturers Bank has
increased its 1-4 family residential lending by 12.8 percent.
From 1991 to 1993, the number of HMDA-related applications from low- and moderate-income areas increased from
six to 34 applications. Between 1992 and 1993, the total of
HMDA loans extended within its delineated community
increased from $1.1 million to $2.6 million.
Manufacturers Bank also seeks to improve its provision
of mortgage credit by increasing the types of products it
offers and participating in community development organizations. Manufacturers Bank has an arrangement under
9. The 1993 Examination found Manufacturers Bank's delineated community to be reasonable. The bank's delineated community is comprised almost
entirely of low- and moderate-income census tracts. In September 1994, the
bank expanded its delineated community to include four new census tracts
and to exclude one census tract.
10. Only 9.8 percent of Manufacturers Bank's loan portfolio is in residential lending and consumer loans.
Legal Developments
which it refers candidates for government-sponsored programs to a qualified local mortgage company. Since June
1994, Manufacturers Bank has offered a five-year and a tenyear home improvement loan, and has made a $500,000
commitment to the Community Investment Corporation,
which focuses its programs on the construction of multifamily dwellings. Twenty-four loans, totalling $68,000 have
been originated under the Community Investment Corporation program. Manufacturers Bank also purchased a
$100,000 security from the Illinois Housing Development
Authority. This year Manufacturers Bank will initiate a new
loan program called the Chicago West Town Purchase/
Rehab Loan Program to develop a low-income home lending and home improvement program for the western part of
Manufacturers Bank's delineated community.
The record indicates that Applicant's subsidiary bank,
Allied Bank, meets the credit needs of its community.
Allied Bank extends almost all of its commercial loans to
small business owners. As of January 9, 1995, Allied had
made 110 loans with $11.4 million outstanding to small
businesses. In addition, Allied Bank participates in the
Illinois Guaranteed Student Loan Program and has over
$475,000 in loans outstanding. Allied Bank also has extended $200,000 in loans as part of the State of Illinois
Agriculture Program. Allied Bank makes most of its
HMDA-related loans to borrowers in its delineated community and its originations increased from $4.4 million in 1992
to $5.9 million in 1993. In 1994, over 80 percent of its
applications came from within its community. The percentage of HMDA-related applications Allied Bank received
from low- and moderate-income areas increased to
6.6 percent of all applications in 1993 from 3.7 percent in
1992. 11
Conclusion
The Board has carefully considered all the facts of record,
including the comments received, in reviewing the CRA
records of performance for Manufacturers Bank, Allied
Bank, and Peterson Bank. Based on a review of the entire
record, including the information from Protestant and Applicant, and relevant reports of examination, the Board
concludes that convenience and needs considerations, including the CRA records of performance of all three banks
are consistent with approval of this application. The Board
expects Manufacturers Bank to continue its efforts to increase lending within its delineated community.
11. Since 1992, Allied Bank sold over 200 loans to FNMA and serviced an
additional 197 loans, totalling $12.2 million, for FNMA. Peterson Bank also
participates in the secondary mortgage market by selling loans through an
independent FHA and VA lender.
285
C. Other Considerations
Protestant also alleges that consummation of the proposal
would result in a decline in Applicant's capital and that
Applicant would not be able to service the debt that it would
incur as part of this proposal. The Board has reviewed the
effects of this transaction on Applicant's financial resources
and the resources of the subsidiary banks. Applicant's debt
service projections appear reasonable and are consistent
with the Board's guidelines. In addition, Applicant, its
subsidiary banks, and Peterson Bank would remain "well
capitalized" after consummation of this transaction.12
Accordingly, the Board concludes that financial and managerial resources and future prospects of CCC, MNC, and
their respective subsidiary banks, and the other supervisory
factors that the Board must consider under section 3 of the
BHC Act, are consistent with approval of this proposal.13
12. Applicant is purchasing shares of Peterson Bank that are subject to a
voting agreement, and Protestant asserts that the agreement results in a bank
holding company that has not obtained the necessary Board approval. Protestant bases this assertion on the fact that one party to the agreement previously
had participated in another voting agreement.
The Board has reviewed the voting agreement in light of the Board's
statement on Voting Trusts and Buy-Sell Agreements ("Policy Statement").
Secretary Letter to the Presidents of the Reserve Banks no. 2196, 2 FRRS
f 4.185 (May 4,1972). In its Policy Statement, the Board determined that in
most cases, a voting trust or buy-sell agreement would not be viewed as a
"company" under section 2(b) of the BHC Act if the agreement:
(1) Relates only to the shares of a single bank;
(2) Terminates within 25 years;
(3) Engages in no other activity except to hold and vote the shares of a
single bank; and
(4) Involves parties who are not participants in any other similar arrangement with respect to any other bank or nonbank business.
The Board's review of the agreement indicates that the agreement meets
all the Policy Statement's criteria. The Board does not believe, as Protestant
alleges, that the participation by a single member of this voting agreement in
an agreement with a different group of individuals regarding an unrelated
bank would cause the voting agreement involving Peterson Bank to constitute a "company" for purposed of the BHC Act. In addition, the Board notes
that the Peterson Bank agreement does not involve Applicant or its shareholders, and terminates after consummation of this proposal. Based on these
and all the other facts of record, the Board concludes that the voting
agreement involving Peterson Bank does not violate the BHC Act.
Protestant also asserts that the participation of Peterson Bank's ESOP as a
party to the agreement violates the Employees Retirement Income Security
Act of 1974 ("ERISA"). The Department of Labor, which is the agency
responsible for enforcing ERISA, has informed the Board that ERISA does
not prohibit the ESOP from owning securities that are subject to the restrictions of the voting agreement.
Protestant also alleges that Peterson Bank and its officers and directors
breached their fiduciary duty to the minority shareholders of Peterson Bank
in negotiating and accepting Applicant's offer, as structured. These questions
raise matters under state law governing shareholder rights and the fiduciary
duty of corporate officers and directors. The courts have determined that the
Board does not have authority under the BHC Act to consider these matters
unless they directly relate to a factor specified in the BHC Act. Western
Bancshares, Inc., v. Board of Governors, 480 F.2d 749 (10th Cir. 1973). After
considering the managerial and financial resources of the Applicant, and
reviewing the relevant examinations of Applicant's bank subsidiaries and
Peterson Bank, the Board concludes that Protestant's comments on these
matters do not reflect so adversely on the factors the Board is required to
consider under the BHC Act as to warrant denial of this proposal.
13. The Protestant also alleges that a new issue of preferred shares may be
purchased by controlling shareholders and that the shareholders have not
made the appropriate filings under the Change in Bank Control Act ("CIBC
286
Federal Reserve Bulletin • March 1995
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 is expressly
conditioned on Applicant's compliance with all the commitments made in connection with this application. The commitments and conditions relied on by the Board in reaching
this decision shall be deemed to be conditions imposed in
writing by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings
under applicable law.
The acquisition shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Chicago,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 17, 1995.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
First Bancshares of Valley City, Inc.
Valley City, North Dakota
Order Approving
the Merger of Bank Holding
Companies
First Bancshares of Valley City, Inc., Valley City, North
Dakota ("First Bancshares"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire all of the voting shares of
Insurance by Strehlow, Inc. ("Strehlow"), and thereby indirectly acquire The First State Bank of Casselton, both of
Casselton, North Dakota. 1
Notice of the application, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 47,336 (1994)). The time for filing comments has expired and the Board has considered the application and all comments received in light of the factors set
forth in section 3 of the BHC Act.
First Bancshares is the 25th largest commercial banking
organization in North Dakota, controlling deposits of
$57.1 million, representing less than 1 percent of total
deposits in commercial banking organizations in the state. 2
Strehlow is the 55th largest commercial banking organiza-
tion in North Dakota, controlling deposits of $26.9 million,
representing less than 1 percent of total deposits in commercial banking organizations in the state. Upon consummation
of this proposal, First Bancshares would become the 16th
largest commercial banking organization in North Dakota,
controlling deposits of $84 million, representing approximately 1.2 percent of total deposits in commercial banking
organizations in the state.
First Bancshares and Strehlow do not compete directly in
any relevant banking markets. Based on all the facts of
record, the Board concludes that the acquisition of Strehlow
and its subsidiary bank would not result in any significantly
adverse effects on competition or concentration of banking
resources in any relevant banking market. The Board also
concludes that the financial and managerial resources and
future prospects of First Bancshares, Strehlow, and their
respective subsidiaries, and other supervisory factors the
Board must consider under section 3 of the BHC Act, are
consistent with approval. Considerations relating to the
convenience and needs of the communities to be served also
are consistent with approval of this application.
Based on all the facts of record, the Board has determined that this application should be, and hereby is, approved. The Board's approval is specifically conditioned on
compliance by First Bancshares with all the commitments
made in connection with this application. For the purpose of
this action, the commitments and conditions relied on by
the Board in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its
findings and decision and, as such, may be enforced in
proceedings under applicable law.
The acquisition of Strehlow shall not be consummated
before the fifteenth calendar day following the effective date
of this order, and neither transaction shall be consummated
later than three months after the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of Minneapolis, acting
pursuant to delegated authority.
By order of the Board of Governors, effective
January 11, 1995.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
KeyCorp
Cleveland, Ohio
Act"). Applicant has not issued the shares at this time, and thus it is
uncertain whether a CIBC Act filing would be required.
Order Approving Acquisition
1. Strehlow does not engage directly or indirectly in any nonbanking
activities.
2. Asset and state deposit data are as of June 30, 1994.
KeyCorp, Cleveland, Ohio ("KeyCorp"), and its wholly
owned subsidiary, Key Bancshares of Maine, Inc., Portland,
of a Bank
Legal Developments
Maine ("Key Maine"), both bank holding companies within
the meaning of the Bank Holding Company Act ("BHC
Act"), have applied under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire Casco Northern Bank, N.A.,
Portland, Maine ("Bank"), and thereby indirectly acquire
Bank's subsidiaries.1
Notice of the application, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 52,306 (1994)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set
forth in section 3 of the BHC Act.
KeyCorp, through Key Maine, is the second largest commercial banking organization in Maine, controlling deposits
of $2 billion, representing 29.3 percent of total deposits in
commercial banking organizations in the state.2 Bank is the
third largest commercial banking organization in Maine,
controlling $895.5 million in deposits, representing
13.5 percent of total deposits in commercial banking organizations in the state.
Douglas Amendment
teristics of these markets, the increase in the concentration
of total deposits in depository institutions5 in these markets
as measured by the Herfindahl-Hirschman Index ("HHI"), 6
and commitments made by KeyCorp.
In five banking markets in Maine, specifically Bridgton,
Sanford, Augusta, Lewiston-Auburn, and Brunswick, an
increase in the concentration of total deposits in depository
institutions in the market, as measured by the HHI, indicates that the proposal could result in significantly adverse
competitive effects. In order to mitigate the potential that
this proposal may result in adverse competitive effects in
these markets, KeyCorp has committed to divest branches
in these five banking markets7 to an acquiror that could
purchase the branches without substantially lessening of
competition in these markets.8 After consummation of this
proposal and the divestiture of the branch offices in these
five banking markets, the competitive effect of this proposal
in these markets would be consistent with the merger guidelines established by the Justice Department and the parameters applied by the Board in previous decisions. 9
Analysis
Section 3(d) of the BHC Act, the Douglas Amendment,
prohibits the Board from approving an application by a
bank holding company to acquire control of any bank
located outside its 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 KeyCorp is Ohio.
The statute laws of Maine permit an out-of-state bank
holding company, such as KeyCorp, to acquire a bank
located in Maine. 4 Based on a review of the relevant state
statutes, the Board has concluded that approval of this
proposal is not prohibited by the Douglas Amendment. The
Board's action on this proposal is specifically conditioned
upon KeyCorp's receiving all required state approvals.
Competitive
287
Considerations
KeyCorp and Casco compete directly in ten banking markets in Maine and one in New Hampshire. The Board has
carefully considered the effects that consummation of this
proposal would have on competition in these banking markets, in light of all the facts of record, including the charac-
1. Bank controls twelve wholly owned subsidiaries that are engaged in
holding assets acquired in the ordinary course of collecting a debt previously
contracted in good faith.
2. State deposit data are as of June 30,1994.
3. 12 U.S.C. § 1842(d). 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.
4. See Me. Rev. Stat. Ann. tit. 9-B, § 1013 (1993).
5. Market data are as of June 30, 1993. In this context, depository
institutions include commercial banks, savings banks, and savings associations. 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 WM Bancorp, 76
Federal Reserve Bulletin 788 (1990); 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 200 points. The Justice Department has stated that the higher than
normal threshold for an increase in the HHI when screening bank mergers
and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial
entities.
7. The Bridgton banking market consists of the Cumberland County
townships of Bridgton and Harriston, and the Oxford County townships of
Denmark and Sweden. The Sanford banking market consists of the York
County townships of Acton, Alfred, Limerick, Newfield, Sanford, Shapleigh,
and Waterboro. The Augusta banking market consists of the Augusta RMA
plus the Somerset County townships of Canaan and Smithfield; the Waldo
County townships of Freedom, Palermo, Thomdike, Troy, and Unity; the
Lincoln County townships of Jefferson, Somerville, Whitefield, and Hibberts
Gore; the Knox County townships of Washington; and the Kennebec County
townships of Albion, Belgrade, China, Clinton, Fayette, Litchfield, Monmouth, Mount Vernon, Rome, Sydney, Smithfield, Vienna, Wayne, and
Windsor. The Lewiston-Auburn banking market consists of the LewistonAuburn RMA plus the Androscoggin County townships of Durham, Leeds,
Turner and Wales; the Oxford County township of Hebron; and the Cumberland County township of New Gloucester. The Brunswick banking market
consists of the Brunswick/Bath RMA plus the Sagadahoc County townships
of Arrowsic, Bowdoin, Georgetown, Phippsburg, and Woolwich; and the
Lincoln County townships of Alna, Dresden, Westport, and Wiscasset
8. KeyCorp has committed to sell these branches either to an organization
that does not currently operate in these markets or to certain in-market
competitors.
9. Taking the proposed divestitures into account, upon consummation of
this proposal, the HHI in these five banking markets would not increase by
more than the following amounts: Bridgton would remain at 3547; Sanford
288
Federal Reserve Bulletin • March 1995
KeyCorp and Bank also compete in the Portland and
Bangor banking markets. In the Portland banking market,10
KeyCorp would, absent divestitures, become the largest
depository institution in the market upon the acquisition of
Bank, controlling $1.1 billion in deposits, representing approximately 33.3 percent of total deposits in depository
institutions in the market. In connection with this proposal,
KeyCorp has committed to divest branches in these markets
to an out-of-market competitor, or to a specific in-market,
full-service competitor. Upon consummation of this proposal, and after completing the proposed divestitures, the
HHI would increase by no more than 368 points to 2167. 11
A number of factors indicate that the increase in concentration levels in the Portland banking market, as measured by
the HHI, tend to overstate the competitive effects of this
proposal. For example, upon consummation of this proposal, 13 depository institutions would remain in the market, several with significant market shares. The divestiture
of approximately $127 million of deposits and $118 million
of loans in this market would create a strong competitor to
replace Bank. In addition, the Portland banking market is
relatively attractive for entry, with two new banks having
entered this market between 1991 and 1994. Finally, credit
unions have a competitive effect on banking services offered in the Portland banking market.12
In the Bangor banking market,13 KeyCorp would become
the second largest depository institution after acquiring
Bank, controlling $174 million of deposits, representing
approximately 22.7 percent of total deposits in depository
institutions in the banking market. The HHI would increase
by 214 points to 2076. A number of factors indicate that the
increase in concentration levels in the Bangor banking
would remain at 2165; Augusta would increase by 199 points to 2083;
Lewiston-Auburn would increase by 199 points to 2212; and Brunswick
would increase by 414 points to 1763.
10. The Portland banking market consists of the Portland RMA plus the
Cumberland County townships of Baldwin, Casco, Naples, Pownal, Sebago;
and the York County townships of Dayton, Hollis, Kennebunkport, Limington, Lyman, North Kennebunkport, and the city of Biddeford.
11. Market share data are based on calculations in which the deposits of
Peoples Heritage Savings Bank, Portland, Maine ("Peoples Bank") are
included at 100 percent. The deposits of all other thrifts in this market are
included at 50 percent. The Board previously has indicated that Peoples
Bank offers all or virtually all of the cluster of banking products and services,
including commercial loans, and, thus, is a full competitor of commercial
banks. See Peoples Heritage Financial Group, 80 Federal Reserve Bulletin
755 (1994); Fleet/Norstar Financial Group, Inc., 77 Federal Reserve Bulletin 750 (1991). In the Portland banking market, Peoples Bank ranks second
in market deposits, and non-real-estate commercial loans outstanding as of
June 30, 1994, accounted for 9.7 percent of total assets.
12. There are 28 credit unions in this market, controlling approximately
19 percent of the combined deposits in depository institutions and credit
unions in the market, which is substantially higher than the 5.6 percent
national average of deposits controlled by credit unions.
13. The Bangor banking market consists of the Bangor RMA plus the
Penobscot County townships of Alton, Amherst, Argyle, Bradford, Bradley,
Carmel, Charleston, Clifton, Corinth/East Corinth, Dixmont, Etna, Greenbush, Greenfield, Hudson, LaGrange, Levant, Milford, Newburgh, and Stetson; the Hancock County townships of Bucksport, Castine, Dedham, Orland,
Otis, and Verona; the Waldo County townships of Frankfort, Prospect, and
Stockton Springs; and the unorganized townships T1N.D. and T32M.D.
market, as measured by the HHI, tend to overstate the
competitive effects of this proposal. Upon consummation of
this proposal, eight depository institutions would remain in
this market, several of which would have a significant
market share. In addition, the market is relatively attractive
for entry as evidenced by the entry to this market of one
new bank and two de novo entrants during 1991 and 1992,
and credit unions also have a competitive effect on banking
services offered in this market.14
Consummation of this proposal in the remaining banking
markets where KeyCorp and Bank compete would not
exceed Justice Department guidelines and numerous competitors would remain in each of these banking markets.15
In accordance with the BHC Act, the Board has sought
comments from the Justice Department on the competitive
effects of this proposal. The Justice Department has indicated that, in light of the proposed divestitures, this proposal is not likely to have a significantly adverse effect on
competition in any relevant banking market. Based on all
the facts of record, including the facts discussed above and
the divestitures proposed by KeyCorp, 16 the Board concludes that consummation of this proposal is not likely to
have a significantly adverse effect on competition or on the
concentration of resources in any relevant banking market. 17
The Board also has concluded that the financial and
managerial resources and future prospects of KeyCorp and
Bank and their respective subsidiaries, and all other supervisory factors the Board must consider under section 3 of the
BHC Act, are consistent with approval of this proposal.18
14. There are 11 credit unions in this market, controlling approximately
17 percent of the combined deposits in depository institutions and credit
unions in the market.
15. The changes in the HHI in the three remaining banking markets in
Maine would be as follows: Damariscotta would increase by 59 points to
3615; Ellsworth would increase by 70 points to 2195; and Rockland would
increase by 77 points to 3250. The HHI in the Portsmouth-Dover-Rochester,
New Hampshire, banking market would increase 7 points to 1090.
16. As part of its commitment to divest branches in the Bridgton, Sanford,
Augusta, Lewiston-Auburn, Brunswick and Portland banking markets, KeyCorp has committed to execute sales agreements for each of the proposed
divestitures prior to consummation of this proposal, and to complete these
divestitures within 180 days of consummation. KeyCorp also has committed
that in the event it is unsuccessful in completing these divestitures within 180
days of consummation of the proposal, it will transfer these branch offices to
an independent trustee that will be instructed to sell the branches promptly.
See BankAmerica Corporation, 78 Federal Reserve Bulletin 338, 340 (1992);
United New Mexico Financial Corporation, 77 Federal Reserve Bulletin
484, 485 (1991).
17. The Board received comments from an individual ("Protestant")
alleging that this proposal would have anti-competitive effects on banking
services in Maine. For the reasons set forth above, the Board concludes that
competitive considerations are consistent with approval of this application.
18. In evaluating financial and managerial resource considerations, the
Board carefully considered comments received from Protestant alleging that
lax management and supervision by KeyCorp have resulted in excessive
expenses for its Maine operations. Protestant has provided no evidence to
support these allegations. The Board has carefully reviewed these allegations
in light of all facts of record, including relevant reports of examination. The
Board notes that the findings and conclusions in these examinations do not
support Protestant's allegations. The Protestant also commented on other
Legal Developments
Considerations relating to convenience and needs of the communities to be served also are consistent with approval.19
Based on the foregoing and all the other facts of record,
the Board has determined that the application should be,
and hereby is, approved. 20 The Board's approval of this
proposal is expressly conditioned on KeyCorp's compliance
with all the commitments made in connection with this
application, and on the receipt by KeyCorp and its subsidiary banks of all necessary approvals from federal and state
regulators. For purposes of this action, these commitments
and conditions will both be considered conditions imposed
in writing by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings
under applicable law.
The acquisition of Bank shall not be consummated before
the fifteenth calendar day following the effective date of this
order, and the transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of Cleveland, acting pursuant to delegated authority.
By order of the
January 17, 1995.
Board
of
Governors,
effective
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
aspects of the operations of KeyCorp and its subsidiary banks, including
their record under the Community Reinvestment Act and transactions and
dealings between the Protestant and KeyCorp's subsidiary banks. All of
these concerns were carefully reviewed and considered by the Board in
connection with KeyCorp's application to acquire BANKVERMONT Corporation. See BANKVERMONT Corporation, 81 Federal Reserve Bulletin 160
(1995). For the reasons explained in that order, and based on all facts of
record, the Board does not believe that the comments warrant denial of this
proposal.
19. In connection with this application, the Board received 21 comments
from individuals, organizations, local businesses and public officials supporting this proposal and commending KeyCorp for its commitment to its
community, and, in particular, its commitment to meeting the credit and
banking needs of local citizens and businesses.
20. Protestant has requested that the Board hold a public meeting or
hearing on this application. Section 3(b) of the BHC Act does not require the
Board to hold a public hearing on an application unless the appropriate
supervisory authority for the bank to be acquired makes a timely written
recommendation of denial of the application. In this case, the Board has not
received such a recommendation. Generally, 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 Protestant's request. In the Board's view, Protestant has
had ample opportunity to present written submissions, and Protestant has
submitted substantial written comments that have been considered by the
Board in connection with this application and KeyCoip's application to
acquire BANKVERMONT Corporation. In light of the foregoing and all the
facts of record, the Board has determined that a public meeting or hearing is
not necessary to clarify the factual record on this application, or otherwise
warranted in this case. Accordingly, the request for a public meeting or
hearing on this application is denied.
289
Peak B a n k s o f Colorado, Inc.
Nederland, Colorado
Order Approving
Formation of a Bank Holding
Company
Peak Banks of Colorado, Inc., Nederland, Colorado ("Applicant"), has applied under section 3(a)(1) of the Bank
Holding Company Act ("BHC Act")
(12U.S.C.
§ 1842(a)(1)) to become a bank holding company by acquiring all the voting shares of Peak National Bank, Nederland,
Colorado ("Bank"). 1
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(59 Federal Register 35,122 (1994)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Applicant is a nonoperating corporation formed for the
purpose of acquiring Bank. Bank is the 97th largest commercial banking organization in Colorado, controlling deposits of approximately $40 million, representing less than
1 percent of total deposits in commercial banking organizations in the state. 2 Based on all the facts of record, including
the fact that this transaction constitutes a corporate reorganization, the Board believes 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. Accordingly, the Board concludes that competitive considerations are consistent with
approval.
The Board also concludes that the financial and managerial resources and future prospects of Applicant and Bank,
and the convenience and needs and other supervisory factors that the Board is required to consider under section 3 of
the BHC Act, are consistent with approval of this proposal.
Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved. The Board's approval is expressly
conditioned on compliance with all the commitments made
by Applicant, including commitments made by the principals of Applicant, 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 transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
1. This transaction constitutes a reorganization of interests by the shareholders of Bank. After consummation of this transaction, all shareholders of
Bank would become shareholders of Applicant.
2. Deposit data are as of September 30, 1994.
290
Federal Reserve Bulletin • March 1995
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 30, 1995.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Whitney Holding Corporation
New Orleans, Louisiana
Order Approving
the Acquisition
of a Bank
Whitney Holding Corporation, New Orleans, Louisiana
("Applicant"), 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 all the voting shares of
Whitney Bank of Alabama, Mobile, Alabama ("Alabama
Bank"), a de novo bank. Following consummation of this
transaction, Alabama Bank would acquire substantially all
the assets and assume substantially all the liabilities of five
of the nine branches of Peoples Bank, Elba, Alabama
("Peoples Bank").
Notice of the application, affording interested persons
an opportunity to submit comments, has been published
(59 Federal Register 53,988 (1994)). The time for filing
comments has expired, and the Board has considered the
applications and all comments received in light of the
factors set forth in section 3 of the BHC Act.
Applicant, a one-bank holding company, is the fourth
largest commercial banking organization in Louisiana, controlling approximately $2.4 billion in deposits, representing
approximately 7.2 percent of total deposits in commercial
banks in the state.1 Peoples Bank is the 19th largest commercial banking organization in Alabama, controlling deposits of approximately $174.3 million, representing less
than 1 percent of total deposits in commercial banking
organizations in Alabama. Upon consummation of the proposal, Applicant would become the 43d largest commercial
banking organization in Alabama, controlling approximately $92 million in deposits, representing less than
1 percent of total deposits in commercial banks in the state.
Applicant and Peoples Bank do not compete directly in
any banking market. Accordingly, consummation of this
proposal would not have a significantly adverse effect on
competition or on the concentration of banking resources in
any relevant banking market.
1. Banking data are as of September 30,1994.
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 control of 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." 2 For
purposes of the Douglas Amendment, Applicant's home
state is Louisiana. 3
Alabama 4 and Louisiana 5 have enacted banking statutes
that permit out-of-state bank holding companies to acquire
banks in their respective states, provided that the home state
of the acquiring bank holding company permits the acquisition of banks in that state on a reciprocal basis. The Alabama state banking supervisor concluded that Applicant's
proposal is authorized under Alabama law and has approved this transaction. In light of the foregoing, and based
on an analysis of the interstate banking statutes involved,
the Board has determined that its approval of this proposal
is not prohibited by the Douglas Amendment.
Convenience
and Needs
Considerations
In acting on an application under the BHC Act to acquire a
depository institution, 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 their
safe and sound operation. 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 moderateincome 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. 6
The Board received comments from the Plaisance Development Corporation ("Protestant"), maintaining that Applicant and its subsidiary bank, Whitney National Bank, New
Orleans, Louisiana ("Whitney"), have failed to meet the
banking needs of all segments of Whitney's delineated
2. 12 U.S.C. § 1842(d).
3. 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.
4. Ala. Code § 5-31A-1 et seq. (West Supp. 1994).
5. La. Rev. Stat. Ann. § 6:531 et seq. (West Supp. 1994).
6. 12 U.S.C. § 2903.
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communities, 7 especially African Americans, and to comply with fair lending laws. 8 Protestant also contends that
disparities in the rates of home-related loan applications
from and loan originations to African Americans compared
with those for white residents in Whitney's 1992 and 1993
data collected under the Home Mortgage Disclosure Act
("HMDA") indicate illegal discrimination.9
The Board has carefully reviewed the CRA performance
record of Whitney, all comments received on this application, including Whitney's response to these comments, and
all other 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"). 10
Record of CRA Performance
A. Evaluation of CRA Performance
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 reports of these examinations will be given great weight in the
applications process. 11 The Board notes that Whitney received a "satisfactory" rating from its primary federal
supervisor, the Office of the Comptroller of the Currency
("OCC"), at its most recent examination for CRA performance as of November 16, 1994 ("1994 CRA Examination"). Peoples Bank also received a "satisfactory" rating
from its primary federal supervisor, the Federal Deposit
Insurance Corporation, at its most recent CRA performance
examination as of January 18,1994.
7. Whitney's three delineated communities include New Orleans (Orleans,
Jefferson, and St. Tammany Parishes), Baton Rouge (East Baton Rouge
Parish), and Lafayette (Lafayette Parish).
8. In particular, Protestant alleges that Applicant and Whitney have failed
to:
(1) Develop and implement CRA policies;
(2) Provide capital and financing to African-American homeowners;
(3) Provide funds, grants, and loans to African-American community
organizations;
(4) Provide capital to businesses owned by African Americans;
(5) Participate in community development projects to improve economic
opportunities in African-American communities; and
(6) Locate branches in African-American communities.
9. Protestant also maintains that several factors contribute to Applicant's
and Whitney's alleged failure to comply with fair lending laws, including the
following: delineation of service areas to exclude the African-American
community; solicitation of real estate agents and developers serving predominately white residential areas; employment of few African-American loan
officers; use of a compensation program for lending officers that provides
incentives to solicit and originate mortgages only on higher-priced homes;
failure to use media and images oriented to the African-American community in advertising its loan products; and infrequent marketing of its Federal
Housing Administration, Veterans Administration, and Small Business Administration loan products in the African-American community.
10. 54 Federal Register 13,742 (1989).
11. Id. at 13,745.
291
B. HMDA Data and Lending Practices
The Board has carefully reviewed Whitney's 1992, 1993,
and preliminary 1994 HMDA data in light of Protestant's
comments. In general, these data indicate an improvement
in Whitney's record of HMDA-reported loans to African
Americans in its delineated communities. For example, the
1993 HMDA data indicate an increase in the number and
percentages of HMDA-reported loans originated to African
Americans in Whitney's New Orleans and Lafayette delineated communities. The preliminary 1994 HMDA data indicate an increase in loan applications from and loan originations to African Americans in each of Whitney's New
Orleans, Baton Rouge and Lafayette delineated communities. 12 However, these data also reflect disparities at Whitney in the rate of loan originations, denials, and applications
by racial group or income level.
The Board is concerned when the record of an institution
indicates disparities in lending to minority applicants and it
believes that all banks are obligated to ensure that their
lending practices are based on criteria that assure not only
safe and sound lending, but also equal access to credit by
creditworthy applicants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community.
The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other
information, for concluding that an institution has engaged
in illegal discrimination in making lending decisions.
The Board has carefully reviewed Protestant's allegations
regarding Whitney's record in lending to minorities, particularly African Americans, in light of information from its
primary supervisor, the OCC. The report of the 1994 CRA
Examination ("1994 CRA Examination Report") stated
that examiners found no evidence of prohibited discrimination or any practices or procedures that would discourage
applications for available credit from any segment of Whitney's delineated communities, or other illegal credit practices. Examiners also found that Whitney was in compliance with the substantive provisions of the fair lending
laws. Moreover, examiners reported that the geographic
distribution of Whitney's HMDA-reported loan applications, approvals, and denials represents a reasonable penetration of all segments of its delineated communities, including low- and moderate-income areas. In addition, the
OCC conducted a fair lending review as part of its 1994
CRA Examination of Whitney and found no evidence of
illegal discriminatory treatment of minority applicants. The
1994 CRA Examination Report also noted that Whitney has
adopted adequate policies, procedures, and training pro-
12. Beginning in 1994, Whitney has excluded data on loans sold into the
secondary market in its HMDA reporting at the request of the OCC. The
Board's analysis of Whitney's preliminary 1994 HMDA data includes such
loans for purposes of comparison with prior years.
292
Federal Reserve Bulletin • March 1995
grams, including fair lending training, to support nondiscriminatory lending decisions. 13
Whitney has taken several steps to increase its lending to
minority and low- and moderate-income borrowers. For
example, Whitney has a second review process for all
mortgage, small business, and consumer loan applications
recommended for denial to determine whether a denial is
justified, and to determine whether there are alternative
means of meeting the applicant's credit needs. This process
is designed to ensure that all applicants, including minority
and low- and moderate-income applicants, receive equitable
consideration in credit decisions.
In addition, in late 1993, Whitney initiated a special loan
product through its Neighborhood Housing Program that
focuses on low- and moderate-income borrowers. This
product, which is available in each of Whitney's delineated
communities, offers a below-market interest rate for borrowers with income under 80 percent of median income, and
offers an even lower rate for borrowers with income under
50 percent of median income. The product also provides for
higher than standard debt-to-income ratios, non-traditional
methods of establishing credit histories, and reduced down
payments and closing costs, and requires no private mortgage insurance, discount points or origination fees. The
1994 CRA Examination Report found that, as of October
1994, Whitney had made 144 loans under its Neighborhood
Housing Program, totalling more than $7 million. Seventysix of these loans, totalling $3.4 million, were to African
Americans.
In 1994, Whitney began underwriting loans through Federal Housing Administration ("FHA") and Veterans Administration ("VA") loan programs. Examiners reported that, as
of October 1994, Whitney had made FHA and VA loans
totalling more than $850,000. In addition, in 1994, Whitney
began participating in the Louisiana Housing Finance
Agency Bond Program. The Board notes that Whitney also
implemented a goal-oriented, incentive-based compensation plan as part of its efforts to encourage housing-related
loans to low- and moderate-income residents.
Whitney also assists in meeting the affordable housing
needs of minority and low- and moderate-income residents
throughout its delineated communities through active participation in various affordable housing programs and projects
of government agencies, non-profit organizations, and private businesses. For example, through its Neighborhood
Housing Program, Whitney works closely with several nonprofit housing organizations that offer homebuyer training
programs for low- to moderate-income residents, including
Neighborhood Housing Services ("NHS") of New Orleans,
Inc., St. Tammany Community Homeowner Counseling
Center, and various housing authorities in its New Orleans
community; NHS of Lafayette LA, Inc., in its Lafayette
community; and Mid City Redevelopment Alliance and
Second Chance Academy in its Baton Rouge community.
Since October 1993, Whitney has funded 60 mortgage
loans, totalling $3.2 million, to clients of NHS of New
Orleans, Inc., and nine mortgage loans, totalling approximately $427,000, to clients of NHS of Lafayette, LA, Inc.,
both non-profit corporations that assist minorities and lowand moderate-income residents in obtaining flexible-term
mortgage loans and meeting down payment and closing
costs. During this same period, Whitney also made 25
mortgage loans totalling approximately $1.2 million to lowand moderate-income graduates of the Neighborhood Development Foundation's Homebuyer Training Program.
In addition, Whitney has financed 36 mortgage loans to
African-American borrowers, totalling more than $865,000,
through the New Orleans Home Mortgage Authority PRIDE
Program ("NOHMA"), which provides interest-free loans
for up to one-half of the down payment and closing costs in
connection with Whitney mortgage loans. Whitney also
participates in a program sponsored by the City of New
Orleans, "Inner-City Vision: A Plan for Today and Tomorrow," which has designated 12 inner-city neighborhoods for
redevelopment. 14 In addition, Whitney extended a line of
credit to a community-based organization in Baton Rouge
for the purchase of houses formerly owned by the U.S.
Department of Housing and Urban Development that will
be sold to low-income residents. Moreover, Whitney extended a line of credit to a minority mortgage company that
focuses on lending in minority neighborhoods in New Orleans.
In the past four years, Whitney has extended a line of
credit to a developer to fund the rehabilitation of more than
150 residences in New Orleans that he subsequently sold to
low- and moderate-income homeowners, including African
Americans. In addition, in the last two years, Whitney
loaned up to $3 million to renovate 124 affordable housing
rental units in a New Orleans apartment complex in which
the majority of the residents are African Americans. In its
Baton Rouge community, Whitney has loaned more than
$530,000 to purchase and renovate four low- and moderateincome apartment complexes, with predominantly AfricanAmerican residents. Whitney also has made annual contributions exceeding $250,000 to various neighborhood,
housing, and other organizations, including those that pri-
13. Whitney responded to Protestant's comments that Whitney employs
few minority lending officers by noting that the managers of Whitney's
Mortgage Loan Operations, its Neighborhood Housing Program, and many
of its branches are minorities. In addition, Whitney notes that, in September
1994, it hired a minority as the full-time mortgage lending officer for the
Baton Rouge community.
14. Whitney also donated funds to cover start-up costs to help establish
New Orleans and Baton Rouge offices of the Local Initiatives Support
Corporation ("LISC"), a national nonprofit organization that assists in
organizing community development companies to redevelop low- and
moderate-income neighborhoods.
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marily benefit African Americans, in its delineated communities.
To help meet consumer credit needs of low- and
moderate-income residents, including minorities, Whitney
offers its "Opportunity Loan" product, which provides
smaller loan amounts and flexible underwriting criteria to
assist low- and moderate-income borrowers who otherwise
might not qualify for credit. Since the product's inception in
December 1993, Whitney has made 108 loans totalling
$232,000, including 46 loans totalling $101,000 in predominantly minority census tracts. In addition, Whitney offers a
secured credit card to assist persons who have had difficulties establishing or re-establishing credit. Whitney also offers a Senior Economic Checking Account, which has no
monthly charges, as well as government check cashing
services.
C. Small Business Lending
Whitney also actively engages in small business lending,
with special programs focusing on minority-owned businesses and businesses in low- and moderate-income areas.
Whitney has established an Economic Development Lending Department, which specializes in making loans to entrepreneurs and owners of existing small businesses, who do
not meet all the requirements for conventional commercial
bank financing. Whitney also participates in numerous federal and state government-related small business loan programs. For example, Whitney began participating in Small
Business Administration ("SBA") loan programs in 1993.
As a certified SBA lender, Whitney participates in various
SBA lending programs, including the SBA Women Prequalified Loan Program and the SBA Small Loan Pilot
Program, and had SBA loans outstanding totalling approximately $4.9 million as of October 1994.
In addition, Whitney invested $250,000 in the New Orleans Small Business and Industrial Development Corporation, Inc., a private community development financial institution that makes loans to small businesses within the city,
and funded three such loans totalling $400,000, including
two loans to African Americans. As of year end 1994,
Whitney had made seven loans totalling $500,000 through
the Jefferson Parish Economic Development Commission
("JEDCO"). In addition, Whitney committed $1 million to
the JEDCO Loan Pool, the first commercial bank pool for
small business loans in southern Louisiana. Whitney also
made 15 loans totalling approximately $5 million in conjunction with the Regional Loan Corporation ("RLC"),
which administers a number of economic development loan
programs for the City of New Orleans and surrounding
parishes. In 1994, Whitney donated funds to help establish
the Louisiana Capital Certified Development Corporation,
the certified development corporation for Lafayette Parish,
and loaned approximately $93,000 through the corporation.
293
As of October 1994, Whitney had approximately
$25 million in loans outstanding under these and other
government-related small business loan programs, including $2.8 million in loans through the Louisiana Small
Business Linked-Deposit Program, through which small
business borrowers receive loans with below-market interest rates, and $9 million in industrial revenue bond loan
participations. In addition, Whitney loaned $100,000 for the
organizational expenses of a new minority-owned depository institution in New Orleans.
D. Ascertainment and Marketing
Whitney uses various methods to ascertain community
credit needs and to reach all segments of its delineated
communities. The 1994 CRA Examination Report stated
that Whitney established a formal ascertainment program
that is administered by the Community Affairs Officer and
supervised by the CRA Officer. In 1993, Whitney implemented a Needs Ascertainment Program, under which Whitney's calling officers have made 140 community contacts
and have held many meetings with government representatives.
The 1994 CRA Examination Report stated that bank
employees also participated in numerous trade shows, special events, and bank fairs throughout Whitney's delineated
communities, featuring home buyer, affordable housing, and
small business lending programs. In addition, Whitney participated in affordable housing seminars for real estate professionals. Whitney also has conducted educational workshops and credit seminars in cooperation with a university
and various community organizations that primarily serve
the African-American community, including workshops and
seminars in minority churches, and has contacted residents
of local housing projects.
In addition, examiners reported that Whitney's marketing
program is designed to reach all segments of its delineated
communities. Whitney markets its products and services
through a variety of advertising methods, including print
and broadcast media and billboards. These activities include
marketing efforts directed toward African Americans and
Hispanics, such as advertising in newspapers circulated
primarily in the African-American and Hispanic communities. Whitney also has increased the use of minority models
in its advertising. In April 1994, Whitney began a cultural
diversity media campaign, including a series of advertisements in minority publications, which features many African Americans and the diverse cultures of the region.
E. Community Delineation and Branch Locations
The 1994 CRA Examination Report indicated that Whitney's delineation of its three communities using parish
boundaries is reasonable, is consistent with Whitney's size
294
Federal Reserve Bulletin • March 1995
and resources, and does not arbitrarily exclude low- and
moderate-income areas. Examiners noted that Whitney's
branches are reasonably accessible to all segments of its
community, including low- and moderate-income neighborhoods.
The Board notes that, of Whitney's 44 branches, 18 are
located in or immediately adjacent to low- and moderateincome census tracts, which also represent predominantly
African-American neighborhoods. In addition, examiners
reported that Whitney added loan officers in various
branches, including branches in Lafayette and Baton Rouge,
to make mortgage lending services more accessible and
extended business hours at 27 branches to accommodate all
segments of its delineated community. The Board notes that
Whitney had only one branch in its Baton Rouge delineated
community until March 1994, when it acquired six additional branches, of which three are located in or adjacent to
predominantly African-American census tracts.
Conclusion on Convenience and Needs Factors
On the basis of all the facts of record, including information
provided by the Protestant, Applicant's responses, and the
relevant reports of examination, the Board concludes that
convenience and needs considerations, including the CRA
performance records of the institutions involved in the
proposal, are consistent with approval of this application.
The Board will monitor and assess the success of Whitney's
continued efforts to increase its lending to minorities and
low- and moderate-income borrowers in, and to residents in
minority and low- and moderate-income areas of, each of its
delineated communities, especially its Baton Rouge and
Lafayette communities, in connection with future applications by Applicant to expand its deposit-taking facilities.
Other
Considerations
The 1994 CRA Examination Report also indicated that
Whitney has a comprehensive branch closing policy, which
requires an assessment of the adverse impact that a closing
would have on the branch's community. The Board notes
that Whitney has not closed any branches in the last nine
years.
The Board also has reviewed information concerning the
financial and managerial resources and future prospects of
Applicant and Alabama Bank and the other supervisory
factors the Board must consider under section 3 of the BHC
Act, and concludes that these factors are consistent with
approval of this proposal.
F. CRA Policies and Procedures
Conclusion
Whitney has adopted and implemented formal CRA policies and procedures consistent with an effective CRA program. The 1994 CRA Examination Report stated that Whitney's board of directors has adopted a CRA strategic plan
that outlines CRA goals and objectives and provides specific strategies to achieve them. Examiners also reported
that the CRA Committee has adopted CRA action plans for
each of Whitney's three delineated communities.
In addition, examiners reported that the board of directors
maintains active oversight of Whitney's CRA program
through various reporting mechanisms, including monthly
reports on Whitney's CRA activities, quarterly CRA monitoring reports that inform the board of directors and senior
management of progress in implementing the CRA strategic
plan, and annual CRA self-assessment reports that evaluate
Whitney's CRA activities and recommend improvements.
The board of directors also receives needs ascertainment
reports that identify community needs and actions taken to
address such needs, and geographic loan distribution analyses that report Whitney's loans and deposits by census tract.
In addition, examiners noted that Whitney provides fair
lending and cultural diversity training to its employees at all
levels, including the board of directors.15
Based on the foregoing, including all the facts of record, the
Board has determined that this application should be, and
hereby is, approved.16 The Board's approval is conditioned
on Applicant's compliance with all commitments made in
connection with this application. For purposes of this action, the commitments and conditions relied on by the
Board in reaching its decision are deemed to be conditions
15. Applicant has committed to implement its CRA program at Alabama
Bank. In particular, Applicant has committed to adopt a CRA strategic plan
and a CRA action plan tailored to the needs of Alabama Bank's delineated
community, which include elements that address active involvement of
Alabama Bank's board of directors and its CRA Committee in CRA planning
and implementation; effective ascertainment of the credit needs of Alabama
Bank's delineated community; affordable housing programs and consumer
loan products targeted to low- and moderate-income residents, including
minorities; government-related small business products; implementation of a
second review process substantially similar to Whitney's second review
process, discussed above; marketing and media plans and significant outreach and educational efforts by Alabama Bank's staff to reach all segments
of Alabama Bank's delineated community; analyses of the geographic distribution of Alabama Bank's loans and deposits with action plans to take
appropriate steps to provide Alabama Bank's products and services to all
segments of its delineated community; and fair lending and cultural diversity
training for all of Alabama Bank's employees.
16. Protestant also appears to maintain that Applicant and Whitney discriminate against African Americans in their employment practices. The
Board notes that, because Whitney employs more than 50 people, serves as a
depository of government funds, and acts as agent in selling or redeeming
U.S. savings bonds and notes, Applicant and its subsidiaries are subject to
regulations enforceable by the Department of Labor that require:
(1) The filing of annual reports with the Equal Employment Opportunity
Commission; and
(2) A written affirmative action compliance program which states efforts
and plans to achieve equal opportunity in the employment, hiring, promotion, and separation of personnel. See 41 C.F.R. 50-1.7(a), 60-1.40.
Legal Developments
imposed in writing by the Board and, as such, may be
enforced in proceedings under applicable law.
This transaction shall not be consummated before the
fifteenth 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 Atlanta, acting
pursuant to delegated authority.
By order of the Board of Governors, effective
January 24, 1995.
Voting for this action: Chairman Greenspan, and Governors
Kelley, LaWare, Lindsey, Phillips and Yellen. Absent and not
voting: Vice Chairman Blinder and Governor Lindsey.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Orders Issued Under Section 4 of the Bank Holding
Company Act
BNCCORP, INC.
Bismarck, North Dakota
Order Approving
Activities
Notice to Conduct Data
Processing
BNCCORP, INC., Bismarck, North Dakota ("Applicant"),
a bank holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has given notice
under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23(a) of the Board's Regulation Y (12 C.F.R. 225.23(a)) of its intention to acquire all
the voting shares of JMS Systems, Inc., Bismarck, North
Dakota ("Company"), and thereby engage in data processing and data transmission activities pursuant to section
225.25(b)(7) of Regulation Y for depository institutions
such as banks and savings associations ("financial institutions") and for other customers. Company's activities
would be limited to data processing and transmission services, and would not include the provision of management
assistance or advice to any financial institution or other
customer.1
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 30,587,61,895 (1994)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
1. For example, in providing data processing services to financial institutions for loan processing and credit analysis, Company would not make
lending or credit decisions for its customers, would not process loan or credit
applications using the underwriting or credit standards of a bank affiliated
with Company, and would not provide software that incorporates the underwriting or credit standards of any such affiliated bank.
295
Applicant, with $144.4 million in total consolidated assets, is the 11th largest commercial banking organization in
North Dakota, controlling $119.8 million in deposits. 2 Applicant operates three subsidiary banks in North Dakota.
Company is a going concern with offices in Bismarck,
North Dakota.
Section 4(c)(8) of the BHC Act provides that a bank
holding company may, with Board approval, engage in any
activity that the Board determines to be "so closely related
to banking or managing or controlling banks as to be a
proper incident thereto." The Board has previously determined that certain data processing activities are closely
related to banking and permissible for bank holding companies under section 4(c)(8) of the BHC Act. In particular,
Regulation Y permits bank holding companies to provide
data processing and transmission services, facilities, data
bases, or access to such services, facilities, or data bases by
any technological means, so long as the data to be processed or furnished are "financial, banking, or economic"
in nature.3 Applicant proposes to provide comprehensive
data processing services needed in the operation of a financial institution. 4 Except as discussed below, all of Company's proposed activities would specifically involve financial, banking, or economic data, and Applicant has
committed that Company will conduct its data processing
and transmission activities in accordance with the requirements set forth in Regulation Y, including the limitation on
the nature of the data to be processed or furnished. 5
Company's proposed activities would include processing
certain nonfinancial data, such as personnel information, for
financial institutions in their internal operations. Services
relating to such nonfinancial data would be provided only as
part of a larger package of data processing services to a
financial institution, and would not be offered on a stand-
2. Asset and deposit data are as of September 30, 1994.
3. See 12 C.F.R.225.25(b)(7). Regulation Y also requires that the services
be provided pursuant to a written agreement, and places certain limitations
on the facilities and hardware provided with the data processing services. In
particular, the facilities must be designed, marketed, and operated for the
processing and transmission of financial, banking, or economic data; hardware must be provided only in conjunction with permissible software; and
general purpose hardware must not constitute more than 30 percent of the
cost of any packaged offering. See id.
4. These data processing activities are described in the Appendix, and
include services relating to matters such as deposit account transactions and
securities recordkeeping. Company also proposes to provide data processing
services that the Board has previously determined are permissible for bank
holding companies to provide to nonfinancial customers, such as accounts
receivable and payable services. These services also are described in the
Appendix.
5. The data processing activities that Company would conduct pursuant to
section 225.25(b)(7) of Regulation Y are described in the Appendix. Company also would provide data processing and transmission services for
affiliates pursuant to section 4(c)(1)(C) of the BHC Act and section 225.22(a)
of Regulation Y. In addition, as an incident to its data processing activities
conducted pursuant to section 225.25(b)(7) of Regulation Y, Company would
provide excess capacity, by-products of permissible data processing activities, and data processing services not otherwise reasonably available in the
relevant market area in accordance with the Board's regulations and interpretations. See 12 C.F.R. 225.21(a)(2); 12 C.F.R. 225.123(e).
296
Federal Reserve Bulletin • March 1995
alone basis or to customers other than financial institutions.
Applicant notes that nonfinancial data processing would
constitute a relatively small portion of Company's services,
but contends that this aspect of the proposal would permit
Company to offer competitively complete data processing
services to financial institutions.
Data processing services for financial institutions relate
largely to financial and banking data. However, financial
institutions must also process some nonfinancial information to support their internal operations. These data typically represent a relatively small percentage of the data
processing activities of financial institutions. The Board
believes that processing nonfinancial data is a necessary
part of providing general data processing services to financial institutions. The Board has concluded that the proposed
activity is incidental to providing data processing services
for financial institutions, and, therefore, is permissible under section 4 of the BHC Act and Regulation Y. 6
In every case involving a nonbanking acquisition by a
bank holding company under section 4 of the BHC Act, the
Board also considers the financial condition and resources
of the applicant and its subsidiaries and the effect of the
transaction on those resources. 7 Based on all the facts of
record, the Board has concluded that financial and managerial considerations are consistent with approval of this proposal.
In order to approve this notice, the Board also must
determine that the proposed activities are a proper incident
to banking, that is, that the performance of the proposed
activities by Applicant through Company "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). The Board expects that the participation of Company in the market for the proposed data
processing services would maintain or increase the level of
competition among providers of those services. The Board
also anticipates that Company's proposed activities would
result in a wider range of services and products, enhanced
efficiency, and increased convenience for customers. In
addition, there is no evidence in the record that consummation of the proposed activities would result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices. Accordingly, the
Board has concluded that the balance of the public interest
factors it is required to consider under the proper incident to
banking standard of section 4(c)(8) of the BHC Act is
favorable, and consistent with approval of this notice.
6. See 12 C.F.R. 225.21(a)(2).
7. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 75 Federal
Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve
Bulletin 155 (1987).
Based on all the facts of record, the Board has determined that the notice should be, and hereby is, approved. 8
The Board's approval is specifically conditioned on compliance with the commitments made in connection with this
notice and with the conditions referred to in this order. The
Board's determination also is subject to all the conditions
set forth in Regulation Y, including those in sections 225.7
and 225.23(b) of Regulation Y, and to the Board's authority
to require such modification or termination of the activities
of a bank holding company or any of its subsidiaries as the
Board finds necessary to ensure compliance with, and to
prevent evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder. For purposes of this action, these commitments and conditions 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 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 Minneapolis, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
January 9, 1995.
Voting for this action: Chairman Greenspan and Governors
Kelley, LaWare, Lindsey, Phillips, and Yellen. Absent and not
voting: Vice Chairman Blinder.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix
(1) Company would provide data processing services to
financial institutions relating to the following areas of operation: opening and closing customer accounts; deposits,
loan payments, and other account transactions; account
reconciliation, the calculation of account balances, fees, and
interest payments, and the preparation of account statements; the issuance of certificates of deposit; credit analysis
and financial modeling; monitoring of data processing costs;
access to financial and economic data bases; bill payments
and other home banking transactions (for example, opening
or closing accounts, or transferring funds between accounts); check collection and processing; loan processing
and documentation; trade finance; cash management; bank
retail operations; tax documentation; signature verification;
8. Company also may develop additional data processing and transmission
services not described in the notice. Applicant has committed that it will
consult with the Federal Reserve System before Company commences any
new activity not described in the notice to ensure that the activity satisfies the
criteria set forth in the BHC Act and Regulation Y, and to allow the Federal
Reserve System to consider whether a separate notice should be reviewed in
any particular case.
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lockbox operations; securities recordkeeping; and general
recordkeeping.
(2) Company would provide data processing services to
other customers relating to the following areas: billing and
payroll; accounts receivable and payable; inventory; accounting and bookkeeping; economic forecasting; and access to financial and economic data bases.
(3) Company would provide on-line data processing and
transmission services; home banking and bill payment services; data processing services with computer output to
optical digital disks, and related storage, retrieval, processing, and transmission capabilities; and on-site data processing and transmission facilities.
(4) As an incident to the foregoing activities, Company
would purchase, sell, rent, and maintain electronic equipment used to perform permissible data processing and transmission services subject to the specific limits in section 225.25(b)(7) of Regulation Y.
State Street Boston Corporation
Boston, Massachusetts
Order Approving Acquisition of a Nonbanking
Company
State Street Boston Corporation, Boston, Massachusetts
("State Street"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has
applied under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the
Board's Regulation Y (12 C.F.R. 225.23(a)) to acquire IFTC
Holdings, Inc., and its wholly owned subsidiary, Investors
Fiduciary Trust Company ("Company"), both of Kansas
City, Missouri, and thereby engage in providing trust and
custody services and transfer, paying, clearing, and settlement agency services to mutual funds and other entities
pursuant to section 225.25(b)(3) of Regulation Y (12 C.F.R.
225.25(b)(3)). Company also proposes to engage in providing administrative services to mutual funds.1
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(59 Federal Register 64,427 (1994)). 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 4 of the BHC Act.
State Street, with total consolidated assets of approximately $22.4 billion, operates one commercial bank subsidiary, State Street Bank and Trust Company, Boston, Massachusetts ("Bank"). Through offices in 32 locations
worldwide, State Street also provides a broad range of
financial asset services, such as corporate trusteeship, do-
1. A list of the proposed administrative services is included in the
Appendix.
297
mestic and global custody arrangements, and portfolio accounting.
Company is a Missouri state-chartered trust company
insured by the Federal Deposit Insurance Corporation
("FDIC") that engages in trust and fiduciary activities, as
well as activities that are not permitted for trust companies
under the BHC Act, including significant nonfiduciary
deposit-taking, incidental commercial lending, offering
FDIC-insured deposits through its affiliates, and using the
Federal Reserve System's payment services. Company operates under a special exemption from the definition of
"bank" under the BHC Act. 2 The BHC Act provides that
Company loses its special exemption upon a change in
ownership.3
State Street proposes to operate Company as a trust
company and not as a bank as defined in the BHC Act. 4
State Street has made a number of commitments to conform
Company's activities to those of a trust company. In particular, Company proposes to divest all its nonfiduciary and
demand deposit accounts within 90 days after its acquisition
by State Street, and to cease marketing FDIC-insured deposits through its affiliates immediately after its acquisition by
State Street. Moreover, within one year of consummation,
Company proposes to terminate all deposit taking, terminate its FDIC deposit account insurance, and cease to be an
insured bank under section 3(h) of the FDI Act
(12 U.S.C. § 1813(h)). Within a year, Company also proposes to terminate making incidental commercial loans to
its mutual fund clients and using the Federal Reserve payment system. 5 Company's long-standing operations have
been conducted under a specific legislative grant of authority, and State Street contends that a shorter divestiture
period would cause significant operational difficulties. The
Board believes, in light of the facts in this case, that
permitting Company a year to conform the activities of
2. The Competitive Equality Banking Act of 1987 ("CEBA") amended the
definition of "bank" in section 3 of the BHC Act to include any organization
that is an insured bank within the meaning of the Federal Deposit Insurance
Act ("FDI Act"). See 12 U.S.C. § 1841(c)(1)(A). CEBA also enacted section
2(c)(2)(I) of the BHC Act that specifically exempts Company by name from
this amended definition. See 12 U.S.C. § 1841(c)(2)(I).
3. 12 U.S.C. § 1841(c)(2)(I). Company does not qualify for the exception
from the definition of bank that is provided in section 2(c)(2)(D) of the BHC
Act (12 U.S.C. § 1841(c)(2)(D)).
4. The law of Company's home state (Missouri) does not authorize the
acquisition of Missouri banks by Massachusetts bank holding companies.
5. Company would continue to make certain interest-free advances to unit
investment trusts and retirement plans in its capacity as trustee for those
plans. These advances would not be outstanding for more than three days and
are for the payment of ordinary operating expenses of the plan or for a
purpose incidental to the ordinary operation of the plan. The legislative
history of the provision creating Company's exemption indicates that Congress considered these advances to be in the nature of normal and customary
advances in a trust or fiduciary capacity that would not cause Company to be
engaged in the business of making commercial loans. See H.R. Conf. Rep.
No. 261, 100th Cong., 1st Sess. 121 (1987). In light of Company's commitment to terminate its demand deposit taking activities, this lending activity
would not cause Company to become a bank for purposes of the BHC Act.
298
Federal Reserve Bulletin • March 1995
Company to those of a trust company is consistent with
section 4 of the BHC Act. 6
In addition to its trust activities, Company proposes to
engage in several activities permissible under section 4 of
the BHC Act. 7 In particular, Company would act as a
trustee, custodian, paying agent, dividend disbursing agent,
securities clearing agent, general transfer agent, and would
provide certain settlement services to mutual fund clients.
These types of agency activities are traditional activities
performed by trust companies under Federal and state law. 8
Company also proposes to continue to provide administrative services to mutual funds. 9 The administrative services that Company provides to mutual funds include computing the fund's net asset value and performance data,
coordinating communications and activities between the
investment advisor and the other service providers, accounting and recordkeeping, disbursing payments for the fund's
expenses, providing office space for the fund, and preparing
and filing regulatory reports for the fund. The Board previously has approved these activities, and Company has committed to conduct these activities involving mutual funds
subject to the prudential limitations previously established
by the Board.10 The Board believes that Company's perfor-
6. See The Mitsui Bank, Limited, 76 Federal Reserve Bulletin 381 (1990).
That application involved an acquisition by a California bank holding
company of a New York bank that became a trust company because the laws
of New York did not authorize California bank holding companies to acquire
New York banks. The trust company was given a year to divest all its
impermissible deposits and loans.
7. The conduct of these activities by Company would not cause it to be
deemed a bank under the BHC Act. Under the BHC Act, an uninsured
company is deemed a bank if it engages both in accepting demand deposits
or deposits that the depositor may withdraw by check or similar means and in
the business of making commercial loans. As noted above, within 90 days
after consummation of this proposal, Company will have ceased collecting
demand deposits and other nontrust deposits.
8. Serving as a paying agent, dividend disbursing agent, and securities
clearing agent are permissible trust company agency activities. See 12 C.F.R.
225.25(b)(3)(ii); 12 C.F.R. 9.20 (national banks as transfer agents) and
12 C.F.R. 208.8(f) (state member banks as transfer agents); see also 12 C.F.R.
225.125(i). Company is currently registered with the FDIC as a transfer
agent pursuant to 12 C.F.R. Part 241. Company also would continue to
invest in a variety of securities, including government or municipal securities, mortgage-backed securities, and corporate debt securities that are sold
on the secondary market. State Street has committed that Company will
divest all its equity securities before or immediately after consummation of
the proposal.
Company would also continue to provide financial data processing and
accounting services to its business customers by maintaining inventories and
other economic data on domestic and foreign securities, and providing such
services as general ledger accounting, recordkeeping, and market valuation
for those securities. The Board has previously determined such activities to
be closely related to banking. See BankAmerica Corporation, 66 Federal
Reserve Bulletin 511 (1980); Citicorp (Citishare), 68 Federal Reserve Bulletin 505 (1982); see also 12 C.F.R. 225.25(b)(7).
9. Company would not provide any administrative services to mutual
funds the shares of which are sold or marketed primarily to customers of
Bank.
10. See Mellon Bank Corporation, 79 Federal Reserve Bulletin 626 (1993)
("Mellon"). In particular, the distributor of the funds would not be affiliated
with Company or State Street, and neither State Street nor Company will be
involved in the distribution of the shares of any mutual fund. Company
would also not be involved in the promotion or sale of the shares of any
mutual fund, and State Street has committed that Company would not engage
mance of these activities is also consistent with its status as
a trust company. Under these circumstances, and for the
reasons discussed in Mellon, Company's proposed administrative activities for mutual funds are not prohibited by the
Glass-Steagall Act (12 U.S.C. §§ 221a and 377) and are
permissible nonbanking activities for bank holding companies. 11
In order to approve this proposal, the Board also must
find that the performance of the proposed activities by
Company "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). The Board has determined previously that the provision of the proposed administrative services within certain parameters is not likely to
result in the types of subtle hazards at which the GlassSteagall Act is aimed or any other adverse effects. 12 The
Board believes that the performance of the proposed activities by Company can reasonably be expected to produce
benefits to the public such as a wider range of products,
increased efficiency, and greater convenience for Company's and State Street's customers. There is no evidence in
the record to indicate that consummation of this proposal,
subject to the commitments noted above, would result in
significant adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of interests, or unsound banking practices, that are not outweighed by the expected public benefits of the proposal. In
making this determination, the Board has considered the
financial and managerial resources of State Street and its
subsidiaries, and those of Company, and the effect of this
proposal upon such resources, and has concluded that these
factors are consistent with approval of this application.
Based on all the facts of record, the Board finds that the
public benefits of Company's proposed activities outweigh
any adverse effects and, therefore, the activities are a proper
incident to banking for purposes of section 4(c)(8) of the
BHC Act.
in any marketing, sales or advertising activities relative to any mutual fund.
Company would provide the distributor of a fund with performance and
portfolio data, and Company would review marketing materials prepared by
the distributor for the sole purpose of ensuring compliance with all pertinent
regulatory requirements. State Street would not acquire for its own account
more than 5 percent of the shares of any fund administered by Company.
11. State Street does not propose to have any director or senior officer
interlocks between Company, State Street, or any of its subsidiaries and any
fund that Company administers. Company would provide junior level officers and employees to some of its mutual fund clients under the circumstances
permitted in Mellon. State Street also will comply with the Investment
Company Act of 1940 (15 U.S.C. §§ 80a-2, 80a-10), which requires that at
least 40 percent of the board of directors of a mutual fund consist of
disinterested individuals who are not affiliated with the investment advisor,
with any person that the SEC has determined to have a material business or
professional relationship with the fund, with any employee or officer of the
fund, with any registered broker or dealer, or with any other interested or
affiliated person.
12. See Mellon.
Legal Developments
Based on the foregoing and all the facts of record, including all of State Street's commitments and representations,
and subject to all the terms and conditions set forth in this
order, the Board has determined that the application should
be, and hereby is, approved. The Board's determination is
subject to all the conditions set forth in Regulation Y,
including those in sections 225.7 and 225.23(b)(3) of Regulation Y (12 C.F.R. 225.7 and 225.23(b)(3)), and to the
Board's authority to require modification or termination of
the activities of a bank holding company or any of its
subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the
BHC Act and the Board's regulations and orders issued
thereunder. The Board's decision is specifically conditioned
on State Street's compliance with all the commitments and
representations made in connection with this application,
including the commitments and conditions discussed in this
order. The commitments, representations, and conditions
relied on in reaching this decision shall be deemed to be
conditions imposed in writing by the Board in connection
with its findings and decision and may be enforced in
proceedings under applicable law.
This transaction shall not be consummated later than
three months after the effective date of this order, unless
such period is extended for good cause by the Board or by
the Federal Reserve Bank of Boston, acting pursuant to
delegated authority.
By order of the
January 30, 1995.
Board
of
Governors,
effective
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
299
(7) Providing office facilities and clerical support for the
fund;
(8) Developing and implementing procedures for monitoring compliance with regulatory requirements and compliance with the fund's investment objectives, policies, and
restrictions as established by the fund's board;
(9) Providing routine fund accounting services and liaison
with outside auditors;
(10) Preparing and filing tax returns;
(11) Reviewing and arranging for payment of the fund's
expenses;
(12) Providing communication and coordination services
with regard to the fund's investment advisor, transfer agent,
custodian, distributor and other service organizations that
render recordkeeping or shareholder communication services;
(13) Reviewing and providing advice to the distributor, the
fund and investment advisor regarding sales literature and
marketing plans to assure regulatory compliance;
(14) Providing information to the distributor's personnel
concerning the fund's performance and administration;
(15) Participation in seminars, meetings, and conferences
designed to present information to brokers and investment
companies, but not in connection with the sale of shares of
the funds to the public, concerning the operations of the
funds, including administrative services provided by Company to the funds;
(16) Assisting existing funds in the development of additional portfolios; and
(17) Providing reports to the fund's board with regard to its
activities.
Orders Issued Under Sections 3 and 4 of the Bank
Holding Company Act
Deputy Secretary of the Board
Boatmen's Bancshares, Inc.
St. Louis, Missouri
Appendix
List of Administrative
Services
Order Approving
Company
(1) Maintaining and preserving the records of the fund,
including financial and corporate records;
(2) Computing net asset value, dividends, performance data
and financial information regarding the fund;
(3) Furnishing statistical and research data;
(4) Preparing and filing with the SEC and state securities
regulators registration statements, notices, reports and other
material required to be filed under applicable laws;
(5) Preparing reports and other informational materials regarding the fund including proxies and other shareholder
communications and reviewing prospectuses;
(6) Providing legal and regulatory advice in connection
with its other administrative services;
the Acquisition
of a Bank
Holding
Boatmen's Bancshares, Inc., St. Louis, Missouri ("Boatmen's), a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has applied
under section 3 of the BHC Act (12 U.S.C. § 1842) to
acquire all the voting shares of Worthen Banking Corporation, Little Rock, Arkansas ("Worthen"), and thereby indirectly acquire the subsidiary banks of Worthen listed in the
Appendix.
Boatmen's also has applied under section 4(c)(8) of the
BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. 225.23) to acquire:
300
Federal Reserve Bulletin • March 1995
(1) Worthen TrustCompany, Little Rock, Arkansas, and
thereby engage in trust company activities pursuant to
section 225.25(b)(3) of Regulation Y; and
(2) Consumer Protective Life Insurance Company, Little
Rock, Arkansas, and thereby engage in credit-related
insurance activities pursuant to section 225.25(b)(8)(i) of
Regulation Y.
Notice of the applications, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 52,791 (1994)). 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 and 4 of the BHC Act.
Boatmen's, with total consolidated assets of $28.6 billion, controls 45 depository institutions1 in eight states.2
Boatmen's is the seventh largest depository institution in
Arkansas, controlling deposits of $774.8 million, representing approximately 2.7 percent of the total deposits in depository institutions in the state. Worthen, with total consolidated assets of $3.5 billion, controls ten banks in Arkansas
and one bank in Texas. Worthen is the largest depository
institution in Arkansas, controlling deposits of approximately $3 billion, representing approximately 10.8 percent
of total deposits in depository institutions in the state. Upon
consummation of this proposal, Boatmen's would become
the largest depository institution in Arkansas, controlling
deposits of approximately $3.7 billion, representing approximately 13.4 percent of total deposits in depository institutions in the state.
Boatmen's is the 13th largest commercial banking organization in Texas, controlling deposits of approximately
$1.3 billion, representing less than 1 percent of the total
deposits in commercial banking organizations in the state.
Worthen is the 170th largest commercial banking organization in Texas, controlling deposits of approximately
$102.3 million, representing less than 1 percent of total
deposits in commercial banking organizations in the state.
Upon consummation of this proposal, Boatmen's would
become the 12th largest commercial banking organization
in Texas, controlling deposits of approximately $1.4 billion,
representing less than 1 percent of total deposits in commercial banking organizations in the state.
Douglas Amendment
Analysis
Section 3(d) of the BHC Act, the Douglas Amendment,
prohibits the Board from approving an application by a
bank holding company to acquire control of any bank
1. Depository institutions include commercial banks, savings banks, and
savings associations.
2. All asset data are as of September 30, 1994, and all state deposit data are
as of June 30, 1993. These figures are adjusted to reflect mergers approved
through December 5, 1994.
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
Boatmen's is Missouri. 4
Missouri5 and Arkansas6 have enacted banking statutes
that permit out-of-state bank holding companies to acquire
banks in these states, provided that the home state of the
acquiring bank holding company permits the acquisition of
banks in that state on a reciprocal basis. The Board previously has determined that the interstate banking statutes of
Texas permit out-of-state bank holding companies to acquire established banking organizations in Texas.7 The Arkansas and Texas state banking supervisors have informally
indicated that the proposed acquisition appears to be expressly authorized under their respective state statutes. In
light of the foregoing, and based on an analysis of the
interstate banking statutes involved, the Board has determined that its approval of this proposal is not prohibited by
the Douglas Amendment. Approval of this proposal is conditioned on receipt by Boatmen's of all required state regulatory approvals.
Competitive
Considerations
Boatmen's and Worthen own depository institutions that
compete directly in the Arkansas banking markets of Little
Rock, Garland County, Faulkner County, Fayetteville/
Springdale, Russellville, and Harrison, and in the Missouri
banking market of West Plains. The Board has carefully
considered the effects that consummation of this proposal
would have on competition in these banking markets in
light of all the facts of record, including the number of
competitors that would remain in these markets, the increase in the concentration of total deposits in depository
institutions8 in these markets ("market deposits") as mea-
3. 12 U.S.C. § 1842(d).
4. 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.
5. Mo. Rev. Stat. § 362.925 (Vernon Supp. 1994).
6. Ark. Code Ann. § 23-32-1804(e) (1993). The Arkansas Regional Banking Act also imposes certain conditions. Boatmen's has sought the approval
of the Arkansas state banking supervisor and appears to have satisfied the
other conditions under Arkansas law.
7. Boatmen's Bancshares, Inc., 79 Federal Reserve Bulletin 1179 (1993).
Under Texas law, each bank to be acquired must have been in existence for at
least five years, and the proposed transaction must not result in the acquiring
organization controlling more than 25 percent of total deposits held by
depository institutions in Texas. Tex. Rev. Civ. Stat. Ann. Art. 342-916
(West 1992). The proposed acquisition in Texas appears to meet these
requirements.
8. Market deposit data are as of June 30,1993. 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
Legal Developments
sured by the Herfindahl-Hirschman Index ("HHI"), 9 and
certain commitments made by Boatmen's.
Upon consummation of the proposal, Boatmen's would
become the second largest depository institution in both the
Faulkner County banking market ("Faulkner banking market") 10 and the Garland County banking market ("Garland
banking market").11 Both markets would be considered
highly concentrated under the Department of Justice Merger
Guidelines, and Boatmen's would control more than
35 percent of the market deposits in each market.12 To
mitigate the potential that this transaction may have adverse
competitive effects in these markets, Boatmen's has committed to divest to an out-of-market depository institution:
(1) A branch of either Worthen or Superior Federal Bank,
FSB, Fort Smith, Arkansas ("Superior FSB"), a Boatmen's savings association subsidiary, with at least
$17.5 million in total deposits and loans in the Faulkner
banking market; and
(2) A branch of either Worthen or Superior FSB with at
least $7 million in total deposits and loans in the Garland
market.13
Under these divestiture commitments, consummation of
this proposal would not exceed the threshold levels in the
Department of Justice Merger Guidelines and the number of
(1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
Thus, the Board has regularly included thrift deposits in the calculation of
market share on a 50 percent weighted basis. See, e.g., First Hawaiian Inc.,
77 Federal Reserve Bulletin 52 (1991).
9. 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. The Justice Department
has informed the Board that a bank merger or acquisition generally will not
be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger increases
the HHI by more than 200 points. The Justice Department has stated that the
higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose
lenders and other non-depository financial entities.
10. The Faulkner County banking market is approximated by Faulkner
County.
11. The Garland County banking market is approximated by Garland
County.
12. Without any divestiture, the HHI in the Faulkner banking market
would increase by 475 points to 3791, and Boatmen's would control approximately 44 percent of market deposits upon consummation. In the Garland
banking market, consummation of the proposal would increase the HHI by
232 points to 3990 without any divestiture, and Boatmen's would control
approximately 37 percent of market deposits.
13. Boatmen's has committed to submit to the Board, prior to consummation of its acquisition of Worthen, a binding contract acceptable to the Board
for the sale of these branches. Boatmen's also has committed that, if it does
not consummate such divestiture transactions within 180 days after consummation of the acquisition of Worthen, it will transfer these branches to an
independent trustee, who will be authorized to supervise the operations of
these branches and instructed to prompdy find a suitable buyer. In addition,
Boatmen's has committed to submit to the Board, before consummation of
the acquisition of Worthen, an executed trust agreement acceptable to the
Board stating the terms of this divestiture. The Board's action on the
application is expressly conditioned on compliance with these commitments.
301
depository institutions that compete in these markets would
remain unchanged. 14
In the Little Rock banking market15 and the Harrison
banking market,16 Boatmen's would become the largest
depository institution, and these banking markets would be
considered highly concentrated under the Department of
Justice Merger Guidelines upon consummation of the proposal. 17 Currently, Boatmen's is the fourth largest depository institution in the Little Rock banking market and the
fifth largest in the Harrison banking market. A number of
factors indicate that the increased level of concentration in
the Little Rock and Harrison markets, as measured by the
HHI, tends to overstate the competitive effects of this proposal. For example, numerous competitors would remain in
these markets after consummation of this proposal.18 Both
of these markets also are attractive for entry. In the Little
Rock banking market, which encompasses the state's capital and largest city, the population growth rate from 1980 to
1992 increased at almost twice the rate of the state's population growth as a whole. The per capita income in the Little
Rock banking market also is substantially higher than any
other area of the state. Five de novo banks have entered this
market in the last six years, demonstrating the attractiveness
of this market for new entrants. In the Harrison banking
market, the population growth, per capita income, and ratios
of population and deposits per banking office exceed the
average of other rural counties in Arkansas, which also
makes this market attractive for new entrants. The Department of Justice has not objected to consummation of this
proposal or indicated that the proposal would have any
significantly adverse competitive effects.
In the Arkansas banking markets of Russellville and
Fayetteville/Springdale and in the Missouri banking market
of West Plains, 19 consummation of this proposal would not
14. Upon completion of the proposed divestitures, in the Faulkner banking
market, Boatmen's would control approximately 40 percent of the total
market deposits, and the HHI would increase by no more than 173 points to
3489. In the Garland banking market, Boatmen's would control approximately 36 percent of the total market deposits, and the HHI would increase
by no more than 165 points to 3923.
15. The Little Rock banking market is approximated by Pulaski and Saline
Counties; Butler, Caroline, Magness, Oak Grove, Ward, and York townships
in Lonoke County; and El Paso, Royal and Union townships in White
County.
16. The Harrison banking market is approximated by Boone, Marion,
Newton and Searcy Counties.
17. In the Little Rock banking market, the HHI would increase 249 points
to 2159, and Boatmen's would control approximately 32.3 percent of market
deposits. In the Harrison banking market, the HHI would increase 344 points
to 1854, and Boatmen's would control approximately 27.6 percent of market
deposits.
18. In the Little Rock banking market, 18 competitors would remain,
including the second and third largest banking organizations in the market,
which would have market shares of approximately 28 percent and
16 percent, respectively. In the Harrison market, seven competitors would
remain in the market after consummation of this proposal, including the
second, fourth and eighth largest commercial banking organizations operating in the state.
19. The Russellville, Arkansas, banking market is approximated by Pope
and Yell Counties in Arkansas; the Fayetteville/Springdale, Arkansas, bank-
302
Federal Reserve Bulletin • March 1995
exceed the threshold standards in the Department of Justice
Merger Guidelines. 20 In addition, numerous competitors
would remain in all these markets.
Based on all the facts of record, including the proposed
divestitures, the attractiveness of these markets to potential
entrants, and the number of competitors that would remain,
the Board concludes that consummation of this proposal
would not have a significantly adverse effect on competition
or concentration of banking resources in any relevant banking market.
Convenience and Needs
Considerations
In acting on 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 expansion
proposals.21
The Board received a number of comments on the proposal, including comments from 30 community groups,
government officials, and development organizations that
support the proposal. These commenters note the active
involvement of Boatmen's in various affordable housing
and community development programs and small business
development projects throughout its delineated community
and support approval of this proposal. In addition, the
Midwestern District Office of the Office of the Comptroller
of the Currency ("OCC"), which supervises 20 Boatmen's
bank subsidiaries, submitted a comment supporting the
proposal, stressing that Boatmen's, through its subsidiary
banks, has demonstrated a strong commitment to meeting
ing market is approximated by Benton and Washington Counties in Arkansas; and the West Plains, Missouri, banking market is approximated by
Howell and Oregon Counties in Missouri; and Fulton County in Arkansas.
20. Boatmen's would become the largest depository institution in the
Russellville banking market, controlling 25.4 percent of market deposits, and
the HHI would increase by 195 points to 1927. In the Fayetteville/Springdale
banking market, Boatmen's would become the second largest depository
institution, controlling 19.2 percent of market deposits, and the HHI would
increase by 31 points to 2353. Boatmen's would remain the largest depository institution in the West Plains, Missouri, banking market, controlling
approximately 30 percent of market deposits, and the HHI would increase by
118 points to 1551.
21. 12 U.S.C. § 2903.
the needs of its communities, including low- and moderateincome neighborhoods. In particular, the OCC states that
Boatmen's has demonstrated substantial flexibility through
product innovations and has provided substantial community support.
The Board also received comments from the national
office of the Association of Community Organization for
Reform Now ("ACORN") in Washington, D.C., and
ACORN members in St. Louis, Missouri; Little Rock, Arkansas; Kansas City, Missouri; Dallas, Texas; Philadelphia,
Pennsylvania; Chicago, Illinois; Boston, Massachusetts; and
Minneapolis, Minnesota (collectively, "Protestant"), which
generally criticize the performance and commitment of
Boatmen's under the CRA in helping to meet the credit
needs of minority and low- and moderate-income communities. In particular, Protestant maintains that 1993 data collected under the Home Mortgage Disclosure Act
("HMDA") indicate disparities in the rates of HMDAreported loans originated to African-American and Hispanic
loan applicants as compared to rates of loan originations to
white loan applicants at several Boatmen's subsidiaries,
including its lead bank subsidiary, The Boatmen's National
Bank of St. Louis, St. Louis, Missouri ("Boatmen's
St. Louis"). 22 Protestant also questions Superior FSB's
efforts to ascertain its delineated community's credit needs
and criticizes its outreach to minority neighborhoods. In
addition, Protestant contends that Sunwest Albuquerque
does not have enough branches in predominantly minority
areas.23
The Board has carefully reviewed the CRA performance
records of Boatmen's and its subsidiary depository institutions; all comments received regarding these applications;
information provided by Boatmen's on its CRA activities;
and all 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"). 24
22. The other Boatmen's subsidiaries that were the subject of Protestant's
comments include: Boatmen's mortgage subsidiary, Boatmen's Mortgage
Company, St. Louis, Missouri ("Boatmen's Mortgage"); Sunwest Bank of
Albuquerque, N.A., Albuquerque, New Mexico ("Sunwest Albuquerque");
Boatmen's First National Bank of Kansas City, Kansas City, Missouri
("Boatmen's Kansas City"); Boatmen's First National Bank of Oklahoma,
Oklahoma City, Oklahoma ("Boatmen's Oklahoma"); Boatmen's Bank of
Tennessee, Memphis, Tennessee ("Boatmen's Tennessee"); Sunwest Bank
of El Paso, El Paso, Texas ("Sunwest El Paso"); and Superior FSB.
23. The Board also received comments relating to two loan transactions at
Boatmen's St. Louis and a loan transaction at Superior FSB. The Board has
carefully reviewed these comments, in light of the relevant reports of
examination of the institutions and other available information. The complaints have been referred to the institutions' primary federal supervisors,
which have authority to investigate and resolve claims of this type. Based on
all facts of record, the Board does not believe that these comments warrant
denial of the applications under the statutory factors that the Board must
consider under the BHC Act.
24. 54 Federal Register 13,742 (1989).
Legal Developments
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 reports of these examinations will be given great weight in the
applications process. 25 The Board notes that Boatmen's
St. Louis, which represents approximately 37 percent of
Boatmen's total assets, received three consecutive "outstanding" ratings from its primary federal supervisor, the
OCC, in its last three CRA performance examinations,
including its most recent examination as of August 26,
1994. All the other depository institution subsidiaries of
Boatmen's that were discussed by Protestant were examined recently for CRA performance by their primary federal
supervisors. Five of these institutions received "outstanding" ratings and one received a "satisfactory" rating.26 The
remaining Boatmen's depository institution subsidiaries received either "outstanding" or "satisfactory" ratings at
their most recent examinations for CRA performance.27
Each of Worthen's bank subsidiaries also received either
"outstanding" or "satisfactory" ratings from their primary
federal supervisor, the OCC, in the most recent examinations of their CRA performance.28
B. HMDA Data and Lending Practices
The Board has carefully reviewed the 1992 and 1993
HMDA data of Boatmen's St. Louis and Boatmen's Mortgage, 29 Boatmen's Albuquerque, Boatmen's Kansas City,
25. Id. at 13,745.
26. The following Boatmen's subsidiary institutions received "outstanding" ratings at their most recent CRA performance examinations: Sunwest
Albuquerque (OCC—May 5, 1994); Boatmen's Kansas City (OCC—
March 14, 1994); Sunwest El Paso (Federal Deposit Insurance Corporation
("FDIC")—July 17, 1994); and Superior FSB (Office of Thrift Supervision
("OTS")—August 8, 1994). Boatmen's Tennessee received an "outstanding" rating from the FDIC at its CRA performance examination as of
November 23, 1992, and the FDIC indicated that this rating likely will not
change as a result of its most recent CRA examination as of December 12,
1994. Boatmen's Oklahoma received a "satisfactory" rating from the OCC
at its most recent CRA performance examination as of July 21, 1994.
27. Of Boatmen's remaining depository institution subsidiaries, 17 received "outstanding" ratings and 21 received "satisfactory" ratings at their
most recent examinations for CRA performance.
28. Of these institutions, nine received a CRA performance rating of
"satisfactory," and two received a CRA performance rating of "outstanding."
29. Historically, Boatmen's Mortgage has operated principally in the
St. Louis area, originating a majority of its loans through a relationship with
Boatmen's St. Louis. Before 1994, all Boatmen's loans in the St. Louis area
that met secondary market eligibility standards were originated by Boatmen's Mortgage and sold into the secondary market, with Boatmen's Mortgage retaining the servicing rights. Loan applications failing to meet secondary market eligibility standards were referred back to Boatmen's St. Louis
for further underwriting using the bank's non-conforming loan products. In
1994, Boatmen's St. Louis began originating all its mortgage loans and
selling mortgage loans eligible for the secondary market to Boatmen's
Mortgage for further packaging and sale into the secondary market.
303
Boatmen's Oklahoma, Sunwest El Paso, Boatmen's Tennessee, and Superior FSB in light of Protestant's concerns. In
general, the 1993 HMDA data indicate that Boatmen's
St. Louis and Boatmen's Mortgage, Sunwest Albuquerque,
Boatmen's Kansas City, Boatmen's Tennessee, and Superior FSB have improved their lending records of home
mortgage loans to African-American and/or Hispanic loan
applicants. For example, these data of Boatmen's St. Louis
and Boatmen's Mortgage, Boatmen's Kansas City, Boatmen's Tennessee, and Superior FSB indicate an increase in
loan applications from African Americans and loans originated to African Americans. The 1993 HMDA data of
Boatmen's Oklahoma and Sunwest El Paso similarly indicate an increase in loan applications from and loans to
Hispanics. In addition, the 1993 HMDA data of Superior
FSB, which Boatmen's acquired in 1992, indicate a decrease in the percentage of denied loan applications from
African-American applicants. The 1993 HMDA data of
Sunwest Albuquerque, similarly, indicate a decrease in the
percentage of denied loan applications from Hispanic loan
applicants since Boatmen's acquired the bank in 1992.
However, these data also reflect some disparities at Boatmen's subsidiaries in the rate of loan origination, denials,
and applications by racial group or income level.
The Board is concerned when the record of an institution
indicates disparities in lending to minority applicants and it
believes that all banks are obligated to ensure that their
lending practices are based on criteria that assure not only
safe and sound lending, but also equal access to credit by
creditworthy applicants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community.
The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other
information, for concluding that an institution has engaged
in illegal discrimination in making lending decisions.
The Board has carefully reviewed Protestant's allegations
regarding the record of Boatmen's lending to minorities,
particularly African Americans and Hispanics, and to lowand moderate-income residents in light of information from
the OCC, the primary federal supervisor of Boatmen's
St. Louis, Sunwest Albuquerque, Boatmen's Kansas City,
and Boatmen's Oklahoma; from the FDIC, the primary
federal supervisor of Boatmen's Tennessee and Sunwest El
Paso; and from the OTS, the primary federal supervisor of
Superior FSB. The 1994 CRA performance examinations of
these institutions found no evidence of prohibited discrimination or any practices or procedures that would discourage
applications for available credit from any segment of their
respective delineated communities, or other illegal credit
practices. Moreover, the Board notes that the examinations
of all these institutions found that the geographic distribution of HMDA-reported loans represents a reasonable penetration of their respective delineated communities. In addition, the OCC compared a sample of African-American and
304
Federal Reserve Bulletin • March 1995
white applicants for mortgage loans during its 1994 CRA
performance examination of Boatmen's St. Louis and found
no evidence of discrimination or other illegal credit practices. The OCC also conducted a fair lending examination
as part of its 1994 CRA performance evaluations of Sunwest Albuquerque and Boatmen's Oklahoma, which included a comparison of a sample of home-related loan
applications from African Americans and/or Hispanics with
other applicants, and found no evidence of discrimination or
other illegal credit practices.
Through each of its depository institution subsidiaries
and their branch offices, Boatmen's offers various lending
programs designed to enhance its lending to minorities and
to residents of low- and moderate-income communities. For
example, Boatmen's has a second review process at its
subsidiaries for HMDA-reportable loan applications prior to
denial. This process is designed to ensure that all applicants,
including minority and low- and moderate-income applicants, receive equitable consideration in credit decisions.
Boatmen's has committed to continue Worthen's second
review process, which is substantially similar to the second
review process implemented at Boatmen's subsidiaries.
In addition, Boatmen's St. Louis offers special home
purchase loan products, through its CRP BASIC mortgage
program ("BASIC mortgage program"), that focus on lowand moderate-income borrowers. These BASIC mortgages
offer flexible terms such as higher loan-to-value and debt-toincome ratios than standard mortgage loans, the elimination
of private mortgage insurance requirements, and lower closing costs. The 1994 CRA performance examination of
Boatmen's St. Louis notes that, in 1993 and the first eight
months of 1994, the bank originated 442 residential mortgage loans under its BASIC mortgage program, totalling
more than $24 million.
Boatmen's Kansas City, Boatmen's Oklahoma, Sunwest
El Paso, and Boatmen's Tennessee offer similar mortgage
products targeted to low- and moderate-income borrowers,
which offer more flexible terms and underwriting standards
and lower costs than conventional mortgage products.30 In
addition, Sunwest Albuquerque has developed a "Sweat
Equity" Loan Program in response to community needs
through which home improvement loans are extended to
low- and moderate-income residents who use their own
labor to replace a traditional down payment. In 1994, Sunwest Albuquerque extended loans totalling more than
$450,000 under this program.
Boatmen's also assists in meeting the affordable housing
needs of low- and moderate-income residents throughout its
delineated community through a variety of community development programs with government agencies, non-profit
organizations, and private developers. These projects in-
30. For example, Boatmen's Kansas City made at least 217 of such loans
in 1993 and 1994, totalling more than $8.4 million.
elude the participation of Boatmen's Community Development Corporation ("BCDC") in the St. Louis Equity Fund
("SLEF"), a not-for-profit corporation that promotes lowincome housing development in St. Louis. Since 1993,
BCDC has invested at least $1 million in SLEF and has
loaned $1.9 million to three of SLEF's low-income, multifamily housing projects.31 Boatmen's intends to enhance
Worthen's current community development efforts by providing additional support services and capital for lowincome housing development, expansion of businesses
owned by women and minorities, and other community and
economic development initiatives.
Other Boatmen's subsidiary institutions also have actively engaged in community development programs. Sunwest Albuquerque has loaned more than $7.5 million to
develop affordable rent-subsidized housing and affordable
housing for families headed by single women. Boatmen's
Kansas City has contributed $2 million to a newly formed
consortium of banks that will provide $14 million for flexible mortgage loans to low- and moderate-income borrowers
in the Kansas City area.32 In 1993, Boatmen's Oklahoma
provided $1.2 million in loans for the purchase and rehabilitation of a 160-unit apartment complex for low- and
moderate-income persons. 33 Similarly, Sunwest El Paso has
provided approximately $800,000 in financing for the rehabilitation and construction of two low-income housing
projects, and has committed to finance approximately 30
mortgage loans for low- and moderate-income residents
through the Lower Valley Housing Corporation's 1994 SelfHelp Housing Project. In addition, Boatmen's Tennessee,
together with another lending institution, has provided approximately $5.5 million in loans to finance the reconstruction of a 484-unit apartment complex in Whitehaven, a
primarily minority and low- and moderate-income neighborhood in Memphis. Boatmen's Tennessee also has pro-
31. The 1994 CRA performance examination of Boatmen's St. Louis also
reports that the bank participates in programs of the Missouri Housing
Development Commission, which provides various types of assistance to
borrowers primarily for residential mortgage lending. Examiners also report
that, in the first eight months of 1994, Boatmen's St. Louis provided more
than 18 construction loans and other financing for several federal programs
that provide gap and rehabilitation financing for low-income single-family
housing. In addition, Boatmen's St. Louis has provided financing to the
Technical Assistance Corporation (and its related partnerships), formed by
the Mayor of St. Louis to promote redevelopment, affordable housing, and
job creation, including a $960,000 loan to renovate low-income and student
housing units.
32. The 1994 CRA performance examination of Boatmen's Kansas City
reports that, as of November 30, 1993, the bank originated 23 loans, totalling
approximately $875,000 under Kansas City's "70/30" and "80/20" Programs, through which first-time, low- and moderate-income home buyers
receive partially subsidized mortgages. Boatmen's Kansas City also provided
$1.7 million in funding for the acquisition and construction or rehabilitation
of two low-income, multi-family housing complexes. In 1993, BCDC invested $5.8 million in an 84-unit apartment complex in a low- and moderateincome neighborhood in Kansas City.
33. The 1994 CRA performance examination of Boatmen's Oklahoma
also reports that the bank has committed $200,000 to the Central Oklahoma
Clearing House Association Low-Income Residential Loan Program, which
has lent over $2 million to low- and moderate-income home purchasers.
Legal Developments
vided funding and operating expenses for the Cooper/
Young Development Corporation, which is rehabilitating 12
houses in the Cooper Young neighborhood, another primarily minority and low- and moderate-income neighborhood
in Memphis. The bank has provided low-interest housing
and commercial loans to residents and businesses in the
Cooper Young neighborhood, totalling more than $2.4 million. 34
The 1994 CRA performance examination of Superior
FSB reported that Superior FSB also actively engages in
affordable housing programs, including the provision of
more than $800,000 in financing for the rehabilitation of 25
houses in low-income neighborhoods in Little Rock; contributions to the Local Initiatives Support Corporation, a loan
pool formed by local depository institutions to provide
financing for two multi-family, low-income housing
projects in Little Rock; participation in numerous Habitat
for Humanity programs throughout its delineated community; and a $1.2 million loan for a low-income housing
complex in Conway, Arkansas.
Boatmen's also has designed special products to meet the
consumer needs of low- and moderate-income residents.
For example, the 1994 CRA performance examination of
Boatmen's St. Louis notes that the bank, together with
Grace Hill Neighborhood Services, a community redevelopment organization operating in 11 low-income neighborhoods in St. Louis, developed the MORE Cache Card pilot
program through which the bank has provided Grace Hill
residents personal bank accounts, with no minimum balance
requirement or service charges, and automated teller machine ("ATM") and health care record access devices. In
addition, other Boatmen's subsidiary institutions offer free
and/or low-cost checking accounts and government check
cashing services for non-account customers.
Boatmen's also actively engages in small business lending with special programs focusing on minority-owned businesses and businesses in low- and moderate-income areas.
For example, the 1994 CRA performance examination of
Boatmen's St. Louis noted that the bank has hired a Specialized Small Business Lender to help meet the needs of small
businesses owned by minorities and women through active
participation in various city, state, and federal small business lending programs. Examiners reported that, in the first
eight months of 1994, Boatmen's St. Louis made 23 loans
to such businesses, totalling more than $5 million and, since
1992, made 91 Small Business Administration ("SBA")
loans totalling over $10 million. The 1994 CRA performance examination of Boatmen's Oklahoma reports that, in
1993, the bank extended SBA loans totalling $10 million in
Tulsa, 44 percent of which were made to businesses in low-
34. Boatmen's Tennessee, in participation with the City of Memphis, also
helped establish the Housing Resource Center, which, when it opens in 1995,
will provide credit and home purchase counselling and minor home repairs
for low-income residents in Memphis.
305
and moderate-income areas. Examiners also report that, in
1993, Sunwest El Paso made 23 SBA loans totalling over
$2.4 million.
Boatmen's also actively participates in public and private
joint ventures to help meet the small business needs of
minority-owned businesses and businesses located in lowand moderate-income areas. For example, Boatmen's
St. Louis recently invested in the St. Louis Business Development Fund, a newly formed multi-bank lending consortium that will provide special financing for minority-owned
businesses, and in the St. Louis Local Development Company Contractor Revolving Loan Program, which provides
working capital at below-market interest rates to small and
minority contractors. In addition, Boatmen's St. Louis is the
largest participant in lending through the Business Consortium Fund, Inc., which provides capital and loans at reasonable interest rates to minority-owned firms. Boatmen's
St. Louis also has taken a leadership role in the development and organization of a Specialized Small Business
Investment Company, which will use private capital and
SBA funding to provide venture capital loans for small
businesses and minority entrepreneurs.35
In addition, the 1992 CRA performance examination of
Boatmen's Tennessee reports that the bank participates in
the Minority Purchasing Council Revolving Loan Fund.
Examiners also report that Sunwest El Paso has committed
funds to a micro lending program, Accion International,
which is designed to meet the particular credit needs of
small businesses in El Paso.
Boatmen's has committed to add relevant programs to
Worthen's existing programs designed to meet the credit
needs of minority and low- and moderate-income communities. In addition, Boatmen's has coi mitted to incorporate
its CRA, diversity, and fair lending training programs into
Worthen's staff training curriculum.36
35. Since 1992, Boatmen's St. Louis also has made at least 11 loans
totalling more than $38 million under the Mo-Bucks Program, a low interestlinked-deposit loan program administered by the Missouri State Treasurer's
office to assist in creating and sustaining jobs for Missouri businesses. The
1994 CRA performance examination report of Boatmen's Kansas City
reports that the bank has made commercial and residential loans totalling
over $500,000, through Kansas City's Linked-Deposit Program, to borrowers in city-designated low- and moderate-income census tracts.
36. Protestant also objects to the failure of Boatmen's to continue negotiating a lending agreement with Protestant. The Board has indicated in previous
orders and in the Agency CRA Statement that communication by depository
institutions with community groups provides a valuable method of assessing
and determining how best to address the credit needs of the community.
However, neither the CRA nor the Agency CRA Statement require depository institutions to enter into agreements with particular organizations. Accordingly, the Board's review has focused on the programs and policies that
Boatmen's has in place to serve the credit needs of its entire community. See
First Empire State Corporation, 80 Federal Reserve Bulletin 1111 (1994);
Fifth Third Bancorp, 80 Federal Reserve Bulletin 838 (1994).
306
Federal Reserve Bulletin • March 1995
C. Ascertainment and Outreach Efforts
Boatmen's uses various methods to ascertain community
credit needs, including direct contacts, community outreach
programs, credit and homebuyer seminars, and membership
in numerous public and private organizations. In addition,
Boatmen's conducts annual focus group meetings with
members of the African-American, Hispanic and other minority communities as well as women entrepreneurs in its
various markets to discuss their financial needs and expectations. Boatmen's uses input from these focus groups to
market suitable products and services more effectively to
such segments of its delineated community. For example, as
a result of such focus groups, Sunwest Albuquerque has
launched a comprehensive marketing effort in Hispanic and
Native-American communities.
Each of Boatmen's subsidiary institutions, including Superior FSB, also ascertains community credit needs through
active involvement with various community organizations.
The 1994 CRA performance examination of Superior FSB
reports that the institution communicates regularly with
local community development, affordable housing, minority, and government agencies within its delineated community, and actively participates in numerous affordable housing seminars conducted by government and affordable
housing agencies. In addition, Superior FSB co-sponsored
two bank fairs, in 1994, designed to introduce low- and
moderate-income residents to home loan, consumer finance,
and additional bank services of Superior and other area
institutions.
In addition, Boatmen's markets its products and services
through a variety of advertising activities, including print
media, direct mail, and radio and television. 37 These activities include marketing efforts directed toward AfricanAmerican and Hispanic consumers. For example, Boatmen's St. Louis, Boatmen's Kansas City, and Superior FSB
advertise in newspapers circulated primarily in the AfricanAmerican community and on minority radio stations. Sunwest Albuquerque and Sunwest El Paso advertise in Spanish on billboards, on Spanish-speaking radio stations and
television channels, and in Spanish language publications.
D. Branch Locations
The 1994 CRA performance examination of Sunwest Albuquerque found that Sunwest Albuquerque operated full-
37. Other examples of Boatmen's ascertainment and outreach efforts
include the Neighborhood Partnership Program ("NPP") administered by
Boatmen's St. Louis. The NPP is a grant program to promote development in
low- and moderate-income neighborhoods through which the bank has
extended grants totalling more than $200,000 to 20 organizations since 1992.
In response to suggestions from NPP participants and others in the community, Boatmen's St. Louis developed and revised the CRP BASIC mortgage
program, discussed above, to respond to community affordable housing
needs.
service branches, motor bank offices, ATMs, and a mobile
branch at locations reasonably accessible to all segments of
its community, including low- and moderate-income neighborhoods. Examiners reported that products and services
provided at these facilities were suitable for the needs of the
community. Examiners also reported that the bank had a
comprehensive branch closing policy, but had not closed
any branches since 1992. In addition, the Board notes that
11 of Sunwest Albuquerque's 35 branches are in predominantly minority census.
Conclusion Regarding Convenience and Needs
Factors
On the basis of all the facts of record, including information provided by commenters supporting the proposal
and the Protestant, the responses of Boatmen's, and the
relevant reports of examination, the Board concludes that
convenience and needs considerations, including the
CRA performance records of the institutions involved in
the proposal, are consistent with approval of these applications. 38
Other
Considerations
The Board also has reviewed information about the financial and managerial resources and future prospects of
Boatmen's, Worthen, and their respective subsidiaries,
and other supervisory factors the Board must consider
under section 3 of the BHC Act, and concludes that these
factors are consistent with approval of this proposal.
Boatmen's also has applied, pursuant to section 4(c)(8)
of the BHC Act, to engage in trust company and creditrelated insurance activities. The Board has previously
determined by regulation that these activities are closely
related to banking for purposes of section 4(c)(8) of the
BHC Act. 39 Boatmen's has committed that it will conduct these activities in accordance with the Board's
regulations. The record in this case indicates that there
38. The Protestant has requested that the Board hold a public hearing or
public meeting to consider the record of Boatmen's in meeting its responsibilities under the CRA. Section 3(b) of the BHC Act does not require the
Board to hold a hearing or meeting on an application unless the appropriate
supervisory authority of the bank to be acquired makes a timely written
recommendation of denial of the application. In this case, the Board has not
received such a recommendation. Generally, under the Board's Rules of
Procedure, 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 the Protestant's request. In the
Board's view, the Protestant has had an opportunity to present written
submissions, and has submitted substantial written comments that have been
considered by the Board. In addition, a number of other public comments
have been submitted. Boatmen's and Protestant also have held several
private meetings to discuss Boatmen's CRA performance. In light of all the
facts of record, the Board has determined that a public hearing or meeting is
not necessary to clarify the factual record in this application, and is not
otherwise warranted in this case. Accordingly, the Protestant's request for a
public hearing or meeting on this application is denied.
39. See 12 C.F.R. 225.25(b)(3) and (b)(8)(i).
Legal Developments
are numerous providers of these nonbanking services,
and there is no evidence in the record to indicate that
consummation of this proposal is likely to result in any
significantly adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices that would outweigh the public benefits of this proposal. Accordingly,
the Board has determined that the balance of public
interest factors it must consider under section 4(c)(8) of
the BHC Act is favorable and consistent with approval.
Conclusion
Based on the foregoing, including the commitments made
to the Board by Boatmen's in connection with these
applications, and in light of all the facts of record, the
Board has determined that these applications should be,
and hereby are, approved. The Board's approval is specifically conditioned upon compliance by Boatmen's with
all commitments made in connection with these applications as well as the conditions discussed in this order.
The Board's determinations as to the nonbanking activities to be conducted by Boatmen's are subject to all
the conditions in Regulation Y, including those in sections 225.7 and 225.23(b) (12 C.F.R. 225.7 and
225.23(b)), 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 evasion of, the provisions and purposes of the BHC Act and
the Board's regulations and orders issued thereunder. The
commitments and conditions relied on by the Board in
reaching this decision are deemed to be conditions imposed in writing by the Board in connection with its
findings and decision, and as such may be enforced in
proceedings under applicable law.
The acquisition of Worthen's subsidiary banks shall
not be consummated before the fifteenth calendar day
following the effective date of this order, and the banking
and the nonbanking transactions shall not be consummated later than three months following the effective
date of this order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of St.
Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective
January 18, 1995.
307
Appendix
Worthen Subsidiary Banks
Worthen National Bank of
Little Rock, Arkansas
Worthen National Bank of
Batesville, Arkansas
Worthen National Bank of
Camden, Arkansas
Worthen National Bank of
Conway, Arkansas
Worthen National Bank of
Harrison, Arkansas
Worthen National Bank of
Hot Springs, Arkansas
Worthen National Bank of
Newark, Arkansas
Worthen National Bank of
Fayetteville, Arkansas
Worthen National Bank of
Pine Bluff, Arkansas
Worthen National Bank of
Russellville, Arkansas
Worthen National Bank of
Austin, Texas
Arkansas,
Batesville,
South Arkansas,
Conway,
Harrison,
Hot Springs,
Newark,
Northwest Arkansas,
Pine Bluff,
Russellville,
Texas,
Southern National Corporation
Lumberton, North Carolina
Order Approving Merger of Bank Holding
Companies
Southern National Corporation, Lumberton, North Carolina
("Southern"), 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 BB&T Financial Corporation, Wilson, North
Carolina ("BB&T"), and thereby indirectly acquire Branch
Banking and Trust Company, Wilson, North Carolina;
Branch Banking and Trust Company of South Carolina,
Greenville, South Carolina; Lexington State Bank, Lexington, South Carolina; and Community Bank of South Carolina, Varnville, South Carolina.1 Southern also has applied under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and the Board's Regulation Y (12 C.F.R.
225.25) to:
(1) Acquire 15 percent of the voting shares of Southeast
Switch, Inc., Maitland, Florida ("Switch"), and thereby
engage in providing data processing services and man-
Voting for this action: Vice Chairman Blinder and Governors
Kelley, LaWare, Lindsey, Phillips, and Yellen. Absent and not
voting: Chairman Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
1. In connection with these applications, both Southern and BB&T have
requested approval to acquire options to purchase up to 19.9 percent of the
voting shares of the other organization. These options will terminate upon
consummation of this proposal.
308
Federal Reserve Bulletin • March 1995
agement consulting advice pursuant to sections
225.25(b)(7) and (b)(l 1) of Regulation Y;2 and
(2) Engage in community development activities pursuant to section 225.25(b)(6) of Regulation Y.
Notice of the applications, affording interested persons an
opportunity to submit comments, has been published (59
Federal Register 52,306 (1994)). 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 and 4 of the BHC Act.
Southern is the sixth largest commercial banking organization in North Carolina, controlling deposits of $4 billion,
representing 6.7 percent of total deposits in commercial
banking organizations in the state,3 and is the third largest
commercial banking organization in South Carolina, controlling deposits of $2 billion, representing 9 percent of
total deposits in commercial banking organizations in the
state. BB&T is the fourth largest commercial banking organization in North Carolina, controlling deposits of
$6.2 billion, representing 10.3 percent of total deposits in
commercial banking organizations in the state, and is the
sixth largest commercial banking organization in South
Carolina, controlling deposits of $1 billion, representing
4.7 percent of total deposits in commercial banking organizations in the state. Upon consummation of this proposal,
Southern would become the fourth largest commercial
banking organization in North Carolina, controlling deposits of $10.2 billion, representing 17 percent of total deposits
in commercial banking organizations in the state, and it
would remain the third largest commercial banking organization in South Carolina, controlling $3 billion in deposits,
representing 13.7 percent of total deposits in commercial
banking organizations in the state.
Southern and BB&T compete directly in 22 banking
markets in North Carolina and South Carolina. The Board
has carefully considered the effects that consummation of
this proposal would have on competition in these banking
markets in light of all the facts of record, including the
characteristics of the markets, the increase in the concentration of total deposits in depository institutions4 in the markets as measured by the Herfindahl-Hirschman Index
("HHI"), 5 and commitments made by Southern.
2. The data processing services are provided to federally insured depository institutions who participate in Switch's shared electronic funds transfer
network, or who participate in other electronic funds transfer networks.
3. All banking data are as of June 30, 1994.
4. Market data are as of June 30, 1994. In this context, depository
institutions include commercial banks, savings banks, and savings associations. 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 WM Bancorp, 76
Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984).
5. 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
The acquisition of BB&T by Southern would significantly increase market concentration in the Goldsboro,
Moore County, Mount Airy, Sanford, and Statesville banking markets,6 as measured by the HHI. In order to mitigate
the potential adverse competitive effects that may result
from this acquisition, Southern has committed to divest
branches in each of these markets to an acquiror that could
purchase the branches without substantially lessening competition in these markets.7 After consummation of this
proposal and the divestiture of the branch offices in the
Goldsboro, Moore County, Mount Airy, Sanford, and
Statesville banking markets, the competitive effect of this
proposal in those markets would be consistent with the
merger guidelines established by the Justice Department
and the parameters applied by the Board in previous decisions. 8 Based on these proposed divestitures, the Justice
Department has indicated that this proposal is not likely to
have a significantly adverse effect on competition in these
banking markets.
Consummation of this proposal in the remaining banking
markets where Southern and BB&T compete would not
exceed Justice Department guidelines and numerous competitors would remain in each of these banking markets.9
Based on these and all the facts of record, including the
proposed divestitures,10 the Board concludes that consummation of this proposal is not likely to have a significantly
above 1800 is considered to be highly concentrated. In such markets, the
Justice Department is likely to challenge a merger that increases the HHI by
more than 50 points. The Justice Department has informed the Board that a
bank merger or acquisition generally will not be challenged (in the absence
of other factors indicating anti-competitive effects) unless the post-merger
HHI is at least 1800 and the merger or acquisition increases the HHI by at
least 200 points. The Justice Department has stated that the higher than
normal threshold for an increase in the HHI when screening bank mergers
and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial
entities.
6. The Goldsboro banking market consists of the Goldsboro, North Carolina RMA, the remainder of Wayne County, and La Grange in Lenoir
County, North Carolina; the Moore County banking market consists of
Moore County, North Carolina; the Mount Airy banking market consists of
Surry County, North Carolina, plus the adjoining portions of Carroll and
Patrick Counties in Virginia; the Sanford banking market consists of Lee
County, North Carolina; and the Statesville banking market consists of
Iredell County, North Carolina, excluding the town of Mooresville.
7. Southern has committed to sell these branches either to a commercial
banking organization that does not currently operate in these markets or to a
current market competitor whose acquisition of these branches would not
exceed the Justice Department merger guidelines.
8. Taking the proposed divestitures into account, upon consummation of
this proposal, the HHI in these five banking markets would not increase by
more than the following amounts: Goldsboro by 166 points to 2087; Moore
County by 569 points to 1799; Mount Airy by 172 points to 1867; Sanford
by 172 points to 1961; and Statesville by 194 points to 2070.
9. The changes in the HHI in the 17 remaining banking markets are set
forth in the Appendix.
10. Southern has committed to execute a sales agreement for the proposed
divestitures before consummation of this proposal, and to complete these
divestitures within 180 days of consummation of this proposal. Southern also
has committed that, in the event it is unsuccessful in completing these
divestitures within 180 days of consummation of the proposal, it will transfer
these branch offices to an independent trustee that will be instructed to sell
the branches promptly. See BankAmerica Corporation, 78 Federal Reserve
Legal Developments
adverse effect on competition or on the concentration of
resources in any relevant banking market.
The Board also has concluded that the financial and
managerial resources and future prospects of Southern and
BB&T and their respective subsidiaries, and all other supervisory factors the Board must consider under section 3 of
the BHC Act, are consistent with approval of this proposal. 11 Considerations relating to the convenience and needs
of the communities to be served also are consistent with
approval.
Southern also has applied, pursuant to section 4(c)(8) of
the BHC Act, to acquire 15 percent of the voting shares of
Switch, and thereby provide data processing and transmission services and bank management consulting advice to
depository institutions, and to engage in community development activities. As noted above, the Board previously has
determined that these activities are closely related to banking and generally permissible for bank holding companies
under section 4(c)(8) of the BHC Act and Regulation Y, 12
and Southern proposes to conduct these activities in accordance with the Board's regulations.
In order to approve this proposal, the Board also must
find that the performance of the proposed activities by
Southern "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). The Board expects
that the continuation of these activities by Southern would
maintain the level of competition among providers of these
services. In addition, there is no evidence in the record that
Bulletin 338, 340 (1992); United New Mexico Financial Corporation, 11
Federal Reserve Bulletin 484, 485 (1991).
11. In evaluating the financial resources of Southern and BB&T, the Board
carefully considered comments received from several of Southern's shareholders, and several members of the public criticizing a post-employment
consulting agreement and non-compete agreement entered into by Southern
and its current chief executive officer. The Atlanta Regional Office of the
Federal Deposit Insurance Corporation also recommended that the Board
carefully review these agreements. Southern has argued that it is in the best
interest of the surviving entity to have only one chief executive officer, and
that the post-employment remuneration package is fair and reasonable payment for an agreement to terminate the individual's employment prematurely, and for the individual to refrain from competing with the surviving
entity.
The complete terms of the arrangement with this individual were disclosed
to the shareholders of Southern and BB&T in proxy solicitation material
explaining the merger, and the shareholders of both institutions overwhelmingly approved the merger. Two independent benefit consulting firms have
indicated that the present value of the post-employment remuneration package is less than the present value of payments required by the individual's
current employment agreement. After considering the size of the companies
involved, the current employment contract of the individual and comparably
situated individuals, the individual's continuing service to the surviving
entity, the capitalization and the financial strength of the surviving entity, the
agreement not to compete, the analysis of the benefit consulting firms, and all
the other facts of record, the Board concludes that the post-employment
consulting and non-compete agreement does not reflect so adversely on the
managerial or financial resources of Southern as to warrant denial of this
proposal.
12. 12 C.F.R. 225.25(b)(6), (b)(7) and (b)(ll).
309
consummation of this proposal would result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices, that would outweigh the
public benefits of this proposal. Accordingly, the Board has
determined that the balance of public interest factors it must
consider under section 4(c)(8) of the BHC Act is favorable
and consistent with approval of Southern's section 4 application.
Based on the foregoing and all the other facts of record,
the Board has determined that the applications should be,
and hereby are, approved. The Board's approval of this
proposal is expressly conditioned on compliance with all
the commitments made by Southern in connection with
these applications, and on receipt by Southern and its subsidiary banks of all necessary approvals from federal and
state regulators. The determination on the nonbanking activities is subject to all the conditions in Regulation Y, including those in sections 225.7 and 225.23(b) (12 C.F.R. 225.7
and 225.23(b)), 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 evasion
of, the provisions and purposes of the BHC Act and the
Board's regulations and orders issued thereunder. For purposes of this action, these commitments and conditions will
both be considered conditions imposed in writing by the
Board in connection with its findings and decision, and, as
such, may be enforced in proceedings under applicable law.
The acquisition of BB&T shall not be consummated
before the fifteenth calendar day following the effective date
of this order, and the banking and nonbanking transactions
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
January 17, 1995.
Board
of
Governors,
effective
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix
Markets in which Southern and BB&T currently compete
in which the post-merger increase in HHI is within the
Justice Department Merger Guidelines.
(1) The Burlington RMA banking market consists of
Alamance County and Gibsonville, North Carolina. The
HHI would increase by 30 points to 1322.
310
Federal Reserve Bulletin • March 1995
(2) The Charlotte RMA banking market consists of Mecklenburg and York Counties, Mooresville, Indian Trial, Harrisburg, Midland, Denver, and Stanley, North Carolina. The
HHI would increase by 14 points to 2273.
(3) The Durham RMA banking market consists of Durham
and Orange Counties and Creedmore, and Butner, North
Carolina. The HHI would increase by 15 points to 1704.
(4) The Fayetteville RMA banking market consists of Cumberland County and Parkton, North Carolina. The HHI
would increase by 290 points to 1470.
(5) The Gastonia RMA banking market consists of Gaston
County and Kings Mountain, North Carolina, excluding
Stanley. The HHI would increase by 457 points to 1725.
(6) The Greensboro RMA banking market consists of Guildord and Davidson Counties, excluding Gibsonville, and
Northern Randolph and Southern Rockingham Counties,
North Carolina. The HHI would increase by 218 points to
1361.
(7) The Hickory RMA banking market consists of Alexander, Burke, Caldwell and Catawba Counties, North Carolina. The HHI would increase by 351 points to 1623.
(8) The Kinston banking market consists of Lenoir County,
North Carolina, excluding La Grange, Hookerton, and Snow
Hill, North Carolina. The HHI would increase by 93 points
to 2297.
(9) The Raleigh RMA banking market consists of Wake,
Harnett, Johnston, and Franklin Counties, North Carolina.
The HHI would increase by 79 points to 1181.
(10) The Rockingham County market consists of Rockingham County, North Carolina, excluding the southern portion of the Greensboro RMA. The HHI would increase by
316 points to 1677.
(11) The Rocky Mount banking market consists of Wilson,
Nash, and Edgecomb Counties, North Carolina. The HHI
would increase by 135 points to 2236.
(12) The Wilmington RMA banking market consists of
New Hanover, Brunswick, and Pender Counties, North
Carolina. The HHI would increase by 61 points to 1285.
(13) The Winston-Salem RMA banking market consists of
Forsyth, Stokes, and Davie Counties, North Carolina. The
HHI would increase by 156 points to 3194.
(14) The Columbia RMA banking market consists of Richland and Lexington Counties, South Carolina. The HHI
would increase by 142 points to 1885.
(15) The Greenville RMA banking market consists of
Greenville, and Pickens Counties, South Carolina, and Pelzer, Powdersville, and Piedmont, South Carolina. The HHI
would increase by 311 points to 1378.
(16) The Oconee County banking market consists of
Oconee County, South Carolina. The HHI would increase
by 30 points to 1545.
(17) The Spartanburg RMA banking market consists of
Spartanburg County, South Carolina, excluding the Greenville, South Carolina, RMA. The HHI would increase by 54
points to 1315.
ORDERS ISSUED UNDER FEDERAL RESERVE ACT
Marine Midland Bank
Buffalo, New York
Order Approving Establishment
Offsite Electronic Facility
of a Branch and an
Marine Midland Bank, Buffalo, New York ("Bank"), a
state member bank, has applied under section 9 of the
Federal Reserve Act ("Act") (12 U.S.C. § 321 et seq.) to
establish a branch office at P&C Store # 130, 3577 West
Genesee Street, Syracuse, New York ("Syracuse Branch")
and an Offsite Electronic Facility on the first floor of the
Wilson Commons Building at the University of Rochester,
Rochester, New York ("Rochester ATM").
Notice of the applications, affording interested persons an
opportunity to submit comments, has been published. The
time for filing comments has expired, and the Board has
considered the applications and all comments received in
light of the factors contained in the Federal Reserve Act.
Bank is the fifth largest commercial banking organization
in New York State, controlling deposits of $12.4 billion,
which represent 5.1 percent of the total deposits in commercial banks in the state.1 Bank is wholly owned by HSBC
Holdings pic, London, England, which also wholly owns
Hongkong and Shanghai Banking Corporation Limited,
Hong Kong.
Community Reinvestment Act Performance
Record
In acting on branch applications, 2 the Board is required to
take into account the bank's record 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 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 branch
applications.
The Board has received comments from the Greater
Rochester Community Reinvestment Coalition, Rochester,
New York ("Protestant"), that criticize Bank's CRA performance record. Protestant maintains that Rochester needs
additional branches in low- and moderate-income areas, as
does Syracuse, and opposes Bank's proposed Syracuse
1. Deposit data are as of September 30, 1994.
2. The Board has determined that electronic facilities, such as ATMs, are
included in the term "branch".
Legal Developments
branch because it is located in a suburb of Syracuse. Protestant also alleges that Bank's data filed under the Home
Mortgage Disclosure Act ("HMDA") show insufficient
lending in low- and moderate-income census tracts in the
Rochester Metropolitan Statistical Area ("MSA") 3 in 1992
and 1993 and indicate the possibility of illegal discrimination in that MSA in 1993.
The Board has carefully reviewed the entire record of
Bank's CRA performance, the comments received, Bank's
response to those comments, and all 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").4
The Board notes that Bank's overall CRA performance
record was recently reviewed in connection with its application to acquire six retail branch banking offices of
Hongkong and Shanghai Banking Corporation Limited in
New York, New York. This review included consideration
of Bank's special mortgage programs, small business lending, community development activities, and ascertainment
and marketing efforts. For reasons set forth in the order
approving that application, the Board concluded that Bank's
overall performance record was generally consistent with
approval of the acquisition.5
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 reports on these examinations will be given great weight in
the applications process. 6 The Board notes that Bank
received a "satisfactory" rating from the Office of the
Comptroller of the Currency for CRA performance as of
March 31, 1992, and a "satisfactory" rating from the Federal Reserve Bank of New York7 ("Reserve Bank") for
CRA performance as of January 31, 1994.
B. HMDA Data and Lending Practices
The Board has reviewed Bank's 1992 and 1993 HMDA
data8 for Rochester and Syracuse. These data reflect some
disparities in the rate of loan originations, denials, and
applications by racial group or income level. 9 The Board is
3. Protestant also believes that similar issues are raised by the HMDA data
for the Syracuse area. In addition, Protestant asked the Board to review the
HMDA data for Binghamton and Buffalo, New York.
4. 54 Federal Register 13,742 (1989).
5. See Marine Midland Bank, 81 Federal Reserve Bulletin 56 (1995).
6. Id. at 13,745.
7. Bank has been a state member bank of the Federal Reserve System
since December 31, 1993.
8. The Board's review included HMDA data for both Bank and Marine
Midland Mortgage Corporation.
9. Data for Binghamton and Buffalo showed generally similar patterns.
311
concerned when an institution's record indicates disparities
in lending to minority applicants, and it believes that all
banks are obligated to ensure that their lending practices are
based on criteria that assure not only safe and sound lending, but also equal access to credit by creditworthy applicants regardless of race. The Board recognizes, however,
that HMDA data alone provide an incomplete measure of
an institution's lending in its community. The Board also
recognizes that HMDA data have limitations that make the
data an inadequate basis, absent other information, for
concluding that an institution has engaged in illegal discrimination in lending.
Bank's most recent CRA examination as of January
31, 1994 (the "1994 Examination"), found that its loan
policies and underwriting criteria were reasonable and
did not discriminate on any prohibited basis. Specifically,
examiners noted that the loan terms, qualifying ratios and
underwriting guidelines for residential mortgage loans
were reasonable and comparable with industry standards.
The examination also noted that Bank used a second
review program for all declined residential mortgage
applications, in which underwriting supervisors reviewed
the original underwriter's decision and had to concur in
the denial of an application.
The 1994 Examination did not find any practices that
were intended to discourage credit applications. Examiners
noted that Bank solicited credit applications from all segments of its communities, including low- and moderateincome areas. Moreover, the examination found that Bank's
credit practices complied with antidiscrimination laws and
regulations. Examiners also found that Bank generally had a
reasonable geographic distribution of residential mortgage
and home improvement loans and applications from lowand moderate-income census tracts throughout its delineated service areas.
Bank offers several special mortgage programs to its
communities. Since 1990, Bank has participated in the
Federal National Mortgage Association's Community
Homebuyers and FannieNeighbors programs, both of which
provide flexible down payment methods for borrowers who
do not exceed the Department of Housing and Urban Development's median income guidelines. In addition, Bank recently started its own Affordable Housing Loan Program for
low- and moderate-income borrowers who do not qualify
for other residential lending programs; Bank has committed
$10 million to this program to finance residential mortgage
loans and an additional $300,000 to assist in financing
down payments. In Rochester, Bank participates with the
City of Rochester and Rochester Neighborhood Housing
Services in a city-wide housing rehabilitation initiative, to
which it has offered $100,000 at very low rates for the loan
pool and will commit $1 million in below-market home
improvement loans with flexible credit standards. In 1994,
Bank introduced a low minimum amount personal installment loan program and a secured credit card program.
312
Federal Reserve Bulletin • March 1995
Bank also participates in several governmentally insured
loan programs. Bank has been named one of the top two
Small Business Administration ("SBA") lenders for New
York State during 1992 and 1993, and continues to hold the
SBA's preferred lender status for its commitment to small
business lending. In addition to SBA lending, Bank offers
VA, FHA 203B, 10 and State of New York Mortgage Association ("SONYMA") loans to borrowers who meet the programs' income requirements.
The 1994 Examination found that Bank participates in
various community development programs in New York
State and provides loans and lines of credit to a wide variety
of local organizations that support housing, economic development, rehabilitation or small business development. From
July 1992 to July 1994, the bank's community development
financing totalled $27.2 million. Examiners also found that
many of Bank's officers and employees provided technical
assistance to organizations located throughout the state that
promote community development programs.
In the Rochester area, Bank opened a $1.97 million line
of credit to a not-for-profit corporation for construction of a
low-income housing project. Bank also had working capital
lines of credit to not-for-profit organizations. For example,
Bank had a working capital line to a housing development
corporation that provides weatherization services for lowincome housing, and one to a housing council that assists in
solving housing problems in Rochester and throughout
Monroe County. In addition, Bank provided capitalization
funding to a local minority enterprise small business association for businesses owned by women and minorities in the
area, in which funds provided for direct loans and investments are leveraged three times by the SBA. Bank also had
loans outstanding for renovation of a low-income apartment
complex, to a developer of affordable housing, to a not-forprofit agency for a homeless shelter/community residence,
to a not-for-profit corporation operating low- and moderateincome housing projects, and to a not-for-profit low- and
moderate-income housing project on city-owned land.
In Syracuse, Bank has granted a $1.2 million credit line
to a not-for-profit corporation that revives low-income residential areas. Bank has also made a loan for rehabilitation
and permanent financing to an organization that provides
affordable housing, and has funded a commitment to a
not-for-profit agency that purchases homes and refurbishes
them for affordable housing. In addition, Bank has committed $200,000 annually to an association of five local banks
and a non-profit business development corporation, which
will focus on and service small business loans under
$50,000 and will emphasize businesses owned by women
and minorities.
10. A fixed-rate, HUD-insured loan product only available in New York.
C. Ascertainment and Marketing
Bank ascertains community credit needs in various ways.
For example, Bank has a directed call program, and its
officers and employees participate in a number of community organizations.11 Moreover, in June 1993, Bank conducted a CRA survey in five New York State markets using
a random sample of customers residing in low- and
moderate-income zip codes to determine the level of awareness of Bank and its products and services.
Bank markets its products and services primarily through
advertisements in daily newspapers, local weekly news and
trade publications, and some journals and special audience
publications that focus on specific minority groups and lowand moderate-income areas including two in the Rochester
region. Bank also conducts free seminars throughout its
delineated community. During the 18 months covered by
the 1994 Examination, Bank conducted 16 first-time homebuyer seminars, one SONYMA seminar, and three seminars
entitled "Women and Investing." Bank's representatives
actively marketed its student loan and educational financing
options throughout New York State, and participated in
housing fairs sponsored by the Long Island Board of Realtors, the Federal National Mortgage Association and the
New York State Housing Coalition. Bank also advertised in
publications and annual reports by not-for-profit agencies
including Kensington-Bailey Neighborhood Housing Services, People's Equal Action and Community Effort
(P.E.A.C.E.) Inc., Spanish Action Coalition, Inc., The IberoAmerican Action League, Inc., and Syracuse Housing Partnership, among others.
D. Branch Locations
As of the 1994 Examination date, Bank had 312 branch
offices and 309 ATM locations in New York State. Bank
opened two offices in 1992, none in 1993, and subsequent to
the Examination date, acquired six branches in 1994. Examiners concluded that Bank has an adequate branch closing
policy that requires Bank to take actions to minimize the
impact of a branch closing on the local community. Branch
hours vary by location and are based on customer convenience and local competition. In the Rochester MSA, 36
percent of Bank's branches are in low- to moderate-income
census tracts, including five branches in the areas identified
by Protestant, more than any other bank. In the Syracuse
MSA, 29 percent of its branches are in low- to moderateincome census tracts.
11. In addition, the 1994 Examination noted that the directed call program
reached 66 organizations involved with affordable housing development,
community development, and rehabilitation.
Legal Developments
E. Conclusion
The Board has carefully considered the entire record, including Protestant's comments and Bank's CRA record of
performance. In light of all the facts of record, the Board
believes that Bank's efforts to help meet the credit needs of
all segments of its communities, including low- and
moderate-income neighborhoods, are consistent with approval of these applications and that Protestant's comments
do not warrant their denial.
Other
Considerations
The Board has also concluded that the factors it is required
to consider under section 9 of the Federal Reserve Act and
regulations thereunder, including Bank's financial condition, the general character of its management, and the
proposed exercise of corporate powers, are consistent with
approval of these applications.
Based on the foregoing and all other facts of record,
including commitments made by Bank, the Board has determined that the applications should be, and hereby are,
approved. The Board's approval is specifically conditioned
on all commitments made in connection with applications.
The commitments and conditions relied on by the Board are
deemed 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 subject to completion of the facilities and their
being in operation within one year of the date of this order,
and to approval by the appropriate state authorities.
By order of the Board of Governors, effective
January 25, 1995.
Voting for this action: Chairman Greenspan, and Governors
Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chairman Blinder and Governors Kelley and LaWare.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
ORDERS ISSUED UNDER INTERNATIONAL BANKING
ACT
Turkiye Vakiflar Bankasi, T.A.O.
Ankara, Turkey
Order Approving
Establishment
of a Branch
Turkiye Vakiflar Bankasi, T.A.O. ("Bank"), Ankara,
Turkey, a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section
7(d) of the IBA (12 U.S.C. § 3105(d)) to establish a statelicensed branch in New York, New York. A foreign bank
313
must obtain the approval of the Board to establish a
branch, agency, commercial lending company, or representative office in the United States under the Foreign
Bank Supervision Enhancement Act of 1991, which
amended the IBA.
Notice of the application, affording interested persons
an opportunity to submit comments, has been published
in a newspaper of general circulation in N e w York, N e w
York (New York Post, October 22, 1992). The time for
filing comments has expired and the Board has considered the application and all comments received.
Bank, with assets of $2.7 billion, 1 is the seventh largest bank in Turkey. It operates more than 300 branch
offices in Turkey, and has representative offices in Germany and Austria. The General Directorate of Foundations, an agency of the Turkish government, owns 80
percent of Bank's shares. Bank's pension fund owns the
remainder of Bank's shares.
Bank currently operates a representative office in N e w
York. Bank does not engage in nonbanking activities in
the United States and would be a qualifying foreign
banking organization within the meaning of Regulation K after establishing the proposed branch. 12 C.F.R.
211.23(b).
In order to approve an application by a foreign bank to
establish a branch in the United States, the IBA and
Regulation K require the Board to determine that the
foreign bank applicant engages directly in the business of
banking outside the United States and has furnished the
Board with the information it needs to assess adequately
the application. The Board also must determine that each
of the foreign bank applicant and any foreign bank parent
is subject to comprehensive supervision or regulation on
a consolidated basis by its home country supervisors.
12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24(c)(1). The IBA
and Regulation K also permit the Board to take into
account additional standards. 12 U.S.C. § 3105(d)(3)-(4);
12 C.F.R. 211.24(c)(2).
Bank engages directly in the business of banking outside
of the United States through its banking operations in
Turkey. Bank also has provided the Board with the information necessary to assess the application through submissions
that address the relevant issues.
Regulation K provides that a foreign bank will be considered to be subject to comprehensive supervision or regulation on a consolidated basis if the Board determines that the
bank is supervised and regulated in such a manner that its
home country supervisor receives sufficient information on
the bank's worldwide operations, including its relationship
to any affiliate, to assess the bank's overall financial condition and its compliance with law and regulation. 12 C.F.R.
1. Financial data are as of September 30, 1994, unless otherwise noted.
314
Federal Reserve Bulletin • March 1995
211.24(c)(1). 2 In making its determination under this standard, the Board has considered the following information.
Bank is supervised primarily by the Turkish Undersecretariat of Treasury and Foreign Trade (the "Treasury")
through its Banking Directorate and the Board of Sworn
Auditors ("Auditors"), as well as by the Central Bank of
Turkey ("Central Bank"). The Treasury serves as Bank's
primary home country supervisor. As a state-owned institution, Bank is also subject to supervision by the Prime
Ministry Supreme Board of Supervisors ("Board of Supervisors"). To monitor the condition of Bank, these supervisory authorities use information obtained through on-site
examinations, periodic financial and other reporting, meetings with Bank management, and information exchanges
among the authorities.
The Treasury assumes the leading role in the supervision of
Bank through annual on-site targeted or comprehensive examinations. These examinations are conducted by the Auditors
and include review of Bank's capital adequacy, asset quality,
managerial resources, and compliance with applicable banking
regulations. The Auditors also conduct periodic special examinations and audits of institutions that engage in or are suspected of engaging in questionable activities.
The Treasury and the Central Bank also monitor Bank's
condition through review of periodic financial reports. Bank is
required to submit to the Treasury and to the Central Bank
various weekly, monthly, quarterly, and annual financial statements, including balance sheets and income statements for
Bank's headquarters and domestic and foreign branches. Bank
also is required to submit annual reports to the Treasury, the
Turkish Ministry of Industry and Commerce, and the Central
Bank on the financial position and transactions of all branches
abroad. Recently enacted amendments to Turkish banking law
will require Bank to submit separate audited balance sheets
and income statements for all affiliated companies to the Treasury on an annual basis.3 The Board of Supervisors receives
regulatory reports prepared by Bank, including those relating
to affiliates, and has the authority to investigate, inspect, and
audit affiliates.
2. In assessing this standard, the Board considers, among other factors, the
extent to which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring and
controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its subsidiaries
and offices through regular examination reports, audit reports, or otherwise;
(iii) Obtain information on the dealings with and relationship between
the bank and its affiliates, both foreign and domestic;
(iv) Receive from the bank financial reports that are consolidated on a
worldwide basis, or comparable information that permits analysis of the
bank's financial condition on a worldwide consolidated basis; and
(v) Evaluate prudential standards, such as capital adequacy and risk
asset exposure, on a worldwide basis.
These are indicia of comprehensive, consolidated supervision. No single
factor is essential and other elements may inform the Board's determination.
3. Under Turkish banking law, an ownership interest of 10 percent or more
of a company's voting stock triggers certain reporting obligations and
requirements governing transactions with affiliates.
Bank's internal auditors conduct annual audits of individual branches, departments, and units of Bank. At least two
auditors who represent the interests of Bank's shareholders
hold non-voting seats on Bank's board of directors. These
auditors review and approve all quarterly and annual financial statements that are submitted to the Treasury and the
Central Bank. Bank's annual financial reports also must be
reviewed by an independent external auditor that has been
certified by the Turkish Board of Independent Auditors. The
auditor's report assesses whether Bank has conformed to
international generally accepted accounting principles, and
reviews asset quality, liquidity, adequacy of loan loss reserves, and capitalization. All external audit reports must be
submitted to the Treasury and the Central Bank.
The Treasury obtains information and monitors the condition of Bank's affiliates through review of periodic financial
statements, consultation with other regulatory entities, and
through examination, if necessary. In addition, Turkish law
imposes lending and other limits on Bank's transactions
with affiliates. The Treasury monitors Bank's compliance
with these limits through regular reports submitted by Bank.
Turkish banking law also limits Bank's investments in nonfinancial companies.
A single directorate within the Treasury has overall responsibility for supervising Bank's banking, leasing, insurance, factoring, and capital markets activities and affiliates.
The Treasury exercises its supervisory authority over these
affiliates by reviewing quarterly and annual balance sheets
and income statements, and by conducting on-site examinations, if necessary. The Turkish Board of Securities also
regulates Bank's affiliates engaged in capital markets activities, and shares information with the Treasury concerning
the condition of these affiliates. Bank's internal auditors
submit reports to the Treasury on their reviews of affiliates
in which Bank holds a controlling interest.
The Central Bank receives substantially similar reporting
from Bank and consults regularly with the Treasury on the
condition and activities of Bank and its affiliates engaged in
financial activities. In addition, the Board of Supervisors
notifies the Treasury of problems identified during inspections of Bank and its affiliates.
Based on all the facts of record, which include the
information described above, the Board concludes that Bank
is subject to comprehensive supervision and regulation on a
consolidated basis by its home country supervisors.
The Board has also taken into account the additional
standards set forth in section 7 of the IBA and Regulation K. See 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R.
211.24(c)(2). Bank has received the consent of the Treasury
to establish the proposed state-licensed branch. In addition,
subject to certain conditions, the Treasury may share information on Bank's operations with other supervisors, including the Board.
Bank is in compliance with risk-based capital standards
adopted by Turkey, which conform generally to the Basle
Legal Developments
Capital Accord, with some variation for Turkish accounting
practices. In addition, Bank's capital is in excess of the
minimum levels that would be required by the Basle Capital
Accord and is considered equivalent to capital that would
be required of a U.S. banking organization. Managerial and
other financial resources of Bank are also considered consistent with approval in light of commitments and conditions
reflected in the record. Bank appears to have the experience
and capacity to support the proposed branch and has established controls and procedures for its U.S. offices to ensure
compliance with U.S. law.
Finally, Bank has committed to make available to the
Board such information on the operations of Bank and any
of its affiliates that the Board deems necessary to determine
and enforce compliance with the IB A, the Bank Holding
Company Act of 1956, as amended, and other applicable
Federal law, to the extent not prohibited by law or regulation. The Board has reviewed the restrictions on disclosure
in Turkey and has communicated with certain government
authorities concerning access to information. Bank has committed to cooperate with the Board to obtain any approvals
or consents that may be needed to gain access to information that may be requested by the Board. In light of these
commitments and other facts of record, and subject to the
condition described below, the Board concludes that Bank
has provided adequate assurances of access to any necessary information the Board may request.
On the basis of all the facts of record, and subject to all
commitments made by Bank, as well as the terms and
conditions set forth in this order, the Board has determined
that Bank's application to establish a state-licensed branch
ACTIONS TAKEN UNDER SECTIONS 5(D)(3)
AND 18(C)
315
should be, and hereby is, approved. Should any restrictions
on access to information on the operations or activities of
Bank or any of its affiliates subsequently interfere with the
Board's ability to determine the safety and soundness of
Bank's U.S. operations or compliance by Bank or its affiliates with applicable Federal statutes, the Board may require
termination of any of Bank's direct or indirect activities in
the United States. Approval of this application is also
specifically conditioned on compliance by Bank with the
commitments made in connection with this application, and
with the conditions in this order.4 The commitments and
conditions referred to above are conditions imposed in
writing by the Board in connection with its decision, and
may be enforced in proceedings under 12 U.S.C. § 1818 or
12 U.S.C. § 1847 against Bank, including its offices and its
affiliates.
By order of
January 4, 1995.
the
Board
of
Governors,
effective
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and
Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
4. The Board's authority to approve the establishment of the proposed
branch office parallels the continuing authority of the State of New York to
license offices of a foreign bank. The Board's approval of this application
does not supplant the authority of the State of New York, and its agent, the
New York State Banking Department, to license the proposed branch office
of Bank in accordance with any terms or conditions that the State of New
York may impose.
OF THE FEDERAL DEPOSIT INSURANCE 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.
Acquiring
Bank(s)
SouthTrust Bank of West Florida,
St. Petersburg, Florida
Acquired
Thrift
Anchor Savings Bank, Federal Savings
Bank,
Hewlett, New York
Approval
Date
January 11, 1995
316
Federal Reserve Bulletin • March 1995
ACTIONS TAKEN UNDER SECTIONS 5(D)(3)
AND 18(C)
OF THE FEDERAL DEPOSIT INSURANCE 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.
Acquiring
Bank(s)
Crestar Bank,
Richmond, Virginia
Acquired
Thrift
Reserve
Bank
TideMark Bank,
Newport News, Virginia
Richmond
Approval
Date
January 19, 1995
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
Section 3
Applicant(s)
Bank of Boston Corporation,
Boston, Massachusetts
BancBoston Holdings, Inc.,
Boston, Massachusetts
Paladon Management Co., Inc.
Panhandle, Texas
Paladon Investments, Ltd.,
Panhandle, Texas
Bank(s)
Effective
Date
Bank of Boston (Maine),
National Association,
South Portland, Maine
January 30, 1995
Panhandle Bancshares, Inc.,
Panhandle, Texas
First National Bank of Panhandle,
Panhandle, Texas
January 18, 1995
Section 4
Applicant(s)
Bank of Boston Corporation,
Boston, Massachusetts
Dacotah Bank Holding Co.,
Aberdeen, South Dakota
Signet Banking Corporation,
Richmond, Virginia
Bank(s)
Ganis Credit Corporation,
Newport Beach, California
Thor Credit Corporation,
Newport Beach, California
Grue Abstract Company,
Webster, South Dakota
Signet Strategic Capital Corporation,
Richmond, Virginia
Effective
Date
January 20, 1995
January 27, 1995
January 6, 1995
Legal Developments
317
APPUCATIONS 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)
The Aurora Holding Company,
Aurora, Minnesota
Bancook Corporation,
Cook, Nebraska
Boatmen's Bancshares, Inc.,
St. Louis, Missouri
Boatmen's-Illinois, Inc.,
St. Louis, Missouri
Citizens National Corporation,
Wisner, Nebraska
CNB Bancshares, Inc.,
Evansville, Indiana
Commerce Bancshares, Inc.,
Kansas City, Missouri
Commerce Bancshares, Inc.,
Kansas City, Missouri
Commerce Bancshares, Inc.,
Kansas City, Missouri
Community First BancShares, Inc.
Forest, Ohio
FBOP Corporation,
Oak Park, Illinois
Firstar Corporation,
Milwaukee, Wisconsin
Firstar Corporation of Iowa,
Des Moines, Iowa
First Banks, Inc.,
Clayton, Missouri
Reserve
Bank
Bank(s)
State Bank of Aurora,
Aurora, Minnesota
The First National Bank of
Summerfield,
Summerfield, Kansas
Salem Community Bancorp,
Inc.,
Salem, Illinois
Boatmen's Bank of South
Central Illinois,
Mt. Vernon, Illinois
The First National Bank of
Attica,
Attica, Kansas
The Bank of Orleans,
Orleans, Indiana
Cotton Exchange
Bancshares, Inc.,
Kennett, Missouri
UBI Financial Services, Inc.,
Wichita, Kansas
Union Bancshares, Inc.,
Wichita, Kansas
Community First Bank,
N.A.,
Forest, Ohio
North Houston Bank,
Houston, Texas
First Moline Financial
Corp.,
Moline, Illinois
CCB Bancorp, Inc.,
Santa Ana, California
Effective
Date
Minneapolis
January 13, 1995
Kansas City
January 4, 1995
St. Louis
January 23, 1995
St. Louis
January 23, 1995
Kansas City
January 12, 1995
St. Louis
January 11, 1995
Kansas City
January 18, 1995
Kansas City
January 24, 1995
Kansas City
January 24, 1995
Cleveland
January 5, 1995
Chicago
January 20, 1995
Chicago
January 9, 1995
St. Louis
January 13, 1995
318
Federal Reserve Bulletin • March 1995
Section 3—Continued
Applicant(s)
First Bank System, Inc.,
Minneapolis, Minnesota
First State Bancshares, Inc.,
Scottsbluff, Nebraska
Heritage Bancorp, Inc.,
Burlington, Kentucky
HF Limited Partnership,
Marshall, Missouri
KeyCorp,
Cleveland, Ohio
Marshall & Ilsley Corporation,
Milwaukee, Wisconsin
Menard Bancshares, Inc.,
Menard, Texas
Mission-Heights Management
Company, Ltd.,
Channelview, Texas
Norwest Corporation,
Minneapolis, Minnesota
Norwest Corporation,
Minneapolis, Minnesota
Pea River Capital Corporation,
Elba, Alabama
Philipps Investment Company
Limited Partnership,
Spring Hill, Florida
Reserve
Bank
Bank(s)
First Bank, Fergus Falls,
National Association,
Fergus Falls, Minnesota
First Bank Grand Rapids,
National Association,
Grand Rapids, Minnesota
First Bank Maple Grove,
National Association,
Maple Grove, Minnesota
First Bank Minneapolis
South, National
Association,
Minneapolis, Minnesota
First Bank Saint Cloud,
National Association,
Saint Cloud, Minnesota
Liberty Industrial Bank,
Colorado Springs,
Colorado
Heritage Bank, Inc.,
Burlington, Kentucky
Wood & Huston
Bancorporation, Inc.,
Marshall, Missouri
OmniBancorp,
Denver, Colorado
Financial Services
Corporation of the
Midwest,
Rock Island, Illinois
Menard National Bank,
Menard, Texas
Prime Bancshares, Inc.,
Channelview, Texas
First National Bank of Bay
City,
Bay City, Texas
Independent Bancorp of
Arizona, Inc.,
Phoenix, Arizona
The Peoples Bank of Coffee
County,
Elba, Alabama
Gratiot Bancshares, Inc.,
Gratiot, Wisconsin
Effective
Date
Minneapolis
January 10, 1995
Kansas City
January 18, 1995
Cleveland
January 4, 1995
Kansas City
January 3, 1995
Cleveland
January 4, 1995
Chicago
January 13, 1995
Dallas
December 30, 1994
Dallas
December 30, 1994
Minneapolis
January 5, 1995
Minneapolis
January 12, 1995
Atlanta
January 6, 1995
Chicago
January 5, 1995
Legal Developments
319
Section 3—Continued
Applicant(s)
Philipps Investments Limited
Partnership,
Wapiti, Wyoming
Shawmut National Corporation,
Hartford, Connecticut
Shawmut National Corporation,
Boston, Massachusetts
Northeast Federal Corp.,
Hartford, Connecticut
Tilden Bancshares, Inc.,
Tilden, Nebraska
Triangle Bancorp, Inc.,
Raleigh, North Carolina
Union Bancshares, Inc.,
Wichita, Kansas
West Bancorp, Inc.,
Denver, Colorado
Wes-Tenn Bancorp, Inc.,
Covington, Tennessee
Winton Jones Limited Partnership,
Wayzata, Minnesota
Anchor Bancorp, Inc.,
Wayzata, Minnesota
Reserve
Bank
Bank(s)
Effective
Date
Gratiot Bancshares, Inc.,
Gratiot, Wisconsin
Chicago
January 5, 1995
Shawmut Bank New York,
National Association,
Schenectady, New York
Boston
January 24, 1995
Tilden Enterprises, Inc.,
Tilden, Nebraska
Atlantic Community
Bancorp, Inc.,
Rocky Mount, North
Carolina
CBI-Central Kansas, Inc.,
Kansas City, Missouri
Bankers' Bank of the West,
Denver, Colorado
West Tennessee Financial
Corporation,
Selmer, Tennessee
First National Bank of
Farmington,
Farmington, Minnesota
Kansas City
January 4, 1995
Richmond
January 23, 1995
Kansas City
January 24, 1995
Kansas City
January 20, 1995
St. Louis
January 10, 1995
Minneapolis
January 19, 1995
Section 4
Applicant(s)
American National Corporation,
Chicago, Illinois
Associated Bank-Corp,
Green Bay, Wisconsin
Nonbanking
Activity/Company
ANB Mezzanine
Corporation,
Chicago, Illinois
Associated Investment
Services, Inc.,
Green Bay, Wisconsin
Associated Brokerage, Inc.,
Green Bay, Wisconsin
Associated Financial Center,
Ltd.,
Menomonee Falls,
Wisconsin
Reserve
Bank
Effective
Date
Chicago
December 30, 1994
Chicago
January 19, 1995
320
Federal Reserve Bulletin • March 1995
Section 4—Continued
Applicant(s)
BanPonce Corporation,
Hato Rey, Puerto Rico
Cabot Bankshares, Inc.,
Cabot, Arkansas
Crestar Financial Corporation,
Richmond, Virginia
Firstar Corporation,
Milwaukee, Wisconsin
Firstar Corporation of Minnesota,
Bloomington, Minnesota
First United Bancorporation,
Anderson, South Carolina
Huxley Bancorp,
Huxley, Iowa
Norwest Corporation,
Minneapolis, Minnesota
Premier Bankshares Corporation,
Bluefield, Virginia
Security State Agency of Aitkin,
Inc.,
Aitkin, Minnesota
Nonbanking
Activity/Company
Reserve
Bank
Effective
Date
Popular International Bank,
Hato Rey, Puerto Rico
BanPonce Financial, Inc.,
Mt. Laurel, New Jersey
Banco Popular, Federal
Savings Bank,
Newark, New Jersey
Bank of Cabot Mortgage
Company,
Cabot, Arkansas
TideMark Bancorp, Inc.,
Newport News, Virginia
Investors Insurance Agency,
Inc.,
Wayzata, Minnesota
New York
January 20, 1995
St. Louis
January 19, 1995
Richmond
January 19, 1995
Chicago
January 26, 1995
Eagle Finance Company,
Inc.,
Hartsville, South Carolina
to engage in the activity of
making and servicing
loans by purchasing loan
participations, in an
aggregate amount, up to
$500 thousand
Norwest Investment
Richmond
December 30, 1994
Chicago
December 30, 1994
Minneapolis
January 5, 1995
Richmond
December 29, 1994
Minneapolis
January 12, 1995
Services, Inc.,
Minneapolis, Minnesota
Premier Trust Company,
Bluefield, Virginia
Norshor Agency, Inc.,
Aitkin, Minnesota
Sections 3 and 4
Applicant(s)
Stearns Financial Services, Inc.,
Employee Stock Ownership Plan,
Albany, Minnesota
Nonbanking
Activity/Company
Stearns Financial Services,
Inc.,
Albany, Minnesota
Reserve
Bank
Minneapolis
Effective
Date
January 18, 1995
Legal Developments
321
APPUCATIONS 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)
BancFirst,
Oklahoma City, Oklahoma
First Interstate Bank of Commerce,
Billings, Montana
Triangle East Bank,
Raleigh, North Carolina
Triangle East Bank,
Raleigh, North Carolina
Reserve
Bank
Bank(s)
State National Bank,
Marlow, Oklahoma
First Citizens Bank of
Bozeman,
Bozeman, Montana
Standard Bank and Trust
Company,
Dunn, North Carolina
Columbus National Bank,
Whiteville, North
Carolina
Unity Bank & Trust
Company,
Rocky Mount, North
Carolina
Effective
Date
Kansas City
January 24, 1995
Minneapolis
January 12, 1995
Richmond
January 10, 1995
Richmond
January 23, 1995
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.
Kuntz v. Board of Governors, No. 95-3044 (6th Cir., filed
January 12, 1995). Petition for review of a Board order
dated December 19, 1994, approving an application by
KeyCorp, Cleveland, Ohio, to acquire BANKVERMONT
Corp., Burlington, Vermont.
In re Subpoena Duces Tecum, Misc. No. 9 5 - 0 6 (D.D.C.,
filed January 6, 1995). Action to enforce subpoena seeking pre-decisional supervisory documents. The Board
filed its opposition on January 20,1995.
Cavallari v. Board of Governors, No. 9 4 - 4 1 8 3 (2d Cir.,
filed October 17, 1994). Petition for review of Board
order of prohibition against a former outside counsel
to a national bank (80 Federal Reserve Bulletin 1046
(1994)). The case was consolidated with a petition for
review of orders of the Comptroller of the Currency
imposing a civil money penalty and cease and desist
order against petitioner (Cavallari v. OCC, No. 9 4 4151). The agencies filed their consolidated brief on
January 17, 1995.
Jackson v. Board of Governors, No. 94-16789 (9th Cir.,
filed September 22, 1994). Appeal of dismissal of pro se
action for violation of a prisoner's civil rights. On
December 1, 1994, the court dismissed the appeal.
Board of Governors v. MacCallum, No. 94 Civ. 5652 (WK)
(S.D. New York, filed August 3, 1994). Action to freeze
assets of individual pending administrative adjudication
of civil money penalty assessment by the Board. On
August 3, 1994, the court issued an order temporarily
restraining the transfer or disposition of the individual's
assets. On December 22, 1994, the order was dissolved
by agreement of the parties.
In re Subpoena Duces Tecum, No. 94-MS-214 (D. D.C.,
filed June 27, 1994). Subpoena enforcement case in
which the plaintiff in a securities fraud class action seeks
examination reports and internal Board memos. The
Board's opposition to subpoena was filed on July 8,
1994.
National Title Resource Agency v. Board of Governors,
No. 9 4 - 2 0 5 0 (8th Cir., filed April 28, 1994). Petition
for review of Board's order, issued under section 4 of
the Bank Holding Company Act, approving the application of Norwest Corp., Minneapolis, Minnesota, to
acquire Double Eagle Financial Corp., Phoenix, Ari-
322
Federal Reserve Bulletin • March 1995
zona, and its subsidiary, United Title Agency, Inc., and
thereby engage in title insurance agency activities and
real estate settlement services (80 Federal
Reserve
Bulletin 453 (1994)). On January 10, 1995, the court
denied the petition and affirmed the Board's order.
Beckman v. Greenspan, No. CV 94-41-BCG-RWA (D.
Mont., filed April 13, 1994). Action against Board and
others seeking damages for alleged violations of constitutional and common law rights. The Board's motion to
dismiss was filed May 19, 1994.
Scott v. Board of Governors, No. 94-0104 (D. D.C., filed
January 21, 1994). Petition for review of a Board order
approving the application of Society Corporation, Cleveland, Ohio, to merge with KeyCorp, Albany, New York
(80 Federal Reserve Bulletin 253 (1994)). On December 7, 1994, the court granted the Board's motion to
dismiss.
In re Subpoena Duces Tecum, Misc. Nos. 9 3 - 2 6 1 and
9 3 - 2 6 0 (D. D.C., filed August 17, 1993). Subpoena
enforcement case in which plaintiff seeks examination
and other supervisory material in connection with a
shareholder derivative action against a bank holding
company. On January 25, 1995, the court granted in
part and denied in part the plaintiff's motion to compel
production. On January 26, 1995, the plaintiff filed his
notice of appeal.
Bennett v. Greenspan, No. 93-1813 (D. D.C., filed April 20,
1993). Employment discrimination action. A jury verdict
for the plaintiff was rendered on October 13, 1994. The
Board's motion for a new trial on the issue of damages
was denied on January 9, 1995.
Zemel v. Board of Governors, No. 92-1056 (D. D.C., filed
May 4, 1992). Age Discrimination in Employment Act
case. On November 29, 1994, the court granted the
Board's motion for summary judgment.
Board of Governors v. Ghaith R. Pharaon, No. 91-CIV6250 (S.D. New York, filed September 17,1991). Action
to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board.
On September 17, 1991, the court issued an order temporarily restraining the transfer or disposition of the individual's assets.
FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD
OF GOVERNORS
DLG Financial Corp.
The Woodlands, Texas
The Federal Reserve Board announced on January 18,1995,
the issuance of a Combined Consent Order of Assessment
of Civil Money Penalties against DLG Financial Corp., The
Woodlands, Texas, and an Order of Prohibition against
Daniel S. De La Garza, the president and sole shareholder
of DLG Financial.
Sunnie S. Kim
Los Angeles, California
The Federal Reserve Board announced on January 18, 1995,
the joint issuance with the Office of the Comptroller of the
Currency of a Cease and Desist Order against Sunnie S. Kim, a
former officer of the NARA Bank, N.A., Los Angeles, California, and the California Center Bank, Los Angeles, California.
WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS
RT. Bank Ekspor Impor Indonesia (Persero)
Jakarta, Indonesia
The Federal Reserve Board announced on January 18,1995,
the execution of a Written Agreement between the Federal
Reserve Bank of New York, the Superintendent of Banks of
the State of New York, and the P.T. Bank Ekspor Impor
Indonesia (Persero), Jakarta, Indonesia.
P.T. Bank Niaga
Jakarta, Indonesia
The Federal Reserve Board announced on January 26, 1995,
the execution of a Second Amendment to the Written
Agreement, dated January 8, 1993, involving the Federal
Reserve Bank of San Francisco, and the P.T. Bank Niaga,
Jakarta, Indonesia, and its Los Angeles Agency.
A1
Financial and Business Statistics
CONTENTS
WEEKLY REPORTING
A3 Guide to Tabular Presentation
Assets and liabilities
A21 Large reporting banks
A 2 3 Branches and agencies of foreign banks
Domestic Financial Statistics
MONEY STOCK AND BANK
A4
A5
A6
A7
CREDIT
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
FINANCIAL
INSTRUMENTS
A8 Federal Reserve Bank interest rates
A 9 Reserve requirements of depository institutions
A 1 0 Federal Reserve open market transactions
FEDERAL RESERVE
BANKS
A l l Condition and Federal Reserve note statements
A 1 2 Maturity distribution of loan and security
holdings
MONETARY AND CREDIT
AGGREGATES
MARKETS
FINANCE
A28
A29
A30
A30
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
A 3 1 U.S. government securities
dealers—Transactions
A 3 2 U.S. government securities dealers—Positions
and financing
A 3 3 Federal and federally sponsored credit
agencies—Debt outstanding
SECURITIES MARKETS
CORPORATE
A 1 3 Aggregate reserves of depository institutions
and monetary base
A 1 4 Money stock, liquid assets, and debt measures
A 1 6 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A 1 7 Bank debits and deposit turnover
COMMERCIAL BANKING
INSTITUTIONS
A 1 8 Assets and liabilities, Wednesday figures
BANKS
A 2 4 Commercial paper and bankers dollar
acceptances outstanding
A25 Prime rate charged by banks on short-term
business loans
A 2 6 Interest rates—money and capital markets
A 2 7 Stock market—Selected statistics
FEDERAL
POLICY
COMMERCIAL
AND
FINANCE
A 3 4 N e w security issues—Tax-exempt state and local
governments and corporations
A35 Open-end investment companies—Net sales
and assets
A 3 5 Corporate profits and their distribution
A 3 5 Nonfarm business expenditures on new
plant and equipment
A 3 6 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit
2
Federal Reserve Bulletin • March 1995
Domestic Financial Statistics—Continued
REPORTED BY BANKS
IN THE UNITED STATES
REAL ESTATE
A 3 7 Mortgage markets
A 3 8 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A 3 9 Total outstanding
A 3 9 Terms
FLOW OF FUNDS
A40
A42
A43
A44
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Domestic Nonfinancial Statistics
SELECTED
MEASURES
A45 Nonfinancial business activity—Selected
measures
A 4 5 Labor force, employment, and unemployment
A 4 6 Output, capacity, and capacity utilization
A 4 7 Industrial production—Indexes and gross value
A 4 9 Housing and construction
A 5 0 Consumer and producer prices
A51 Gross domestic product and income
A 5 2 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
A 5 5 Selected U.S. liabilities to foreign official
institutions
A55
A56
A58
A59
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A 5 9 Banks' own claims on unaffiliated foreigners
A 6 0 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES
A61 Liabilities to unaffiliated foreigners
A 6 2 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND
TRANSACTIONS
A 6 3 Foreign transactions in securities
A 6 4 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST AND EXCHANGE
RATES
A 6 5 Discount rates of foreign central banks
A 6 5 Foreign short-term interest rates
A 6 6 Foreign exchange rates
A67 Guide to Statistical Releases and
Special Tables
A3
Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
n.e.c.
p
r
ABBREVIATIONS
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
Corrected
Estimated
Not available
Not elsewhere classified
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
GENERAL
INFORMATION
*
0
In many of the tables, components do not sum to totals because
of rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also
G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
VA
Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Metropolitan statistical area
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
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
Department of Veterans Affairs
include not fully guaranteed issues) as well as direct obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political
subdivisions.
A4
1.10
DomesticNonfinancialStatistics • March 1995
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted 1
1994
1994
Monetary or credit aggregate
1
2
3
4
Reserves of depository institutions2
Total
Required
Nonborrowed
Monetary base3
5
6
7
8
9
Concepts of money, liquid assets, and debf4
Ml
M2
M3
L
Debt
Nontransaction components
10 In M25
11 In M3 only6
Nov/
Q1
Q2
Q3
Q4
Aug.
Sept.
Oct/
Dec.
3.1
2.5
3.7
10.2
-4.4
-3.6
-5.4
8.4
-2.5
-2.6
-4.2
7.3
-3.7
-3.2
-2.4
6.4
-6.0
-4.0
-6.3
6.4r
-.7
-1.9
-1.1
5.5r
-6.3
-1.2
-4.2
6.8
-3.2
-7.4
-.6
8.9
-.2
-3.1
.6
1.8
6.0
2.1r
.5r
2.6r
5.3
1.9
1.7r
.5'
1.3r
5.6
3.0
.9r
1.9r
1.3r
4.4
-1.4
-.5
1.9
n.a.
n.a.
-2.2
-1.9
-1.9
-1.6
6.2
,9r
-.4
1.4f
-1.2 r
5.7
-3.5
-1.7
2.5
6.6
4.4
-.9
.5
2.1
2.8
6.3
.0
1.9
4.3
n.a.
n.a.
.3r
-8.0
1.6r
-5.6 r
.0r
7.4r
-.1
15.1
-1.8
-2.2 r
-l.lr
11.7r
-.7
25.0
1.3
10.6
2.8
17.1
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time8'9
Thrift institutions
15 Savings, including MMDAs
16 Small time7
17 Large time8
4.3
-5.2
-2.6
-3.3
.1
-2.1 r
-4.1
8.9
9.3r
-8.5
16.8
20.4
-2.8
15.1
12.1r
-3.6
12.6
19.3'
-12.1
17.5
21.5
-9.9
17.5
23.7
-11.5
21.4
17.5
.5
- 10.7r
-8.5
.2
-5.9 r
-4.5 r
-11.1
-2.1 r
6.8r
-17.7
9.6
14.2
-16.7
-3.5 r
—5.8r
-16.9 r
2.0
23.4r
-15.7
13.4
23.0
-21.5
19.8
5.6
-21.0
5.7
5.6
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
1.2r
-26.7
13.2r
-22.8
2.1r
-6.0
8.3
15.3
-2.0
-11.2
-2.0
-9.9
9.3
52.9
15.9
2.1
20.9
6.8
7.3
4.6
5.4
5.6
3.9
4.6
5.4
4.1
8.5
5.5
12
13
14
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. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters
whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government,
and foreign banks and official institutions, less cash items in the process of collection and
Federal Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable
order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository
institutions, credit union share draft accounts, and demand deposits at thrift institutions.
Seasonally adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing contract) repurchase agreements (RPs)
issued by all depository institutions and overnight Eurodollars issued to US. 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 Ml.
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or
more) issued by all depository institutions, (2) term Eurodollars held by U.S. residents at
foreign branches of U.S. banks worldwide and at all banking offices in the United
n.a.
n.a.
6.1
6.3
6.0
5.5r
n.a.
n.a.
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: The debt aggregate is the outstanding credit market debt of the domestic
nonfinancial sectors—the federal sector (U.S. government, not including governmentsponsored enterprises or federally related mortgage pools) and the nonfederal sectors
(state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of
mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial
paper, and other loans. The data, which are derived from the Federal Reserve Board's flow
of funds accounts, are break-adjusted (that is, discontinuities in the data have been
smoothed into the series) and month-averaged (that is, the data have been derived by
averaging adjacent month-end levels).
5. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs),
and (4) small time deposits.
6. 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 (5) a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by institutiononly 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, the U.S. government, and foreign banks and official institutions.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
1994
Nov. 16
Nov. 23
Nov. 30
Dec. 7
Dec. 14
Dec. 21
Dec. 28
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
Held under repurchase agreements
5
6 Acceptances
Loans to depository institutions
7
Adjustment credit
Seasonal credit
8
9
Extended credit
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
394,856
399,252'
405,187
399,576
400,702
400,887'
400,295
402,024
405,775
354,275
1,648
357,686
2,899
364,374
3,278
358,166
2.743
359,509
3,553
359,214
3,134
363,847
0
364,693
718
364,572
3,086
3,772
349
3,730
969
3,653
648
3.744
807
3,744
1,193
3,684
1,694
3,674
0
0
0
3,661
300
3,644
1,157
20
344
103
159
87
101
40
164
57
140
97
127
111
97
28
91
133
104
559
33,890
720'
32,987
825
32,220
705
33,208
764
31,743
674'
32,264
874
31,692
575
31,957
834
32,244
11,054
22,825r
11,052
8,018
22,905'
11,051
8,018
22,972
11,052
8,018
22,899'
11,052
8,018
22,917'
11,051
8,018
22,934'
11,051
8,018
22,948
11,051
8,018
22,962
11,051
8,018
22,976
388,884'
367
393,906'
379
398,876
350
394,309'
371
394,280'
396
396,145'
390
396,044
383
397,003
347
398,301
342
5,553
192
4,849
336
11,724
24,848
5,250
192
4,612'
316
12,020
24,553'
6,113
195
4,573
342
5,225
181
4,685
318
11,755
24,701
4,821
197
4,537
310
12,098
26,049
5,351
224
4,451'
302
11,902
24,125'
4,337
175
4,454
317
11,246
25,356
6,044
189
4,876
320
11,706
23,570
6,697
178
4,546
317
12,403
25,035
0
0
8,018
0
0
0
0
0
0
0
0
0
0
0
0
0
0
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments ..
20 Other
21 Other Federal Reserve liabilities and capital .
22 Reserve balances with Federal Reserve Banks
12,000
24,778
Wednesday figures
End-of-month figures
Nov.
Nov. 23
Nov. 30
Dec. 7
Dec. 14
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6 Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
/395,756
411,369
399,901
403,171
402,176'
398,397
402,658
408,235
359,627
4,306
359,190
6,510
360,535
364,100
1,675
365,323
5,120
3,644
700
3,644
100
352,313
3,615
359,190
6,510
364,519
9,565
358,817
3,310
3,744
400
3,674
1,655
3,637
1,025
3,744
850
3,744
2,050
3,674
1,655
3,674
0
0
0
17
247
31
113
148
75
16
163
338
131
31
113
720
93
22
97
811
104
579
34,841
-424'
31,428
-715
33,115
1,317
31,685
930
32,046
-424'
31,428
1,541
31,834
244
32,177
657
32,476
11,053
8,018
22,865'
11,052
11,051
8,018
23,004
11,052
8,018
22,899'
11,052
11,052
22,934'
22,917'
22,934'
11,051
8,018
22,948
11,051
8,018
22,962
11,051
8,018
22,976
389,682'
363
396,795'
389
403,853
335
394,665'
397
395,885'
391
396,795'
389
397,278
347
398,354
344
400,566
335
5,164
223
4,782
392
12,584
24,502
5,348
230
4,451'
302
11,133
25,532'
7,161
250
4,464
876
11,959
24,543
4,250
184
4,685
331
11,567
25,792
4,532
198
4,537
290
11,905
27,420
5,348
230
4,451'
302
11,133
25,532'
4,970
166
4,454
324
11,354
21,519
5,977
206
4,876
314
11,837
22,782
8,751
192
4,546
319
12,376
23,194
0
0
0
0
0
8,018
0
0
0
0
0
8,018
0
8,018
0
0
0
0
0
0
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments ..
20 Other
21 Other Federal Reserve liabilities and capital .
22 Reserve balances with Federal Reserve Banks'
1. Amounts of cash held as reserves are shown in table 1.12, line 2.
2. Includes securities loaned—fully guaranteed by US. government securities pledged
with Federal Reserve Banks—and excludes securities sold and scheduled to be bought
back under matched sale-purchase transactions.
3. Excludes required clearing balances and adjustments to compensate for float.
A6
1.12
DomesticNonfinancialStatistics • March 1995
RESERVES AND BORROWINGS
Depository Institutions'
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
2
Reserve balances with Reserve Banks
Total vault cash-'
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks1
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
1991
1992
1993
1994
Dec.
Dec.
Dec.
June
July
Aug.
Sept.
Oct.
Nov/
Dec.
25,368
34,542
31,172
3,370
56,540
55,385
1,155
124
18
1
29,374
36,812
33,484
3,328
62,858
61,795
1,063
82
31
0
24,637
40,363
36,682
3,681
61,319
60,171
1,147
209
100
0
26,502
36,898
33,422
3,476
59,924
58,819
1,105
333
226
0
25,996
37,635
34,096
3,539
60,092
58,985
1,107
458
364
0
25,284
37,614
34,052
3,562
59,337
58,333
1,004
469
445
0
25,157
38,431
34,794
3,637
59,951
58,891
1,060
487
444
0
24,745
38,231
34,745
3,486
59,490
58,686
804
380
339
0
24,715
38,931
35,291
3,640
60,006
58,999
1,008
249
164
0
24,637
40,363
36,682
3,681
61,319
60,171
1,147
209
100
0
Biweekly averages of daily figures for two week periods ending on dates indicated
1994
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
Aug. 31
Sept. 14
Sept. 28
Oct. 12
Oct. 26
Nov. 9
Nov. 23
Dec. 7r
Dec. 21
Jan. 4
25,099
36,913
33,455
3,458
58,554
57,559
995
498
468
0
25,720
38,451
34,839
3,612
60,559
59,643
917
447
437
0
24,641
38,397
34,700
3,697
59,341
58,138
1,204
535
458
0
24,824
38,539
35,138
3,401
59,962
58,907
1,055
433
403
0
25,025
37,608
34,137
3,472
59,161
58,587
574
346
326
0
23,771
39,236
35,506
3,730
59,276
58,435
841
351
223
0
25,360
38,235
34,677
3,558
60,037
59,092
945
201
152
0
24,638
39,934
36,245
3,689
60,883
59,538
1,346
216
112
0
24,288
40,862
37,082
3,780
61,370
60,291
1,080
179
98
0
25,124
39,965
36,428
3,538
61,551
60,449
1,103
246
95
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 "as-of' adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash may be
used to satisfy reserve requirements. The maintenance period for weekly reporters ends
sixteen days after the lagged computation period during which the vault cash is held.
Before Nov. 25, 1992, the maintenance period ended thirty days after the lagged
computation period.
4. All vault cash held during the lagged computation period by "bound" institutions
(that is, those whose required reserves exceed their vault cash) plus the amount of vault
cash applied during the maintenance period by "nonbound" institutions (that is, those
whose vault cash exceeds their required reserves) to satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the terms and conditions
established for the extended credit program to help depository institutions deal with
sustained liquidity pressures. Because there is not the same need to repay such borrowing
promptly as 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 Banks1
Millions of dollars, averages of daily figures
1994, 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 US. 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. 31
Nov. 7
Nov. 14
Nov. 21
Nov. 28
Dec. 5
Dec. 12
Dec. 19
Dec. 26
69,873
15,923
75,143
16,685
72,603
14,817
76,387
17,343
75,368
15,334
81,910
13,801
78,942
13,651
78,752
14,003
77,920
14,640
16,902
22,242
17,835
22,074
18,979
22,471
20,140
21,515
18,621
21,441
18,989
20,252
17,824
20,683
17,600
20,087
22,326
20,816
22,000
32,215
22,406
31,392
23,109
29,513
25,838
27,429
17,864
33,284
24,632
28,624
19,819
31,472
20,422
31,867
20,530
26,825
32,802
17,134
34,363
16,875
33,299
16,955
35,679
17,389
34,426
19,759
35,109
17,824
35,426
18,391
35,089
18,726
34,904
19,546
59,630
21,842
60,309
22,347
61,075
22,091
60,169
22,698
63,006
22,601
64,465
23,074
63,841
22,093
70,480
21,769
73,660
20,361
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 customers2
1. Banks with assets of $4 billion or more as of Dec. 31,1988.
Data in this table also appear in the Board's H.S (507) weekly statistical release. For
ordering address, see inside front cover.
2. Brokers and nonbank dealers in securities, other depository institutions, foreign
banks and official institutions, and U.S. government agencies,
A8
DomesticNonfinancialStatistics • March 1995
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
On
2/3/95
Seasonal credit2
Extended credit3
Effective date
Previous rate
On
2/3/95
Effective date
Previous rate
On
2/3/95
Effective date
Previous rate
2/1/95
2/1/95
2/2/95
2/9/95
2/1/95
2/2/95
4.75
5.90
2/2/95
5.85
6.40
2/2/95
6.35
4.75
5.90
2/2/95
5.85
6.40
2/2/95
6.35
5.25
2/1/95
2/1/95
2/2/95
2/1/95
212195
2/1/95
5.25
Range of rates for adjustment credit in recent years4
Range (or
level)—
All F.R.
Banks
In effect Dec. 31,1977
6
9
20
May 11
12
July 3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10.5
10.5
10.5-11
11
11-12
12
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
1981—May 5
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13-14
14
1978—Jan.
F.R.
Bank
of
N.Y.
6
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10.5
10.5
11
11
12
12
13
13
13
12
11
11
10
10
11
12
13
13
14
14
Effective
1981—Nov. 2 ..
6 ..
Dec. 4 ..
13-14
13
12
F.R.
Bank
of
N.Y.
13
13
12
1982—July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
..
..
..
..
..
..
..
..
..
..
..
..
..
..
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
1984—Apr.
..
..
..
..
..
8.5-9
9
8.5-9
8.5
8
9
9
8.5
8.5
8
1985—May 20 ..
24 ..
7.5-8
7.5
7.5
7.5
1986—Mar. 7 ..
10 ..
Apr. 21 ..
23...
July 11 ..
Aug. 21 ..
22 ..
7-7.5
7
6.5-7
6.5
6
5.5-6
5.5
7
7
6.5
6.5
6
5.5
5.5
9
13
Nov. 21
26
Dec. 24
1. Available on a short-term basis to help depository institutions meet temporary needs
for funds that cannot be met through reasonable alternative sources. The highest rate
established for loans to depository institutions may be charged on adjustment credit loans
of unusual size that result from a major operating problem at the borrower's facility.
2. Available to help relatively small depository institutions meet regular seasonal needs
for funds that arise from a clear pattern of intrayearly movements in their deposits and
loans and that cannot be met through special industry lenders. The discount rate on
seasonal credit takes into account rates charged by market sources of funds and ordinarily
is reestablished on the fiTst business day of each two-week reserve maintenance period;
however, it is never less than the discount rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is not
reasonably available from other sources, including special industry lenders. Such credit
may be provided when exceptional circumstances (including sustained deposit drains,
impaired access to money market funds, or sudden deterioration in loan repayment
performance) or practices involve only a particular institution, or to meet the needs of
institutions experiencing difficulties adjusting to changing market conditions over a longer
period (particularly at times of deposit disintermediation). The discount rate applicable to
adjustment credit ordinarily is charged on extended-credit loans outstanding less than
Range (or
level)—
All F.R.
Banks
Effective date
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1987—Sept. 4
11
5.5-6
6
6
6
1988—Aug. 9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
1990—Dec. 19
6.5
6.5
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
1994—May 17
18
Aug. 16
18
Nov. 15
17
3-3.5
3.5
3.5-1
4
4—4.75
4.75
3.5
3.5
4
4
4.75
4.75
4.75-5.25
5.25
5.25
5.25
4.75-5.25
5.25
1991—Feb.
1
4
Apr. 30
May 2
Sept. 13
17
Nov. 6
7
Dec. 20
24
1992—July
1995—Feb.
1
9
In effect Feb. 3, 1995
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 charged on
market sources of funds is charged. The rate ordinarily is reestablished on the first
business day of each two-week reserve maintenance period, but it is never less than the
discount rate applicable to adjustment credit plus 50 basis points.
4. For earlier data, see the following publications of the Board of Governors: Banking
and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest,
1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustmentcredit 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 INSTITUTIONS 1
Type of deposit2
Net transaction accounts
1 $0 million-$54.0 million..
2 More than $54.0 million4 .
12/20/94
12/20/94
3
5
Nonpersonal time deposits
12/27/90
4
Eurocurrency liabilities 6 ...
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
of 1980, depository institutions include commercial banks, mutual savings banks,
savings and loan associations, credit unions, agencies and branches of foreign banks,
and Edge Act corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 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. 20, 1994, the exemption was raised from $4.0 million to
$4.2 million. The exemption applies only to accounts that would be subject to a 3 percent
reserve requirement.
3. Includes 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 for the purpose of making payments to third persons
or others, other than money market deposit accounts (MMDAs) and similar accounts that
permit no more than six preauthorized, automatic, or other transfers per month, of which
no more than three may be checks (accounts subject to such limits are considered 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 of each year. Effective Dec. 20, 1994, the amount was
increased from $51.9 million to $54.0 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 l'/z years was reduced from 3 percent to
I 1 /! 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 1 '/> 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 was the reserve requirement on
nonpersonal time deposits with an original maturity of less than 1 VS years (see note 5).
A10
DomesticNonfinancialStatistics • March 1995
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1994
Type of transaction
and maturity
1991
1992
1993
May
June
July
Aug.
Sept.
Oct.
Nov.
U.S. TREASURY SECURITIES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
Matched transactions
25 Gross sales
26 Gross purchases
Repurchase agreements
27 Gross purchases
28 Gross sales
20,158
120
277,314
1,000
14,714
1,628
308,699
1,600
17,717
0
332,229
(r
1,395
0
29,807
0
4,143
0
39,484
0
0
0
29,559
0
1,610
0
36,281
0
0
0
29,668
0
518
0
29,361
0
6,109
0
36,543
0
3,043
0
24,454
-28,090
1,000
1,096
0
36,662
-30,543
0
1,223
0
31,368
-36,582
0
155
0
5,413r
917'
0
0
0
1,197
-3,192
0
0
0
1,692
-1,626
0
0
0
6,131
-4,089
0
151
0
961
-2,203
450
0
460
0
0
0
0
1,790
-5,795
0
6,583
0
-21,211
24,594
13,118
0
-34,478
25,811
10,350
0
-27,140
0
0
0
—3,449r
-917'
0
0
-1,197
3,192
0
0
-1,692
1,626
0
0
-5,506
2,889
2,530
-837
2,203
0
0
-460 '
0
200
0
-1,123
4,192
1,280
0
-2,037
2,894
2,818
0
-1,915
3,532
4,168
0
0
0
0
0
-l,510 r
0
0
0
0
0
0
0
0
0
0
0
-549
750
938
0
-125
0
0
0
0
0
0
0
-278
1,603
375
0
-1,209
600
2,333
0
-269
1,200
3,457
0
0
0
0
0
0
-453 r
0
0
0
0
0
0
0
0
0
0
-76
450
840
0
0
0
0
0
0
0
0
0
-389
0
31,439
120
1,000
34,079
1,628
1,600
36,915
0
767r
155r
0
0
4,143
0
0
0
0
302r
1,610
0
0
4,459
0
C
968
0
979'
6,309
0
0
1,482,467 1,475,085
1,480,140 1,475,941
135,796
137,195
133,939
133,075
125,181
126,677
170,356
169,018
151,589
151,029
137,242
136,556
147,858
148,425
1,570,456
1,571,534
0
0
310,084
311,752
378,374
386,257
475,447
470,723
21,517
17,112
10,059
4,405
28,085
35,374
44,948
41,199
4,975
9,354
17,088
15,613
35,456
32,561
29,729
20,642
41,729r
5,691r
8,933
-6,095 r
4,022
-479'
778'
9,771
0
5
292
0
0
632
0
0
774r
0
0
70
0
0
58
0
0
20r
0
0
63
31'
0
0
62'
0
0
70
Repurchase agreements
33 Gross purchases
34 Gross sales
22,807
23,595
14,565
14,486
35,063
34,669
4,195
2,895
580
1,300
9,472
8,702
8,491
8,109
3,620
4,982
2,868
2,838
8,615
7,360
35 Net change in federal agency obligations
-1,085
-554
-380*
1,230
-778
750'
319
-1,393'
-32'
1,185
36 Total net change in System Open Market Account...
28,644
20,089
41,348
6,921'
8,155
—5,345
4341
-1,872
746
10,956
29 Net change in U.S. Treasury securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
0
0
Federal Reserve Banks
1.18
FEDERAL RESERVE BANKS
All
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
Nov. 30
Dec. 7
Wednesday
End of month
1994
1994
Dec. 14
Dec. 21
Dec. 28
Oct. 31
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
11,052
8,018
321
11,051
8,018
330
11,051
8,018
341
11,051
8,018
341
11,051
8,018
321
11,053
8,018
360
11,052
8,018
321
11,051
8,018
320
144
0
0
813
0
0
119
0
0
915
0
0
168
0
0
264
0
0
144
0
0
223
0
0
3,674
1,655
3,674
0
3,644
700
3,644
100
3,637
1,000
3,744
400
3,674
1,655
3,637
1,025
365,700
360,535
365,775
370,443
370,962
355,928
365,700
374,084
10 Bought outright2
11 Bills
12 Notes
13 Bonds
14 Held under repurchase agreements
359,190
176,294
141,150
41,746
6,510
360,535
173,394
144,143
42,998
0
364,100
176,959
144,143
42,998
1,675
365,323
178,182
144,143
42,998
5,120
364,942
177,801
144,143
42,998
6,020
352,313
169,617
140,860
41,836
3,615
359,190
176,294
141,150
41,746
6,510
364,519
177,378
144,143
42,998
9,565
15 Total loans and securities
371,172
365,022
370,237
375,102
375,767
360,336
371,172
378,969
4,983
1,067
7,171
1,068
6,085
1,071
7,038
1,072
11,921
1,075
2,477
1,068
4,983
1,067
4,688
1,076
21,909
8,373
21,925
8,794
21,941
9,140
21,959
9,423
21,974
9,853
23,922
9,848
21,909
8,373
22,031
10,333
426,895
423,379
427,884
434,002
439,979
417,080
426,895
436,487
374,571
375,008
376,077
378,266
382,170
367,540
374,571
381,505
22 Total deposits
36,554
31,534
34,474
37,489
38,769
35,050
36,554
39,075
23
24
25
26
30,674
5,348
230
302
26,074
4,970
166
324
27,983
5,977
206
314
28,227
8,751
192
319
30,648
7,677
173
271
29,271
5,164
223
392
30,674
5,348
230
302
30,789
7,161
250
876
4,637
4,210
5,483
4,026
5,496
4,187
5,871
4,610
6,767
4,473
1,906
3,992
4,637
4,210
3,948
4,592
419,973
416,051
420,233
426,236
432,179
408,488
419,973
429,120
3,668
3,178
77
3,682
3,336
310
3,675
3,390
585
3,680
3,401
686
3,685
3,401
714
3,643
3,401
1,548
3,668
3,178
77
3,683
3,683
0
426,895
423,379
427,884
434,002
439,979
417,080
426,895
436,487
416,344
415,332
413,713
418,499
411,727
407,851
416,344
410,405
9 Total U.S. Treasury securities
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other4
20 Total assets
LIABILITIES
21 Federal Reserve notes
Depository institutions
US. Treasury—General account
Foreign—Official accounts
Other
27 Deferred credit items
28 Other liabilities and accrued dividends5
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 Banks)
36 LESS: Held by Federal Reserve Banks
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
453,444
78,873
374,571
455,963
80,955
375,008
457,181
81,105
376,077
456,900
78,634
378,266
455,472
73,302
382,170
449,946
82,406
367,540
453,444
78,873
374,571
454,642
73,137
381,505
11,052
8,018
0
355,502
11,051
8,018
0
355,938
11,051
8,018
0
357,008
11,051
8,018
0
359,197
11,051
8,018
0
363,101
11,053
8,018
0
348,469
11,052
8,018
0
355,502
11,051
8,018
0
362,437
374,571
375,008
376,077
378,266
382,170
367,540
374,571
381,505
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
1.19
DomesticNonfinancialStatistics • March 1995
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
Millions of dollars
Wednesday
1994
Type of holding and maturity
Nov. 30
1994
Nov. 30
Dec. 31
Dec. 7
Dec. 14
Dec. 21
Dec. 28
Oct. 31
144
813
119
915
168
264
224
223
65
79
0
731
82
0
32
87
0
914
2
0
159
8
0
133
131
0
201
23
0
202
21
0
5 Total acceptances
0
0
0
0
0
0
0
0
6 Within fifteen days'
7 Sixteen days to ninety days
8 Ninety-one days to one year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
359,196
360,535
364,102
365,328
364,948
352,313
359,1%
364,519
15,444
83,053
111,940
87,773
27,036
33,950
12,205
83,236
112,165
90,031
28,053
34,845
15,299
87,927
107,946
90,031
28,053
34,845
14,413
85,581
112,405
90,031
28,053
34,845
18,210
81,254
112,555
90,031
28,053
34,845
10,538
83,281
109,980
88,463
25,711
34,339
15,444
83,053
111,940
87,773
27,036
33,950
11,685
87,450
112,455
90,031
28,053
34,845
16 Total federal agency obligations
3,675
3,674
3,644
3,644
3,638
3,744
3,675
3,637
17
18
19
20
21
22
334
494
915
1,390
518
25
0
749
992
1,390
518
25
8
742
992
1,390
488
25
232
517
992
1,390
488
25
253
573
912
1,387
488
25
119
725
747
1,603
525
25
334
494
915
1,390
518
25
252
573
912
1,387
488
25
1 Total loans
2 Within fifteen days'
3 Sixteen days to ninety days
4 Ninety-one days to one year
9 Total US. Tteasury securities
10
11
12
13
14
15
1
Within fifteen days
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
1. Holdings under repurchase agreements are classified as maturing within fifteen days
in accordance with maximum maturity of the agreements.
Monetary and Credit Aggregates
1.20
A13
AGGREGATE RESERVES O F DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1994
Item
1991
Dec.
1992
Dec.
1993
Dec.
1994
Dec.
May
June
Total reserves3
Nonborrowed reserves4
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 6
Sept.
Oct.
Nov.
Dec.
59.52
59.05
59.05
58.51
409.20r
59.48
59.00
59.00
58.42
411.08 r
59.17
58.79
58.79
58.37
413.40r
59.01
58.76
58.76
58.00'
416.46'
59.00
58.79
58.79
57.86
417.08
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1
2
3
4
5
Aug.
July
45.53
45.34
45.34
44.55
317.12
54.34
54.22
54.22
53.19
350.61
60.48
60.39
60.39
59.41
385.86
59.00
58.79
58.79
57.86
417.08
59.91
59.71
59.71
59.00
401.73
59.71
59.37
59.37
58.60
404.32
59.82
59.36
59.36
58.71
407.04
Not seasonally adjusted
6
7
8
9
10
Total reserves7
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves8
Monetary base 9
46.98
46.78
46.78
46.00
321.07
56.06
55.93
55.93
54.90
354.55
62.37
62.29
62.29
61.31
390.59
60.81
60.61
60.61
59.67
422.22
58.97
58.77
58.77
58.06
400.26
59.56
59.22
59.22
58.45
404.72
59.66
59.20
59.20
58.55
408.17
58.84
58.37
58.37
57.84
408.97 r
59.39
58.90
58.90
58.33
411. 1C
58.87
58.49
58.49
58.06
412.85 r
59.32
59.07
59.07
58.32
416.75'
60.81
60.61
60.61
59.67
422.22
55.53
55.34
55.34
54.55
333.61
.98
.19
56.54
56.42
56.42
55.39
360.90
1.16
.12
62.86
62.78
62.78
61.80
397.62
1.06
.08
61.32
61.11
61.11
60.17
427.19
1.15
.21
59.27
59.07
59.07
58.36
406.59
.92
.20
59.92
59.59
59.59
58.82
410.94
1.11
.33
60.09
59.63
59.64
58.99
414.39
1.11
.46
59.34
58.87
58.87
58.33
414.92r
59.95
59.47
59.47
58.89
416.701
1.06
.49
59.49
59.11
59.11
58.69
418.19'
.80
.38
60.01
59.76
59.76
59.00
421.90'
1.01
.25
61.32
61.11
61.11
60.17
427.19
1.15
.21
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS10
11
12
13
14
15
16
17
Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base
Excess reserves13
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502)
weekly statistical release. Historical data starting in 1959 and estimates of the impact on
required reserves of changes in reserve requirements are available from the Money and
Reserves Projections Section, Division of Monetary Affairs, Board of Governors of the
Federal Reserve System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory changes in reserve requirements. (See also table 1.10)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves (line 1) less total borrowings of depository institutions from the Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under
the terms and conditions established for the extended credit program to help depository
institutions deal with sustained liquidity pressures. Because there is not the same need to
repay such borrowing promptly as with traditional short-term adjustment credit, the
money market 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).
1.00
.47
8. To adjust required reserves for discontinuities that are due to regulatory changes in
reserve requirements, a multiplicative procedure is used to estimate what required
reserves would have been in past periods had current reserve requirements been in effect.
Break-adjusted required reserves include required reserves against transactions deposits
and nonpersonal time and savings deposits (but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6),
plus (2) the (unadjusted) currency component of the money stock, plus (3) (for all
quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required
reserves) the break-adjusted difference between current vault cash and the amount applied
to satisfy current reserve requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with
no adjustments to eliminate the effects of discontinuities associated with regulatory
changes in reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1)
total reserves (line 11), plus (2) required clearing balances and adjustments to compensate
for float at Federal Reserve Banks, plus (3) the currency component of the money stock,
plus (4) (for all quarterly reporters on the "Report of Transaction Accounts, Other
Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds
their required reserves) the difference between current vault cash and the amount applied
to satisfy current reserve requirements. Since the introduction of contemporaneous reserve
requirements in February 1984, currency and vault cash figures have been measured over
the computation periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
A14
1.21
DomesticNonfinancialStatistics • March 1995
MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
1994
Item
1991
Dec.
1992
Dec.
1993
Dec.
1994
Dec.
Sept/
Oct/
Nov/
Dec.
Seasonally adjusted
1
2
3
4
5
Measures2
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6
897.7
3,455.2
4,180.4
4,992.9
11,171.1
1,024.8
3,509.0
4,183.0
5,057.1
11,706.1
1,128.4
3,567.9
4,232.0
5,135.0
12,335.4
1,147.6
3,600.0
4,282.4
n.a.
n.a.
1,151.9
3,597.6
4,250.9
5,176.9
12,809.5
1,148.5
3,592.6
4,259.6
5,205.5
12,856.8
1,147.6
3,594.2
4,267.0
5,217.8
12,924.3
1,147.6
36000
4,282.4
n.a.
n.a.
267.1
7.7
290.0
332.8
292.2
8.1
339.6
384.9
321.4
7.9
384.8
414.3
353.6
8.4
383.3
402.3
347.4
8.4
388.0
408.2
350.0
8.4
385.8
404.3
352.9
8.4
383.4
402.8
353.6
8.4
383.3
402.3
2,557.5
725.2
2,484.2
674.0
2,439.5
664.1
2,452.5
682.4
2,445.6
653.3
2,444.1
666.9
2,446.7
672.8
2,452.5
682.4
Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits9
14 Large time deposits10' 11
665.5
602.9
342.4
754.6
508.7
292.8
785.3
468.6
277.2
752.3
502.7
299.1
773.7
479.8
284.0
765.9
486.8
289.1
759.6
493.9
294.8
752.3
502.7
299.1
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits9
17 Large time deposits10
375.6
464.5
83.4
429.0
361.8
67.5
430.2
317.1
61.8
393.2
315.5
64.5
412.9
305.5
62.7
407.5
308.9
63.9
400.2
314.0
64.2
393.2
315.5
64.5
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
370.4
181.0
352.0
201.5
348.8
197.0
374.5
176.6
360.5
167.9
363.3
175.3
368.1
175.6
374.5
176.6
2,763.3
8,407.8
3,067.9
8,638.1
3,328.0
9,007.4
3,454.0
9,355.5
3,469.4
9,387.3
3,494.0
9,430.3
Nontransaction components
10 In M27
11 In M38 only
Debt components
20 Federal debt
21 Nonfederal debt
n.a.
n.a.
n.a.
n.a.
Not seasonally adjusted
2
22
23
24
25
26
Measures
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6
916.7
3,470.3
4,191.9
5,018.0
11,168.5
1,046.7
3,527.6
4,198.2
5,087.6
11,708.9
1,153.8
3,590.5
4,251.4
5,169.9
12,327.6
1,173.5
3,623.5
4,302.9
n.a.
n.a.
1,146.0
3,587.1
4,240.2
5,164.9
12,765.8
1,147.3
3,591.0
4,254.1
5,197.8
12,816.3
1,155.3
3,603.8
4,279.9
5,241.6
12,895.4
1,173.5
3,623.5
4,302.9
n.a.
n.a.
269.9
7.4
303.1
336.3
295.0
7.8
355.1
388.9
324.9
7.6
402.6
418.6
357.7
8.1
401.1
406.6
347.1
8.8
385.6
404.5
349.7
8.5
388.8
400.3
353.3
8.2
391.7
402.0
357.7
8.1
401.1
406.6
2,553.7
721.6
2,480.8
670.6
2,436.7
660.9
2,450.0
679.4
2,441.1
653.1
2,443.6
663.1
2,448.5
676.1
2,450.0
679.4
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits9
35 Large time deposits10, 11
664.0
601.9
341.3
752.9
507.8
291.7
783.9
467.6
276.0
751.1
501.5
297.9
772.4
481.2
285.0
765.2
487.7
288.8
761.3
493.1
295.2
751.1
501.5
297.9
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits9
38 Large time deposits10
374.8
463.7
83.1
428.1
361.1
67.2
429.4
316.4
61.6
392.6
314.8
64.3
412.2
306.4
62.9
407.1
309.5
63.8
401.1
313.5
64.2
392.6
314.8
64.3
Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only
368.5
180.4
350.2
200.4
347.2
195.8
372.9
175.5
355.8
165.1
359.2
170.5
366.0
175.0
372.9
175.5
Repurchase agreements and Eurodollars
41 Overnight and continuing
42 Term
80.6
130.1
80.7
126.8
92.3
143.8
117.2
157.3
113.1
154.8
114.9
155.5
113.6
158.0
117.2
157.3
2,765.0
8,403.5
3,069.8
8,639.1
3,329.5
8,998.1
3,438.4
9,327.3
3,448.7
9,367.6
3,485.3
9,410.1
Nontransaction components
31 InM2 7
32 In M38
Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appeal- on 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 starting in 1959 are available from the Money
and Reserves Projections Section, Division of Monetary Affairs, Board of Governors of
the Federal Reserve System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the US. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government,
and foreign banks and official institutions, less cash items in the process of collection and
Federal Reserve float, and (4), other checkable deposits (OCDs), consisting of negotiable
order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository
institutions, credit union share draft accounts, and demand deposits at thrift institutions.
Seasonally adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) 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 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 US. 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 fluids. 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,
A15
short-term Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted separately, and then adding this result to M3.
Debt: The debt aggregate is the outstanding credit market debt of the domestic
nonfinancial sectors—the federal sector (U.S. government, not including governmentsponsored enterprises or federally related mortgage pools) and the nonfederal sectors
(state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of
mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial
paper, and other loans. The data, which are derived from the Federal Reserve Board's flow
of funds accounts, are break-adjusted (that is, discontinuities in the data have been
smoothed into the series) and month-averaged (that is, the data have been derived by
averaging adjacent month-end levels).
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank
issuers. Travelers checks issued by depository institutions are included in demand
deposits.
5. Demand deposits at commercial banks and foreign-related institutions other than
those owed to depository institutions, the U.S. government, and foreign banks and official
institutions, less cash items in the process of collection and Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions, credit
union share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs),
and (4) small time deposits.
8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents,
and (4) money market fund balances (institution-only), less (5) a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by institutiononly 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, the U.S. government, and foreign banks and official institutions.
A16
1.22
DomesticNonfinancialStatistics • March 1995
DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING
Commercial and BIF-insured saving banks'
1994
-
Item
1992
1993
Dec.
Dec.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.r
Dec.
Interest rates (annual effective yields)2
INSURED COMMERCIAL BANKS
1 Negotiable order of withdrawal accounts
2 Savings deposits3
3
4
5
6
7
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2l/i years
More than 2 Vi years
2.33
2.88
1.86
2.46
1.81
2.45
1.83
2.50
1.82
2.54
1.83
2.57
1.85
2.63
1.87
2.67
1.88
2.72
1.92
2.81
1.96
2.91
2.90
3.16
3.37
3.88
4.77
2.65
2.91
3.13
3.55
4.29
2.87
3.13
3.42
3.87
4.67
2.99
3.28
3.64
4.12
4.89
3.08
3.36
3.76
4.26
5.02
3.17
3.44
3.88
4.39
5.14
3.29
3.61
4.11
4.61
5.33
3.36
3.75
4.27
4.80
5.47
3.47
3.93
4.49
5.08
5.76
3.68
4.22
4.85
5.42
6.09
3.81
4.44
5.12
5.74
6.30
2.45
3.20
1.87
2.63
1.86
2.65
1.86
2.67
1.88
2.69
1.89
2.67
1.89
2.74
1.91
2.78
1.88
2.76
1.91
2.83
1.95
2.89
3.13
3.44
3.61
4.02
5.00
2.70
3.02
3.31
3.66
4.62
2.72
3.13
3.47
3.96
4.85
2.77
3.21
3.67
4.12
5.08
2.84
3.41
3.92
4.38
5.24
2.98
3.53
4.02
4.56
5.35
3.03
3.69
4.24
4.83
5.47
3.11
3.87
4.47
5.04
5.64
3.31
4.09
4.78
5.36
5.78
3.49
4.41
5.15
5.68
6.16
3.78
4.88
5.49
6.06
6.40
BIF-INSURED SAVINGS BANKS4
8 Negotiable order of withdrawal accounts
9 Savings deposits3
10
11
12
13
14
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2'/I years
More than 2vi years
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS
15 Negotiable order of withdrawal accounts
16 Savings deposits3
17 Personal
18 Nonpersonal
19
20
21
22
23
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 xfi years
More than 2 V2 years
24 IRA and Keogh plan deposits
286,541
738,253
578,757
159,496
305,223
766,413
597,838
168,575
293,888
771,869
611,720
160,149
292,797
773,170
612,648
160,522
290,220
767,539
608,132
159,407
290,631
765,751
605,881
159,870
295,320
764,035
600,892
163,143
286,787
755,249
595,175
160,074
294,069
751,300
591,304
159,996
294,276
746,618
584,645
161,973
303,712
734,489
578,529
155,961
38,474
127,831
163,098
152,977
169,708
29,455
110,069
146,565
141,223
181,528
29,467
105,615
146,733
139,313
181,977
29,950
104,400
148,102
140,764
180,381
28,763
102,439
151,165
144,686
181,843
28,659
100,424
152,216
146,875
182,944
27,959
98,085
155,964
150,807
186,490
28,312
96,398
157,253
152,514
190,209
31,387
95,328
158,564
155,251
188,456
31,312
94,573
159,697
158,417
189,243
32,495
95,729
161,900
162,461
190,958
147,350
143,985
142,448
142,047
142,513
142,649
142,617
142,700
142,742
143,075
143,321
10,871
81,786
78,695
3,091
11,151
80,115
77,035
3,079
11,051
78,982
75,717
3,265
11,052
78,817
75,474
3,344
10,792
77,289
74,121
3,168
10,925
77,337
74,064
3,273
11,016
75,108
72,040
3,068
10,769
74,659
71,525
3,134
11,136
73,416
70,215
3,201
10,998
72,597
69,387
3,210
11,317
70,643
67,674
2,969
3,867
17,345
21,780
18,442
18,845
2,793
12,946
17,426
16,546
20,464
2,697
13,058
17,504
16,453
21,454
2,702
12,822
17,444
16,477
21,546
2,614
12,515
17,310
16,493
21,079
2,531
12,511
17,591
16,901
21,573
2,523
12,292
17,593
16,824
21,531
2,402
12,276
17,928
17,287
21,923
2,258
11,896
18,213
17,521
21,625
2,205
11,895
18,483
17,932
21,652
2,166
11,793
18,753
17,802
21,598
21,713
19,356
19,860
19,772
19,511
19,757
19,445
19,532
19,550
19,521
19,312
BIF-INSURED SAVINGS BANKS4
25 Negotiable order of withdrawal accounts
26 Savings deposits3
27 Personal
28 Nonpersonal
29
30
31
32
33
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2'/S years
More than 2'/> years
34 IRA and Keogh plan accounts
1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508)
Special Supplementary Table monthly statistical release. For ordering address, see inside
front cover. Estimates are based on data collected by the Federal Reserve System from a
stratified random sample of about 425 commercial banks and 77 savings banks on the last
day of each month. Data are not seasonally adjusted and include IRA and Keogh deposits
and foreign currency-denominated deposits. Data exclude retail repurchase agreements
and deposits held in U.S. branches and agencies of foreign banks.
2. As of October 31, 1994, interest rate data for NOW accounts and savings deposits
reflect a series break caused by a change in the survey used to collect these data.
3. Includes personal and nonpersonal money market deposits.
4. Includes both mutual and federal savings banks.
Monetary and Credit Aggregates
1.23
A17
BANK DEBITS A N D DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1994
Bank group, or type of deposit
June'
May'
July'
Aug.'
Sept.'
Oct.
Seasonally adjusted
DEBITS
3
Demand deposits
1 All insured banks
2 Major New York City banks
3 Other banks
4 Other checkable deposits4
5 Savings deposits (including MMDAs)5
277,741.7
137,337.2
140,404.5
313,179.6
165,484.6
147,695.1
334,375.0
171,310.7
163,064.2
376,214.2
200,277.1
175,937.1
371,498.9
195,079.6
176,419.3
345,258.7
182,408.2
162,850.5
384,044.9
196,505.6
187,539.3
370,520.1
186,294.9
184,225.2
346,126.1
176,701.9
169,424.2
3,643.1
3,206.4
3,780.7
3,310.6
3,468.9
3,511.0
3,884.1
3,498.9
3,861.3
3,784.9
3,508.5
3,405.8
3,873.5
3,852.0
3,925.7
3,802.7
3,826.4
3,545.8
803.7
4,267.1
448.1
825.8
4,794.5
428.7
785.4
4,200.5
423.7
834.0
4,714.8
430.6
828.6
4,480.9
435.8
756.3
4,074.6
395.5
852.3
4,635.6
459.4
820.1
4,503.6
448.9
766.8
4,300.5
412.9
16.2
5.2
14.4
4.7
11.8
4.6
12.9
4.5
12.8
4.9
11.5
4.4
12.8
5.0
13.0
5.0
12.8
4.7
DEPOSIT TURNOVER
Demand deposits3
6 All insured banks
7 Major New York City banks
8 Other banks
9 Other checkable deposits4
10 Savings deposits (including MMDAs)5
Not seasonally adjusted
DEBITS
Demand deposits*
11 All insured banks
12 Major New York City banks
13 Other banks
14 Other checkable deposits4
15 Savings deposits (including MMDAs)5
277,752.4
137,307.2
140,445.2
313,344.9
165,595.0
147,749.9
334,354.6
171,283.5
163,071.0
364,448.1
188,885.2
175,563.0
387,201.1
204,251.8
182,949.3
347,403.9
182,452.9
164,951.0
394,394.4
202,845.6
191,548.8
365,063.0
186,161.8
178,901.2
352,652.7
181,406.6
171,246.1
3,645.2
3,209.2
3,783.6
3,310.0
3,467.5
3,509.5
3,700.5
3,535.3
3,918.9
3,906.8
3,515.0
3,521.8
3,861.2
3,873.3
3,960.9
3,716.4
3,797.0
3,472.3
803.6
4,269.0
448.1
826.1
4,803.5
428.8
785.4
4,197.9
423.8
823.3
4,449.3
438.7
868.5
4,878.2
452.9
761.9
4,150.3
400.4
889.5
4,960.2
475.9
811.9
4,539.5
437.8
774.8
4,435.8
413.4
16.2
5.2
14.4
4.7
11.8
4.6
12.4
4.5
13.1
5.0
11.8
4.6
13.0
5.0
13.3
4.9
12.9
4.6
DEPOSIT TURNOVER
Demand deposits3
16 All insured banks
17 Major New York City banks
18 Other banks
19 Other checkable deposits4
20 Savings deposits (including MMDAs)5
1. Historical tables containing revised data for earlier periods can be obtained from the
Publications Section, Division of Support Services, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
Data in this table also appear in 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. As of January 1994, other checkable deposits (OCDs), previously defined as
automatic transfer to demand deposits (ATSs) and negotiable order of withdrawal (NOW)
accounts, were expanded to include telephone and preauthorized transfer accounts. This
change redefined OCDs for debits data to be consistent with OCDs for deposits data.
5. Money market deposit accounts.
A18
1.26
DomesticNonfinancialStatistics • March 1995
ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1
Billions of dollars
Monthly averages
Account
1993
Dec.
1994
June
July
Aug.
Sept.
ALL COMMERCIAL
BANKING INSTITUTIONS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Inteibank loans4
Cash assets5
Other assets6
16 Total assets7
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction.
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities8
27 Total liabUitlcs
Wednesday figures
r
1994
Oct.
Nov.
Dec.
Dec. 7
Dec. 14
Dec. 21
Dec. 28
Seasonally adjusted
3,105.3r
91
727.3
184.4r
2,193.6'
583.4'
940.8'
73.2
867.6r
391.2
87.7
190.5'
152.9
219.2
213.4'
3,224.0
974.6
750.9
223.7
2,249.4
610.4
956.0
74.1
881.9
416.3
76.2
190.5
156.7
214.5
219.2
3,260.3
979.5
751.5
228.0
2,280.8
618.9
9629
74.2
888.7
424.3
77.7
197.1
160.2
210.9
226.1
3,270.8
971.8
746.7
225.1
238.9
623.6
971.6
74.4
897.2
430.3
75.0
198.4
158.5
203.3
227.5
3,280.3
968.0
740.9
227.0
23123
628.1
979.1
74.7
904.4
435.2
69.1
200.8
159.2
2024
221.1
3,287.6
957.5
727.9
229.7
2330.1
634.1
984.0
75.0
908.9
4421
72.1
197.8
163.6
209.7
221.6
3,297.1
950.6
719.9
230.7
2346.5
639.4
990.4
75.6
914.8
444.9
73.3
198.5
171.7
204.8
223.9
3323.3
950.5
717.7
232.8
2372.8
644.3
1,000.0
76.0
924.0
450.2
76.6
201.7
174.6
208.3
234.8
3308.8
947.5
716.9
230.6
2361.3
641.5
996.2
75.8
920.4
447.1
77.1
199.3
173.0
203.8
233.4
3313.9
9527
718.0
234.7
2361.2
6428
997.8
75.8
921.9
448.7
724
199.5
170.6
2023
236.2
3330.5
948.6
716.2
2324
23820
646.8
1,0025
76.0
926.5
4503
81.6
200.8
178.0
206.3
236.0
3333.8
953.3
718.4
234.9
2380.5
645.1
1,001.7
76.1
925.6
453.5
75.5
204.9
176.5
2125
233.2
3,6324'
3,757.4
3^00.1
3£02Ji
3JS05.6
3^25.1
3,840.7
3£84.1
3^624
3JB6633JS93JS
3^99.1
2537.6
819.0
1,718.6
349.8
1368.8
523.9
154.1
369.8
118.9
143.0
2507.0
808.8
1,698.2
334.4
1,363.8
568.8
155.2
413.6
184.6
1716
2,513.5
809.8
1,703.6
339.2
1,364.4
572.2
161.7
410.5
200.7
178.8
2517.1
807.6
1,709.5
342.7
1366.8
567.9
158.1
409.7
211.2
174.1
2520.5
803.1
1,717.4
349.0
1368.4
577.0
156.0
421.0
215.6
173.6
2534.6
806.9
1,727.7
357.9
1369.8
576.2
164.7
411.5
213.9
175.0
2530.9
798.1
1,732.8
362.6
1370.2
578.2
171.4
406.8
208.4
174.4
2537.5
797.0
1,740.5
365.8
1374.7
604.7
176.8
428.0
221.4
183.0
2537.0
797.3
1,739.7
367.5
13723
565.6
176.0
389.6
221.2
181.9
2536.5
795.8
1,740.7
369.0
1,371.7
588.3
175.5
412.8
212.6
185.9
2533.9
791.4
1,7425
365.4
1377.1
627.7
177.7
450.0
224.9
184.3
2539.9
799.0
1,741.0
363.2
1377.7
633.6
176.8
456.8
220.0
181.0
3,323.5
3/133.0
3,465-2
3/470J
3/186.7
3y499.7
3/492.0
3^46.7
3^05.7
3,5233
3^70.7
3^745
324.4
334.8
332.6
319.0
325.4
348.7
337.4
356.7
343.0
323.1
324.6
i.e
28 Residual (assets less liabilities)9
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
4
Interbank loans
Cash assets5
6
Other assets
3,219.1
971.1
748.5
222.6
2248.0
611.4
956.4
73.9
882.5
414.4
74.3
191.5
154.4
212.2
216.5
3,243.9
973.2
745.8
227.3
2270.7
616.7
963.7
74.0
889.7
421.6
72.5
196.2
155.6
207.5
224.4
3,2626
971.2
746.0
225.3
2291.3
619.8
970.6
74.4
896.2
429.6
724
198.9
155.0
197.7
225.8
330.6
969.4
7425
226.9
2311.2
624.3
979.3
75.0
904.3
436.3
68.3
202.9
156.4
204.0
2223
3,291.4
9621
729.5
2326
2329.3
631.9
985.7
75.7
910.0
441.8
70.9
198.9
161.6
209.0
224.0
3309.6
957.7
723.6
234.1
2351.9
640.2
993.4
76.1
917.3
445.0
73.3
199.9
171.9
211.5
227.0
3337.6
947.9
717.4
230.5
2389.7
646.4
1,003.1
76.2
926.9
455.1
78.6
206.6
184.1
221.2
239.6
3326.3
952.1
721.8
230.2
2374.2
641.6
1,001.1
76.3
924.8
448.7
79.2
203.7
182.7
203.8
237.5
33321
951.9
721.0
230.9
2380.2
642.6
1,002.9
76.1
926.8
452.5
78.4
203.8
1823
211.6
240.9
33427
945.3
715.9
229.4
2397.4
650.3
1,003.6
76.2
927.3
456.1
81.7
205.7
185.3
216.9
238.9
3344.1
943.8
712.6
231.1
2400.4
649.5
1,004.1
76.1
928.0
460.8
75.9
210.0
184.3
237.3
239.1
3,7453
3,774.7
3,783.9
3JW6.0
3,829.0
3,8629
3,925.2
3,893.1
3,909.5
3,926^
3,947.6
2566.4
853.5
1,713.0
346.0
1,366.9
534.0
161.4
372.6
126.0
146.5
2,508.6
807.2
1,701.4
337.2
1,364.2
575.1
154.6
420.4
179.8
168.7
2^07.3
801.9
1,705.4
339.6
1,365.9
580.1
156.0
424.1
1929
175.1
2505.5
7924
1,713.1
344.2
1,368.8
583.5
155.1
428.5
200.4
173.5
2517.3
799.7
1,717.6
348.6
1,369.0
588.7
156.4
4323
203.7
174.2
2525.7
800.6
1,725.1
353.8
1,371.2
590.5
161.6
428.9
212.6
178.5
2541.3
809.6
1,731.7
359.3
1,372.4
602.9
171.9
431.0
211.6
181.8
2,564.8
830.2
1,734.6
361.8
1,372.8
618.4
184.1
434.3
229.3
187.5
2553.7
813.2
1,740.4
364.4
1,376.0
608.4
1827
425.6
217.1
187.5
2555.2
817.5
1,737.7
365.1
1,372.6
609.2
182.3
426.9
226.6
190.8
2555.0
821.5
1,733.5
361.0
1,372.5
634.1
185.3
448.8
226.3
187.5
2574.7
846.1
1,728.6
359.1
1,369.5
623.2
184.3
438.9
240.8
185.3
3373.0
3,4321
3/1553
3/1629
3/U&9
3^07.3
3437.6
3399.9
3,566.7
3,581.8
3,6029
3,624.0
300.2
313.2
319.4
321.0
3222
321.6
325.3
325.3
326.4
327.7
323.6
323.6
911.2'
726.8
184.4'
2,209.7r
585.4
944.0
73.5
870.5'
395.5
89.6
195.2r
161.2T
2325
217.4'
44 Total assets7
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities8
55 Total liabilities
56 Residual (assets less liabilities)9
Footnotes appear on last page.
Commercial Banking Institutions
1.26
A19
ASSETS AND LIABILITIES OF COMMERCIAL BANKS1—Continued
Billions of dollars
Wednesday figures
Monthly averages
Account
1994r
1993
Dec.
June
July
Aug.
Sept.
DOMESTICALLY CHARTERED
COMMERCIAL BANKS
57
58
59
60
61
67
63
64
65
66
67
68
69
70
71
Oct.
Nov.
Dec.
Dec. 7
Dec. 14
Dec. 21
Dec. 28
Seasonally adjusted
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
72 Total assets7
73
74
75
76
77
78
79
80
81
82
1994
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices....
Other liabilities8
83 Total UabUities
84 Residual (assets less liabilities)9
27725'
834.3r
673.9
160.5r
1,938.?r
435.6
894.6r
73.2
821.4r
391.?
58.2
158^
133.4
193.8
171.?
2,877.2
885.7
690.2
195.5
1,991.5
455.8
912.8
74.0
838.7
416.3
49.6
157.0
131.6
188.6
166.4
2,903.0
892.1
691.6
200.5
2,010.9
461.0
920.6
74.2
846.4
424.3
46.5
158.6
133.7
185.5
170.6
2,914.3
883.2
686.3
196.9
2,031.1
464.4
929.5
74.4
855.1
430.3
47.0
159.9
134.0
179.6
172.3
2,921.4
876.9
679.7
197.2
2,044.5
468.2
937.3
74.7
862.7
435.2
43.3
160.4
135.7
180.7
167.6
2,931.5
868.1
669.7
198.4
2,063.3
4721
943.3
75.0
868.3
4421
46.7
159.2
138.9
187.0
167.0
29423
865.4
665.5
199.9
2,076.9
474.7
949.8
75.6
874.2
444.9
47.4
160.1
148.8
181.6
168.3
2,962.2
866.5
665.7
200.7
2,095.7
478.5
959.4
75.9
883.5
450.2
46.7
160.8
1527
182.6
170.5
2,947.1
863.4
664.4
199.0
2083.7
475.3
955.8
75.8
880.0
447.1
46.4
159.2
150.5
179.5
168.5
2957.1
870.2
668.0
2021
2,086.9
475.6
957.0
75.8
881.2
448.7
45.4
160.3
149.6
176.9
170.3
2967.9
865.2
664.9
200.3
2102.7
480.5
961.6
76.0
885.7
450.3
50.0
160.2
156.2
180.2
1727
2968.7
867.5
665.0
2025
2101.2
480.5
961.0
76.1
884.9
453.5
44.5
161.8
153.7
186.3
170.2
3^1Z6r
330&8
3,335.5
3342.9
3348.1
3367.0
33843
3/111.1
3389.0
33973
3*4200
3y421.9
2379.2
808.1
1,571.1
208.9
1,362.2
416.9
122.6
294.3
1.7
105.1
2,369.0
798.4
1,570.6
210.1
1360.5
462.4
131.9
330.5
32.6
129.8
2371.4
799.9
1371.5
211.4
1360.1
462.2
140.6
321.6
44.6
132.5
2371.9
797.8
1374.2
212.5
1361.6
461.0
139.1
321.9
53.4
127.6
2,368.4
793.2
1375.2
211.3
1363.9
473.5
138.3
335.2
59.9
128.4
2,374.9
797.4
1377.4
214.7
1362.8
477.6
148.4
329.2
64.6
128.1
2371.0
788.9
1382.1
218.9
1363.1
476.0
154.2
321.8
64.6
126.8
2,374.0
787.7
1386.4
220.3
1,366.0
497.2
159.8
337.5
77.6
124.5
2371.3
787.8
1383.5
219.6
1,363.9
459.9
158.4
301.4
71.1
122.8
2371.1
787.2
1383.9
220.0
1,363.9
484.6
160.9
323.7
70.8
125.8
2371.4
7822
1389.2
221.1
1368.0
520.1
159.6
360.6
78.0
126.2
2377.4
788.9
1388.4
220.2
1368.2
519.4
159.5
359.9
83.4
124.3
24W2.9
2^93.9
3,010.8
3,013.9
3,030.1
3,<M5.2
3,0384
3,0734
3,025.2
3,052-2
3,095.8
3,1043
309.6r
312.9
324.8
329.0
317.9
321.8
345.8
337.6
363.8
345.0
324.2
317.4
Not seasonally adjusted
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
100 Total assets7
101
10?
103
104
105
106
107
108
109
110
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . . . .
Other liabilities8
111 Total UabUities
9
112 Residual (assets less liabilities)
Footnotes appear on following page.
2,779.3r
831./
671.2
160.5r
1,947.6r
435.(?
897.9r
73.5
824.5
395.5
57.5
161.lr
138.7
206.8
173.?
2876.2
885.1
689.8
195.3
1,991.0
456.9
913.5
73.9
839.6
414.4
48.8
1573
130.7
186.1
165.3
2,895.1
887.8
687.7
200.1
2,007.4
459.6
921.4
74.0
847.4
421.6
45.7
159.0
129.6
182.4
170.1
2,910.0
884.0
686.8
197.2
2,026.0
461.5
928.4
74.4
854.0
429.6
46.0
160.5
131.9
173.4
170.9
2,925.6
879.8
682.4
197.3
2,045.8
465.7
937.5
75.0
862.5
436.3
43.6
1627
132.6
181.4
169.0
2,937.8
873.1
671.4
201.7
2,064.7
471.5
944.9
75.7
869.2
441.8
46.0
160.5
136.3
185.3
169.4
2,952.9
871.1
667.8
203.3
2,081.8
475.6
952.7
76.0
876.7
445.0
47.3
161.2
148.9
188.2
169.5
2,967.1
861.9
663.1
198.8
2,105.1
478.4
962.6
76.2
886.5
455.1
46.1
162.9
158.8
195.3
172.3
2,957.0
866.3
667.5
198.8
2,090.8
474.4
960.4
76.3
884.1
448.7
46.3
161.0
158.5
179.7
168.8
2964.5
866.9
667.7
199.1
2,097.6
474.9
962.2
76.1
886.1
452.5
46.4
161.6
157.6
186.2
171.7
2,972.1
860.1
662.2
197.9
2,111.9
481.0
963.1
76.2
886.9
456.1
49.3
162.4
161.3
190.7
173.0
2,968.8
856.4
657.1
199.4
2,112.4
481.3
963.7
76.1
887.6
460.8
42.7
163.9
155.9
209.9
174.2
3,2393'
3301.4
3320.7
3329.1
33513
3371.9
3*4023
3,43&4
3^06L8
3,4226
3,439.8
3451.6
2,411.2
8424
1368.8
207.5
1,361.3
425.6
127.5
298.1
-1.8
107.8
2366.7
796.9
1369.8
209.6
1,360.2
468.3
132.1
336.2
32.9
126.3
2364.1
791.9
1372.3
211.1
1,361.2
469.8
134.6
335.2
43.5
129.9
2,360.3
782.8
1377.5
213.9
1,363.6
475.6
135.8
339.7
51.0
127.3
2366.7
789.4
1,577.2
212.3
1,364.9
483.7
137.9
345.9
55.4
129.1
2,372.2
791.0
1381.1
215.8
1,365.3
489.7
145.5
344.2
623
131.9
2,385.6
800.4
1385.3
219.4
1,365.9
500.4
154.5
345.9
64.1
132.8
2,404.3
820.6
1383.7
218.8
1,364.8
510.8
165.9
344.9
73.9
127.7
2392.6
804.2
1388.4
220.0
1,368.4
500.4
164.1
336.3
66.6
126.6
2393.4
808.6
1384.9
219.4
1,365.5
506.4
165.8
340.6
71.1
129.7
2,394.9
812.0
1382.9
218.8
1,364.0
525.8
166.5
359.3
72.0
129.2
2,413.5
835.6
1377.9
217.3
1,360.6
511.4
165.9
345.5
81.6
127.2
2^428
2p942
3,007.4
3,0141
3,034.9
3,056.0
3,083.0
3,116.7
3,086.1
3,100.6
3,121.9
3,133.7
296.5'
307.2
313.3
315.0
316.4
315.9
319.5
319.6
320.7
322.0
317.9
317.9
A20
DomesticNonfinancialStatistics • March 1995
NOTES TO TABLE 1.26
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of
condition (large domestic); other domestically chartered commercial banks (small domestic); branches and agencies of foreign banks; New York State investment companies, and
Edge Act and agreement corporations (foreign-related institutions). Excludes international banking facilities. Data are Wednesday values, or pro rata averages of Wednesday
values. Large domestic banks constitute a universe; data for small domestic banks and
foreign-related institutions are estimates based on weekly samples and on quarter-end
condition reports. Data are adjusted for breaks caused by reclassifications of assets and
liabilities.
2. Excludes federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
3. Consists of reserve repurchase agreements with broker-dealers and loans to purchase and carry securities.
4. Consists of federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
5. Includes vault cash, cash items in process of collection, demand balances due from
depository institutions in the United States, balances due from Federal Reserve Banks,
and other cash assets.
6. Excludes the due-from position with related foreign offices, which is included in
lines 25,53, 81, and 109.
7. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
8. Excludes the due-to position with related foreign offices, which is included in lines
25, 53, 81, and 109.
9. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis.
NOTE. Data have been benchmarked to the September 1994 Call Report. Earlier tables
were benchmarked to the June 1994 Call Report. In addition, seasonally adjusted data
reflect new seasonal factors.
Weekly Reporting Commercial Banks
1.27
A21
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
1994
Account
Dec. 28
Nov. 30
Dec. 7
119,851
302,400
26,552
275,848
92,735
120,520
299,623
21,680
277,944
92,528
119,636
302,617
24,125
278,492
93,608
109,554
303,847
24,765
279,082
93,801
115,474
303,528
23,768
279,760
94,786
117,958
299,048
21,152
277,896
95,055
132,014
293,571
17,116
276,455
94,343
42,541
77,235
65,980
117,339
1,721
62,743
21,684
5,439
16,245
41,060
52,875
41,135
75,071
66,907
116,326
1,830
62,623
21,730
5,419
16,311
40,894
51,872
44,240
74,177
66,998
115,692
1,775
62,904
21,829
5,424
16,404
41,075
51,014
45,063
74,093
65,728
114,482
1,849
62,746
21,817
5,502
16,315
40,930
49,887
45,730
73,822
65,728
112,148
1,660
62,441
21,567
5,496
16,071
40,874
48,046
44,878
74,726
65,370
111,921
1,758
62,433
21,426
5,457
15,969
41,007
47,730
43,420
74,677
64,743
110,942
2,053
62,219
21,413
5,482
15,931
40,805
46,669
43,583
73,890
64,639
112,176
2,135
62,177
21,441
5,472
15,969
40,736
47,864
Revolving, home equity
79
All other
30 To individuals for personal expenditures
31 To depository and financial institutions
37
Commercial banks in the United States
33
Banks in foreign countries
34
Nonbank depository and otherfinancialinstitutions
35 For purchasing and carrying securities
36 To finance agricultural production
37 To states and political subdivisions
38 To foreign governments and official institutions
39
40 Lease-financing receivables
41 LESS: Unearned income
47
Loan and lease reserve
43 Other loans and leases, net
44 All other assets
99,136
68,342
25,600
5,193
1,129,609
309,275
3,270
306,005
304,034r
1,970
448,517
46,303
402,214
234,561
47,330r
27,325
3,063
16,941
16,296
6,357
11,453
917
24,531
30,372
1,597
34,606
1,093,406
141,350
99,777
70,180
23,794
5,803
1,129,041
308,155
3,143
305,012
302,977
2,035
449,586
46,318
403,268
235,525
46,498
27,123
2,334
17,041
17,041
6,335
11,373
921
23,031
30,575
1,598
34,826
1,092,617
138,946
97,740
68,877
23,333
5,529
1,134,465
310,205
3,273
306,932
304,731
2,201
449,948
46,357
403,591
234,684
47,923
28,145
2,835
16,942
17,006
6,344
11,296
1,087
25,374
30,598
1,609
34,765
1,098,092
136,734
105,780
72,972
27,298
5,510
1,134,335
311,316
3,295
308,021
305,899r
2,121
450,716
46,584
404,132
234,508
48,783
28,749
3,217
16,817
16,004
6,300
11,392
906
23,661
30,749
1,611
34,704
1,098,020
134,852
107,882
77,877
24,406
5,599
l,142,808r
311,378
3,420r
307,958r
305,683r
2,275
453,289
46,812
406,477
237,353r
48,237
27,923
3,614
16,700
18,628
6,347
11,493
1,070
24,048
30,965
1,595
34,721
l,106,492r
140,643r
105,518
74,436
25,029
6,053
1,137,188
308,962
3,252
305,710
303,406
2,304
455,192
46,858
408,334
232,834
50,964
31,444
2,803
16,717
15,668
6,236
11,396
916
23,975
31,044
1,606
34,616
1,100,966
136,410
105,276
74,867
24,761
5,647
1,142,977
309,655
2,976
306,679
304,495
2,184
456,407
46,720
409,687
235,029
50,844
31,607
2,703
16,534
16,059
6,232
11,324
923
25,124
31,382
1,756
34,554
1,106,667
138,650
111,556
80,354
26,209
4,994
1,154,995
314,656
3,019
311,638
309,556
2,082
456,900
46,774
410,126
237,853
52,160
32,516
2,890
16,754
17,636
6,286
11,338
880
25,745
31,540
1,769
34,460
1,118,766
140,928
107,395
79,484
21,551
6,361
1,156,139
314,176
2,680
311,496
309,416
2,080
456,401
46,686
409,716
240,776
52,805
32,792
2,851
17,162
16,050
6,389
11,299
934
25,564
31,743
1,764
34,267
1,120,108
136,366
45 Total assets6
1,873,568
1,851,326
1,871,142
1,874,487
1,891,753
1,868,442
1,881,514
1,899,198
1,901,630
Nov. 9
114,500
305,139
26,700
278,439
91,636
102,414
300,233
22,978
277,256
91,499
43,096
78,029
65,677
120,038
1,846
62,499
21,706
5,400
16,306
40,793
55,693
Nov. 16
Dec. 14
Dec. 21
Nov. 23
Nov. 2
ASSETS
1 Cash and balances due from depository institutions
7 US. Treasury and government securities
Trading account
4 Investment account
5
Mortgage-backed securities1
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 local government, by maturity
n
One year or less
14
More than one year
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
17 Federal funds sold2
18 To commercial banks in the United States
19 To nonbank brokers and dealers in securities
70 To others3
?1 Other loans and leases, gross
77
Commercial and industrial
Bankers acceptances and commercial paper
?4
All other
75
76
Non-U.S. addressees
77
78
Footnotes appear on the following page.
A22
1.27
DomesticNonfinancialStatistics • March 1995
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1994
Account
Nov.
2
Nov.
9
Nov.
16
Nov.
23
Nov.
30
Dec.
7
Dec.
14
Dec.
21
Dec.
28
LIABILITIES
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Deposits
Demand deposits7
Individuals, partnerships, and corporations
Other holders
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits4
Nontransaction balances
Individuals, partnerships, and corporations
Other holders
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions, and banks . .
64
65
66
67
68
Liabilities for borrowed money5
Borrowings from Federal Reserve Banks
Treasury tax and loan notes
Other liabilities for borrowed money6
Other liabilities (including subordinated notes and debentures) . . .
69
Total liabilities
70
Residual (total assets less total liabilities)7
1,149,509
299,232
250,961
48,272
8,755
2,554
21,485
5,424
756
9,298
125,644
724,632
704,023
20,609
16,932
1,725
1,519
433
369,587 R
0
20,506 R
349,08 l r
180,970 R
1,138,825
287,119
244,352
42,767
7,607
2,262
18,171
4,811
693
9,223
125,756
725,950
705,467
20,483
16,968
1,545
1,492
478
1,157,563
308,311
257,254
51,058
9,180
3,157
22,064
5,508
774
10,374
125,659
723,593
703,312
20,281
16,941
1,423
1,477
439
1,150,053
302,406
253,224
49,182
8,976
2,867
20,748
6,115
1,466
9,010
125,070
722,577
701,736
20,841
17,242
1,402
1,671
526
1,158,859
308,991
259,552
49,439
9,648
2,345
20,655
6,508
680
9,603
125,698
724,170
703,073
21,097
17,372
1,426
1,773
526
1,153,177
298,539
252,689
45,850
8,809
1,821
20,071
5,574
761
8,813
128,755
725,883
706,123
19,760
17,341
304
1,592
523
1,157,592
306,960
259,483
47,477
9,375
3,058
19,260
5,772
598
9,414
126,770
723,861
704,552
19,309
17,015
301
1,470
523
1,159,222
307,963
259,175
48,789
10,405
2,506
19,631
5,538
846
9,862
128,378
722,880
702,696
20,185
16,965
1,278
1,409
533
1,173,858
327,647
274,439
53,208
9,845
2,144
23,143
5,910
816
11,350
127,581
718,630
698,678
19,952
16,833
1,279
1,327
513
358,219'
54
6,177
351,988'
180,378'
358,147'
0
4,513'
353,634'
181,822'
364,079'
100
4,320
359,658'
186,966'
380,588'
0
15,354
365,234'
178,471'
365,098
607
137
364,355
175,594
366,424
0
2,786
363,639
182,373
383,294
765
27,985
354,543
183,364
365,997
0
9,835
356,163
187,867
1,700,066
1,677,422
1,697,531
1,701,097
1,717,918
1,693,869
1,706,389
1,725,879
1,727,722
173,502
173,904
173,611
173,390
173,835
174,573
175,125
173,318
173,908
1,549,087
99,298'
677
339
338
22,662
55,984
1,553,908
98,666'
669
338
331
22,646
58,042
1,552,821
99,650
660
340
320
23,138
60,516
1,557,228
98,973
668
340
328
23,123
64,502
1,563,671
98,311
667
339
328
23,108
65,832
1,557,006
97,481
617
298
319
22,936
75,100
MEMO
71
72
73
74
75
76
77
Total loans and leases, gross, adjusted, plus securities8
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. residents10
Net owed to related institutions abroad
1,558,253
99,739'
681
339
342
22,743
51,274
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 (NOWs) and automatic transfer service
(ATS) accounts, arid 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.
1,553,710
99,654'
667
337
330
23,034
67,078
1,561,989'
100,141'
670
340
330
23,211
56,131
8. Excludes loans to and federal funds transactions with commercial banks in the
United States.
9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank affiliates
of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank
subsidiaries of the holding company.
10. Credit extended by foreign branches of domestically chartered weekly reporting
banks to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but
includes an unknown amount of credit extended to other than nonfinancial businesses.
Weekly Reporting Commercial Banks A23
1.28
LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Assets and Liabilities
Millions of dollars, Wednesday figures
1994
Account
Nov. 2
Nov. 9
Nov. 16
Nov. 23
Nov. 30
Dec. 7
Dec. 14
Dec. 21
Dec. 28
ASSETS
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal funds sold1
5 To commercial banks in die United States
6 To others2
7 Other loans and leases, gross
8 Commercial and industrial
9
Bankers acceptances and commercial paper .
10
All other
11
U.S. addressees
Non-U.S. addressees
1?
13 Loans secured by real estate
14 Loans to depository and financial
institutions
Commercial banks in the United States
1 *>
16
Banks in foreign countries
17
Nonbank financial institutions
18 For purchasing and carrying securities
19 To foreign governments and official
institutions
70 All other
21 Other assets (claims on nonrelated parties)
22 Total assets3
14,700
14,984
14,954
15,677
15,481
15,723
16,633
17,115
17,987
38,659
12,494
25,981
6,786
19,195
162,554
104,021
2,889
101,131
97,116
4,015
26,135
37,688
12,351
26,238
5,686
20,552
163,066
104,491
3,096
101,396
97,402
3,994
26,096
38,494
12,261
23,403
4,921
18,482
164,471
105,521
3,143
102,378
98,368
4,010
26,134
37,868
12,624
26,462
6,514
19,948
164,837
105,967
3,180
102,787
98,656
4,131
26,093
37,757
12,550
30,071
10,018
20,053
166,162
106,891r
3,101
103,790r
99,692r
4,098
26,079
36,749
12,605
33,324
7,230
26,094
166,958
106,511
3,179
103,332
99,289
4,043
25,902
35,999
12,775
31,769
7,181
24,588
168,189
106,882
3,328
103,553
99,485
4,069
25,914
36,386
12,696
29,973
6,614
23,359
172,187
108,268
3,620
104,649
100,397
4,251
25,845
37,678
12,791
35,824
9,094
26,730
170,760
107,588
3,668
103,920
99,746
4,174
25,788
24,761
5,094
1,998
17,669
3,463
24,898
5,129
2,005
17,764
3,677
25,119
5,190
1,994
17,935
3,799
25,496
5,386
1,949
18,160
3,432
25,288r
5,361
1,800
18,127r
4,057
26,415
5,417
1,987
19,011
3,923
27,044
5,736
1,912
19,395
4,305
28,714
6,013
2,052
20,649
5,070
28,625
5,806
2,097
20,722
4,671
335
3,840
36,344r
338
3,566
36,901r
380
3,518
36,581
369
3,480
37,506r
372
3,476
38,679
356
3,850
45,231
395
3,650
45,571
423
3,867
43,442
378
3,710
42,775
318,204 R
320,672 R
318,253
321,610 R
325,715
337,310
338,716
338,782
343,193
96,149
4,046
3,414
632
92,103
62,702
29,400
98,385
4,198
3,412
786
94,187
64,076
30,110
97,645
4,173
3,464
709
93,472
63,670
29,803
99,184
3,878
3,198
680
95,306
64,322
30,984
98,952
3,864
3,253
611
95,088
63,757
31,331
101,054
3,892
3,120
772
97,162
64,854
32,308
102,211
3,885
3,184
701
98,326
65,416
32,910
99,722
4,126
3,211
915
95,596
63,580
32,016
99,639
4,737
3,911
826
94,902
64,012
30,890
72,563
37,099
6,511
30,588
35,464
6,591
28,873
34,060
74,574
37,905
7,547
30,358
36,669
6,394
30,275
33,784r
72,846
36,653
6,065
30,588
36,193
6,387
29,806
33,390
75,449
37,824
6,373
31,451
37,624
5,929
31,695
34,665r
75,076
38,259
7,894
30,365
36,817
6,232
30,585
35,844
78,632
42,585
7,443
35,142
36,046
5,838
30,209
42,825
75,112
39,217
6,633
32,584
35,895
5,765
30,130
43,190
77,236
40,877
7,556
33,320
36,360
6,746
29,614
40,588
79,948
43,489
6,620
36,869
36,459
6,425
30,034
40,192
318,204 R
320,672 R
318,253
321,610 R
325,715
337,310
338,716
338,782
343,193
227,807
87,9fff
228,529r
84,486
228,518
86,284
229,892r
85,677
231,160
90,827
236,989
88,079
235,815
90,423
238,615
94,253
242,153
98,037
LIABILITIES
23 Deposits or credit balances owed to other
than directly related institutions
24 Demand deposits4
25 Individuals, partnerships, and corporations . . . .
76 Other
27 Nontransaction accounts
28 Individuals, partnerships, and corporations . . . .
29 Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased5
3? 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 owed to related institutions abroad
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. For U.S. branches and agencies of foreign banks having a net "due from" position,
includes net due from related institutions abroad.
4. Includes other transaction deposits.
5. Includes securities sold under agreements to repurchase.
6. For U.S. branches and agencies of foreign banks having a net "due to" position,
includes net owed to related institutions abroad.
7. Excludes loans to and federal funds transactions with commercial banks in the
United States.
A24
1.32
DomesticNonfinancialStatistics • March 1995
COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December
1994
Item
1989
1990
1991
1992
1993
June
July
Aug.
Sept.
Oct.
Nov.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
Financial companies'
Dealer-placed paper2
Total
Bank-related (not seasonally adjusted)3 . . .
Directly placed paper4
Total
Bank-related (not seasonally adjusted) 3 ...
5
6 Nonfinancial companies
525,831
562,656
528,832
545,619
555,075
563,454
572,925
564,639
574,471
592,518
580,673
183,622
n.a.
214,706
n.a.
212,999
n.a.
226,456
n.a.
218,947
n.a.
214,313
n.a.
222,780
n.a.
214,769
n.a.
214,349
n.a.
224,280
n.a.
215,748
n.a.
210,930
n.a.
200,036
n.a.
182,463
n.a.
171,605
n.a.
180,389
n.a.
199,555
n.a.
199,561
n.a.
199,031
n.a.
203,573
n.a.
207,296
n.a.
202,781
n.a.
131,279
147,914
133,370
147,558
155,739
149,586
150,584
150,839
156,549
160,942
162,144
Bankers dollar acceptances (not seasonally adjusted)6
7 Total
8
9
10
11
12
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks7
Foreign correspondents
Others
By basis
13 Imports into United States
14 Exports from United States
15 All other
62,972
54,771
43,770
38,194
32,348
30,659
30,390
30,448
31,164
30,413
29,760
9,433
8,510
924
9,017
7,930
1,087
11,017
9,347
1,670
10,555
9,097
1,458
12,421
10,707
1,714
12,334
11,273
1,061
11,608
10,838
770
11,543
10,824
719
11,299
10,475
824
11,061
9,931
1,130
11,689
10,548
1,142
1,066
52,473
918
44,836
1,739
31,014
1,276
26,364
725
19,202
453
17,872
386
18,396
325
18,580
388
19,477
332
19,020
234
17,836
15,651
13,683
33,638
13,095
12,703
28,973
12,843
10,351
20,577
12,209
8,096
17,890
10,217
7,293
14,838
10,625
6,576
13,458
10,956
6,399
13,035
10,486
6,458
13,505
10,985
6,575
13,604
10,674
6,754
12,986
10,272
6,688
12,800
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. 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 dollar acceptances are gathered from approximately 100 institutions. The reporting group is revised every January.
7. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances
for its own account.
Financial Markets
1.33
PRIME RATE CHARGED BY BANKS
A25
Short-Term Business Loans1
Percent per year
1992—Jan.
July
1
2
6.50
6.00
1994—Mar.
Apr.
May
Aug.
Nov.
24
19
17
16
15
6.25
6.75
7.25
7.75
8.50
1995—Feb.
1
9.00
1992
1993
1994
6.25
6.00
7.15
-Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
6.00
1993—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
6.00
6.00
1994—Jan. .
Feb.
Mar
6.50
6.50
6.50
6.50
6.50
6.50
6.02
6.00
6.00
1. The prime rate is one of several base rates that banks use to price short-term
business loans. The table shows the date on which a new rate came to be the predominant
one quoted by a majority of the twenty-five largest banks by asset size, based on the most
Average
rate
Average
rate
Date of change
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
Average
rate
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
6.45
6.99
7.25
7.25
7.51
7.75
7.75
8.15
8.50
1995—Jan. .
8.50
6.00
6.00
6.06
recent Call Report. Data in this table also appear in the Board's H.15 (519) weekly and
G.13 (415) monthly statistical releases. For ordering address, see inside front cover.
A26
1.35
DomesticNonfinancialStatistics • March 1995
INTEREST RATES
Money and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
1994
Item
1992
1993
1994, week ending
1994
Sept.
Oct.
Nov.
Dec.
Dec. 2
Dec. 9
Dec. 16
Dec. 23
Dec. 30
MONEY MARKET INSTRUMENTS
Federal funds1'2,3
2 Discount window borrowing2,4
1
3.52
3.25
3.02
3.00
4.21
3.60
4.73
4.00
4.76
4.00
5.29
4.40
5.45
4.75
5.85
4.75
5.47
4.75
5.48
4.75
5.56
4.75
5.45
4.75
3
4
5
Commercial paper3,5,6
1-month
3-month
6-month
3.71
3.75
3.80
3.17
3.22
3.30
4.43
4.66
4.93
4.90
5.02
5.32
5.02
5.51
5.70
5.40
5.81
6.01
6.08
6.26
6.62
5.79
6.05
6.30
6.09
6.26
6.58
6.12
6.30
6.67
6.05
6.25
6.63
6.06
6.29
6.70
6
7
8
Finance paper, directly placed3,5,7
1-month
3-month
6-month
3.62
3.65
3.63
3.12
3.16
3.15
4.33
4.53
4.56
4.79
4.89
4.99
4.91
5.36
5.30
5.30
5.67
5.58
5.93
6.12
6.17
5.68
5.95
5.95
5.94
6.11
6.13
6.02
6.18
6.24
5.90
6.12
6.18
5.86
6.11
6.19
9
10
Bankers acceptances3,5,8
3-month
6-month
3.62
3.67
3.13
3.21
4.56
4.83
4.95
5.24
5.41
5.59
5.71
5.93
6.18
6.53
5.99
6.26
6.17
6.51
6.20
6.55
6.14
6.53
6.23
6.61
11
12
13
Certificates of deposit, secondary market3,9
1-month
3-month
6-month
3.64
3.68
3.76
3.11
3.17
3.28
4.38
4.63
4.%
4.85
5.03
5.40
4.98
5.51
5.79
5.38
5.79
6.11
6.01
6.29
6.78
5.85
6.08
6.47
6.04
6.28
6.72
6.07
6.30
6.82
5.95
6.26
6.78
5.96
6.36
6.88
3.70
3.18
4.63
5.01
5.52
5.78
6.27
6.06
6.28
6.28
6.24
6.34
3.43
3.54
3.71
3.00
3.12
3.29
4.25
4.64
5.02
4.62
5.04
5.43
4.95
5.39
5.75
5.29
5.72
6.13
5.60
6.21
6.67
5.53
5.97
6.45
5.70
6.20
6.62
5.66
6.27
6.73
5.49
6.20
6.66
5.52
6.23
6.74
3.45
3.57
3.75
3.02
3.14
3.33
4.29
4.66
4.98
4.64
5.02
5.38
4.96
5.39
5.72
5.25
5.69
6.09
5.64
6.21
6.75
5.44
5.86
n.a.
5.83
6.33
n.a.
5.76
6.32
6.75
5.59
6.30
n.a.
5.56
6.24
n.a.
3.89
4.77
5.30
6.19
6.63
7.01
n.a.
7.67
3.43
4.05
4.44
5.14
5.54
5.87
6.29
6.59
5.32
5.94
6.27
6.69
6.91
7.09
7.49
7.37
5.76
6.39
6.69
7.08
7.28
7.46
7.87
7.71
6.11
6.73
7.04
7.40
7.58
7.74
8.08
7.94
6.54
7.15
7.44
7.72
7.83
7.96
8.20
8.08
7.14
7.59
7.71
7.78
7.80
7.81
7.99
7.87
6.89
7.41
7.62
7.79
7.83
7.89
8.10
7.99
7.10
7.51
7.64
7.74
7.76
7.79
7.99
7.88
7.20
7.61
7.73
7.78
7.81
7.82
8.00
7.87
7.12
7.63
7.74
7.79
7.82
7.82
7.97
7.85
7.21
7.69
7.79
7.81
7.81
7.81
7.96
7.83
7.52
6.45
7.41
7.81
8.02
8.16
7.97
8.07
7.97
7.97
7.95
7.93
6.09
6.48
6.44
5.38
5.82
5.60
5.77
6.17
6.18
5.87
6.23
6.28
6.05
6.37
6.52
6.57
6.89
6.97
6.62
7.17
6.80
6.65
6.96
6.90
6.55
7.15
6.88
6.62
7.15
6.77
6.65
7.18
6.74
6.65
7.18
6.71
8.55
7.54
8.26
8.60
8.83
8.94
8.73
8.84
8.74
8.73
8.71
8.70
8.14
8.46
8.62
8.98
8.52
7.22
7.40
7.58
7.93
7.46
7.97
8.15
8.28
8.63
8.29
8.34
8.49
8.61
8.98
8.62
8.57
8.71
8.82
9.20
8.80
8.68
8.83
8.94
9.32
8.95
8.46
8.62
8.73
9.10
8.78
8.57
8.73
8.84
9.21
8.81
8.47
8.63
8.75
9.11
8.78
8.46
8.62
8.74
9.10
8.79
8.45
8.60
8.71
9.08
8.75
8.43
8.59
8.70
9.08
8.78
7.46
2.99
6.89
2.78
n.a.
2.82
n.a.
2.80
n.a.
2.82
n.a.
2.86
n.a.
2.91
n.a.
2.91
n.a.
2.93
n.a.
2.91
n.a.
2.90
n.a.
2.89
14 Eurodollar deposits, 3-month3,10
18
19
20
U.S. Treasury bills
Secondary market ,5
3-month
6-month
1-year
Auction average3,5,11
3-month
6-month
1-year
21
22
23
24
25
26
27
28
Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
15
16
17
U.S. TREASURY NOTES AND BONDS
Composite
29 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series13
30
31 Baa
32 Bond Buyer series14
CORPORATE BONDS
33 Seasoned issues, all industries15
Rating group
34
35
36
37
38
Aa
A
Baa
A-rated,recentlyoffered utility bonds16
MEMO
Dividend-price ratio17
39 Preferred stocks18
40 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 for 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 11:00 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.
Department of the Treasury.
13. General obligations based on Thursday figures; Moody's Investors Service.
14. State and local government general obligation bonds maturing in twenty years are
used in compiling this index. The twenty-bond index has a rating roughly equivalent to
Moodys' A1 rating. Based on Thursday figures.
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 & Poor's corporate series. Preferred stock ratio is based on a sample of
ten issues: four public utilities, four industrials, one financial, and one transportation.
Common stock ratio is based on the 500 stocks in the price index.
18. Data for the preferred stock yield was discontinued as of June 29, 1994.
NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and
G. 13 (415) monthly statistical releases. For ordering address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A27
Selected Statistics
1994
Indicator
1992
1993
1994
Apr.
June
May
Aug.
July
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
4
Utility
5
Finance
229.00
284.26
201.02
99.48
179.29
249.71
300.10
242.68
114.55
216.55
254.16
315.32
247.17
104.96
209.75
247.97
304.48
250.43
105.04
208.12
249.56
307.58
244.75
102.89
211.30
251.21
308.66
246.64
103.27
215.89
249.29
307.34
244.21
102.73
210.91
256.08
316.56
244.67
105.61
214.77
257.61
322.19
239.10
102.30
211.90
255.22
321.53
230.71
101.67
203.33
252.48
319.33
227.44
100.07
198.38
248.65
313.92
218.93
100.01
195.25
6 Standard & Poor's Corporation
(1941-43 = 10)'
415.75
451.63
460.42
447.23
450.90
454.83
451.40
464.24
466.96
463.81
461.01
455.19
7 American Stock Exchange
(Aug. 31, 1973 = 50)2
391.28
438.77
449.49
437.01
437.54
436.08
430.10
444.89
456.31
456.25
445.16
427.39
202,558
14,171
263,374
18,188
290,652
n.a.
301,242
15,805
269,812
15,727
265,341
18,400
250,382
14,378
277,877
15,874
292,356
18,785
301,327
20,731
297,001
18,465
302,049
18,745
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 3
43,990
60,310
61,160
60,700
59,870
60,800
61,930
63,070
61,630
62,150
61,000
61,160
8,970
22,510
12,360
27,715
14,095
28,870
13,175
24,800
12,715
23,265
12,560
28,585
12,620
25,790
12,090
24,400
12,415
25,230
12,875
24,180
13,635
25,625
14,095
28,870
4
Free credit balances at brokers
11 Margin accounts5
12 Cash accounts
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. In July 1976 a financial group, composed of banks and insurance companies, was
added to the group of stocks on which the index is based. The index is now based on 400
industrial stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility
(formerly 60), and 40 financial.
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 broker-dealers has
included credit extended against stocks, convertible bonds, stocks acquired through the
exercise of subscription rights, corporate bonds, and government securities. Separate
reporting of data for margin stocks, convertible bonds, and subscription issues was
discontinued in April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.
5. Series initiated in June 1984.
6. Margin requirements, stated in regulations adopted by the Board of Governors
pursuant to the Securities Exchange Act of 1934, limit the amount of credit that can be
used to purchase and carry "margin securities" (as defined in the regulations) when such
Jan. 3, 1974
50
50
50
credit is collateralized by securities. Margin requirements on securities other than options
are the difference between the market value (100 percent) and the maximum loan value of
collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934;
Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and
Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T
the initial margin required for writing options on securities, setting it at 30 percent of the
current market value of the stock underlying the option. On Sept. 30, 1985, the Board
changed the required initial margin, allowing it to be the same as the option maintenance
margin required by the appropriate exchange or self-regulatory organization; such maintenance margin rules must be approved by the Securities and Exchange Commission.
Effective Jan. 31, 1986, the SEC approved new maintenance margin rules, permitting
margins to be the price of the option plus 15 percent of the market value of the stock
underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of
the market value of the stock underlying the option (or 15 percent in the case of
stock-index options).
A28
1.38
Domestic Financial Statistics • March 1995
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
1994
Type of account or operation
1992
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
1993
1994
July
Aug.
Sept.
Oct.
Nov.
Dec.
1,090,453
788,027
302,426
1,380,856
1,128,518
252,339
-290,403
-340,490
50,087
1,153,226
841,292
311,934
1,408,532
1,141,945
266,587
-255,306
-300,653
45,347
1,257,187
922,161
335,026
1,460,557
1,181,185
279,372
-203,370
-259,024
55,654
84,827
60,145
24,681
118,025
93,164
24,861
-33,198
-33,018
-180
97,338
70,949
26,389
121,608
95,279
26,329
-24,270
-24,330
60
135,895
105,212
30,683
131,903
103,189
28,714
3,993
2,024
1,969
89,024
65,385
23,639
121,480r
95,307r
26,174
—32,457r
-29,922 r
-2,535
87,673
62,083
25,590
125,131
99,464
25,668
-37,458
-37,381
-78
130,810
103,859
26,951
134,874
123,490
11,383
-4,063
-19,631
15,568
310,918
-17,305
-3,210
248,594
6,283
429
184,998
16,564
1,808
-3,245
30,705
5,737
52,350
-9,802
-18,374
-11,996
-5,855
13,858
32,457
-480
480r
40,528
9,366
-12,436
-13,316
476
16,903
58,789
24,586
34,203
52,506
17,289
35,217
35,942
6,848
29,094
20,285
3,683
16,603
30,087
5,994
24,093
35,942
6,848
29,094
36,422
5,164
31,258
27,056
5,348
21,709
26,580
7,161
19,419
MEMO
13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts
1. Since 1990, off-budget items have been the social security trust funds (federal
old-age survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on
gold; net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF
loan-valuation adjustment; and profit on sale of gold.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and
Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget of
the U.S. Government.
Federal FinanceA33
1.39
U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Calendar year
Fiscal year
1993
1994
1994
1993
Source or type
1994
HI
H2
HI
H2
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 contributions2
11
Self-employment taxes and contributions3 .
12 Unemployment insurance
13 Other net receipts4
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts5
1,153,226
1,257,453
593,212
582,038
652,236
625,557
89,024
87,673
130,810
509,680
430,211
28
154,989
75,546
543,055
459,699
70
160,364
77,077
255,556
209,517
25
113,510
67,468
262,073
228,423
2
41,768
8,115
275,053
225,387
63
118,245
68,642
273,474
240,062
10
42,031
9,207
43,239
40,480
0
3,919
1,160
37,414
37,882
2
1,857
2,327
54,315
50,680
0
3,635
579
131,548
14,027
428,300
396,939
20,604
26,556
4,805
154,205
13,820
461,475
428,810
24,433
28,004
4,661
69,044
7,198
227,177
208,776
16,270
16,074
2,326
68,266
6,514
206,176
192,749
4,335
11,010
2,417
80,536
6,933
248,301
228,714
20,762
17,301
2,284
78,392
7,331
220,141
206,613
4,135
11,177
2,349
5,513
2,043
32,687
31,263
464
1,073
351
2,682
1,185
37,387
33,786
0
3,249
352
32,616
700
36,358
35,708
0
230
420
48,057
18,802
12,577
18,273
55,225
20,099
15,225
22,041
23,398
8,860
6,494
9,879
25,994
10,215
6,617
9,227
26,444
9,500
8,197
11,170
30,062
11,042
7,071
13,305
4,275
1,848
1,206
2,300
5,518
1,827
1,220
2,811
4,587
1,747
1,092
1,375
1,408,532
1,461,067
673,915
727,685r
OUTLAYS
710,620'
753,255
121,480
125,131
134,874
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
291,086
16,826
17,030
4,319
20,239
20,443
281,451
17,249
17,602
5,398
20,902
15,131
140,535
6,565
7,996
2,462
8,592
11,872
146,672r
10,186
8,880
1,663
11,221'
7,516
133,739
5,800
8,502
2,036
9,179
7,451
141,092
12,056
8,979
2,949
12,373
7,697
18,801
4,339
1,115
525
3,418
2,048
22,428
2,177
1,673
166
1,797
2,784
26,348
1,334
1,529
417
1,622
1,938
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
-22,725
35,004
9,051
-4,851
36,835
11,877
-14,537
16,076
4,929
-1,490
19,570'
4,288
-5,114
16,772
5,592
-2,678
20,489
7,070
858
3,434
1,171
-1,244
3,506
1,109
-2,166
3,021
1,102
18 All types
50,012
44,730
24,080
26,753'
18,976
25,887
3,705
4,025
5,779
29 Health
30 Social security and Medicare
31 Income security
99,415
435,137
207,257
106,495
464,314
213,972
49,882
195,933
107,870
52,958
223,735
102,380'
53,121
232,777
109,103
54,123
236,819
101,743
8,631
37,801
15,275
9,525
39,299
16,151
9,246
41,216
19,331
32
33
34
35
36
35,720
14,955
13,009
198,811
-37,386
37,637
15,283
11,348
202,957
-37,772
16,385
7,482
5,205
99,635
-17,035
19,852
7,400
6,531
99,914
-20,344
16,686
7,718
5,076
99,844
-17,308
19,757
7,800
7,393
109,435
-20,065
1,677
1,340
1,261
18,669
-2,596
3,337
1,176
1,556
18,242
-2,575
4,277
1,278
1,972
19,302
-2,671
Veterans benefits and services
Administration of justice
General government
Net interest6
Undistributed offsetting receipts7
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. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and
Outlays of the U.S. Government-, and U.S. Office of Management and Budget, Budget of
the U.S. Government, Fiscal Year 1995.
A30
1.40
DomesticNonfinancialStatistics • March 1995
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1992
1993
1994
Item
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding
4,1%
4,250
4,373
4,436
4,562
4,602
4,673
4,721r
4,800
2 Public debt securities
3
Held by public
Held by agencies
4
4,177
3,129
1,048
4,231
3,188
1,043
4,352
3,252
1,100
4,412
3,295
1,117
4,536
3,382
1,154
4,576
3,434
1,142
4,646
3,443r
l,203r
4,693
3,480
1,213
n.a.
n.a.
n.a.
19
19
0
20
20
0
21
21
0
25
25
0
27
27
0
26
26
0
28r
27
0
29
29
0
n.a.
n.a.
n.a.
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt1
4,086
4,140
4,256
4,316
4,446
4,491
4,559
4,605
4,711
4,085
0
4,139
0
4,256
0
4,315
0
4,445
0
4,491
0
4,559
0
4,605
0
4,711
0
4,145
4,145
4,370
4,900
4,900
4,900
4,900
4,900
4,900
MEMO
11 Statutory debt limit
1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District of
Columbia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
1994
Type and holder
1 Total gross public debt
2
i
4
5
6
7
8
9
10
11
12
13
14
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Nonmarketable1
State and local government series
Foreign issues2
Government
Public
Savings bonds and notes
Government account series3
Non-interest-bearing
By holder4
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18 Commercial banks
19 Money market funds
20 Insurance companies
21
Other companies
22
State and local treasuries
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international5
Other miscellaneous investors6
26
1991
1993
1994
Q1
Q2
Q3
Q4
3,801.7
4,177.0
4,535.7
n.a.
4,575.9
4,645.8
4,692.8
n.a.
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
4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4
4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,572.6
3,042.9
721.2
1,802.5
504.2
1,529.7
145.5
42.7
42.7
.0
172.6
1,138.4
3.3
4,642.5
3,051.0
698.5
1,835.7
501.8
1,591.5
143.4
42.2
42.2
.0
174.9
1,200.6
3.3
4,689.5
3,091.6
697.3
1,867.5
511.8
1,597.9
137.4
42.0
42.0
.0
176.4
1,211.7
3.2
4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
0
177.8
1,259.8
31.0
968.7
281.8
2,563.2
233.4
80.0
168.7
150.8
520.3
1,047.8
302.5
2,839.9
294.0
79.4
197.5
192.5
534.8
1,153.5
334.2
3,047.7
316.0
80.5
216.0
213.0
564.0
1,141.7
342.6
3,094.6
345.0r
70.5
236.9r
216.3
517.4r
1,203.0
357.7
3,088.2
330.7'
59.5
244. l r
226.3
520.1r
1,213.1
355.2
3,127.8
325.0
59.9
250.0
229.3
521.0
138.1
125.8
491.8
651.3
157.3
131.9
549.7
702.4
171.9
137.9
623.3
725.0
175.0
140.1
632.7r
760.7r
177.1
144.0
632.5r
754.0r
178.6
148.6
653.8
761.6
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.
1992
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, Treasury Bulletin.
Federal Finance A3 3
1.42
U.S. GOVERNMENT SECURITIES DEALERS
Transactions1
Millions of dollars, daily averages
1994, week ending
1994
Item
Nov.
Nov. 2
Nov. 9
53,226
53,350
49,072
44,646'
87,677r
42,801r
17,787
38,452
101,637
52,337
19,003
31,733
94,390r
49,959r
19,748
26,645
95,546'
52,267'
16,133
42,862
99,684r
732
13,004
106,361r
650
14,137
121,000
544
10,683
112,898r
825
9,300
114,555'
511
13,453
73,205r
16,665
21,613
77,342r
17,137
24,316
86,325r
18,459
21,050
80,524'
18,924
17,345
77,904'
15,622
29,409
Sept.
Oct.
52,362
80,253r
40,275
17,398
34,616
Nov. 23
Nov. 30
69,320
54,915
46,232
57,812
108,153
59,668
18,394
35,861
108,468
51,878
19,681
31,400
97,280
46,486
21,507
18,842
115,203
50,510
23,080
31,638
136,995
470
12,226
127,867
557
11,266
107,823
527
6,339
131,712
468
9,305
100,146
17,924
23,634
87,395
19,124
20,134
82,175
20,980
12,503
91,813
22,612
22,333
Nov. 16
Dec. 7
Dec. 21
Dec. 28
58,332
58,271
49,130
91,013
38,323
22,669
36,313
80,604
28,754
22,369
23,603
56,838
26,223
25,442
11,179
111,298
683
11,065
95,694
485
9,975
73,710
399
3,380
76,370
21,987
25,247
71,934
21,884
13,628
58,482
25,043
7,798
Dec. 14
OUTRIGHT TRANSACTIONS2
1
2
3
4
5
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
9
U.S. Treasury
10 Federal agency
11 Mortgage-backed
6
7
8
FUTURES TRANSACTIONS3
12
13
14
15
16
By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
1,157
1,080
1,667
606
873
2,522
2,024
1,675
2,672
1,442
843
865
3,521
13,548
0
0
2,593
12,402
0
0
3,642
14,287
0
0
2,490
13,582
0
0
2,082
12,179
0
0
4,268
16,870
0
0
3,951
14,178
0
0
4,728
14,202
0
0
5,549
17,302
2,806
11,238
0
0
2,658
8,474
0
0
1,714
5,509
0
0
0
0
OPTIONS TRANSACTIONS4
By type of underlying security
17 US. Treasury bills
Coupon securities, by maturity
18 Five years or less
19 More than five years
20 Federal agency
21 Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
3,566
4,714
0
523
4,712
5,527
0
559
2,722
5,327
0
463
2,729
4,605
0
753
2,203
4,902
0
364
3,748
6,568
0
422
3,070
6,043
1,866
4,084
1,877
3,649
0
468
864
3,201
0
267
1,548
2,825
0
236
1,063
2,034
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list
of primary dealers. Monthly averages are based on the number of trading days in the
month. Transactions are assumed evenly distributed among the trading days of the report
week. Immediate, forward, and futures transactions are reported at principal value, which
does not include accrued interest; options transactions are reported at the face value of the
underlying securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Outright transactions include immediate and forward transactions. Immediate delivery refers to purchases or sales of securities (other than mortgage-backed federal agency
securities) for which delivery is scheduled in five business days or less and "whenissued" 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 business days or less. Stripped securities are reported at market value by maturity of
coupon or corpus.
0
0
494
458
0
324
Forward transactions are agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
3. Futures transactions are standardized agreements arranged on an exchange. All
futures transactions are included regardless of time to delivery.
4. Options transactions are purchases or sales of put and call options, whether arranged
on an organized exchange or in the over-the-counter market, and include options on
futures contracts on U.S. Treasury and federal agency securities.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer
data series as of the week ending July 6, 1994.
A32
1.43
DomesticNonfinancialStatistics • March 1995
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Millions of dollars
1994
1994, week ending
Item
Sept.
Oct.
Nov.
Nov. 2
Nov. 9
Nov. 16
Nov. 23
Nov. 30
Dec. 7
Dec. 14
Dec. 21
Positions2
NET OUTRIGHT POSITIONS3
By type of security
1 US. Treasury bills
Coupon securities, by maturity
2 Five years or less
3 More than five years
4 Federal agency
5 Mortgage-backed
1,906
3,177
12,980
4,251
6,260
16,778
12,958
18,418
16,225
22,114
15,696
-16,175
-22,799
21,306
37,645
-16,957
-27,282
22,584
37,701
-6,941
-30,270
20,097
36,127
-14,383
-28,513
22,739
38,947
-7,634
-27,736
22,151
35,102
-8,299
-33,172
18,761
37,598
-2,146
-32,612
20,745
36,077
-7,560
-28,060
17,977
34,926
-8,827
-32,519
21,742
32,397
-12,994
-30,407
19,650
32,061
-4,305
-31,539
19,508
34,996
-2,829
-776
-275
-2,752
-1,313
-717
604
1,035
-383
-1,691
-1,612
8,285
-1,681
0
0
8,205'
83'
0
0
7,470
2,308
0
0
8,162
1,871
0
0
7,406
5,106
0
0
6,747
1,347
0
0
7,264
1,566
0
0
8,240
1,506
0
0
6,901
342
0
0
3,916
345
0
0
NET FUTURES POSITIONS
6
7
8
9
10
By type of deliverable security
US. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
8,517'
5'
0
0
Financing5
Reverse repurchase agreements
11 Ovemight and continuing
12 Term
261,844
387,958
259,660
388,809
248,670
343,089
258,797
385,956
241,378
391,524
269,105
312,801
223,898
355,649
257,407
300,136
267,953
364,244
245,936
374,706
227,393
353,877
Securities borrowed
13 Overnight and continuing
14 Term
174,381
44,574
181,291
45,783
180,702
46,394
183,089
51,228
179,611
54,201
187,161
40,062
178,637
48,052
176,715
41,881
183,995
44,203
176,735
48,395
183,162
45,331
2,015
129
2,058
53
2,392
32
2,100
n.a.
1,915
32
1,933
n.a.
2,658
n.a.
3,146
n.a.
3,472
n.a.
3,258
n.a.
3,016
26
Repurchase agreements
17 Overnight and continuing
18 Term
473,761
359,336
461,787
360,693
438,464
338,786
461,525
363,599
452,491
373,293
482,294
289,697
365,714
402,988
446,770
282,076
462,503
343,304
447,454
362,227
423,925
345,402
Securities loaned
19 Overnight and continuing
20 Term
5,402
922
5,592
1,234
6,262
1,285
5,828
1,743
5,904
1,609
6,847
1,476
5,968
1,018
6,454
904
6,407
1,631
6,119
1,355
5,403
1,351
Securities pledged
21 Overnight and continuing
22 Term
32,972
4,525
34,263
4,095
33,695
3,416
34,786
4,610
31,205
4,516
31,165
4,027
36,266
2,159
35,831
2,619
38,562
1,646
33,544
1,753
34,771
1,450
Collateralized loans
23 Overnight and continuing
24 Term
18,407
6,130
19,273
n.a.
17,871
n.a.
20,729
n.a.
18,093
n.a.
18,472
n.a.
16,333
n.a.
17,771
n.a.
16,354
n.a.
13,060
n.a.
11,828
n.a.
MEMO: Matched book
Securities in
25 Overnight and continuing
26 Term
225,440
355,640
228,104
363,804
224,758
323,287
232,463
364,511
223,740
368,392
249,760
293,829
209,480
336,610
213,850
282,540
246,477
336,578
228,039
341,469
217,211
325,317
Securities out
27 Overnight and continuing
28 Term
283,925
294,295
276,523
301,669
260,138
272,124
268,206
306,609
280,615
309,287
290,586
234,890
215,238
310,998
251,808
223,467
280,575
280,174
261,263
294,017
244,323
284,788
Securities received as pledge
15 Overnight and continuing
16 Term
6
1. Data for positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list
of primary dealers. Weekly figures are close-of-business Wednesday data. Positions for
calendar days of the report week are assumed to be constant. Monthly averages are based
on the number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. Net immediate
positions include securities purchased or sold (other than mortgage-backed agency securities) that have been delivered or are scheduled to be delivered in five business days or less
and "when-issued" securities that settle on the issue date of offering. Net immediate
positions for mortgage-backed agency securities include securities purchased or sold that
have been delivered or are scheduled to be delivered in thirty business days or less.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
4. Futures positions reflect standardized agreements arranged on an exchange. All
futures positions are included regardless of time to delivery.
5. Overnight financing refers to agreements made on one business day that mature on
the next business day; continuing contracts are agreements that remain in effect for more
than one business day but have no specific maturity and can be terminated without
advance notice by either party; term agreements have a fixed maturity of more than one
business day. Financing data are reported in terms of actual funds paid or received,
including accrued interest.
6. 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.
Noic. "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer
data series as of the week ending July 6, 1994.
Federal Finance A3 3
1.44
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
1994
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3 Defense Department'
4 Export-Import Bank2-3
5 Federal Housing Administration
6 Government National
Mortgage Association certificates of
participation5
7 Postal Service6
8 Tennessee Valley Authority
9 United States Railway Association6
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks8
15 Student Loan Marketing Association9
16 Financing Corporation
17 Farm Credit Financial Assistance Corporation
18 Resolution Funding Corporation
1990
1991
1992
20
21
22
23
24
Lending to federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
July
Aug.
Sept.
Oct.
442,772
483,970
570,711
646,661
659,206
674,020
0
0
42,159
7
11,376
393
41,035
7
9,809
397
41,829
7
7,208
374
45,193
6
5,315
255
43,040
6
4,389
138
43,416
6
4,389
82
43,861
6
4,389
101
42,544
6
3,932
112
39,037
6
3,932
114
0
6,948
23,435
0
0
8,421
22,401
0
0
10,660
23,580
0
0
9,732
29,885
0
0
9,473
29,037
0
0
9,473
29,466
0
0
9,773
29,592
0
0
8,973
29,521
0
0
7,773
27,212
0
392,509
117,895
30,941
123,403
53,590
34,194
8,170
1,261
23,055
401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,996
442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,996
525,518
141,577
49,993
201,112
53,123
39,784
8,170
1,261
29,996
603,621
160,822
73,340
227,897
53,692
47,940
8,170
1,261
29,996
615,790
166,137
78,929
230,484
52,276
48,069
8,170
1,261
29,996
630,159
169,284
81,270
237,564
53,844
48,313
8,170
1,261
29,996
0
174,414
83,947
239,320
54,333
49,692
8,170
1,261
29,996
0
185,894
88,680
242,575
53,609
0
8,170
1,261
29,996
179,083
185,576
154,994
128,187
115,603
113,689
112,804
109,357
106,935
11,370
6,698
4,850
14,055
0
9,803
8,201
4,820
10,725
0
7,202
10,440
4,790
6,975
0
5,309
9,732
4,760
6,325
0
4,383
9,473
0
4,375
0
4,383
9,473
0
4,375
0
4,383
9,773
0
4,375
0
3,926
8,973
0
3,400
0
3,926
7,773
0
3,200
0
52,324
18,890
70,896
48,534
18,562
84,931
42,979
18,172
64,436
38,619
17,578
45,864
35,999
17,357
44,016
35,104
17,372
42,982
34,594
17,402
42,322
34,129
17,316
41,613
33,869
17,322
40,845
1. Consists of mortgages assumed by the Defense Department between 19S7 and 1963
under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the securities
market.
5. Certificates of participation issued before fiscal year 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration,
the Department of Health, Education, and Welfare, the Department of Housing and Urban
Development, the Small Business Administration, and the Veterans' Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes Federal Agricultural Mortgage Corporation, therefore details do not sum to total.
Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
shown on line 17.
9. Before late 1982, the association obtained financing through the Federal Financing
Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.
June
434,668
MEMO
19 Federal Financing Bank debt 13
1993
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 itsfirstborrowing in October
1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt
solely for the purpose of lending to other agencies, its debt is not included in the main
portion of the table in order to avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans
guaranteed by numerous agencies, with the amounts guaranteed by any one agency
generally being small. The Farmers Home Administration entry consists exclusively of
agency assets, whereas the Rural Electrification Administration entry consists of both
agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • March 1995
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1994
Type of issue or issuer,
or use
1991
1 All issues, new and refunding'
1992
1993
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
154,402
226,818
279,945
13,563
15,076
13,400
12,175
7,810
10,537
11,685
9,502
By type of issue
2 General obligation
3 Revenue
55,100
99,302
78,611
136,580
90,599
189,346
4,029
8,359
5,556
9,223
7,110
5,340
4,177
8,133
2,309
5,325
2,891
6,899
5,592
6,093
2,261
7,241
By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township
24,939
80,614
48,849
24,874
138,327
63,617
27,999
178,714
73,232
1,158
8,085
3,145
1,733
9,335
3,711
4,686
4,931
2,833
1,675
7,963
2,672
1,009
4,962
1,663
952
6,511
2,327
1,528
6,148
4,009
151
7,270
2,081
116,953
101,865
91,434
9,465
9,913
10,843
10,479
6,155
8,893
10,137
8,486
21,121
13,395
21,039
25,648
8,376
30,275
18,852
14,357
12,164
16,744
6,188
33,560
16,831
9,167
12,014
13,837
6,862
32,723
1,933
1,037
423
2,136
657
2,939
1,945
2,033
856
1,312
935
2,645
1,147
290
694
1,698
959
5,560
2,075
1,088
784
2,117
1,128
3,401
883
334
433
1,897
403
2,011
1,596
1,135
1,887
1,887
420
2,396
1,716
799
644
1,535
688
4,750
1,725
299
1,244
2,172
1,007
2,039
beginning
January
7 Issues for new capital
8
9
10
11
12
13
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
NEW SECURITY ISSUES
SOURCES. Securities Data
Dealer's Digest before then.
Company
1993;
Investment
U.S. Corporations
Millions of dollars
1994
Type of issue, offering,
or issuer
1 All issues1
2 Bonds
2
1991
465,246
1992
559,827
1993
764,509
Apr.
May
June
July
35,110
44,263
49,457
29,153r
r
35,061
Aug.
Sept.
Oct/
Nov.
38,437r
29,406r
32,161
33,566
r
25,973r
28,600
28,100
389,822
471,502
641,498
29,645
40,589
43,126
25,489
286,930
74,930
27,962
378,058
65,853
27,591
486,879
116,240
38,379
26,436
n.a.
3,209
33,414
n.a.
7,175
38,387
n.a.
4,738
21,772r
n.a.
3,718
30,655r
n.a.
4,406
22,726r
n.a.
3,248
24,000
n.a.
4,600
23,300
n.a.
4,800
86,628
36,666
13,598
23,944
9,431
219,555
82,058
43,111
9,979
48,055
15,394
272,904
88,002
60,443
10,756
56,272
31,950
394,076
2,229
990
97
546
1,298
24,484
3,266
2,496
150
1,071
944
32,662
2,093
3,177
1,082
681
618
35,475
l,857r
1,413
248
472
429
21,070r
2,251
3,604r
315
520r
345
28,027r
2,165
2,052r
229
707
526
20,294'
2,500
2,039
327
1,601
379
21,754
2,600
2,302
339
1,649
421
20,789
12 Stocks2
75,424
88,325
113,472
5,465
3,674
6,331
3,664
3376 r
3,433r
3,561
5,466
By type of offering
13 Public preferred
14 Common
15 Private placement3
17,085
48,230
10,109
21,339
57,118
9,867
18,897
82,657
11,917
2,248
3,218
n.a.
695
2,979
n.a.
1,366
4,965
n.a.
599
3,065
n.a.
710
2,666r
n.a.
555
2,877r
n.a.
1,191
2,370
n.a.
279
5,187
n.a.
24,111
19,418
2,439
3,474
475
25,507
22,723
20,231
2,595
6,532
2,366
33,879
22,271
25,761
2,237
7,050
3,439
49,889
2,696
773
106
75
0
1,815
956
850
105
239
32
1,492
1,056
1,853
449
297
28
2,647
489
708
75
0
0
2,386
569
838
50
180
0
l,734r
904r
821r
223
78
0
l,407r
745
1,105
79
4
0
1,628
1,970
1,717
76
333
0
1,350
By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad
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. Beginning July 1993, Securities Data Company and the Board of Governors
of the Federal Reserve System.
Securities Market and Corporate Finance A35
1.47
OPEN-END INVESTMENT COMPANIES
Net Sales and Assets'
Millions of dollars
1994
Item
1992
1993
Apr.
May
June
July
Aug.
Sept.
Oct.r
Nov.
1 Sales of own shares 2
647,055
851,885
71,164
65,179
65,333
59,258
64,833
62,263
59,285
56,849
2 Redemptions of own shares
3 Net sales3
447,140
199,915
567,881
284,004
61,925
9,239
55,036
10,144
56,068
9,265
50,275
8,983
53,242
1,592
53,383
8,880
53,743
5,543
55,757
1,092
1,056,310
1,510,209
1,510,827
1,529,478
1,509,998
1,552,652
1,604,961
1,588,277
1,601,363
1,549,186
73,999
982,311
100,209
1,409,838
118,221
1,392,606
119,982
1,409,496
114,885
1,395,113
120,129
1,432,523
120,315
1,484,646
121,575
1,466,702
126,766
1,474,597
125,843
1,423,344
4 Assets4
5 Cash5
6 Other
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership, which
comprises substantially all open-end investment companies registered with the Securities
and Exchange Commission. Data reflect underwritings of newly formed companies after
their initial offering of securities.
1. Data on sales and redemptions exclude money market mutual funds but include
limited-maturity municipal bond funds. Data on asset positions exclude both money
market mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of capital
gains distributions and share issue of conversions from one fund to another in the same
group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of
money market mutual funds within the same fund family.
1.48
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992
Account
1992
1991
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-tax liability
4 Profits after taxes
5 Dividends
6 Undistributed profits
7 Inventory valuation
8 Capital consumption adjustment
1994
1993
1993
Q4
Q1
Q2
Q3
Q4
Ql
Q2
Q3
390.3
365.2
131.1
234.1
160.0
74.1
405.1
395.9
139.7
256.2
171.1
85.1
485.8
462.4
173.2
289.2
191.7
97.5
432.5
413.5
148.6
264.8
182.1
82.7
442.5
432.7
159.8
273.0
188.2
84.7
473.1
456.6
171.8
284.8
190.7
94.1
493.5
458.7
169.9
288.9
193.2
95.6
533.9
501.7
191.5
310.2
194.6
115.6
508.2
483.5
184.1
299.4
196.3
103.0
546.4
523.1
201.7
321.4
202.5
118.9
556.0
538.1
208.6
329.5
207.9
121.6
5.8
19.4
-6.4
15.7
-6.2
29.5
2.1
16.9
-11.2
21.0
-10.0
26.5
3.0
31.7
-6.5
38.8
-12.3
37.0
-14.1
37.4
-19.6
37.5
SOURCE. U.S. Department of Commerce, Survey of Current Business.
1.50
NONFARM BUSINESS EXPENDITURES
New Plant and Equipment
Billions of dollars; quarterly data at seasonally adjusted annual rates
1993
Industry
1992
1993
1994
19941
Ql
Q2
Q3
Q4
Ql
Q2
Q3
Q4
1 Total nonfarm business
546.60
586.73
638.37
563.48
578.95
594.56
604.51
61934
637.08
651.92
645.13
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
73.32
100.69
81.45
98.02
92.78
99.77
78.19
95.80
80.33
97.22
82.74
99.74
83.64
98.51
86.03
99.02
91.71
102.28
98.97
98.39
94.44
99.39
Nonmanufacturing
4 Mining
Transportation
5 Railroad
6 Air
7 Other
Public utilities
8 Electric
9 Gas and other
10 Commercial and other2
8.88
10.08
11.24
8.98
9.10
11.09
10.92
11.43
10.70
11.57
11.27
6.67
8.93
7.04
6.14
6.42
9.22
6.72
3.95
10.53
6.16
7.26
8.96
5.94
6.63
8.92
5.89
6.70
8.74
6.55
5.06
10.23
7.46
4.23
10.77
5.36
4.53
9.70
6.65
3.86
10.22
7.40
3.16
11.42
48.22
23.99
268.84
52.55
23.43
299.44
52.25
24.20
336.93
49.98
23.79
284.35
50.61
23.83
296.35
52.96
22.98
303.74
55.60
23.27
310.73
48.68
24.51
327.20
53.55
22.96
336.28
54.15
24.35
343.76
52.60
24.97
340.48
1. Figures are amounts anticipated by business.
2. "Other" consists of construction, wholesale and retail trade, finance and insurance,
personal and business services, and communication.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
A36
DomesticNonfinancialStatistics • March 1995
1.51
DOMESTIC FINANCE COMPANIES
Assets and Liabilities'
Billions of dollars, end of period; not seasonally adjusted
1993
Account
1991
1992
1994
1993
Ql
Q2
Q3
Q4
Ql
Q2
Q3
ASSETS
1 Accounts receivable, gross2
2 Consumer
3
Business
4 Real estate
484.6
121.7
295.8
67.1
491.8
118.3
301.3
72.2
482.8
116.5
294.6
71.7
477.9
112.6
292.7
72.5
473.7
110.6
291.8
71.4
474.0
111.0
291.9
71.1
482.8
116.5
294.6
71.7
494.5
120.1
302.3
72.1
511.3
124.3
313.2
73.8
524.2
130.3
317.2
76.6
56.1
13.1
53.2
16.2
50.7
11.2
50.1
15.2
49.7
10.8
49.5
11.2
50.7
11.2
51.2
11.6
51.9
12.1
51.1
12.1
7 Accounts receivable, net
8 All other
415.4
144.9
422.4
142.5
420.9
170.9
412.6
150.6
413.2
151.5
413.3
163.9
420.9
170.9
431.7
171.2
447.3
174.6
460.9
177.2
9 Total assets
560-3
564.9
591.8
5633
564.7
5773
591.8
602.9
621.9
638.1
42.3
159.5
37.6
156.4
25.3
159.2
34.1
149.8
29.4
144.5
25.8
149.9
25.3
159.2
24.2
165.9
23.3
171.2
21.6
171.0
n.a.
n.a.
35.5
190.2
68.4
64.5
n.a.
n.a.
39.5
196.3
68.0
67.1
n.a.
n.a.
42.7
206.0
87.1
71.4
n.a.
n.a.
43.1
197.3
72.5
66.5
n.a.
n.a.
45.0
199.9
77.8
68.1
n.a.
n.a.
44.6
204.2
83.8
68.9
n.a.
n.a.
42.7
206.0
87.1
71.4
n.a.
n.a.
41.1
211.7
90.5
69.5
n.a.
n.a.
44.7
219.6
89.9
73.2
n.a.
n.a.
50.0
228.2
95.0
72.3
560.3
564.9
591.8
5633
564.7
5773
591.8
602.9
621.9
638.1
5 LESS: Reserves for unearned income
6
Reserves tor losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
16
1/
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, as they are not on the books.
1.52
DOMESTIC FINANCE COMPANIES
2. Before deduction for unearned income and losses,
Consumer, Real Estate, and Business Credit1
Millions of dollars, amounts outstanding, end of period
Type of credit
July
Aug.
Sept.
Seasonally adjusted
1 Total . . . .
523,824
540,679
546,020
576,239
571,470
579,032
590,512
596,397
603,274
2 Consumer.,
3 Real estate:
4 Business..
154,389
67,376
302,060
157,857
72,496
310,325
160,802
71,991
313,226
168,531
74,503
333,205
166,639
75,321
329,510
166,921
75,524
336,587
172,547
76,424
341,542
173,178
76,971
346,248
175,135
77,991
350,148
Not seasonally adjusted
5 Total
6 Consumer
7 Motor vehicles
8 Other consumer3
9 Securitized motor vehicles4
10 Securitized other consumer4
11 Real estate2
12 Business
13 Motor vehicles
14
Retail5
15
Wholesale6
16
Leasing
17 Equipment
18
Retail
19
Wholesale6
20
Leasing
21 Other business7
22 Securitized business assets4
23
Retail
24
Wholesale
25
Leasing
527,329
544,691
550,387
577,546
568,648
575,769
588,525
596,054
604,115
155,671
62,232
59,468
23,361
10,610
67,132
304,526
91,554
23,967
31,164
36,423
140,396
30,952
9,671
99,773
63,802
8,774
576
5,285
2,913
159,558
57,259
61,020
29,734
11,545
72,243
312,890
89,011
20,541
29,890
38,580
151,424
33,521
8,680
109,223
60,856
11,599
1,120
5,756
4,723
162,770
56,057
60,396
36,024
10,293
71,727
315,890
95,173
18,091
31,148
45,934
145,452
35,513
8,001
101,938
53,997
21,268
2,483
10,584
8,201
167,909
59,788
64,530
32,705
10,886
73,755
335,882
105,828
21,024
31,188
53,616
151,542
39,062
8,419
104,061
55,849
22,663
2,619
14,240
5,804
164,749
58,107
65,095
31,848
9,699
75,379
328,520
101,878
20,670
26,154
55,054
151,480
39,348
8,859
103,273
54,444
20,718
2,480
12,817
5,421
166,501
58,589
66,608
31,787
9,517
76,012
333,256
102,655
20,272
25,875
56,508
151,388
39,629
8,968
102,791
56,389
22,824
2,656
14,147
6,021
172,002
60,522
69,784
32,372
9,324
76,585
339,938
106,365
21,164
27,201
58,000
152,782
39,357
9,119
104,306
58,101
22,690
2,564
14,411
5,715
172,813
60,750
70,812
31,592
9,659
77,235
346,006
110,089
21,645
29,302
59,142
152,675
38,584
9,134
104,957
59,314
23,928
2,956
15,173
5,799
174,928
61,372
72,312
31,494
9,750
77,907
351,280
113,222
22,113
30,614
60,495
154,312
38,912
9,484
105,916
59,893
23,853
2,853
15,311
5,689
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.
5. Passenger car fleets and commercial land vehicles for which licenses are required.
6. Credit arising from transactions between manufacturers and dealers, that is, floor
plan financing.
7. Includes loans on commercial accounts receivable, factored commercial accounts,
and receivable dealer capital; small loans used primarily for business or farm purposes;
and wholesale and lease paper for mobile homes, campers, and travel trailers.
Real Estate
1.53
MORTGAGE MARKETS
A3 7
Mortgages on New Homes
Millions of dollars except as noted
1994
Item
1992
1993
1994
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
Terms'
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)2
Yield (percent per year)
6 Contract rate1
7 Effective rate1,3
8 Contract rate (HUD series)4
158.1
118.1
76.6
25.6
1.60
163.1
123.0
78.0
26.1
1.30
170.4
130.8
78.8
27.5
1.29
172.6
130.0
78.0
26.5
1.30
166.0
129.0
79.4
27.5
1.35
167.6
129.3
79.0
28.0
1.38
170.6
133.7
79.4
27.9
1.36
173.4
131.9
78.3
27.6
1.22
178.2
136.2
78.0
27.9
1.30
184.9
136.2
76.9
28.0
1.38
7.98
8.25
8.43
7.02
7.24
7.37
7.26
7.47
n.a.
7.41
7.62
8.72
7.50
7.71
8.64
7.45
7.67
8.68
7.48
7.70
8.96
7.55
7.76
9.19
7.59
7.81
9.34
7.61
7.83
n.a.
8.46
7.71
7.46
6.65
n.a.
7.96
9.03
8.01
8.65
8.23
8.66
8.15
9.10
8.28
9.23
8.66
9.53
8.86
n.a.
8.76
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203)5
10 GNMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 F H A / V A insured
13 Conventional
158,119
22,593
135,526
190,861
23,857
167,004
222,057
28,377
194,499
208,180
25,390
182,790
210,666
25,477
185,189
212,680
25,604
187,076
215,249
25,800
189,449
218,479
26,226
192,253
220,377
27,118
193,259
222,057
28,377
194,499
Mortgage transactions (during period)
14 Purchases
75,905
92,037
62,389
4,386
4,628
4,077
4,266
5,003
3,549
3,399
Mortgage commitments (during period)
15 Issued7
16 To sell8
74,970
10,493
92,537
5,097
54,038
1,820
4,268
1
3,798
0
3,776
0
4,880
0
3,421
48
2,696
20
2,910
55
33,665
352
33,313
55,012
321
54,691
72,693
276
72,416
62,232
299
61,933
62,993
296
62,697
64,118
291
63,827
66,478
287
66,191
69,340
284
69,057
70,757
279
70,477
72,693
276
72,416
Mortgage transactions (during period)
20 Purchases
21
191,125
179,208
229,242
208,723
124,697
117,110
8,341
8,097
6,535
6,338
6,407
5,828
5,512
5,213
8,351
8,139
3,022
2,865
4,890
3,769
Mortgage commitments (during periodf
22 Contracted
261,637
274,599
136,067
7,252
5,820
5,649
5,035
7,288
3,454
2,412
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings (end of periodf
17 Total
18 F H A / V A insured
19 Conventional
1. Weighted averages based on sample surveys of mortgages originated by major
institutional lender groups for purchase of newly built homes; compiled by the Federal
Housing Finance Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or
the seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built homes,
assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from
U.S. Department of Housing and Urban Development (HUD). Based on transactions on
the first day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages
insured by the Federal Housing Administration (FHA) for immediate delivery in the
private secondary market. Based on transactions on first day of subsequent month.
6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year mortgages insured by the
Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments
converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal Home Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, whereas the corresponding data for FNMA
exclude swap activity.
A38
1.54
DomesticNonfinancialStatistics • March 1995
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1993
Type of holder and property
1990
1991
1994
1992
Q3
Q4
Ql
Q2
Q3
1 All holders
3,763,628
3,926,154
4,056,233
4,174,202
4,215,480
4,239,496
4,290,640
4,346,606
By type of property
2 One- to four-family residences
3 Multifamily residences
4 Commercial
5
2,617,044
309,369
758,313
78,903
2,781,416
306,410
759,023
79,306
2,963,391
295,417
716.687
80,738
3,098,344
290,690
704,032
81,136
3,147,255
290,489
696,542
81,194
3,178,389
288,988
690,726
81,393
3,225,062
290,109
692,584
82,886
3,276,039
291,907
694,842
83,818
1,914,315
844,826
455,931
37,015
334,648
17,231
801,628
600,154
91,806
109,168
500
267,861
13,005
28,979
215,121
10,756
1,846,726
876,100
483,623
36,935
337,095
18,447
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044
1,769,187
894,513
507,780
38,024
328,826
19,882
627,972
489,622
69,791
68,235
324
246,702
11,441
27,770
198,269
9,222
1,769,950
922,670
537,661
37,655
326,507
20,848
609,654
478,456
68,440
62,439
320
237,626
9,835
26,844
191,660
9,287
1,767,835
940,444
556,538
38,635
324,409
20,862
598,330
469,959
67,362
60,704
305
229,061
9,458
25,814
184,305
9,484
1,746,474
937,944
554,117
38,451
324,122
21,254
584,531
458,075
66,914
59,245
297
223,999
9,245
25,232
180,152
9,370
1,763,249
956,793
570,325
37,948
326,605
21,916
585,671
462,240
66,245
56,887
299
220,785
9,107
24,855
177,463
9,360
1,784,191
981,350
590,244
38,130
330,568
22,408
587,375
466,414
65,611
55,058
292
215,466
8,877
24,227
172,977
9,385
239,003
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
32,600
15,800
8,064
8,736
0
104,870
94,323
10,547
29,416
1,838
27,577
21,857
19,185
2,672
266,146
19
19
0
41,713
18,496
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
112,283
100,387
11,896
28,767
1,693
27,074
26,809
24,125
2,684
286,263
30
30
0
41,695
16,912
10,575
5,158
9,050
12,581
5,153
7,428
32,045
12,960
9,621
9,464
0
137,584
124,016
13,568
28,664
1,687
26,977
33,665
31,032
2,633
306,578
43
37
7
41,424
15,714
10,830
5,347
9,533
11,797
4,850
6,947
19,925
8,381
6,002
5,543
0
160,721
146,009
14,712
28,810
1,695
27,115
43,858
41,314
2,544
317,486
22
15
7
41,386
15,303
10,940
5,406
9,739
12,215
5,364
6,851
17,284
7,203
5,327
4,754
0
166,642
151,310
15,332
28,460
1,675
26,785
51,476
48,929
2,547
323,464
20
13
7
41,209
14,870
11,037
5,399
9,903
11,344
4,738
6,606
14,241
6,308
4,208
3,726
0
172,343
156,576
15,767
28,181
1,658
26,523
56,127
53,571
2,556
327,690
12
12
0
41,370
14,459
11,147
5,526
10,239
11,169
4,826
6,343
13,908
6,045
4,230
3,633
0
175,377
159,437
15,940
28,475
1,675
26,800
57,379
54,799
2,580
334,284
12
12
0
41,390
14,063
11,254
5,587
10,485
10,657
4,503
6,154
15,401
6,984
4,528
3,889
0
177,200
161,255
15,945
28,538
1,679
26,859
61,087
58,432
2,655
1,079,103
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
59,232
53,335
731
5,166
0
1,250,666
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
94,177
84,000
3,698
6,479
0
1,425,546
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
153,499
132,000
6,305
15,194
0
1,517,003
415,076
405,963
9,113
433,090
428,155
4,935
481,880
473,599
8,281
30
6
0
14
10
186,927
158,000
7,991
20,936
0
1,550,818
414,066
404,864
9,202
443,029
438,494
4,535
495,525
486,804
8,721
28
5
0
13
10
198,171
164,000
8,701
25,469
0
1,604,449
423,446
414,194
9,251
459,949
455,779
4,170
507,376
498,489
8,887
26
5
0
12
9
213,653
177,000
9,202
27,451
0
1,643,627
435,709
426,363
9,346
470,183
466,361
3,822
514,855
505,730
9,125
22
4
0
10
8
222,858
179,500
11,514
31,844
0
1,668,496
444,976
435,511
9,465
469,062
465,614
3,448
523,512
514,375
9,137
20
3
0
9
8
230,926
182,300
13,891
34,735
0
531,208
350,247
85,969
80,761
14,232
562,616
370,246
83,796
93,410
15,164
575,237
382,572
85,871
91,524
15,270
580,670
388,669
86,391
91,588
14,023
579,341
387,334
86,516
91,482
14,009
565,109
373,752
86,700
90,621
14,037
556,074
364,178
87,014
90,617
14,264
559,635
365,772
87,462
92,020
14,380
By type of holder
6 Major financial institutions
7 Commercial banks8
One- to four-family
9
Multifamily
10
Commercial
11
Farm
12 Savings institutions3
One- to four-family
13
14
Multifamily
15
Commercial
16
Farm
17 Life insurance companies
18
One- to four-family
19
Multifamily
20
Commercial
21
Farm
22 Federal and related agencies
23 Government National Mortgage Association
24
One- to four-family
25
Multifamily
26
Farmers Home Administration4
One- to four-family
27
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
4b
One- to four-family
4/
Multifamily
48 Mortgage pools or trusts5
49
Government National Mortgage Association
50
One- to four-family
51
Multifamily
52
Federal Home Loan Mortgage Corporation
53
One- to four-family
54
Multifamily
55 Federal National Mortgage Association
56
One- to four-family
57
Multifamily
58
Farmers Home Administration4
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
68 Individuals and others6
69
One- to four-family
70
Multifamily
71
Commercial
72 Farm
1. Multifamily debt refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by bank trust
departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated
from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of
accounting changes by the Fanners 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.
SOURCES. Based on data from various institutional and government sources. Separation
of nonfarm mortgage debt by type of property, if not reported directly, and interpolations
and extrapolations, when required for some quarters, are estimated in part by the Federal
Reserve. Line 64 from Inside Mortgage Securities.
Consumer Installment Credit
A39
CONSUMER INSTALLMENT CREDIT 1
1.55
Millions of dollars, amounts outstanding, end of period
1994
Holder and type of credit
1991
1992
1993
July
June
Aug.
Sept.
Oct/
Nov.
Seasonally adjusted
1 Total
728,389
731,098
794,300
847,715
854,469
869,628
879,961
891,603
904,487
2 Automobile
3 Revolving
4 Other
259,594
245,281
223,514
257,678
257,304
216,117
282,036
287,875
224,389
303,526
309,472
234,717
305,193
313,591
235,685
309,721
321,365
238,542
315,162
322,823
241,976
318,036
327,707
245,860
322,808
334,428
247,251
Not seasonally adjusted
744,039
747,690
812,782
842,126
847,727
868,049
880,609
891,442
906,162
By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business
Pools of securitized assets2
340,713
121,700
90,302
41,373
46,658
103,293
330,088
118,279
91,694
37,049
49,184
121,396
368,549
116,453
101,634
37,855
57,637
130,654
386,235
124,318
108,183
38,134
55,374
129,882
393,927
123,202
109,838
38,055
55,775
126,930
404,438
125,197
113,122
37,975
56,496
130,821
410,312
130,306
114,699
37,943
55,967
131,382
414,833
131,562
116,325
38,122
56,020
134,580
421,634
133,684
118,050
38,275
58,591
135,928
By major type of credit*
12 Automobile
13 Commercial banks
14 Finance companies
15 Pools of securitized assets2
259,863
112,666
62,232
28,588
258,226
109,623
57,259
33,888
282,825
123,358
56,057
39,490
302,874
136,038
59,788
35,817
304,026
138,907
58,107
34,436
310,925
142,452
58,589
34,584
316,778
144,260
60,522
35,149
320,182
146,456
60,750
34,394
323,104
148,128
61,372
33,664
16 Revolving
17 Commercial banks
18 Nonfinancial business
19 Pools of securitized assets2
258,841
138,005
41,658
63,333
271,368
132,966
43,974
74,931
303,444
149,527
52,113
79,887
305,758
153,032
49,845
82,075
309,716
156,940
50,218
81,704
319,003
161,417
50,873
85,644
321,205
164,724
50,314
85,051
325,872
165,561
50,332
88,762
336,158
171,244
52,819
90,775
20 Other
21 Commercial banks
22 Finance companies
23 Nonfinancial business
24 Pools of securitized assets2
225,335
90,042
59,468
5,000
11,372
218,096
87,499
61,020
5,210
12,577
226,513
95,664
60,396
5,524
11,277
233,494
97,165
64,530
5,529
11,990
233,985
98,080
65,095
5,557
10,790
238,121
100,569
66,608
5,623
10,593
242,626
101,328
69,784
5,653
11,182
245,388
102,816
70,812
5,688
11,424
246,900
102,262
72,312
5,772
11,489
5 Total
6
7
8
9
10
11
1. The Board's series on amounts of credit covers most short- and intermediate-term
credit extended to individuals 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.
1.56
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.
TERMS O F CONSUMER INSTALLMENT CREDIT 1
Percent per year except as noted
1994
Item
1991
1992
1993
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 companies
5 New car
6 Used car
11.14
15.18
13.70
18.23
9.29
14.04
12.67
17.78
8.09
13.47
11.87
16.83
7.76
12.96
11.60
16.15
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
8.41
13.33
12.04
16.25
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
8.75
13.59
n.a.
n.a.
12.41
15.60
9.93
13.80
9.48
12.79
9.92
13.51
9.96
13.78
10.17
13.86
10.32
13.92
10.13
13.98
10.39
14.01
10.53
14.19
55.1
47.2
54.0
47.9
54.5
48.8
53.5
50.6
53.3
50.0
53.9
50.2
54.2
50.1
54.3
50.2
54.9
50.2
54.6
50.3
88
96
89
97
91
98
93
99
94
100
93
100
93
100
93
100
92
100
93
100
12,494
8,884
13,584
9,119
14,332
9,875
15,194
10,606
15,180
10,656
15,319
10,735
15,283
10,755
15,419
10,906
15,827
10,554
15,971
11,202
OTHER TERMS3
Maturity (months)
7 New car
8 Used car
Loan-to-value ratio
9 New car
10 Used car
Amount financed (dollars)
11 New car
12 Used car
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. Data are available for only the second month of each quarter,
3. At auto finance companies,
A40
1.57
DomesticNonfinancialStatistics • March 1995
FUNDS RAISED IN U.S. CREDIT MARKETS'
Billions of dollars; quarterly data at seasonally adjusted annual rates
1993
1989
1990
1991
1994
1992
Ql
Q2
Q3
Q4
Ql
Q2
Q3
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors....
729.0
635.6
475.8
536.1
628.1
481.4
740.5
613.3
677.2
651.2
543.4
612.3
By sector and instrument
2 U.S. government
3 Treasury securities
4 Budget agency issues and mortgages
146.4
144.7
1.6
246.9
238.7
8.2
278.2
292.0
-13.8
304.0
303.8
.2
256.1
248.3
7.8
240.5
237.4
3.2
336.4
332.3
4.1
173.4
157.2
16.3
274.2
266.5
7.7
210.6
211.8
-1.3
122.9
118.2
4.7
134.1
129.8
4.4
5 Private
582.7
388.7
197.5
232.1
372.0
240.9
404.1
439.9
403.0
440.6
420.5
478.1
6
7
H
9
10
11
12
13
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
69.8
73.8
281.2
224.5
11.5
47.8
-2.5
45.8
27.3
21.4
63.3
48.7
47.1
199.5
185.6
4.8
9.3
-.3
16.0
.4
9.7
67.4
68.7
78.8
161.4
163.8
-3.1
.4
.4
-15.0
-40.9
-18.4
-37.1
31.1
67.5
123.9
179.5
-11.2
-45.5
1.1
5.5
-13.8
8.6
9.2
78.1
75.2
155.6
183.9
-6.1
-22.5
.5
62.3
5.0
10.0
-14.3
88.7
85.7
99.8
120.9
-5.5
-15.7
.2
20.3
-16.2
-14.1
-23.3
130.3
75.7
152.2
193.5
-11.4
-30.9
1.0
41.6
-.2
33.2
-28.6
66.2
72.0
222.1
236.5
-4.9
-9.9
.4
76.2
7.8
17.2
-21.7
27.4
67.4
148.5
184.5
-2.6
-33.6
.2
111.3
28.5
3.8
16.2
22.6
35.1
151.5
180.2
-6.1
-23.4
.8
72.7
74.2
8.0
76.5
-9.8
38.9
162.2
144.9
4.3
7.1
6.0
121.9
73.0
16.4
17.8
-41.2
24.6
219.4
199.6
7.1
8.9
3.7
127.1
93.5
33.8
20.9
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate.
State and local government
281.6
233.1
.6
40.3
192.1
68.0
218.9
123.7
2.3
10.1
111.3
46.0
170.9
-35.9
2.1
-28.5
-9.6
62.6
217.7
-2.0
1.0
-43.9
40.9
16.4
284.5
21.9
2.0
-26.0
45.8
65.7
167.5
-11.6
-2.3
-28.6
19.3
85.0
264.1
26.7
2.7
-33.4
57.4
113.2
368.5
24.1
4.1
-26.2
46.3
47.3
337.7
48.2
3.6
-15.6
60.2
17.1
299.4
131.4
3.1
8.4
119.9
9.9
303.6
144.7
11.8
16.5
116.4
-27.8
370.5
156.4
3.6
26.9
125.9
-48.8
23 Foreign net borrowing in United States
24 Bonds
25 Bank loans n.e.c
26 Commercial paper
27 U.S. government and other loans
10.2
4.9
-.1
13.1
-7.6
23.9
21.4
-2.9
12.3
-7.0
13.9
14.1
3.1
6.4
-9.8
21.3
14.4
2.3
5.2
-.6
46.9
59.4
.7
-9.0
-4.2
38.9
66.5
1.5
-21.7
-7.5
42.8
45.3
6.6
-.6
-8.4
83.1
84.5
1.0
-1.6
-.8
22.9
41.4
-6.3
-12.0
-.1
-66.3
29.0
6.0
-101.8
.5
-1.9
11.1
-.8
-5.2
-7.0
-3.4
6.6
.9
-8.1
-2.7
28 Total domestic plus foreign
739.2
659.4
489.6
557.4
675.0
520.3
783-3
696.4
700.2
584.9
541.5
608.9
Financial sectors
29 Total net borrowing by financial sectors
30
31
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42 Private
43 Commercial banks
44 Bank holding companies
45 Funding corporations
46 Savings institutions
47 Credit unions
48 Life insurance companies
49 Finance companies
50 Mortgage companies
51 Real estate investment trusts (REITs)
52 Issuers of asset-backed securities (ABSs)
225.1
202.9
152.6
237.1
286.1
180.4
175.5
438.9
349.8
477.0
294.9
345.6
149.5
25.2
124.3
.0
167.4
17.1
150.3
-.1
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
161.2
80.6
80.6
.0
169.4
32.2
137.2
.0
56.6
68.8
-12.2
.0
287.3
167.8
119.5
.0
131.3
53.4
77.9
.0
320.8
160.0
180.0
-19.2
245.2
146.6
98.6
.0
224.9
152.1
72.8
.0
75.7
41.5
.3
13.5
31.3
-11.0
35.5
46.3
.6
4.7
8.6
-24.7
6.8
67.6
.5
8.8
-32.0
-38.0
81.3
78.5
.6
2.2
-.7
.8
125.0
118.3
3.6
-14.0
-6.2
23.3
11.0
99.0
1.4
-34.6
-75.1
20.4
118.9
92.4
1.4
12.8
-16.2
28.4
151.6
143.4
6.2
-16.1
-9.4
27.4
218.5
138.3
5.5
-18.0
76.0
16.8
156.2
148.6
.2
-18.3
36.6
-10.8
49.7
59.9
.6
-45.1
2.1
32.3
120.7
65.3
.1
-17.6
42.1
30.7
25.2
124.3
75.7
-1.4
6.2
12.5
-15.1
.0
.0
27.4
10.1
1.4
28.3
17.0
150.3
35.5
-.7
-27.7
15.4
-30.2
.0
.0
24.0
.0
.8
52.3
9.1
136.6
6.8
-11.7
-2.5
-6.5
-44.5
.0
.0
18.6
-2.4
1.2
51.0
40.2
115.6
81.3
8.8
2.3
13.2
-6.7
.0
.0
-3.6
8.0
.3
56.3
80.6
80.6
125.0
5.6
8.8
2.9
11.1
.2
.2
.2
-1.0
3.5
81.5
32.2
137.2
11.0
3.5
21.1
-31.4
9.7
.0
.1
-19.6
-25.2
.4
62.0
68.8
-12.2
118.9
11.3
1.3
-1.6
12.6
.3
.6
-13.6
32.4
1.3
60.5
167.8
119.5
151.6
6.5
.5
7.9
13.5
.3
-.1
17.5
-.8
6.0
85.8
53.4
77.9
218.5
1.2
12.2
36.7
8.8
.1
.4
16.3
-10.4
6.2
117.6
140.8
180.0
156.2
2.0
3.5
47.4
-5.6
.1
.0
63.3
-27.6
1.2
81.8
146.6
98.6
49.7
12.4
8.2
-17.1
5.8
.2
.0
67.0
-33.2
2.2
4.0
152.1
72.8
120.7
22.8
11.7
47.0
14.8
.5
.0
16.9
-10.0
2.3
22.3
Flow of Funds A41
1.57
FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued
1994
1993
Transaction category or sector
1989
1990
1991
1992
1993
Ql
Q2
Q3
Q4
Ql
Q2
Q3
All sectors
S3 Total net borrowing, all sectors
54
55
56
57
58
59
60
61
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
964.4
862.3
295.8
69.8
120.2
281.6
45.8
40.7
65.9
44.7
414.4
48.7
114.7
200.1
16.0
2.2
30.7
35.6
642.2
424.0
68.7
160.5
161.9
-15.0
-29.1
-44.0
-84.9
794.5
961.2
700.7
958.8
1,135.3
1,050.0
1,061.9
836.4
954.5
459.8
31.1
160.4
124.5
5.5
-9.4
13.1
9.5
417.3
78.1
252.9
159.2
62.3
-8.3
-5.1
4.7
409.9
88.7
251.2
101.2
20.3
-49.2
-110.9
-10.4
393.0
130.3
213.4
153.5
41.6
19.2
16.4
-8.7
460.7
66.2
299.9
228.3
76.2
-7.3
6.3
4.9
405.5
27.4
247.1
154.0
111.3
4.2
67.7
32.9
550.5
22.6
212.6
151.8
72.7
61.9
-57.2
47.0
368.1
-9.8
109.8
162.7
121.9
27.1
13.3
43.1
359.0
-41.2
96.5
219.6
127.1
76.8
67.8
49.0
Funds raised through mutual funds and corporate equities
62 Total net share issues
63 Mutual funds
64 Corporate equities
65
Nonfinancial corporations
66 Financial corporations
67 Foreign shares purchased in United States
-60.8
19.7
215.4
296.0
436.9
343.9
471.9
498.0
434.0
214.5
218.6
117.4
37.2
-98.0
-124.2
9.0
17.2
65.3
-45.6
-63.0
10.0
7.4
151.5
64.0
18.3
15.1
30.7
211.9
84.1
27.0
26.4
30.7
316.8
120.1
21.3
38.2
60.6
268.9
75.0
8.2
35.2
31.6
358.0
113.9
23.2
38.6
52.1
348.9
149.1
32.3
38.2
78.6
291.5
142.4
21.5
40.9
80.0
114.0
100.5
-9.6
40.7
69.4
152.7
65.8
-2.0
29.0
38.9
131.2
-13.8
-50.0
21.6
14.6
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release,
tables F.2 through F.5. For ordering address, see inside front cover.
A42
1.58
D o m e s t i c Financial Statistics
•
March 1995
SUMMARY OF FINANCIAL TRANSACTIONS 1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1994
1993
Transaction category or sector
1989
1990
1991
1992
1993
Q1
Q2
Q3
Q4
Q1
Q2
Q3
NET LENDING IN CREDIT MARKETS2
1 Total net lending in credit markets
964.4
862.3
642.2
794.5
961.2
700.7
958.8
1,135.3
1,050.0
1,061.9
836.4
954.5
137.0
94.7
-.8
13.7
29.3
-3.1
86.6
743.8
-4.1
124.3
-7.3
177.2
146.1
26.7
2.8
1.6
8.0
-90.0
101.8
29.7
81.1
46.1
32.0
20.1
23.8
6.6
67.1
.5
80.2
27.1
19.7
190.1
157.2
-1.7
-3.7
38.3
33.7
85.5
553.0
13.9
150.3
8.1
125.1
94.9
28.4
-2.8
4.5
16.1
-154.0
94.4
26.5
17.2
34.9
29.0
41.4
.2
80.9
-.7
2.8
51.1
15.9
-7.5
-39.6
-3.7
6.7
29.2
10.5
26.6
612.5
15.2
136.6
31.1
80.8
35.7
48.5
-1.5
-1.9
15.8
-123.5
83.2
32.6
85.7
46.0
-12.7
11.2
90.3
14.7
30.1
-.7
17.5
48.9
10.0
72.0
70.7
-1.1
29.2
-26.8
-11.9
100.5
633.9
69.0
115.6
27.9
95.3
69.5
16.5
5.6
3.7
23.5
-61.3
79.1
12.8
37.3
34.4
1.7
.1
123.7
17.4
1.3
1.1
-6.9
53.8
8.0
6.8
-9.6
-3.2
18.0
1.5
-18.4
126.0
846.8
90.2
80.6
36.2
142.2
149.6
-9.8
.0
2.4
18.1
-2.0
105.1
33.3
40.2
25.5
-9.0
.0
164.0
10.2
12.9
.6
9.2
80.1
9.5
-23.1
-74.8
-3.0
-2.4
57.0
-23.2
65.9
681.1
16.7
137.2
42.5
100.5
103.4
-1.4
-4.5
3.0
-3.8
-30.7
113.0
27.3
118.0
-9.8
-33.3
-50.4
148.6
16.7
-57.3
.2
75.2
61.5
9.1
-3.7
-75.6
-3.2
17.3
57.7
-27.1
93.4
896.2
128.0
-12.2
35.7
133.4
137.4
-14.3
7.9
2.4
1.1
15.2
109.4
36.0
11.1
47.5
-34.7
65.1
194.4
10.5
33.3
.8
52.5
59.4
10.0
-39.5
-69.7
-3.3
41.2
-7.7
-15.4
123.5
1,066.6
144.8
119.5
28.2
146.7
160.3
-16.9
1.2
2.2
32.4
21.0
111.8
37.6
91.9
27.4
9.4
-1.6
174.6
5.9
25.3
1.0
-7.8
88.6
9.9
93.3
181.8
-3.5
16.0
-101.0
-7.9
221.2
743.3
71.2
77.9
38.5
188.1
197.3
-6.5
-4.8
2.1
42.6
-13.3
86.4
32.1
-60.1
36.9
22.6
-13.3
138.4
7.7
50.3
.2
-82.8
111.1
8.9
458.8
462.2
-3.6
21.9
-21.6
-40.8
127.5
516.4
92.4
180.0
48.8
184.7
120.6
59.0
3.1
2.1
17.8
13.5
53.7
27.9
-97.7
45.3
72.1
-55.4
-72.6
8.7
-37.4
.7
-56.1
81.0
9.3
346.1
412.3
-1.8
23.8
-88.2
-8.2
51.9
446.7
101.1
98.6
17.9
112.7
128.4
-17.8
.2
1.9
35.3
42.1
6.1
20.8
-30.7
51.2
49.8
-66.2
11.3
3.6
33.7
.7
-52.6
6.2
5.2
208.8
316.4
-1.9
-1.7
-104.0
-6.6
113.1
639.3
135.6
72.8
24.0
183.5
164.7
19.2
-2.4
1.9
18.7
44.7
33.3
16.0
-13.4
41.1
59.0
-20.0
-18.6
1.4
54.4
.7
-14.4
17.5
2.9
33 Net flows through credit markets
964.4
862.3
642.2
794.5
961.2
700.7
958.8
1,135.3
1,050.0
1,061.9
836.4
954.5
Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Life insurance reserves
Pension fund reserves
Interbank claims
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
Investment in bank personal trusts
Miscellaneous
24.8
3.5
.6
28.8
321.2
-16.2
6.4
98.7
16.9
90.1
77.8
35.7
37.2
-98.0
15.6
68.2
2.4
-25.8
19.6
313.8
2.0
1.5
1.0
25.7
165.1
35.4
43.3
63.7
-66.1
70.3
-24.2
38.2
65.3
-45.6
3.5
37.0
-4.8
-28.3
29.7
135.7
-5.9
.0
.0
25.7
360.3
-3.9
86.4
1.5
-58.5
41.2
-16.5
-16.7
151.5
64.0
51.4
3.6
-6.2
-3.3
16.1
197.2
-1.6
-2.0
.2
27.3
249.7
61.7
113.8
-57.2
-73.2
3.9
35.5
-7.2
211.9
84.1
4.2
41.5
8.5
18.4
-7.1
257.6
.8
.0
.4
35.2
304.7
42.1
117.3
-23.5
15.8
65.5
-22.1
316.8
120.1
61.9
49.0
4.6
-10.2
1.6
302.1
3.4
.0
.3
38.6
331.7
63.8
99.7
-108.5
-21.6
-46.8
170.7
-11.9
268.9
75.0
44.8
43.4
7.9
-6.6
-4.2
197.9
-4.0
.0
.4
35.3
333.7
130.2
214.4
-67.8
-26.8
61.8
37.9
-17.1
358.0
113.9
40.0
51.0
7.3
-14.8
-7.2
404.0
1.7
.0
.4
46.6
359.9
-7.6
73.1
-68.1
-59.5
.6
67.8
-50.7
348.9
149.1
76.6
49.6
-1.8
6.2
.1
222.3
2.2
.0
.7
20.5
193.6
-18.1
81.9
-36.6
13.7
47.7
-14.4
-8.6
291.5
142.4
86.5
51.9
4.9
-25.8
17.6
384.0
-.2
.0
.7
20.0
-18.8
150.8
173.1
2.5
-39.6
-10.9
12.8
24.9
114.0
100.5
29.7
30.3
13.7
-45.8
15.4
279.6
-11.2
.0
.6
8.1
64.3
195.7
-68.0
-59.9
-4.8
67.8
176.3
35.9
152.7
65.8
-17.3
67.2
-3.4
-47.2
-15.5
204.8
-.6
.0
.8
23.8
197.8
-44.5
-81.0
-61.5
80.6
50.3
68.3
5.0
131.2
-13.8
-62.3
61.6
5.9
-39.9
6.7
316.8
1,985.7
1,410.6
1,530.2
1,764.5
2^73.0
1,847.1
2,608.9
2^50.7
2,285.5
1,914.8
1,648.4
1,599.4
8.4
-2.2
7.0
3.3
8.5
9.1
-13.1
4.5
9.7
.7
1.6
4.1
-1.5
-1.3
16.5
4.7
-2.0
5.8
2.9
8.3
25.7
2.1
-5.2
22.2
-15.5
-6.2
12.5
-2.4
.6
-27.0
.3
-1.1
-10.3
14.7
-6.2
-2.2
-.2
-4.4
32.4
2.7
-55.6
.2
1.6
-24.0
.1
-35.4
-.6
26.2
6.2
1.3
-45.3
-.2
-4.9
27.9
14.0
-46.0
-.2
4.2
81.1
1.0
-45.3
-.2
2.7
179.6
-6.9
-101.5
-.2
.5
60.8
18.2
-97.6
-.2
-10.4
66.6
1.2
-18.4
-.2
24.0
17.3
-8.6
36.4
-.2
-29.1
7.1
-.7
-87.6
-.2
5.3
119.1
12.4
-173.7
.0
11.4
63.8
-1.4
79.9
1,997.6
1,447.2
1,541.2
1,767.2
2,218.5
1,765.0
2^90.2
2,292.9
2^25.9
2,054.2
1,696.6
ly439.4
2 Private domestic nonfinancial sectors
3 Households
4 Nonfarm noncorporate business
Nonfinancial corporate business
6 State and local governments
7 U.S. government
8 Foreign
9 Financial sectors
10 Government sponsored enterprises
11 Federally related mortgage pools
12 Monetary authority
13 Commercial banking
U.S. commercial banks
14
15
Foreign banking offices
16
Bank holding companies
17
Banks in U.S. affiliated areas
18
Funding corporations
19
Thrift institutions
20
Life insurance companies
21
Other insurance companies
22
Private pension funds
23
State and local government retirement funds
24
Finance companies
25
Mortgage companies
26
Mutual funds
27
Closed-end funds
28
Money market funds
29
Real estate investment trusts (REITs)
30
Brokers and dealers
31
Asset-backed securities issuers (ABSs)
32
Bank personal trusts
.0
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54 Total financial sources
Floats not included in assets (-)
55 U.S. government checkable deposits
56 Other checkable deposits
57 Trade credit
58
59
60
61
62
Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
63 Total identified to sectors as assets
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.
-70.3
2. Excludes corporate equities and mutual fund shares,
Flow of Funds A43
1.59
SUMMARY O F CREDIT MARKET DEBT OUTSTANDING 1
Billions of dollars, end of period
1994
1993
Transaction category or sector
1990
1991
1992
1993
Q2
Ql
Q3
Q4
Ql
Q2
Q3
Nonfinancial sectors
1 Total credit market debt owed by
10,712.6
11,181.5
11,720.7
12363.1
11,816.1
12,008.9
12,155.3
12363.1
12,485.5
12,629.7
12,775.0
By sector and instrument
2 U.S. government
3 Treasury securities
4 Budget agency issues and mortgages
2,498.1
2,465.8
32.4
2,776.4
2,757.8
18.6
3,080.3
3,061.6
18.8
3,336.5
3,309.9
26.6
3,140.2
3,120.6
19.6
3,201.2
3,180.6
20.6
3,247.3
3,222.6
24.7
3,336.5
3,309.9
26.6
3,387.7
3,361.4
26.3
3,395.5
3,368.0
27.5
3,432.5
3,403.9
28.6
5 Private
8,214.5
8,405.1
8,640.4
9,026.6
8,675.9
8,807.7
8,908.1
9,026.6
9,097.8
9,234.3
9,342.5
6
7
8
9
10
11
12
13
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
1,039.9
1,008.2
3,758.5
2,616.3
307.9
755.4
78.9
812.4
726.9
116.9
751.8
1,108.6
1,086.9
3,920.0
2,780.0
304.8
755.8
79.3
797.4
686.0
98.5
707.8
1,139.7
1,154.4
4,043.9
2,959.6
293.6
710.3
80.4
803.0
672.1
107.1
720.2
1,217.8
1,229.6
4,206.5
3,147.3
287.5
690.6
81.2
866.5
677.2
117.8
711.1
1,160.7
1,175.9
4,061.5
2,979.3
292.3
709.2
80.8
788.2
660.9
113.9
714.9
1,202.2
1,194.8
4,109.9
3,038.1
289.4
701.4
81.0
800.2
666.3
124.0
710.2
1,210.0
1,212.8
4,166.6
3,098.3
288.2
699.0
81.1
824.3
665.6
123.2
705.5
1,217.8
1,229.6
4,206.5
3,147.3
287.5
690.6
81.2
866.5
677.2
117.8
711.1
1,222.3
1,238.4
4,230.5
3,178.4
286.0
684.7
81.4
863.6
688.8
129.9
724.3
1,229.5
1,248.1
4,281.5
3,225.1
287.1
686.5
82.9
8953
712.6
135.7
731.4
1,209.9
1,254.3
4,337.4
3,276.0
288.8
688.7
83.8
932.1
732.7
138.7
737.5
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
3,614.3
3,751.7
135.4
1,147.0
2,469.2
848.6
3,784.7
3,709.3
135.0
1,116.4
2,458.0
911.1
4,002.3
3,710.5
136.0
1,074.1
2,500.4
927.5
4,292.0
3,741.5
138.3
1,049.1
2,554.1
993.2
4,012.6
3,715.7
133.4
1,067.2
2,515.1
947.6
4,093.0
3,729.8
136.7
1,059.4
2,533.7
984.9
4,190.9
3,729.1
138.7
1,052.2
2,538.3
988.0
4,292.0
3,741.5
138.3
1,049.1
2,554.1
993.2
4,330.4
3,772.9
136.7
1,050.4
2,585.7
994.4
4,420.7
3,816.4
142.4
1,055.1
2,618.9
997.2
4,518.5
3,848.4
144.3
1,061.2
2,642.9
975.7
23 Foreign credit market debt held in
United States
28S.0
298.8
310.9
357.8
319.8
332.0
3513
357.8
340.3
341.2
339.0
24
25
26
27
115.4
18.5
75.3
75.7
129.5
21.6
81.8
65.9
143.9
23.9
77.7
65.3
203.4
24.6
68.7
61.1
160.6
24.3
72.3
62.7
171.9
25.9
72.1
62.0
193.0
26.2
71.7
60.3
203.4
24.6
68.7
61.1
210.6
26.2
433
603
213.4
26.0
42.0
59.9
215.0
26.2
39.9
57.8
10,997.6
11,4803
12,031.6
12,720.8
12,135.9
12340.9
12,506.6
12,720.8
12,825.8
12,971.0
13,114.0
Bonds
Bank loans n.e.c
Commercial paper
U.S. government and other loans
28 Total credit market debt owed by nonfinandal
sectors, domestic and foreign
Financial sectors
29 Total credit market debt owed by
financial sectors
30
31
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
LoansfromU.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42 Privatefinancialsectors
43 Commercial banks
44 Bank holding companies
45 Funding corporations
46 Savings institutions
47 Credit unions
48 Life insurance companies
49 Finance companies
50 Mortgage companies
51 Real estate investment trusts (REITs)
52 Issuers of asset-backed securities (ABSs)
2,599.5
2,752.1
3,004.7
3,297.3
3,047.0
3,096.6
3,204.7
3,297.3
3,412.3
3,492.5
3,577.1
1,418.4
393.7
1,019.9
4.9
1,181.1
572.4
4.3
69.6
417.7
117.1
1,564.2
402.9
1,156.5
4.8
1,187.9
640.0
4.8
78.4
385.7
79.1
1,720.0
443.1
1,272.0
4.8
1,284.8
724.8
5.4
80.5
394.3
79.9
1,881.1
523.7
1,352.6
4.8
1,416.1
844.1
8.9
66.5
393.5
103.1
1,755.8
451.2
1,299.8
4.8
1,291.3
751.0
5.7
70.3
379.3
85.0
1,774.5
468.4
1,301.3
4.8
1,322.2
774.8
6.0
73.3
375.9
92.1
1,845.2
510.3
1,330.1
4.8
1,359.5
810.5
7.6
69.2
373.2
98.9
1,881.1
523.7
1,352.6
4.8
1,416.1
844.1
8.9
66.5
393.5
103.1
1,954.5
563.7
1,390.8
.0
1,457.9
879.3
9.0
60.3
408.8
100.4
2,021.1
600.3
1,420.8
.0
1,471.4
895.0
9.1
48.9
409.9
108.5
2,075.9
638.3
1,437.6
.0
1,501.1
911.1
9.2
44.5
420.1
116.2
398.5
1,019.9
1,181.1
76.7
114.8
145.7
139.1
.0
.0
374.4
24.6
12.4
278.1
407.7
1,156.5
1,187.9
65.0
112.3
139.1
94.6
.0
.0
393.0
22.2
13.6
329.1
447.9
1,272.0
1,284.8
73.8
114.6
161.6
87.8
.0
.0
389.4
30.2
13.9
391.7
528.5
1,352.6
1,416.1
79.5
123.4
169.9
99.0
.2
.2
390.5
29.2
17.4
473.2
456.0
1,299.8
1,291.3
73.1
119.9
162.2
90.3
.0
.0
381.3
23.9
14.0
407.2
473.2
1,301.3
1,322.2
76.6
120.2
166.5
93.4
.1
.2
373.8
32.0
14.4
422.3
515.1
1,330.1
1,359.5
77.9
120.3
166.3
96.8
.2
.1
380.0
31.8
15.8
443.8
528.5
1,352.6
1,416.1
79.5
123.4
169.9
99.0
.2
.2
390.5
29.2
17.4
473.2
563.7
1,390.8
1,457.9
78.4
124.2
190.4
97.6
.3
.3
401.9
22.3
17.7
493.6
600.3
1,420.8
1,471.4
82.1
126.3
191.1
99.0
3
.3
414.2
14.0
18.3
494.6
638.3
1,437.6
1,501.1
87.5
129.2
200.3
102.7
.4
.3
420.9
11.5
18.8
500.2
All sectors
53 Total credit market debt, domestic and foreign....
54
55
56
57
58
59
60
61
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
13,597.1
14,2323
15,0363
16,018.1
15,183.0
15,437.5
15,7113
16,018.1
16,238.1
16,463.5
16,691.0
3,911.7
1,039.9
1,696.0
3,762.9
812.4
815.0
609.9
949.4
4,335.7
1,108.6
1,856.5
3,924.8
797.4
785.9
565.9
857.5
4,795.5
1,139.7
2,023.1
4,049.3
803.0
776.6
579.0
870.2
5,212.8
1,217.8
2,277.0
4,215.5
866.5
768.4
580.0
880.1
4,891.2
1,160.7
2,087.4
4,067.2
788.2
755.4
565.5
867.4
4,970.9
1,202.2
2,141.5
4,116.0
800.2
765.5
572.0
869.1
5,087.7
1,210.0
2,216.3
4,174.2
824.3
761.0
568.2
869.6
5,212.8
1,217.8
2,277.0
4,215.5
866.5
768.4
580.0
880.1
5,342.2
1,222.3
2,328.3
4,239.5
863.6
775.4
582.0
884.9
5,416.5
1,229.5
2,356.5
4,290.6
895.3
787.5
587.5
899.8
5,508.3
1,209.9
2,380.4
4,346.6
932.1
803.5
598.7
911.5
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release,
tables L.2 through L.4. For ordering address, see inside front cover.
A44
1.60
Domestic Financial Statistics • March 1995
SUMMARY O F FINANCIAL ASSETS AND LIABILITIES'
Billions of dollars except as noted, end of period
1993
Transaction category or sector
1990
1991
1992
1994
1993
Ql
Q2
Q3
Q4
Q2
Ql
Q3
CREDIT MARKET DEBT OUTSTANDING2
1
Total credit market assets
13,597.1
14,232.3
15,036.3 16,018.1 15,183.0
15,437.5
15,711.3
16,018.1
16,238.1 16,463.5
16,691.0
2
3
4
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government-sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U.S. affiliated areas
Funding corporations
Thrift institutions
Life insurance companies
Other insurance companies
Private pension funds
State and local governmentretirementfunds
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities issuers (ABSs)
Bank personal trusts
2,260.8
1,499.3
47.8
189.6
524.1
239.0
918.3
10,179.0
375.6
1,019.9
241.4
2,772.5
2,466.7
270.8
13.4
21.6
35.7
1,320.5
1,116.5
344.0
607.4
433.9
497.6
49.2
360.2
35.6
372.7
7.7
106.5
268.9
213.4
2,240.2
1,446.5
44.1
196.2
553.3
246.9
958.1
10,787.2
390.7
1,156.5
272.5
2,853.3
2,502.5
319.2
11.9
19.7
51.5
1,192.6
1,199.6
376.6
693.0
479.9
484.9
60.3
450.5
50.3
402.7
7.0
124.0
317.8
223.5
2,318.0
1,523.1
42.9
225.4
526.5
235.0
1,052.7
11,430.6
459.7
1,272.0
300.4
2,948.6
2,571.9
335.8
17.5
23.4
75.0
1,134.5
1,278.8
389.4
730.4
514.3
486.6
60.5
574.2
67.7
404.1
8.1
117.1
377.9
231.5
2,340.9
1,557.5
39.7
248.1
495.6
216.6
1,175.1
12,285.5
549.8
1,352.6
336.7
3,090.8
2,721.5
326.0
17.5
25.8
93.1
1,132.5
1,383.9
422.7
770.6
542.6
482.8
60.4
738.2
77.9
417.0
8.6
126.3
458.0
240.9
2,301.4
1,501.8
42.2
220.1
537.3
229.4
1,061.8
11,590.3
463.0
1,299.8
303.6
2,956.6
2,589.4
326.7
16.4
24.2
74.0
1,124.8
1,313.3
396.3
759.8
514.6
477.9
47.9
611.4
71.9
404.5
8.1
135.9
393.3
233.7
2,296.4
1,501.4
41.4
227.3
526.2
223.1
1,084.0
11,834.0
495.5
1,301.3
318.2
2,998.8
2,628.5
327.1
18.4
24.8
74.3
1,129.8
1,343.9
405.3
762.6
526.5
473.7
64.1
659.9
74.5
403.9
8.3
149.0
408.1
236.2
2,285.0
1,488.3
40.6
234.7
521.5
218.8
1,118.1
12,089.4
531.8
1,330.1
324.2
3,036.4
2,670.2
322.3
18.7
25.3
82.4
1,136.2
1,372.1
414.6
785.6
533.4
474.0
63.8
703.6
76.0
400.6
8.6
147.1
430.2
238.7
2,340.9
1,557.5
39.7
248.1
495.6
216.6
1,175.1
12,285.5
549.8
1,352.6
336.7
3,090.8
2,721.5
326.0
17.5
25.8
93.1
1,132.5
1,383.9
422.7
770.6
542.6
482.8
60.4
738.2
77.9
417.0
8.6
126.3
458.0
240.9
2,429.1
1,657.1
38.8
243.7
489.5
206.3
1,206.8
12,395.9
572.0
1,390.8
341.5
3,120.2
2,743.8
331.8
18.2
26.4
97.5
1,134.0
1,404.2
429.6
746.2
553.9
494.5
46.6
720.0
80.1
422.2
8.8
112.3
478.2
243.3
2,511.5
1,747.0
38.4
252.5
473.6
204.7
1,219.1
12,528.2
597.9
1,420.8
351.6
3,157.1
2,780.3
331.7
18.3
26.8
106.3
1,145.7
1,409.1
434.8
738.5
566.7
511.3
30.0
722.9
81.0
422.0
9.0
99.2
479.8
244.6
2,562.9
1,826.8
37.9
249.6
448.6
202.6
1,250.4
12,675.1
631.9
1,437.6
356.8
3,203.1
2,822.4
335.7
17.7
27.3
111.0
1,157.9
1,417.8
438.8
735.1
577.0
524.2
25.0
718.2
81.3
425.1
9.1
95.6
484.2
245.3
13,597.1
14,2323
15,036.3 16,018.1
15,183.0
15,437.5
15,7113
16,018.1 16,238.1 16,463.5
16,691.0
61.3
10.0
16.3
380.0
3,484.2
95.3
5,005.3
934.2
2,349.2
546.9
498.4
372.3
304.3
602.1
137.4
942.2
77.4
522.1
2,820.4
55.4
10.0
16.3
405.7
4,138.3
96.4
5,044.8
1,020.6
2,350.7
488.4
539.6
355.8
289.6
813.9
188.9
935.9
71.2
608.3
2,992.2
54.5
8.0
16.6
442.6
4,652.7
135.7
5,055.3
1,089.1
2,275.7
410.6
556.6
446.2
277.1
1,134.6
225.0
976.9
82.9
639.0
3,174.9
53.9
8.0
16.7
451.4
4,710.4
144.3
5,097.1
1,168.0
2,255.0
401.1
549.8
450.4
272.8
1,225.8
234.7
989.7
81.2
637.6
3,249.9
55.6
8.0
16.8
463.1
4,869.4
165.4
5,088.5
1,181.9
2,236.6
389.4
547.9
472.5
260.2
1,342.4
254.5
1,009.6
82.8
651.2
3,316.5
5
6
7
8
9
10
11
12
13
14
LB
16
1/
18
19
20
21
22
23
24
25
26
21
28
29
30
31
32
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
33
Total credit market debt
Other liabilities
34 Official foreign exchange
35 Special drawing rights certificates
36 Treasury currency
37 Life insurance reserves
3 8 Pension fund reserves
3 9 Interbank claims
4 0 Deposits at financial institutions
41
Checkable deposits and currency
42
Small time and savings deposits
43
Large time deposits
44
Money market fund shares
45
Security repurchase agreements
46
Foreign deposits
47 Mutual fund shares
4 8 Security credit
4 9 Trade debt
5 0 Taxes payable
5 1 Investment in bank personal trusts
5 2 Miscellaneous
51.8
8.0
16.5
433.0
4,516.5
132.8
5,059.1
1,134.4
2,293.5
415.2
543.6
392.3
280.1
1,042.1
217.3
977.4
79.6
629.6
3,160.2
53.4
8.0
17.0
468.2
4,945.1
175.2
5,141.8
1,251.7
2,223.2
391.7
559.4
457.8
258.0
1,429.3
279.3
1,026.4
84.2
660.9
3,414.6
27,751.1 29,609.6 31,360.1 33,721.3 31,781.7
53
Total liabilities
54
55
56
Financial assets not included in liabilities (+)
Gold and special drawing rights
Corporate equities
Household equity in noncorporate business
22.0
3,530.2
2,529.1
22.3
4,863.6
2,444.4
57
58
59
Floats not included in assets (—)
U.S. government checkable deposits
Other checkable deposits
Trade credit
15.0
35.9
-130.3
40.4
42.0
-129.3
-124.6
-101.7
60
61
62
63
64
Liabilities not identified as assets (—)
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
-4.1
-32.0
3.0
17.8
-261.2
-4.8
-4.2
9.2
17.8
-330.7
-4.9
-9.3
38.1
25.2
-398.4
-5.1
-4.7
119.2
26.2
-451.0
65
Total identified to sectors as assets
19.6
5,462.9
2,411.5
6.8
3.8
56.4
8.0
17.1
473.2
4,890.7
201.6
5,155.8
1,220.5
2,233.8
382.6
582.4
472.4
264.3
1,439.0
282.7
1,022.3
88.8
655.3
3,503.2
54.9
8.0
17.3
475.2
4,880.8
223.9
5,182.8
1,229.3
2,214.7
378.9
576.4
510.3
273.2
1,443.1
278.1
1,039.5
84.4
640.2
3,550.8
55.5
8.0
17.5
481.2
5,016.8
238.9
5,201.3
1,206.5
2,198.3
402.0
586.1
534.0
274.5
1,563.7
263.2
1,062.5
88.1
656.8
3,673.6
32,338.1 33,035.0 33,721.3 34,032.4 34,342.6 35,018.1
19.8
5,647.3
2,419.5
20.0
5,683.7
2,434.2
20.3
5,941.7
2,445.3
5.6
3.4
40.7
36.7
-130.9
3.5
41.6
-135.0
2.2
33.7
-130.4
-101.7
-5.0
-5.8
94.9
14.5
-432.7
-5.0
-5.7
108.0
24.3
-409.3
-5.1
-7.8
132.6
24.3
-452.6
-5.1
-4.7
119.2
26.2
-451.0
20.1
6,186.5
2,427.7
20.4
6,052.2
2,457.8
20.8
5,877.7
2,478.9
21.0
6,135.1
2,487.3
5.6
.3
40.7
36.3
-121.6
.9
38.7
-135.1
1.2
30.6
-136.0
-5.2
-7.7
133.0
15.2
-470.3
-5.2
-7.4
160.3
23.6
-441.1
-5.3
-3.5
186.3
23.8
-456.3
34,1883 37,337.6 39,679.1 42,726.5 40,293.1 40,853.6 41,845.5 42,726.5 42,982.9 43,085.3 44,020.8
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release,
tables L.6 and L.7. For ordering address, see inside front cover.
20.1
6,186.5
2,427.7
53.4
8.0
17.0
468.2
4,945.1
175.2
5,141.8
1,251.7
2,223.2
391.7
559.4
457.8
258.0
1,429.3
279.3
1,026.4
84.2
660.9
3,414.6
2. Excludes corporate equities and mutual fund shares,
Selected Measures
2.10
NONFINANCIAL BUSINESS ACTIVITY
A45
Selected Measures
Monthly data seasonally adjusted, and indexes 1987=100, except as noted
1994
1992
Measure
1993
1994
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1 Industrial production 1
107.6
112.0
118.1
116.7
117.4
118.0
118.2
119.1
119.0
119.4r
120.3r
121.4
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
106.5
109.0
105.9
113.4
98.8
109.2
110.7
113.4
109.4
119.3
102.4
114.1
115.9
118.4
113.1
126.7
108.1
121.4
114.7
117.3
112.3
124.9
106.9
119.7
115.3
117.8
112.8
125.4
107.7
120.5
115.9
118.4
113.5
125.8
108.5
121.2
116.2
118.5
113.3
126.4
109.1
121.4
116.7
119.2
113.8
127.5
109.2
122.8
116.4
118.9
113.0r
128.0r
108.6r
122.9r
116.8r
119.1r
112.6r
129.2r
109.9r
123.4r
117.6r
119.8r
113.6
129.6
110.8'
124.3'
118.5
121.0
114.6
130.9
110.8
125.9
108.0
112.9
119.7
118.4
119.0
119.3
119.8
120.9
120.9
121.4r
122.6
123.9
83.0
83.2
83.2
83.3
83.8
83.6
83.8r
84.4
85.1
109.0
110.0
109.0
107.0
111.0
101.0
7
3
4
5
6
7
Industry groupings
8 Manufacturing
2
9 Capacity utilization, manufacturing (percent) ..
3
79.2
80.9
83.4
97.7
104.4
106.9
103.0
108.0
105.0
11 Nonagricultural employment, total4
17, Goods-producing, total
n
Manufacturing, total
Manufacturing, production workers
14
1 5 Service-producing
16 Personal income, total
17 Wages and salary disbursements
18
Manufacturing
19 Disposable personal income5
20 Retail sales5
106.5
94.2
95.3
94.9
110.5
135.6
131.6
118.0
137.0
126.9
108.4
94.3
94.8
94.9
112.9
141.4
136.2
120.0
142.5
135.2
111.3
95.6
95.1
96.1
116.3
n.a.
n.a.
n.a.
n.a.
145.3
110.5
95.3
94.8
95.7
115.4
148.3
143.3
124.8
148.2
143.1
110.8
95.3
94.8
95.7
115.7
149.0
144.3
124.9
149.8
143.0
111.2
95.6
95.0
96.0
116.1
149.3
144.5
125.3
150.1
144.3
111.4
95.6
95.0
96.0
116.5
150.0
145.2
125.6
150.9
144.5
111.7
95.8
95.2
96.3
116.8
150.7
145.5
126.2
151.6
146.6
112.0
95.9
95.3
96.4
117.1
151.7
146.4
126.7
152.6
147.8
112.2
96.1
95.5
96.7
117.3
153.9
148.4
128.9
154.8
149.6r
112.6'
96.6
95.7
97.0
117.8'
153.6
148.2
128.0
154.5
149.8'
112.9
96.7
96.0
97.5
118.0
n.a.
n.a.
n.a.
n.a.
149.7
Prices6
71 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
140.3
123.2
144.5
124.7
148.2
125.5
147.4
125.0
147.5
125.3
148.0
125.6
148.4
126.0
149.0
126.5r
149.4
125.5
149.5
125.8
149.7
126.1
149.7
126.2
10 Construction contracts
covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the
price indexes can be obtained from the U.S. Department of Labor, Bureau of Labor
Statistics, Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for
series mentioned in notes 3 and 6, can also be found in the Survey of Current Business.
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. See also "Industrial Production Capacity and Capacity Utilization
since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release.
For the ordering address, see the inside front cover. The latest historical revision of the
industrial production index and the capacity utilization rates was released in November
1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve
Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial
production index, 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 Company, F.W.
Dodge Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings. Series
2.11
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted except as noted
1994
Category
1992'
1993'
1994
May
June
July
Aug.
Sept.
Oct.'
Nov.'
Dec.
HOUSEHOLD SURVEY DATA1
1
Civilian labor force2
4
5
Nonagricultural industries3
Agriculture
Unemployment
Number
Rate (percent of civilian labor force)
6
Nonagricultural payroll employment4
7
3
126,982
128,040
131,056
130,699'
130,538'
130,774'
131,086'
131,291'
131,646
131,718
131,725
114,391
3,207
116,232
3,074
119,651
3,409
119,290'
3,413'
119,341'
3,294'
119,448'
3,333'
119,761'
3,436'
120,233'
3,411'
120,647
3,494
120,903
3,500
121,038
3,532
9,384
7.4
8,734
6.8
7,996
7,996'
6.1'
7,903'
6.1'
7,993'
7,889r
6.0'
7,647'
5.8'
7,505
5.7
7,315
5.6
7,155
5.4
108,604
110,525
113,423
112,951
113,334
113,624
113,914
114,186
114,348
114,836
115,092
18,104
635
4,492
5,721
25,354
6,602
29,052
18,645
18,003
611
4,642
5,787
25,675
6,712
30,278
18,817
18,064
604
4,916
5,842
26,362
6,789
31,805
19,041
18,009
603
4,907
5,843
26,190
6,787
31,598
19,014
18,044
605
4,927
5,849
26,328
6,798
31,765
19,018
18,045
601
4,944
5,857
26,439
6,797
31,918
19,023
18,095
603
4,942
5,866
26,484
6,801
32,036
19,087
18,096
605
4,972
5,865
26,565
6,794
32,138
19,151
18,142
599
4,974
5,867
26,629
6,786
32,231
19,120
18,181
597
5,047
5,881
26,735
6,790
32,411
19,194
18,235
595
5,041
5,906
26,837
6,793
32,521
19,164
6.1
6.1
ESTABLISHMENT SURVEY DATA
7
8
9 Contract construction
10 Transportation and public utilities
11 Trade
17
N
14 Government
1. Beginning January 1994, reflects redesign of current population survey and population controls from the 1990 census.
2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly
figures are based on sample data collected during the calendar week that contains the
twelfth day; annual data are averages of monthly figures. By definition, seasonality does
not exist in population figures.
3. Includes self-employed, unpaid family, and domestic service workers.
4. Includes all full- and part-time employees who worked during, or received pay for,
the pay period that includes the twelfth day of the month; excludes proprietors, selfemployed persons, household and unpaid family workers, and members of the armed
forces. Data are adjusted to the March 1992 benchmark, and only seasonally adjusted data
are available at this time.
SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings.
A46
2.12
D o m e s t i c Nonfinancial Statistics •
March
1995
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION 1
Seasonally adjusted
1994
Qi
Q2
1994
Q3r
Q4
Output (1987=100)
Qi
Q2
1994
Q3
Q4
Capacity (percent of 1987 output)
Q2
Ql
Q3r
Q4
Capacity utilization rate (percent)2
1 Total industry
115.7
117.4
118.8
120.4
139.0
140.0
140.9
141.9
83.2
83.8
84.3
2 Manufacturing
116.8
118.9
120.5
122.6
142.0
143.1
144.2
145.3
82.3
83.1
83.6
84.4
Primary processing3
Advanced processing4
112.4
118.9
114.7
120.9
115.9
122.7
118.0
124.8
130.3
147.4
131.0
148.7
131.6
150.0
132.3
151.3
86.3
80.7
87.6
81.3
88.1
81.8
89.2
82.5
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
122.0
104.4
110.6
114.5
105.3
152.1
150.3
140.0
124.1
105.4
114.4
120.2
106.9
157.6
156.8
133.3
126.5
106.6
114.1
115.8
111.4
162.6
163.5
135.0
129.6
108.0
118.2
121.2
114.1
168.1
170.0
141.7
148.8
115.1
124.7
127.5
120.6
176.5
175.8
156.7
150.2
115.5
125.0
127.9
120.5
179.0
179.9
158.5
151.6
116.0
125.2
128.4
120.5
181.6
184.1
160.3
153.0
116.5
125.4
128.8
120.5
184.1
188.3
162.2
82.0
90.7
88.6
89.8
87.3
86.2
85.5
89.4
82.6
91.2
91.6
93.9
88.7
88.0
87.1
84.1
83.4
91.9
91.1
90.2
92.4
89.6
88.8
84.2
84.7
92.7
94.3
94.1
94.6
91.3
90.3
87.3
83.7
84.2
82.1
82.1
130.1
129.8
129.4
129.1
64.4
64.9
63.5
63.6
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
111.0
106.8
115.1
122.1
120.6
103.7
113.1
108.7
115.9
123.6
124.3
106.3
113.8
108.9
118.5
124.4
126.9
104.9
114.8
111.7
120.6
125.1
134.8
120.8
126.6
151.9
130.0
115.3
135.5
121.4
127.1
153.3
130.8
115.2
136.3
122.0
127.7
154.7
115.1
82.9
88.9
91.4
81.1
93.4
89.9
83.9
90.1
91.6
81.4
95.6
92.2
84.0
89.7
93.2
81.1
97.0
91.1
84.3
91.5
94.4
80.9
105.8
134.0
120.1
126.0
150.5
129.2
115.4
91.9
99.3
119.3
117.6
100.7
117.2
118.0
100.1
118.1
118.2
99.2
116.0
116.4
111.5
134.6
132.1
111.5
135.0
132.6
111.5
135.4
133.1
111.4
135.8
133.6
89.1
88.6
89.0
90.3
86.8
89.0
89.8
87.2
88.8
89.0
85.4
87.1
1973
1975
Previous cycle5
High
Low
High
Oct/
Nov/
Dec.p
85.4
3
4
5
6
/
8
y
10
ii
12
13
14
15
16
17
18
19
20 Mining
21 Utilities
22 Electric
Low
Latest cycle6
High
Low
1993
Dec.
84.8
1994
July
Aug.
Sept.'
Capacity utilization rate (percent^ 2
1 Total industry
89.2
72.6
87.3
71.8
84.9
78.0
82.9
84.1
84.5
84.2
84.3
84.7
2 Manufacturing
88.9
70.8
87.3
70.0
85.2
76.6
82.2
83.3
83.8
83.6
83.8
84.4
85.1
92.2
87.5
68.9
72.0
89.7
86.3
66.8
71.4
89.0
83.5
77.9
76.2
86.9
80.3
87.7
81.5
88.3
82.1
88.2
81.8
88.3
82.0
89.3
82.5
90.0
83.1
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
88.8
90.1
100.6
105.8
92.9
68.5
62.2
66.2
66.6
61.3
86.9
87.6
102.4
110.4
90.5
65.0
60.9
46.8
38.3
62.2
84.0
93.3
92.8
95.7
88.7
73.7
76.3
74.0
72.1
75.0
81.9
91.1
91.0
93.2
88.4
82.8
92.2
90.0
90.5
89.6
83.7
91.0
90.7
88.0
94.2
83.6
92.6
92.6
92.0
93.5
84.0
91.8
92.4
92.2
92.7
84.6
93.0
94.0
93.2
95.2
85.5
93.3
96.4
96.8
96.0
96.4
87.8
93.4
74.5
63.8
51.1
92.1
89.4
93.0
64.9
71.1
44.5
84.0
84.9
85.1
72.5
76.6
57.6
86.5
85.1
87.3
88.9
88.4
81.1
89.5
89.2
86.1
90.2
88.9
85.3
90.9
89.4
85.7
91.2
90.1
87.2
91.7
91.4
89.1
77.0
66.6
81.1
66.9
88.4
79.4
65.1
63.9
63.6
62.9
63.1
63.5
64.2
Nondurable gocds
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
86.7
92.1
94.8
85.9
97.0
88.5
80.4
78.9
86.5
78.9
74.8
83.7
82.7
88.3
93.6
80.8
94.4
91.0
84.0
90.3
91.8
81.6
97.9
90.5
84.1
89.8
94.6
81.4
97.3
91.4
83.8
89.0
93.2
80.4
95.7
91.4
83.6
90.6
93.2
80.2
93.3
90.3
84.4
91.3
94.9
81.0
84.8
92.6
95.0
81.4
92.6
92.9
94.4
95.6
99.0
88.4
82.5
82.7
96.6
88.3
88.3
80.6
76.2
78.7
86.5
92.6
94.8
86.0
83.2
86.5
88.2
86.1
87.4
89.8
88.0
89.5
89.7
87.8
89.0
89.8
86.0
87.9
89.0
86.4
88.4
88.5
85.3
87.0
89.6
84.5
86.1
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Primary processing5
Advanced processing4
20 Mining
21 Utilities
22 Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release.
For the ordering address, see the inside front cover. The latest historical revision of the
industrial production index and the capacity utilization rates was released in November
1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve
Bulletin, vol. 81 (January 1995), pp. 16—26. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally
adjusted index of industrial production to the corresponding index of capacity.
3. Primary processing includes textiles; lumber; paper; industrial chemicals; petroleum
refining; rubber and plastics; stone, clay, and glass; and primary and fabricated metals.
4. Advanced processing includes food, tobacco, apparel, furniture, printing, chemical
products such as drugs and toiletries, leather and products, machinery, transportation
equipment, instruments, miscellaneous manufacturing, and ordnance.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value1
Monthly data seasonally adjusted
portion
1994r
1993
1992
Group
1994
avg.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.p
Index (1987 = 100)
MAJOR MARKETS
100.0
118.1
114.7
114.7
115.6
116.6
116.7
117.4
118.0
118.2
119.1
119.0
119.4
120.3
121.4
60.9
46.6
28.5
5.5
2.5
1.6
.9
.7
.9
3.0
115.9
118.4
113.1
119.4
125.5
125.4
94.9
180.7
123.0
114.2
112.9
115.5
110.9
117.1
123.1
125.9
95.0
181.8
114.7
112.0
113.1
115.9
111.5
118.6
126.6
128.3
98.7
181.5
120.4
111.8
114.0
117.0
112.4
121.1
131.5
134.8
102.7
192.7
121.9
112.2
114.7
117.4
112.9
119.0
126.4
127.7
98.8
179.6
121.1
112.7
114.7
117.3
112.3
117.8
124.1
125.0
96.0
177.2
119.8
112.5
115.3
117.8
112.8
116.4
120.1
118.1
90.4
168.0
121.9
113.2
115.9
118.4
113.5
118.0
121.0
118.5
89.6
170.7
123.8
115.4
116.2
118.5
113.3
118.0
119.5
115.0
86.5
166.6
126.6
116.'
116.7
119.2
113.8
120.7
124.9
126.0
91.7
189.0
120.0
117.1
116.4
118.9
113.0
119.1
123.8
122.5
90.2
181.5
123.9
115.2
116.8
119.1
112.6
119.5
124.5
122.3
92.9
175.5
126.6
115.3
117.6
119.8
113.6
120.8
127.1
126.5
94.0
185.8
125.6
115.5
118.5
121.0
114.6
123.1
130.5
131.5
100.5
187.3
125.8
116.7
.7
.8
1.5
23.0
10.3
2.4
4.5
2.9
2.9
.9
2.1
126.4
104.9
113.8
111.6
110.3
95.8
129.4
104.8
113.8
106.5
116.9
127.5
100.9
111.2
109.5
106.6
95.2
127.9
104.3
113.2
107.9
115.3
124.0
102.3
111.4
109.8
106.5
93.6
127.7
104.0
118.4
105.8
123.6
121.6
103.5
112.7
110.4
107.6
94.5
128.7
103.9
117.3
105.4
122.2
124.3
103.1
112.8
111.5
109.8
95.7
130.3
103.9
114.5
105.8
118.1
120.7
104.5
113.2
111.0
110.2
96.4
128.4
105.1
110.0
108.3
110.5
125.6
103.3
113.1
112.0
110.9
97.2
129.5
105.6
112.4
107.4
114.4
132.8
103.6
114.2
112.5
110.5
96.3
131.4
105.8
115.5
106.5
119.3
129.7
108.4
115.3
112.2
110.6
96.5
131.1
105.2
114.3
105.8
117.8
135.1
106.9
114.6
112.2
111.2
95.9
129.8
105.9
113.1
105.8
116.1
130.2
104.1
114.6
111.7
111.9
95.5
127.5
105.2
110.5
107.4
111.8
125.3
107.6
114.9
111.0
111.1
96.3
127.1
103.6
110.1
103.9
112.6
129.9
105.5
114.4
111.9
112.0
95.7
129.4
104.8
110.0
107.9
110.8
132.9
106.4
115.1
112.7
112.9
95.9
131.2
105.6
109.0
107.4
109.6
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
18.1
14.0
5.7
1.5
4.0
2.6
1.2
1.7
3.4
.5
.2
126.7
146.9
176.5
284.5
121.1
138.7
148.0
129.4
71.1
90.8
122.6
140.0
165.0
262.5
115.7
139.0
147.9
122.5
75.2
88.1
128.9
122.7
140.4
167.1
265.5
114.6
140.1
149.1
121.1
74.5
88.9
132.4
123.8
142.0
168.5
267.6
116.4
142.3
154.6
122.3
73.6
91.9
131.5
124.3
142.6
170.0
270.9
117.8
139.3
148.1
123.3
73.7
92.1
135.6
124.9
143.5
170.2
270.8
119.2
138.0
145.9
127.1
73.6
93.2
132.4
125.4
144.5
171.8
271.6
120.7
135.3
140.0
129.4
72.4
94.6
135.2
125.8
145.5
173.7
276.5
120.6
136.1
141.7
130.5
71.3
94.2
137.8
126.4
146.9
177.1
282.6
122.1
132.6
138.2
132.6
69.9
93.7
133.3
127.5
148.9
179.7
288.9
122.3
137.9
149.4
133.5
69.2
89.6
134.5
128.0
149.5
181.1
295.8
123.0
136.8
147.7
133.3
68.8
93.9
138.4
129.2
151.4
183.7
301.1
124.6
138.6
149.2
134.3
68.8
88.3
142.0
129.6
152.0
184.8
307.0
124.9
140.4
151.7
132.9
69.0
86.0
143.1
130.9
153.7
188.1
313.0
126.0
141.9
152.6
132.5
69.3
86.0
Intermediate products, total
Construction supplies
Business supplies
14.3
5.3
9.0
108.1
106.7
109.2
104.7
103.7
105.5
104.6
102.9
105.8
104.9
102.7
106.5
106.3
103.2
108.4
106.9
104.7
108.5
107.7
106.1
108.8
108.5
106.4
110.1
109.1
107.9
110.0
109.2
108.2
109.9
108.6
108.6
108.7
109.9
109.6
110.2
110.8
110.2
111.3
110.8
110.4
111.2
37 Materials
38 Durable goods materials
39
Durable consumer parts
40
Equipment parts
41
Other
Basic metal materials
42
43 Nondurable goods materials
44
Textile materials
Paper materials
45
46
Chemical materials
Other
47
48 Energy materials
Primary energy
49
50
Converted fuel materials
39.1
20.6
3.9
7.5
9.1
3.0
8.9
1.1
1.8
4.0
2.0
9.6
6.3
3.3
121.4
131.2
132.2
143.3
121.2
119.7
118.3
105.5
118.7
123.0
116.3
105.2
100.1
115.2
117.5
125.4
128.5
133.2
117.8
118.5
116.3
101.3
117.7
119.3
118.0
103.2
98.3
113.1
117.1
125.2
129.9
134.1
116.0
114.4
114.6
101.8
113.8
119.5
113.4
103.8
97.3
116.9
118.1
126.2
129.7
135.6
117.1
116.9
115.6
102.7
116.3
120.0
114.0
104.7
99.4
115.2
119.5
128.3
131.5
137.9
119.3
117.6
116.7
104.0
117.8
120.6
115.6
105.0
100.5
114.0
119.7
129.2
130.1
139.6
120.4
119.7
115.9
104.4
116.1
120.6
113.3
104.8
100.9
112.5
120.5
129.8
129.7
140.5
121.2
120.0
118.2
104.2
118.9
123.8
114.8
104.6
100.4
112.8
121.2
130.0
129.2
142.1
120.8
119.6
118.1
104.8
118.4
122.9
116.5
106.7
100.2
119.9
121.4
130.9
130.4
143.8
121.1
118.8
118.6
104.8
117.5
123.4
118.6
105.2
100.3
114.9
122.8
132.6
133.2
145.2
122.3
119.3
120.3
105.7
122.5
124.8
118.1
106.1
100.9
116.3
122.9
133.3
133.1
146.7
122.8
121.1
i 19.8
105.9
121.5
124.0
118.2
105.6
100.8
115.1
123.4
134.2
133.9
149.0
122.6
121.4
120.0
106.5
120.5
124.8
118.4
105.2
100.3
115.1
124.3
136.0
136.1
150.7
124.3
123.0
121.0
109.8
121.9
125.1
118.6
104.6
99.6
114.6
125.9
138.4
139.0
154.1
125.8
125.8
121.7
112.1
121.6
125.7
119.7
105.3
100.7
114.4
97.2
95.2
117.6
117.1
114.1
113.6
114.1
113.5
114.8
114.3
116.1
115.5
116.2
115.7
117.1
116.6
117.7
117.3
118.1
117.7
118.7
118.2
118.6
118.0
119.0
118.4
119.8
119.2
120.9
120.2
98.3
26.9
25.6
115.3
112.3
113.0
112.2
109.9
110.6
112.2
110.4
110.7
113.1
111.0
111.9
114.0
111.9
112.7
114.1
111.5
112.5
114.8
112.4
112.8
115.4
113.2
113.2
115.5
113.2
113.2
116.4
113.0
113.8
116.1
112.4
113.3
116.5
112.0
112.9
117.3
112.7
114.0
118.4
113.5
115.2
1 Total index
13
14
15
16
17
18
19
20
21
22
Products
Final products
Consumer goods, total
Durable consumer goods
Automotive products
Autos and trucks
Autos, consumer
Trucks, consumer
Auto parts and allied goods
Other
Appliances televisions and air
conditioners
Carpeting and furniture
Miscellaneous home goods
Nondurable consumer goods
Foods and tobacco
Clothing
Chemical products
Paper products
Energy
Fuels
Residential utilities
23
24
25
26
27
28
29
30
31
32
33
34
35
36
7
3
4
5
6
7
8
9
10
11
12
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks .
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
12.8
146.7
139.1
139.4
140.7
142.0
143.2
144.8
145.7
147.7
148.8
149.5
151.5
151.9
153.7
12.5
29.5
130.9
127.2
125.4
122.6
125.6
121.9
127.2
122.9
127.6
124.8
128.5
125.1
129.4
126.2
130.0
126.4
131.1
127.2
132.7
128.8
132.7
129.2
134.3
129.9
134.5
131.4
135.8
133.3
A48
2.13
Domestic Nonfinancial Statistics • March 1995
INDUSTRIAL PRODUCTION
Group
SIC
code2
Indexes and Gross Value1—Continued
1992
proportion
1994
avg.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov/
Dec.1
Index (1987 = 100)
MAJOR INDUSTRIES
59 Total index
100.0
118.1
114.7
114.7
115.6
116.6
116.7
117.4
118.0
118.2
119.1
119.0
119.4
120.3
121.4
60 Manufacturing
61 Primary processing
62 Advanced processing
85.5
26.5
59.0
119.7
115.2
121.8
116.1
112.9
117.6
115.8
111.7
117.7
116.7
112.2
118.9
118.0
113.3
120.2
118.4
114.0
120.5
119.0
115.2
120.8
119.3
114.7
121.5
119.8
115.3
121.9
120.9
116.3
123.1
120.9
116.2
123.1
121.4
116.6
123.7
122.6
118.1
124.7
123.9
119.3
126.1
63
64
65
66
45.1
2.0
1.4
111.1
125.6
106.1
121.2
104.6
107.0
121.0
105.3
105.8
122.1
103.8
107.6
122.9
104.0
107.7
123.7
103.9
110.2
124.0
106.0
110.1
124.6
106.2
111.8
125.2
106.8
114.0
127.0
105.5
115.5
127.2
107.6
112.4
128.2
106.7
115.0
129.5
108.3
112.7
131.2
108.8
111.7
104.8
114.2
117.8
104.4
113.4
118.6
110.9
106.6
107.1
101.8
108.0
110.8
102.0
104.1
107.2
101.8
111.6
116.0
105.8
105.8
106.6
103.7
112.1
116.7
106.0
106.0
108.5
105.0
114.8
121.5
105.3
106.2
109.6
105.5
114.8
120.9
105.7
106.9
110.0
104.4
113.7
118.2
106.3
107.6
110.2
104.3
112.7
116.1
104.7
108.0
111.7
105.8
113.5
113.0
107.0
113.6
112.4
105.8
116.0
118.2
109.9
112.7
111.6
105.5
115.8
118.6
109.0
111.8
112.4
106.9
117.9
120.1
114.2
114.7
113.4
108.1
121.0
124.8
79
80
Durable goods
Lumber and products
"24
Furniture and fixtures
25
Stone, clay, and glass
products
32
Primary metals
33
331,2
Iron and steel
Raw steel
Nonfarous
333-6,9
Fabricated metal products...
34
Industrial and commercial
machinery and
computer equipment...
35
Computer and office
equipment
357
Electrical machinery
36
Transportation equipment...
37
371
Motor vehicles and parts .
Autos and light trucks .
371
Aerospace and
miscellaneous
transportation
equipment
372-6,9
Instruments
38
Miscellaneous
39
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobaoco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products .
Leather and products
67
68
69
70
71
72
73
74
75
76
77
78
92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
96 Stone and earth minerals
97 Utilities
98 Electric
99 Gas
2.1
3.1
1.7
.1
1.4
5.0
1093
110.7
115.7
114.1
7.9
160.0
151.3
150.3
151.9
154.0
156.1
157.7
158.9
160.6
162.6
164.6
166.6
167.9
169.7
1.7
7.3
9.6
4.8
2.5
284.5
160.2
109.9
138.0
131.9
262.5
147.3
109.8
135.9
132.3
265.5
148.1
110.8
138.7
135.2
267.6
150.1
112.3
142.6
141.9
270.9
152.6
110.7
138.8
134.7
270.8
154.3
109.5
136.2
131.7
271.6
156.5
107.6
131.6
124.4
276.5
159.5
107.5
132.2
124.6
282.6
161.5
105.7
129.6
120.8
288.9
164.1
109.5
138.1
131.9
295.8
165.0
108.8
137.4
128.4
301.1
167.1
109.3
138.4
128.6
307.0
169.6
141.5
132.8
313.0
173.4
113.2
145.0
138.4
4.8
5.4
1.3
83.0
107.5
116.2
84.9
104.9
112.4
84.1
105.9
112.6
83.3
106.3
113.5
83.8
106.9
114.1
84.1
106.6
115.2
84.6
106.4
115.4
83.8
106.8
115.8
82.8
108.5
118.6
82.3
108.7
117.1
81.4
108.0
117.0
81.5
108.6
118.4
82.0
108.1
118.8
82.8
108.7
118.1
20
21
22
23
26
27
28
29
30
31
40.5
9.4
1.6
1.8
2.2
3.6
6.8
9.9
1.4
3.5
.3
113.2
112.8
94.7
109.0
96.2
117.4
101.3
123.9
105.1
133.4
85.9
110.4
110.3
86.9
105.7
94.7
117.6
98.8
120.9
105.1
127.4
86.6
110.0
109.9
87.0
106.0
93.5
114.0
98.2
121.3
104.0
128.3
86.8
110.7
109.9
93.6
106.4
94.9
115.7
98.8
121.8
103.8
128.2
85.4
112.5
112.9
93.0
107.9
95.7
115.7
101.3
123.1
103.4
130.9
87.0
112.4
111.9
98.1
108.6
96.2
114.4
101.7
122.4
107.5
130.8
87.6
113.4
112.8
98.5
108.9
97.1
116.7
101.6
124.0
107.0
132.4
85.9
113.4
112.8
95.9
108.7
97.0
116.6
102.4
124.4
104.5
132.8
85.5
113.6
113.4
93.7
109.4
97.0
116.6
102.1
124.7
104.3
134.5
86.3
114.0
113.7
96.2
109.0
96.8
120.2
101.5
124.7
105.2
134.5
85.5
113.7
114.6
96.1
108.3
96.8
118.7
100.9
123.7
105.3
134.7
85.4
113.8
113.0
97.7
110.4
97.1
118.9
101.6
123.7
103.9
136.3
85.6
115.0
114.5
95.2
111.4
96.4
121.3
102.5
125.3
106.5
138.2
84.9
115.8
115.1
97.1
113.3
96.9
121.6
102.7
126.3
106.9
139.8
85.1
10
12
13
14
6.8
.4
1.0
4.7
.6
99.8
160.5
112.0
92.9
107.2
98.4
167.8
104.7
92.5
103.1
97.8
164.2
101.6
92.4
103.6
99.5
161.6
112.0
92.7
104.8
100.5
165.2
117.7
92.9
104.7
100.7
157.0
118.3
93.2
105.9
100.7
156.4
111.5
94.3
108.1
100.6
162.8
113.4
93.8
105.6
100.1
159.5
108.6
93.9
107.9
100.0
156.6
111.4
93.5
106.6
100.1
160.0
110.7
93.7
106.7
99.2
161.4
110.2
92.1
109.1
98.7
160.3
110.1
91.3
110.5
99.9
161.5
117.6
91.4
111.8
49L3PT
492,3PT
7.7
6.1
1.6
118.1
117.6
119.9
115.6
115.2
117.0
120.3
118.1
128.9
119.6
117.5
128.1
117.9
117.2
120.5
114.7
116.4
107.9
115.8
116.2
114.1
121.1
121.4
120.0
119.0
119.0
118.9
118.8
118.4
120.4
116.5
117.1
114.2
117.2
117.9
114.5
115.8
116.2
114.2
114.9
115.2
113.8
80.7
118.6
114.9
114.4
115.2
116.7
117.3
118.2
118.6
119.2
119.8
119.9
120.4
121.5
122.6
83.8
116.5
113.2
112.8
113.7
114.9
115.3
115.9
116.2
116.6
117.6
117.5
118.0
119.1
120.3
111.1
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding office
and computing machines . . .
Gross value (billions of 1987 dollars, annual rates)
MAJOR MARKETS
102 Products, total
1,707.0 2,006.5 1,958.9 1,964.4 1,977.8 1,985.6 1,985.8 1,990.7 2,002.5 2,002.1 2,020.2 2,015.6 2,020.8 2,039.4 2,055.5
103 Final
104 Consumer goods
105 Equipment
106 Intermediate
1,314.6 1,576.6 1,542.4 1,547.1 1,559.9 1,563.6 1,559.9 1,561.7 1,571.1 1,569.3 1,586.6 1,584.2 1,584.9 1,600.2 1,615.0
977.1 983.0 979.0 987.3 981.5 976.0 987.0 995.2
866.6 982.0 968.8 972.5
979.6 981.3 976.0
448.0 594.6
573.6 574.6
580.4 582.3 583.9
584.5
588.1
590.3
599.3
602.7
609.0
613.2
619.7
392.5 429.8 416.5 417.3 417.8 422.0 425.9 429.0 431.4 432.9
433.5 431.4 435.9
439.2 440.5
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release.
For the ordering address, see the inside front cover. The latest historical revision of the
industrial production index and the capacity utilization rates was released in November
1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve
Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204.
2. Standard industrial classification.
Selected Measures
2.14
A49
HOUSING AND CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1994
Item
1991
1992
1993
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept/
Oct/
Nov.
Private residential real estate activity (thousands of units except as noted)'
NEW UNITS
949
754
195
1,014
840
174
606
434
173
1,091
838
253
171
1,095
911
184
1,200
1,030
169
612
473
140
1,158
964
194
210
1,199
986
213
1,288
1,126
162
680
543
137
1,193
1,040
153
254
1,252
1,054
198
1,328
1,121
207
720
578
142
1,334
1,185
149
301
1,313
1,068
245
1,519
1,271
248
732
585
147
1,273
1,115
158
308
1,380
1,069
311
1,471
1,211
260
740
585
155
1,354
1,192
162
290
1,357
1,083
274
1,491
1,200
291
748
582
166
1,446
1,257
189
292
1,316
1,046
270
1,358
1,163
195
751
584
167
1,329
1,151
178
292
1,337
1,034
303
1,439
1,219
220
758
585
173
1,282
1,160
122
286
1,354
1,046
308
1,463
1,176
287
768
587
181
1,342
1,145
197
288
1,425
1,052
373
1,509
1,234
275
772
589
183
1,400
1,157
243
301
1,398
1,047
351
1,436
1,153
283
779
588
191
1,365
1,155
210
310
1,388
1,035
353
1,545
1,193
352
795
594
201
1,347
1,112
235
323
507
284
610
266
666
294
697
298
722
298
673
298
692
301
628
313
630
317
673r
322r
701
327
711
331
693
336
120.0
147.0
121.3
144.9
126.1
147.6
129.9
150.7
132.3
152.8
129.0
152.9
129.9
151.8
133.5
158.4
124.4
144.4
133.3
154.9r
129.6
155.8
130.0
151.3
128.7
155.2
18 Number sold
3,219
3,520
3,800
3,840
4,070
4,120
4,110
3,960
3,970
3,930
3,890
3,910
3,820
Price of units sold (thousands
of dollars)2
19 Median
20 Average
99.7
127.4
103.6
130.8
106.5
133.1
107.2
133.3
107.6
134.4
108.9
135.5
109.8
136.6
112.8
140.9
111.7
139.3
112.4
140.6
108.4
135.2
108.0
133.7
108.1
134.2
1
2
3
4
5
6
7
8
9
10
11
12
13
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period1
One-family
Two-or-more-family
Completed
One-family
Two-or-more-family
Mobile homes shipped
Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1
Price of units sold (thousands
of dollars)1
16 Median
17 Average
EXISTING UNITS ( o n e - f a m i l y )
Value of new construction (millions of dollars)3
CONSTRUCTION
403,644
435,355
466,365
485,894
496,042
497,035
504,356
r
506,144 505,445r 505,470
514,197
518,937
522,689
Private
Residential
Nonresidential
Industrial buildings
Commercial buildings
Other buildings
Public utilities and other
293,536
157,837
135,699
22,281
48,482
20,797
44,139
316,115
187,870
128,245
20,720
41,523
21,494
44,508
341,101
210,455
130,646
19,533
42,627
23,626
44,860
361,895
233,322
128,573
19,972
42,065
22,258
44,278
371,681
236,767
134,914
19,905
46,602
23,918
44,489
374,091
238,049
136,042
21,221
47,481
23,824
43,516
378,235
241,162
137,073
21,338
47,912
23,956
43,867
379,345 376,463r 376,216'
240,694 237,775r 236,871'
r
138,651 138,688 139,345'
20,960 21,117r 22,012'
48,410 48,607'r 48,185'
23,648'
24,439 23,838
44,842 45,126r 45,500'
382,287
238,529
143,758
22,621
50,180
24,784
46,173
383,205
237,274
145,931
22,297
50,909
24,059
48,666
390,628
239,266
151,362
24,002
52,732
24,972
49,656
7.9 Public
30
Military
31
Highway
32
Conservation and development
33 Other
110,107
119,238
125,262
2,454
37,355
5,976
79,477
123,999
124,361
122,944
1,959
39,508
5,851
75,626
126,121
126,799 128,982' 129,255'
2,357'
2,277
2,35 LR
40,300 40,305r 40,057'
5,754'
5,935r
4,605
79,617 80,391r 81,087'
131,910
2,364
40,797
7,521
81,228
135,733
2,556
41,809
7,911
83,457
132,061
2,255
40,887
7,001
81,918
21 Total put in place
22
7.3
24
25
26
27
28
1,837
2,502
32,041
5,010
71,219
34,899
6,021
75,816
2,404
2,231
36,329
6,731
78,535
38,830
5,206
78,094
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable with data
for previous periods because of changes by the Bureau of the Census in its estimating
techniques. For a description of these changes, see Construction Reports (C-30-76-5),
issued by the Census Bureau in July 1976.
2,024
40,655
5,677
77,765
SOURCES. Bureau of the Census estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing Institute and
seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units,
which are published by the National Association of Realtors. All back and current figures
are available from the originating agency. Permit authorizations are those reported to the
Census Bureau from 17,000 jurisdictions beginning in 1984.
A50
2.15
Domestic Nonfinancial Statistics • March 1995
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
1994
1994
Item
1993
Dec.
Index
level,
Dec.
19941
1994
Dec.
Mar.
June
Sept.
Dec.
Aug.
Sept.
Oct.
Nov.
Dec.
CONSUMER PRICES2
(1982-84=100)
1 All items
2 Food
3 Energy items
4 All items less food and energy
5 Commodities
6
Services
3
2.7
2.7
2.5
2.5
3.6
2.2
.2
.1
.2
149.7
2.9
-1.4
3.2
1.6
3.9
2.9
2.2
2.6
1.4
3.2
-1.1
4.7
2.9
.6
4.2
2.8
-4.9
3.1
4.2
2.4
5.1
10.9
2.6
.6
3.6
5.0
-1.1
2.0
.3
2.6
.4
1.4
.3
-.1
.4
.3
-.7
.2
.1
.2
.0
-.7
.2
.0
.2
.2
.7
.2
.1
.3
1.0
-.3
.1
.0
.1
146.8
104.7
157.9
137.6
169.6
.2
2.4
-4.1
-.4
1.8
1.7
1.0
3.4
1.4
2.0
3.6
-.6
15.4
2.0
4.3
-.3
-5.5
-1.0
1.5
3.0
2.6
3.9
3.2
2.0
2.4
1.0
6.8
-2.6
.3
-1.8
.5'
.3r
1.8
.4
,2r
-.3'
,2r
-2.9
.If
.2'
-.5
-.2
-1.2
-.3
-1.0
.5
.2
2.1
.2
.1
.2
1.6
-1.5
.1
.4
126.2
128.5
75.8
139.9
135.1
.8
1.6
4.8
5.1
2.8
1.9
3.1
3.9
5.9
6.2
7.9
9.0
.1'
,5r
.2'
.5r
.4
.7
1.1
.9
.4
.6
121.6
130.8
7.2
-12.3
10.7
-9.3
-1.9
17.0
-4.5
10.1
22.7
-20.6
21.0
-.8
-12.9
-20.5
18.8
2.0
-12.3
30.7
- 1 .<f
.l r
-6.R
,8r
-2.0
.0
.9
1.5
-1.0
3.4
1.1
-2.3
2.5
101.7
68.7
168.0
3
PRODUCER PRICES
(1982=100)
7 Finished goods
8 Consumer foods
9
Consumer energy
10 Other consumer goods
11 Capital equipment
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
15 Energy
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rentalequivalence measure of homeownership.
,4r
1.5r
SOURCE. US. Department of Labor, Bureau of Labor Statistics.
Selected Measures
2.16
GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
Q3
Q4
QI
Q2
GROSS DOMESTIC PRODUCT
1 Total
5,724.8
6,020.2
6,343.3
6,359.2
6,478.1
6,574.7
6,689.9
By source
2 Personal consumption expenditures
3
Durable goods
4
Nondurable goods
5
Services
3,902.4
456.6
1,257.8
2,188.1
4,136.9
492.7
1,295.5
2,348.7
4,378.2
538.0
1,339.2
2,501.0
4,401.2
541.9
1,340.2
2,519.1
4,469.6
562.8
1,355.2
2,551.6
4,535.0
576.2
1,368.9
2,589.9
4,586.4
580.3
1.381.4
2,624.7
744.8
746.6
557.0
182.9
374.1
189.6
788.3
785.2
561.4
171.1
390.3
223.8
882.0
866.7
616.1
173.4
442.7
250.6
882.2
868.3
619.0
173.9
445.1
249.3
922.5
913.5
646.3
176.7
469.6
267.2
966.6
942.5
665.4
172.7
492.7
277.1
1,034.4
967.0
683.3
-1.8
3.0
-2.7
15.4
-1.2
20.1
13.9
24.2
9.0
10.7
24.1
22.3
67.4
60.4
-19.9
601.1
620.9
-30.3
638.1
668.4
-65.3
659.1
724.3
-77.0
649.0
726.0
-71.2
680.3
751.4
-86.7
674.2
760.9
-97.6
704.5
802.1
17 Government purchases of goods and services . .
18
Federal
19
Suite and local
1,097.4
445.8
651.6
1,125.3
449.0
676.3
1,148.4
443.6
704.7
1,152.9
442.7
710.2
1,157.2
439.8
717.4
1,159.8
437.8
722.0
1,166.7
435.1
731.5
By major type of product
20 Final sales, total
21
Goods
22
Durable
23
Nondurable
24
Services
25
Structures
5.726.6
2.225.7
934.2
1,291.5
3,028.9
472.0
6,017.2
2,292.0
968.6
1,323.4
3,227.2
498.1
6,327.9
2,390.4
1.032.4
1,358.1
3.405.5
532.0
6,345.4
2,381.9
1,026.8
1,355.1
3,429.3
534.1
6.469.2
2.452.6
1,072.9
1.379.7
3.459.3
557.2
6,550.6
2.489.1
1.098.2
1,390.9
3,503.8
557.7
6,622.5
2,493.7
1,099.4
1.394.3
3.555.4
573.4
-1.8
3.0
-13.0
16.0
15.4
-16.9
15.1
13.9
14.9
9.0
9.0
.0
24.1
20.6
3.5
67.4
38.2
29.2
4,867.6
4,979.3
5,134.5
5,139.4
5,218.0
5,261.1
5,314.1
30 Total
4,608.2
4,829.5
5,131.4
5,138.5
5,262.0
5,308.7
5,430.7
31 Compensation of employees
32
Wages and salaries
33
Government and government enterprises . .
34
Other
35
Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
3,404.8
545.4
2,270.6
588.8
289.8
299.0
3,591.2
2,954.8
567.3
2,387.5
636.4
307.7
328.7
3,780.4
3,100.8
583.8
2,517.0
679.6
324.3
355.3
3.801.7
3,115.9
586.1
2.529.8
685.9
327.0
358.8
3,845.8
3,148.4
587.8
2,560.7
697.4
330.6
366.8
3,920.0
3,208.3
595.7
711.7
338.5
373.2
3.979.3
3,257.2
601.9
2.655.4
722.0
343.6
378.4
38 Proprietors' income'
39
Business and professional'
40
Farm'
376.2
339.5
36.7
418.7
374.4
44.4
441.6
404.3
37.3
420.3
404.5
15.8
462.9
418.5
44.4
471.0
423.8
47.2
471.3
431.9
39.3
41 Rental income of persons2
—10.5
—5.5
24.1
26.3
30.3
15.3
34.1
42 Corporate profits'
43
Profits before tax3
44
Inventory valuation adjustment
45
Capital consumption adjustment
390.3
365.2
5.8
19.4
405.1
395.9
-6.4
15.7
485.8
462.4
29.5
493.5
458.7
3.0
31.7
533.9
501.7
-6.5
38.8
508.2
483.5
-12.3
37.0
546.4
523.1
-14.1
37.4
46 Net interest
447.4
420.0
399.5
396.7
389.1
394.2
399.7
6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
15
Exports
16
Imports
26 Change in business inventories
27
Durable goods
28
Nondurable goods
MEMO
29 Total GDP in 1987 dollars
8.6
6.7
-1.1
181.8
501.5
283.6
NATIONAL INCOME
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
2,816.0
-6.2
2,612.6
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business
A51
A52
2.17
Domestic Nonfinancial Statistics • March 1995
PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1994
1993
Account
1991
1992
Q4
Q3
Q3
Q2
Ql
PERSONAL INCOME AND SAVING
4,8603
5,1543
5,375.1
5395.9
5,484.6
5,555.8
5,659.9
5,734.5
2,816.1
738.4
557.4
648.0
884.2
545.5
2,974.8
757.6
578.3
682.3
967.6
567.3
3,080.8
773.8
588.4
701.9
1,021.4
583.8
3,115.9
781.4
594.9
709.6
1,038.8
586.1
3,148.4
791.0
601.7
712.6
1,057.0
587.8
3,208.3
801.9
609.4
728.6
1,082.0
595.7
3,257.2
811.6
612.8
742.5
1,101.2
601.9
3,293.9
821.8
618.3
753.5
1,114.3
604.4
299.0
376.2
339.5
36.7
-10.5
150.5
695.1
770.1
382.3
328.7
418.7
374.4
44.4
-5.5
161.0
665.2
860.2
414.0
355.3
441.6
404.3
37.3
24.1
181.3
637.9
915.4
444.4
358.8
420.3
404.5
15.8
26.3
182.8
634.1
921.6
446.8
366.8
462.9
418.5
44.4
30.3
184.1
627.7
931.0
452.1
373.2
471.0
423.8
47.2
15.3
185.7
631.1
947.4
463.8
378.4
471.3
431.9
39.3
34.1
191.7
649.4
957.6
470.7
383.7
467.0
437.1
29.8
32.6
196.9
674.2
969.0
476.5
236.2
248.7
261.3
263.8
266.6
276.3
279.9
282.9
4,860.3
5,154.3
5,375.1
5,395.9
5,484.6
5,555.8
5,659.9
5,734.5
623.7
648.6
686.4
695.4
707.0
723.0
746.4
744.1
2 0 EQUALS: Disposable personal i n c o m e
4,236.6
4,505.8
4,688.7
4,700.5
4,777.6
4,832.8
4,913.5
4,990.3
21
LESS: Personal outlays
4,025.0
4,257.8
4,496.2
4,518.2
4,588.2
4,657.3
4,712.4
4,787.0
22 EQUALS: Personal saving
211.6
247.9
192.6
182.3
189.4
175.5
201.1
203.3
19,263.3
12,898.9
14,003.0
19,489.7
13,110.4
14,279.0
19,878.8
13,390.8
14,341.0
19,871.2
13,425.1
14,338.0
20,119.1
13,518.9
14,451.0
20,235.2
13,639.8
14,535.0
20,389.7
13,650.9
14,625.0
20,536.5
13,716.6
14,697.0
5.0
5.5
4.1
3.9
4.0
3.6
4.1
4.1
1
Total personal income
7 Wage and salary disbursements
Commodity-producing industries
4
6
7
Government and government enterprises
8
9
Proprietors' income
10 Business and professional1
11
1? Rental income of persons2
N
14
15
16
17
Transfer payments
Old age survivors, disability, and health insurance benefits
LESS: Personal contributions for social insurance
18 EQUALS: Personal i n c o m e
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1987 dollars)
73
24
25
Personal consumption expenditures
Disposable personal income
26
Saving rate (percent)
GROSS SAVING
27
Gross saving
751.4
722.9
787.5
788.9
825.8
886.2
9233
922.6
28
Gross private saving
937.3
980.8
1,002.5
989.9
1,011.4
1,037.3
1,041.4
1,052.7
211.6
99.2
5.8
247.9
94.3
-6.4
192.6
120.9
-6.2
182.3
130.3
3.0
189.4
147.9
-6.5
175.5
127.7
-12.3
201.1
142.3
-14.1
203.3
139.5
-19.6
383.3
243.1
396.8
261.8
407.8
261.2
413.3
264.1
411.1
263.0
432.2
301.8
425.9
272.1
432.6
277.3
-185.9
-202.9
17.0
-257.8
-282.7
24.8
-215.0
-241.4
26.3
-201.0
-224.9
23.9
-185.6
-220.1
34.5
-151.1
-176.2
25.2
-118.1
-145.1
27.0
-130.1
-154.0
23.9
7,9 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
Capital consumption allowances
3?
33
Noncorporate
34
Government surplus, or deficit ( - ) , national income and
product accounts
35
36
State and local
37
Gross investment
752.9
731.7
789.8
783.4
8093
850.2
8993
901.5
38
39
Gross private domestic investment
Net foreign investment
744.8
8.1
788.3
-56.6
882.0
-92.3
882.2
-98.8
922.5
-113.2
966.6
-116.4
1,034.4
-135.1
1,055.1
-153.6
40
Statistical discrepancy
1.5
8.8
2.3
-5.5
-16.5
-36.1
-24.0
-21.1
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 noted 1
1994
1993
Item credits or debits
1991
1992
1993
Q3
Q4
Ql
Q2r
Q3P
-27,856
-36,488
111,736
-148,224
-87
14,317
2,015
-3,114
-986
-3,513
-30,587
-33,169
119,679
-152,848
-444
13,637
-590
-5,591
-987
-3,443
-32,317
-36,962
118,018
-154,980
-338
12,972
-811
-2,371
-968
-3,839
-37,906
-41,632
122,683
-164,315
177
14,809
-2,809
-3,590
-974
-3,887
-41,722
-44,633
127,817
-172,450
376
14,746
-3,948
-2,789
-1,550
-3,924
-6,952
-74,068
416,913
-490,981
-5,485
51,082
14,833
23,959
-3,461
-13,811
-67,886
-96,097
440,361
-536,458
-3,034
58,747
4,540
-15,010
-3,735
-13,297
11 Change in U.S. government assets other than official
reserve assets, net (increase, —)
2,900
-1,652
-306
-192
-321
490
462
-118
12 Change in U.S. official reserve assets (increase, - )
13
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies
5,763
0
-177
-367
6,307
3,901
0
2,316
-2,692
4,277
-1,379
0
-537
-44
-797
-545
0
-118
-48
-378
-673
0
-113
-80
-480
-59
0
-101
-3
45
3,537
0
-108
251
3,394
-165
0
-111
273
-327
-60,175
4,763
11,097
-44,740
-31,295
-63,759
22,314
45
-45,114
-41,004
-146,213
32,238
-598
-119,983
-57,871
-34,915
7,335
4,838
-40,777
-6,311
-62,628
-9,293
-303
-30,349
-22,683
-48,667
-1,236
1,941
-24,605
-24,767
-11,030
15,248
-4,264
-14,007
-8,007
-20,111
-3,458
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
27 Other foreign official assets5
17,199
14,846
1,301
1,177
-1,484
1,359
40,858
18,454
3,949
2,572
16,571
-688
71,680
48,702
4,062
1,666
14,666
2,585
19,259
19,098
1,345
1,121
-2,489
184
23,962
22,856
970
825
-587
-102
11,530
1,193
50
938
10,139
-790
8,925
6,033
2,355
252
1,241
-956
17,496
15,207
2,003
526
539
-779
28 Change in foreign private assets in United States (increase, +)
29 U.S. bank-reported liabilities3
30 U.S. nonbank-reported liabilities
31 Foreign private purchases of U.S. Treasury securities, net
32 Foreign purchases of other U.S. securities, net
33 Foreign direct investments in United States, net
80,935
3,994
-3,115
18,826
35,144
26,086
105,646
15,461
13,573
36,857
29,867
9,888
159,017
18,452
14,282
24,849
80,068
21,366
52,675
27,618
1,169
3,474
17,445
2,969
66,200
7,370
4,733
7,996
38,008
8,093
83,548
35,200
5,867
9,260
21,258
11,963
40,332
25,539
3,662
-7,434
13,152
5,413
49,943
16,826
0
-39,670
0
-17,108
0
21,096
-39,670
-17,108
21,096
0
-8,427
-6,643
-1.785
0
4,047
103
3,944
0
-14,525
5,810
-20,335
0
-4,320
639
-4,959
0
-5,323
-6,919
1,596
1 Balance on current account
2 Merchandise trade balance
3
Merchandise exports
4
Merchandise imports
5 Military transactions, net
6 Other service transactions, net
7 Investment income, net
8 U.S. government grants
9 U.S. government pensions and other transfers
10 Private remittances and other transfers
17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims3
19 Nonbank-reported claims
20 U.S. purchases of foreign securities, net
21 U.S. direct investments abroad, net
34 Allocation of special drawing rights
35
36 Due to seasonal adjustment
37 Before seasonal adjustment
-103,896
-132,575
456,866
-589,441
-763
57,613
3,946
-14,620
-3,785
-13,712
-7,146
-9,507
5,661
14,162
13,294
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)
5,763
3,901
-1,379
-545
-673
-59
3,537
-165
16,022
38,286
70,015
18,138
23,137
10,592
8,673
16,970
-4,882
5,942
-3,847
-3,194
-229
-1,674
-4,149
3,592
1. Seasonal factors are 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 5.
3. Reporting banks include all types of depository institution as well as some brokers
and dealers.
4. Associated primarily with military sales contracts and other transactions arranged
with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of
Current Business.
A54
3.11
International Statistics • March 1995
U.S. FOREIGN TRADE 1
Millions of dollars; monthly data seasonally adjusted
1994
Item
1991
1992
1993
May
June
July
Aug.
Sept.
Oct.
Nov.p
1 Goods and services, balance
2 Merchandise
3 Services
-28,472
-74,068
45,596
-40,384
-96,097
55,713
-75,725
-132,575
56,850
-9,219
-14,272
5,053
-8,845
-14,020
5,175
-10,953
-15,955
5,002
-9,060
-14,101
5,041
-9,354
-14,433
5,079
-10,097
-15,051
4,954
-10,531
-15,562
5,031
4 Goods and services, exports
5 Merchandise
6 Services
580,127
416,913
163,214
616,924
440,361
176,563
641,677
456,866
184,811
56,258
40,276
15,982
58,333
42,028
16,305
56,297
40,128
16,169
60,292
44,121
16,171
60,063
43,596
16,467
59,847
43,380
16,467
61,160
44,535
16,625
7 Goods and services, imports
8 Merchandise
9 Services
-608,599
-490,981
-117,618
-657,308
-536,458
-120,850
-717,402
-589,441
-127,961
-65,477
-54,548
-10,929
-67,178
-56,048
-11,130
-67,250
-56,083
-11,167
-69,352
-58,222
-11,130
-69,417
-58,029
-11,388
-69,944
-58,431
-11,513
-71,691
-60,097
-11,594
-66,723
-84,501
—115,568
-12,885
-13,028
-14,845
-12,758
-13388
-13,815
-14,521
MEMO
10 Balance on merchandise trade, Census
basis
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.
U.S. RESERVE ASSETS
Millions of dollars, end of period
1994
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights2,3
4 Reserve position in International Monetary
Fund2
5 Foreign currencies4
1991
1992
1993
July
Aug.
Sept.
Oct.
Nov.
Dec.p
77,719
71,323
73,442
75,732
75,443
75,740
76,532
78,172
74,000
74,335
11,057
11,240
11,056
8,503
11,053
9,039
11,052
9,731
11,052
9,696
11,054
9,837
11,054
9,971
11,053
10,088
11,052
10,017
11,051
10,039
9,488
45,934
11,759
40,005
11,818
41,532
12,184
42,765
12,183
42,512
12,161
42,688
12,067
43,440
12,339
44,692
12,037
40,894
12,030
41,215
1. Gold held "under earmark" at Federal Reserve Banks for foreign and international
accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold
stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted by the
International Monetary Fund (IMF) in July 1974. Values are based on a weighted average
of exchange rates for the currencies of member countries. From July 1974 through
December 1980, sixteen currencies were used; since January 1981, five currencies have
3.13
June
been used. U.S. SDR holdings and reserve positions in the IMF also have been valued on
this basis since July 1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the
year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net
transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1994
Asset
1991
1992
1993
June
1 Deposits
Held in custody
2 U.S. Treasury securities2
3 Earmarked gold3
Aug.
Sept.
Oct.
Nov.
Dec.1"
968
205
386
604
181
188
342
223
230
250
281,107
13,303
314,481
13,118
379,394
12,327
411,580
12,065
423,715
12,056
427,574
12,044
429,819
12,044
439,854
12,039
444,339
12,037
441,866
12,033
1. Excludes deposits and U.S. Treasury securities held for international and regional
organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury
securities, in each case measured at face (not market) value.
July
3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce;
not included in the gold stock of the United States.
Summary Statistics
3.15
A55
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1994
Item
1 Total1
2
3
4
5
6
7
8
9
10
11
12
1992
1993
Mayr
June
July
Aug.
Sept.
Oct/
Nov.p
412,624
482,858'
489,555
501,827
516,466r
518,785r
520,585r
530,968
523,703
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities
54,967
104,596
69,808
150,900
78,255
134,568
80,887r
141,338
84,889
146,244r
79,806r
143,400
82,582r
138,261
79,356
147,849
73,411
143,132
210,931
4,532
37,598
212,253r
5,652
44,245
226,144
5,837
44,751
228,823r
5,875
44,904
233,720'
5,913
45,700
242,936r
5,952
46,691
247,624'
5,990
46,128
250,425
6,031
47,307
253,070
6,069
48,021
By area
Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries6
189,230
13,700
37,973
164,690
3,723
3,306
206,921
15,285
55,898
197,758r
4,052
2,942
214,880
14,505
43,741
209,082
3,969
3,376
221,957
15,996
42,646r
211,250r
4,110
5,866
227,466r
18,656
42,749
217,93 l r
3,862
5,800
226,234'
18,597
44,224
221,IOC
4,259
4,369
225,600*
19,287
44,427
222,971r
4,388
3,910
223,162
18,402
47,847
232,126
4,232
5,197
217,404
17,339
45,306
233,835
4,673
5,144
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.
3.16
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
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 U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the
United States, and on the 1989 benchmark survey of foreign portfolio investment in the
United States.
Reported by Banks in the United States1
Millions of dollars, end of period
1994r
1993
Item
1 Banks' liabilities
2 Banks' claims
3
Deposits
Other claims
4
5 Claims of banks' domestic customers2
1990
70,477
66,796
29,672
37,124
6,309
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1991
75,129
73,195
26,192
47,003
3,398
1992
72,796
62,799
24,240
38,559
4,432
Dec/
Mar.
June
Sept,
78,120
59,262
19,404
39,858
3,058
86,459
72,696
19,684
53,012
3,655
72,312
55,978
20,499
35,479
4,182
82,183
58,536
19,623
38,913
4,987
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.
A56
3.17
International Statistics • March 1995
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1994r
Item
1991
1992
1993
May
June
July
Aug.
Sept.
Oct.
Nov.p
BY HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
756,066
810,259
920,995'
964,290
991,779
997,239
993,475
993,564
1,006,237
982,450
2 Banks' own liabilities
3 Demand deposits
4
Time deposits2
5 Other3
6 Own foreign offices4
575,374
20,321
159,649
66,305
329,099
606,444
21,828
160,385
93,237
330,994
622,847r
21,574r
175,116r
110,144r
316,013r
666,349
27,824
182,416
124,769
331,340
685,581
24,521
183,568
118,657
358,835
697,021
23,549
185,826
127,500
360,146
692,920
22,962
184,552
118,816
366,590
706,331
23,541
178,006
134,614
370,170
708,822
24,627
181,169
133,678
369,348
685,870
23,969
178,629
123,849
359,423
180,692
110,734
203,815
127,644
298,148r
176,523
297,941
161,145
306,198
171,315
300,218
170,064
300,555
170,592
287,233
164,341
297,415
174,291
296,580
168,667
18,664
51,294
21,974
54,197
36,289r
85,336r
48,776
88,020
49,915
84,968
46,257
83,897
46,416
83,547
39,033
83,859
37,681
85,443
40,050
87,863
8,981
6,827
43
2,714
4,070
9,350
6,951
46
3,214
3,691
10,936'
5,639
15
2,780
2,844
8,364
6,437
35
2,785
3,617
9,042
5,667
31
3,223
2,413
7,318
5,511
29
3,469
2,013
5,323
4,328
36
2,691
1,601
7,279
6,302
28
2,699
3,575
7,591
5,814
83
2,845
2,886
6,182
5,416
35
2,817
2,564
2,154
1,730
2,399
1,908
5,291'
4,275
1,927
857
3,375
2,825
1,807
1,082
995
836
977
767
1,777
1,572
766
501
424
0
486
5
l,022r
0
1,070
0
548
2
725
0
159
0
205
5
205
0
265
0
131,088
34,411
2,626
16,504
15,281
159,563
51,202
1,302
17,939
31,961
220,708
64,231
1,601
21,654
40,976
212,823
66,158
1,435
23,644
41,079
222,225
67,641
2,029
24,925
40,687
231,133
73,967
1,472
27,497
44,998
223,206
67,619
1,232
25,948
40,439
220,843
72,109
1,691
26,909
43,509
227,205
67,500
2,028
23,801
41,671
216,543
60,655
1,682
20,634
38,339
96,677
92,692
108,361
104,596
156,477
150,900
146,665
134,568
154,584
141,338
157,166
146,244
155,587
143,400
148,734
138,261
159,705
147,849
155,888
143,132
3,879
106
3,726
39
5,482
95
12,053
44
13,112
134
10,863
59
12,054
133
10,407
66
11,820
36
12,739
17
522,265
459,335
130,236
8,648
82,857
38,731
329,099
547,320
476,117
145,123
10,170
90,296
44,657
330,994
588,448r
476,426r
160,413r
9,719
105,192
45,502r
316,013r
629,488
511,082
179,742
15,551
109,083
55,108
331,340
646,058
530,866
172,031
12,323
108,366
51,342
358,835
649,670
536,234
176,088
11,792
106,888
57,408
360,146
652,508
536,398
169,808
11,837
107,110
50,861
366,590
646,547
538,016
167,846
10,555
101,741
55,550
370,170
652,398
545,187
175,839
11,023
106,646
58,170
369,348
640,929
532,073
172,650
11,259
106,317
55,074
359,423
62,930
7,471
71,203
11,087
112,022r
10,707
118,406
11,407
115,192
10,834
113,436
10,138
116,110
12,249
108,531
10,951
107,211
10,771
108,856
11,586
5,694
49,765
7,555
52,561
17,020
84,295r
22,081
84,918
22,347
82,011
21,446
81,852
22,049
81,812
15,388
82,192
13,248
83,192
13,654
83,616
93,732
74,801
9,004
57,574
8,223
94,026
72,174
10,310
48,936
12,928
100,903'
76,55 l r
10,239r
45,490r
20,822
113,615
82,672
10,803
46,904
24,965
114,454
81,407
10,138
47,054
24,215
109,118
81,309
10,256
47,972
23,081
112,438
84,575
9,857
48,803
25,915
118,895
89,904
11,267
46,657
31,980
119,043
90,321
11,493
47,877
30,951
118,796
87,726
10,993
48,861
27,872
18,931
8,841
21,852
10,053
24,352
10,641
30,943
14,313
33,047
16,318
27,809
12,600
27,863
14,107
28,991
14,362
28,722
14,099
31,070
13,448
8,667
1,423
10,207
1,592
12,765
946
13,572
3,058
13,908
2,821
13,223
1,986
12,154
1,602
13,033
1,596
12,408
2,215
13,392
4,230
7,456
9,111
17,567
26,385
27,075
25,589
25,338
19,160
16,813
17,582
7 Banks' custodial liabilities5
8 U.S. Treasury bills and certificates6
9
Other negotiable and readily transferable
instruments7
10 Other
11 Nonmonetary international and regional organizations 8 ...
12 Banks' own liabilities
13
Demand deposits
14
Time deposits
15
Other3
16
17
18
19
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
20 Official institutions9
21 Banks' own liabilities
Demand deposits
22
23
Time deposits2
24
Other3
25
26
27
28
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
29 Banks10
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
Time deposits2
33
34
Other3
35
Own foreign offices4
36
37
38
39
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
40 Other foreigners
41
Banks' own liabilities
Demand deposits
42
Time deposits2
43
44
Other3
45
46
47
48
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institutions, as well as some brokers
and dealers.
2. Excludes negotiable time certificates of deposit, which are included in "Other
negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts owed to own foreign branches and foreign
subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign
banks, consists principally of amounts owed to the head office or parent foreign bank, and
to foreign branches, agencies, or wholly owned subsidiaries of die head office or parent
foreign bank.
5. Financial claims on residents of the United States, other than long-term securities,
held by or through reporting banks.
6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to
official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time certificates
of deposit.
8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for International
Settlements.
10. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
3.17
Data
LIABILITIES TO FOREIGNERS Reported by Banks in the United States'—Continued
1994
Item
1991
1992
1993
May
June
July
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
11 Italy
17 Netherlands
13 Norway
14 Portugal
15 Russia
16 Spain
17 Sweden
18 Switzerland
19 Turkey
7.0 United Kingdom
21
Yugoslavia"
22 Other Europe and other former U.S.S.R.
756,066
810,259
920,995'
964,290'
991,779'
997039'
993,475'
993,564'
1,006,237
747,085
800,909
910,059'
955,926'
982,737'
989,921'
988,152'
986,285'
998,646
976,268
249,097
1,193
13,337
937
1,341
31,808
8,619
765
13,541
7,161
1,866
2,184
241
11,391
2,222
37,238
1,598
100,292
622
12,741
307,670
1,611
20,567
3,060
1,299
41,411
18,630
913
10,041
7,365
3,314
2,465
577
9,793
2,953
39,440
2,666
111,805
504
29,256
376,988r
1,917
28,627
4,517
1,872
39,741
26,613
1,519
11,559
16,096
2,966
3,366
2,511
20,493
2,572
41,555
3,227
133,936
570
33,331r
405,793'
3,309
32,612
3,207
1,849
42,131'
28,215'
1,453
13,015
ls.soc
3,278
2,853
4,016
17,832'
3,443
40,174
2,759
158,961'
424
27,762'
412,178'
3,578
25,298'
3,473
2,649
43,246
33,114
1,377
12,771
18,691'
4,018
2,920
4,497
15,839
4,043
38,075
3,250
163,338'
434
31,567
422,577'
3,364
25,145
2,877
2,504
41,410
30,838
1,153
11,537
18,446'
3,731
2,865
4,593
17,137'
5,709'
41,378
3,515
171,239*
230
34,906
419,932'
3,349
27,159
2,634
1,747
41,911
31,046'
1,199
11,725
17,199'
3,195
2,867
3,794
15,455'
4,149'
43,486
3,238
174,078'
227
31,474
406,937'
3,014
27,593
2,128
2,319
43,143
31,889'
1,227
10,781
18,754'
2,861
3,023
2,899
14,198'
4,651'
41,050'
3,013
160,361'
224
33,909'
413,700
3,610
23,591
2,374
2,601
44,209
33,136
1,711
10,701
18,034
3,400
2,859
2,337
16,324
3,467
41,834
3,133
172,376
220
27,983
393,100
4,263
22,346
2,307
1,587
41,160
31,049
1,477
9,685
17,310
2,807
2,919
2,367
15,037
3,361
41,756
3,032
162,775
240
27,822
982,450
21,605
22,420
20,227
25,948
25,480
26,625
26,341'
24,660
23,115
23,295
74 Latin America and Caribbean
25
Argentina
76 Bahamas
77 Bermuda
78 Brazil
79 British West Indies
30 Chile
31 Colombia
37
Cuba
33 Ecuador
34 Guatemala
35 Jamaica
36 Mexico
37 Netherlands Antilles
38 Panama
39 Peru
40 Uruguay
41
Venezuela
Other
42
345,529
7,753
100,622
3,178
5,704
163,620
3,283
4,661
2
1,232
1,594
231
19,957
5,592
4,695
1,249
2,096
13,181
6,879
317,228
9,477
82,284
7,079
5,584
153,033
3,035
4,580
3
993
1,377
371
19,454
5,205
4,177
1,080
1,955
11,387
6,154
357,380r
14,477
73,150r
7,830
5,301
190,446r
3,183
3,171
33
880
1,207
410
28,018
4,195
3,582
926
1,611
12,786
6,174
360,056'
13,474
79.64C
8,182
5,572
189,785'
3,286
3,865
11
842
1,137
526
21,900
7,021
3,811
91'2
1,561
12,023'
6,508
381,263'
13,750
85,817
8,975
5,708
206,466'
3,523
3,929
11
812
1,143
475
21,286
4,885
3,861
930
1,597
11,655
6,440
375,700'
14,592
87,264
10,103
6,261'
198,471'
3,353
3,773
12
819
1,207'
518
20,182'
4,301
4,087
916
1,420
12,004
6,417'
377,864'
14,806'
83,260
8,422
5,697'
204,677'
2,988
3,726
13
847
1,142'
531
20,821'
5,058
3,843
1,027
1,336
13,157
6,513'
384,805'
13,783
86,011
10,334
5,670'
208,452'
3,407
4,027
13
823
1,103'
565
19,937'
4,268
4,082'
1,079
1,399
13,297
6,555'
385,829
15,577
88,086
8,936
6,195
204,625
3,078
4,471
7
830
1,076
589
21,254
4,146
4,077
1,027
1,471
13,805
6,579
390,645
15,950
89,515
7,615
6,722
209,202
3,741
4,413
7
825
1,035
513
19,191
4,838
4,598
935
1,189
13,829
6,527
43
120,462
143,540
144,639r
152,054'
148,721'
151,279'
152,530'
158,328'
163,346
157,086
2,626
11,491
14,269
2,418
1,463
2,015
47,069
2,587
2,449
2,252
15,752
16,071
3,202
8,408
18,499
1,399
1,480
3,773
58,435
3,337
2,275
5,582
21,437
15,713
4,011
10,633
17,233
1,114
1,986
4,435
61,466r
4,913
2,035
6,137
15,824
14,852
5,358
9,820
21,665
1,521
1,537
3,460
62,971'
4,523
2,590
5,788
14,895
17,926'
6,158
8,375
19,111
2,136
2,002
3,762
64,084'
4,581
3,150
4,851
14,374
16,137
5,018
8,811
18,759'
1,695
1,676
3,822
65,671'
5,310*
3,396
5,222
14,935
16,964
4,394
8,737
18,679'
1,777
1,835
3,436
65,755'
4,873
3,214
6,364
15,928
17,538
5,062
8,863
2,187
1,828
3,204
68,242'
4,622
3,135
6,503
17,138
18,725
5,625
9,483
18,244
2,376
1,734
6,607
66,145
4,740
3,158
5,682
17,232
22,320
8,017
10,929
17,572
2,378
1,613
5,066
63,331
5,016
3,064
5,926
17,678
16,496
4,825
1,621
79
228
31
1,082
1,784
5,884
2,472
76
190
19
1,346
1,781
6,633r
2,208
99
451
12
1,303
2,560"
6,166
1,984
.93
230
8
1,057
2,794
6,411
1,999
78
290
7
1,204
2,833
6,153
1,706
80
289
8
1,291
2,779
6,360
1,914
82
417
8
1,156
2,783
6,278
2,014
72
197
9
1,186
2,800
6,375
1,996
66
245
9
1,176
2,883
6,939
2,097
67
693
10
1,227
2,845
63 Other
64 Australia
65 Other
5,567
4,464
1,103
4,167
3,043
1,124
4,192
3,308
884
5,909
2,796
3,113
8,684
5,804
2,880
7,587
6,288
1,299
5,125
3,935
1,190
5,277
3,966
1,311
6,281
5,114
1,167
5,203
4,094
1,109
66 Nonmonetary international and regional organizations....
67 International15
68 Latin American regional16
69 Other regional11
8,981
6,485
1,181
1,315
9,350
7,434
1,415
501
10,936'
6,85 l r
3,218
867
8,364'
5,635'
909
1,820
9,042'
7,058'
847
1,137
7,318
5,446
612
1,260
5,323'
3,998'
418
907
7,279'
5,350'
1,058
871
7,591
5,847
950
794
6,182
4,336
1,094
752
23 Canada
44
45
46
47
48
49
50
51
52
53
54
55
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
56
57
58
59
60
61
62
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries14
Other
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992, has
included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and
Slovenia.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United
Arab Emirates (Trucial States).
14. Comprises Algeria, Gabon, Libya, and Nigeria.
15. Principally the International Bank for Reconstruction and Development. Excludes
"holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian, African, Middle Eastern, and European regional organizations, except the
Bank for International Settlements, which is included in "Other Europe."
A57
A58
3.18
International Statistics • March 1995
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1994r
Area or country
1991
1992
1993r
May
June
July
Aug.
Sept.
Oct.
Nov.p
1 Total, all foreigners
514,339
499,437
483,600
472,814
476,201
468,933
478,179
474,585
478,743
464,477
2 Foreign countries
508,056
494,355
481,195
471,088
473,780
467,537
476,220
471,321
476,738
463,184
114,310
327
6,158
686
1,907
15,112
3,371
553
8,242
2,546
669
344
1,970
1,881
2,335
4,540
1,063
60,395
825
1,386
123,377
331
6,404
707
1,418
14,723
4,222
717
9,047
2,468
355
325
3,147
2,755
4,923
4,717
962
63,430
569
2,157
121,253
413
6,535
382
594
11,497
7,693
679
8,845
3,063
396
834
2,310
2,766
4,082
6,567
1,287
60,997
536
1,777
123,645
486
6,389
1,332
656
13,089
8,303
682
6,753
3,272
605
948
1,656
2,823
3,386
6,487
1,324
63,160
361
1,933
119,779
416
7,113
539
695
13,750
7,264
661
6,093
3,003
620
989
1,605
2,497
3,383
6,674
1,210
61,170
340
1,757
123,072
470
6,915
622
735
13,263
7,927
583
6,039
3,006
751
1,035
1,541
1,900
3,601
9,028
1,208
62,492
275
1,681
124,237
442
6,543
464
507
15,992
9,996
657
5,518
2,948
826
1,040
1,378
2,664
4,168
6,938
1,152
61,264
273
1,467
119,758
282
7,250
521
599
14,829
8,650
613
5,308
2,854
650
1,182
1,272
2,211
3,903
5,854
1,024
60,518
258
1,980
131,506
440
6,323
880
591
16,292
8,496
520
6,652
3,358
905
1,056
1,220
2,731
3,156
7,670
1,142
68,231
266
1,577
119,252
369
6,237
668
718
12,906
8,114
518
5,957
3,319
985
1,006
1,172
2,188
3,596
6,544
895
62,545
266
1,249
3 Europe
4
Austria
5 Belgium and Luxembourg
6 Denmark
7 Finland
8 France
9 Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Russia
16 Spain
17 Sweden
18 Switzerland
19 Turkey
20 United Kingdom
21 Yugoslavia^.
22 Other Europe and other former U.S.S.R.3
23 Canada
15,113
13,845
18,413
17,187
20,496
19,888
19,678
19,226
16,384
17,750
24 Latin America and Caribbean
25 Argentina
26
Bahamas
27 Bermuda
28 Brazil
29 British West Indies
30 Chile
31 Colombia
32 Cuba
33 Ecuador
34 Guatemala
35 Jamaica
36 Mexico
37 Netherlands Antilles
38 Panama
39 Peru
40
Uruguay
41
Venezuela
42
Other
246,137
5,869
87,138
2,270
11,894
107,846
2,805
2,425
0
1,053
228
158
16,567
1,207
1,560
739
599
2,516
1,263
218,078
4,958
60,835
5,935
10,773
101,507
3,397
2,750
0
884
262
162
14,991
1,379
4,654
730
936
2,525
1,400
224,112
4,427
65,060
8,034
11,812
97,997
3,616
3,179
0
680
286
195
15,838
2,367
2,892
653
952
2,907
3,217
219,696
5,178
64,993
6,876
11,933
94,245
3,353
3,229
0
683
291
198
16,095
2,872
2,324
909
551
2,475
3,491
221,604
5,506
64,088
6,276
11,285
98,112
3,419
3,366
0
707
312
194
16,463
2,366
2,197
908
608
2,428
3,369
215,608
5,811
67,955
5,783
10,547
89,528
3,327
3,326
8
683
308
186
16,378
2,118
2,335
926
748
2,240
3,401
223,297
5,876
63,358
7,328
10,051
100,519
3,410
3,414
0
604
320
210
16,459
2,139
2,386
924
706
2,146
3,447
220,137
5,585
63,096
5,430
10,278
100,657
3,391
3,459
0
624
310
204
16,223
1,295
2,372
943
711
2,055
3,504
221,254
5,588
65,196
5,186
10,188
99,345
3,429
3,670
12
628
337
255
16,825
1,158
2,307
857
800
1,934
3,539
217,065
5,715
62,039
6,697
9,759
95,972
3,624
3,768
3
632
335
251
17,282
1,781
2,304
884
652
1,950
3,417
43 Asia
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries4
Other
125,262
131,789
110,751
103,851
104,859
102,408
102,391
105,597
101,098
103,253
747
2,087
9,617
441
952
860
84,807
6,048
1,910
1,713
8,284
7,796
906
2,046
9,642
529
1,189
820
79,172
6,179
2,145
1,867
18,540
8,754
2,299
2,628
10,878
589
1,522
826
59,616
7,569
1,408
2,154
14,398
6,864
802
2,024
9,016
738
1,378
710
53,048
7,410
914
2,947
18,323
6,541
784
1,948
9,782
784
1,319
671
55,496
7,974
654
2,979
16,565
5,903
951
1,786
10,045
791
1,369
638
53,286
8,112
514
2,839
16,342
5,735
764
1,807
9,921
829
1,363
675
52,597
8,553
533
2,784
16,080
6,485
1,177
1,256
13,066
950
1,343
663
52,872
8,639
562
2,686
15,293
7,090
822
1,467
10,354
951
1,326
860
50,032
8,869
639
2,756
15,424
7,598
817
1,485
11,228
1,001
1,361
696
53,261
9,252
583
2,676
14,455
6,438
4,928
294
575
1,235
4
1,298
1,522
4,279
186
441
1,041
4
1,002
1,605
3,857
196
481
633
4
1,129
1,414
3,698
219
477
575
5
1,217
1,205
3,784
281
518
556
4
1,235
1,190
3,456
234
479
492
3
1,194
1,054
3,659
229
485
656
3
1,189
1,097
3,473
250
490
569
3
1,103
1,058
3,147
237
468
480
3
955
1,004
3,080
229
480
454
3
879
1,035
63 Other
64
Australia
65
Other
2,306
1,665
641
2,987
2,243
744
2,809
2,072
737
3,011
1,369
1,642
3,258
1,489
1,769
3,105
1,587
1,518
2,958
1,390
1,568
3,130
1,810
1,320
3,349
2,158
1,191
2,784
1,687
1,097
66 Nonmonetary international and regional organizations 6 ...
6,283
5,082
2,405
1,726
2,421
1,396
1,959
3,264
2,005
1,293
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries5
Other
1. Reporting banks include all types of depository institutions, as well as some brokers
and dealers.
2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements. Since December 1992, has included
all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in "Other
Europe."
Nonbank-Reported
3.19
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
United States1 Payable in U.S. Dollars
Data
Reported by Banks in the
Millions of dollars, end of period
1994r
Type of claim
1991
1993r
1992
May
June
472,814
22,198
284,907
98,741
50,394
48,347
66,968
476,201
21,250
289,930
101,908
51,016
50,892
63,113
July
Aug.
Sept.
468,933
21,536
283,848
100,922
50,849
50,073
62,627
478,179
22,392
287,022
102,200
49,809
52,391
66,565
474,585
24,419
283,308
100,414
50,736
49,678
66,444
Nov.P
478,743
22,124
287,037
106,564
52,699
53,865
63,018
464,477
20,517
277,104
103,374
50,415
52,959
63,482
23,029
n.a.
528,301
1 Total
579,683
559,495
535,131
2 Banks' claims
3 Foreign public borrowers
4
Own foreign offices2
5 Unaffiliated foreign banks
6
Deposits
7
Other
8 All other foreigners
514,339
37,126
318,800
116,602
69,018
47,584
41,811
499,437
31,367
303,991
109,342
61,550
47,792
54,737
483,600
28,904
286,880
98,165
47,039
51,126
69,651
65,344
15,280
60,058
15,452
51,531
20,006
56,569
24,051
37,125
31,474
17,842
18,853
16,260
12,939
13,132
13,683
13,665
13,015
8,974
8,655
7,854
7,493
7,605
43,024
38,623r
26,073
9 Claims of banks' domestic customers3
10 Deposits
11 Negotiable and readily transferable
instruments4
12 Outstanding collections and other
claims
Oct.
532,770
53,716
24,441
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States5
23,161
1. For banks' claims, data are monthly; for claims of banks' domestic customers, data
are for quarter ending with month indicated.
Reporting banks include all types of depository institution, as well as some brokers and
dealers.
2. For U.S. banks, includes amounts due from own foreign branches and foreign
subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign
banks, consists principally of amounts due from the head office or parent foreign bank,
3.20
23,748
22,880
23,026
24,456
and to foreign branches, agencies, or wholly owned subsidiaries of the head office or
parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit 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.
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1994
1993
Maturity, by borrower and area2
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 less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3
1990
1992
Dec.r
Mar.r
Juner
Sept.
206,903
195,302
195,119
195,180
193,306
185,359
190,087
165,985
19,305
146,680
40,918
22,269
18,649
162,573
21,050
141,523
32,729
15,859
16,870
163,325
17,813
145,512
31,794
13,266
18,528
166,567
17,563
149,004
28,613
10,813
17,800
166,741
15,953
150,788
26,565
9,260
17,305
160,270
12,786
147,484
25,089
8,056
17,033
164,622
16,683
147,939
25,465
7,379
18,086
49,184
5,450
49,782
53,258
3,040
5,272
51,835
6,444
43,597
51,059
2,549
7,089
53,300
6,091
50,376
45,709
1,784
6,065
56,432
7,545
56,720
40,341
1,821
3,708
58,919
7,272
58,942
36,007
1,620
3,981
51,037
8,258
56,552
37,992
1,798
4,633
57,732
7,197
56,779
36,116
1,496
5,302
3,859
3,290
25,774
5,165
2,374
456
3,878
3,595
18,277
4,459
2,335
185
5,367
3,287
15,312
5,038
2,380
410
4,404
2,553
13,863
5,412
1,934
447
3,840
2,548
13,023
4,704
2,001
449
3,327
2,451
12,420
4,607
1,849
435
3,609
2,612
12,145
4,801
1,836
462
1. Reporting banks include all kinds of depository institutions besides commercial
banks, as well as some brokers and dealers.
1991
2. Maturity is time remaining to maturity,
3. Includes nonmonetary international and regional organizations.
A59
A60
3.21
International Statistics • March 1995
CLAIMS ON FOREIGN COUNTRIES
Held by U.S. and Foreign Offices of U.S. Banks1
Billions of dollars, end of period
1992
Area or country
1990
1993
1994
1991
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.p
320.1
343.6
344.5
346.5
361.0
377.0
3883
403.7
488.9
4953
502.8
132.2
.0
10.4
10.6
5.0
.0
2.2
4.4
60.9
5.9
24.0
137.6
6.0
11.0
8.3
5.6
4.7
1.9
3.4
68.5
5.8
22.6
136.0
6.2
15.3
10.9
6.4
3.7
2.2
5.2
61.0
6.3
18.9
132.9
5.6
15.3
9.3
6.5
2.8
2.3
4.8
60.8
6.3
19.3
142.4
6.1
13.5
9.9
6.7
3.6
3.0
5.3
65.7
8.2
20.4
150.0
7.0
14.0
10.8
7.9
3.7
2.5
4.7
73.5
8.0
17.9
153.3
7.1
12.3
12.4
8.7
3.7
2.5
5.6
74.7
9.7
16.8
161.0
7.4
11.7
12.6
7.6
4.7
2.5
5.9
84.5
6.6
17.4
178.0
7.9
16.4
28.7
15.5
4.1
2.8
6.3
69.8
7.6
18.8
165.6
8.6
18.8
24.3
14.0
3.6
2.9
6.5
57.7
9.5
19.6
183.8
9.5
19.3
24.3
11.6
3.4
2.6
6.2
81.0
9.8
16.0
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
22.9
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
1.2
1.8
1.8
22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7
25.0
.7
1.5
1.0
3.0
1.6
.5
9.7
1.5
1.5
1.7
2.3
24.0
1.2
.9
.7
3.0
1.2
.4
8.9
1.3
1.7
1.7
2.9
25.4
1.2
.8
.7
2.7
1.8
.7
9.5
1.4
2.0
1.6
2.9
27.2
1.3
1.0
.9
3.1
1.8
.9
10.5
2.1
1.7
1.3
2.5
26.0
.6
1.1
.6
3.2
2.1
1.0
9.3
2.1
2.2
1.2
2.8
24.6
.4
1.0
.4
3.2
1.7
.8
8.9
2.1
2.6
1.1
2.3
41.2
1.0
1.1
1.0
3.8
1.6
1.2
12.3
2.4
3.0
1.2
12.7
43.2
1.0
1.1
.8
4.6
1.6
1.1
13.2
2.1
2.8
1.2
13.7
41.5
1.0
.8
.8
4.3
1.6
1.0
13.0
1.8
1.0
1.2
15.0
25 OPEC2
26 Ecuador
27
Venezuela
28
Indonesia
29 Middle East countries
30 African countries
12.8
1.0
5.0
2.7
2.5
1.7
14.5
.7
5.4
2.7
4.2
1.5
15.9
.7
5.4
3.0
5.4
1.4
16.1
.6
5.2
3.0
6.2
1.1
16.6
.6
5.1
3.1
6.6
1.1
15.7
.6
5.5
3.1
5.4
1.1
14.8
.5
5.4
2.8
4.9
1.1
16.7
.5
5.1
3.2
6.7
1.2
22.4
.5
4.7
3.4
12.8
1.0
21.5
.5
4.4
3.2
12.4
1.1
21.5
.4
3.9
3.2
13.0
1.0
31 Non-OPEC developing countries
65.4
63.9
72.8
72.1
74.4
76.6
77.0
82.5
93.4
93.9
91.9
5.0
14.4
3.5
1.8
13.0
.5
2.3
4.8
9.6
3.6
1.7
15.5
.4
2.1
6.2
10.8
4.2
1.7
17.1
.5
2.5
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.0
11.6
4.6
1.9
16.8
.4
2.6
6.6
12.3
4.6
1.9
16.8
.4
2.7
7.2
11.7
4.7
2.0
17.5
.3
2.6
7.7
12.0
4.7
2.1
17.7
.4
3.0
8.7
12.5
5.1
2.2
18.7
.5
2.6
9.8
11.8
5.1
2.4
18.3
.6
2.7
10.5
9.1
5.4
2.4
19.5
.6
2.7
1 Total
2 G-10 countries and Switzerland
3 Belgium and Luxembourg
4
France
Germany
5
6
Italy
Netherlands
7
8
Sweden
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
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 Asia
.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7
.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.0
.3
5.0
3.6
.4
7.4
3.0
3.6
2.2
2.7
.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
2.7
.6
5.3
3.1
.5
6.5
3.4
3.4
2.2
2.7
1.6
5.9
3.1
.4
6.9
3.7
2.9
2.4
2.6
.5
6.4
2.9
.4
6.5
4.1
2.6
2.8
3.0
2.0
7.3
3.2
.5
6.7
4.4
3.1
3.1
2.9
.8
7.5
3.6
.4
13.9
5.2
3.4
2.9
3.1
.7
7.1
3.7
.4
14.1
5.2
3.2
3.3
3.5
1.0
6.9
3.9
.4
13.9
3.9
2.9
3.4
3.6
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa'
.4
.8
.0
1.0
.4
.7
.0
.7
.3
.6
.0
.9
.2
.6
.0
1.0
.2
.5
.0
.8
.2
.6
.0
.9
.2
.6
.0
.8
.4
.6
.0
.8
.4
.7
.0
1.0
.5
.7
.0
.9
.3
.7
.0
.9
52 Eastern Europe
53 Russia4
54
Yugoslavia5
55
Other
2.3
.2
1.2
.9
2.4
.9
.9
.7
3.1
1.8
.7
.7
3.1
1.9
.6
.6
2.9
1.7
.6
.7
3.2
1.9
.6
.7
3.0
1.7
.6
.7
3.0
1.6
.6
.9
3.3
1.5
.5
1.4
3.0
1.2
.5
1.4
3.4
1.1
.5
1.9
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama6
62 Lebanon
63 Hong Kong
64
Singapore
65
Other'
44.7
2.9
4.4
11.7
7.9
1.4
.1
9.7
6.6
.0
54.2
11.9
2.3
15.8
1.2
1.4
.1
14.4
7.1
.0
54.5
8.9
3.8
16.9
.7
2.0
.1
15.2
6.8
.0
58.3
6.9
6.2
21.8
1.1
1.9
.1
13.8
6.5
.0
60.2
9.7
4.1
17.6
1.6
2.0
.1
16.7
8.4
.0
58.0
7.1
4.5
15.6
2.5
2.1
.1
16.9
9.3
.0
67.9
12.7
5.5
15.1
2.8
2.1
.1
19.1
10.4
.0
72.5
12.6
8.1
16.9
• 2.3
2.4
.1
18.7
11.2
.1
78.3
15.4
8.4
17.2
2.7
2.0
.1
19.7
12.7
.0
76.6
13.5
6.1
20.1
2.4
1.9
.1
21.8
10.6
.0
77.9
16.4
5.3
20.5
1.7
1.8
.1
20.3
11.7
.1
66 Miscellaneous and unallocated8
39.9
48.0
36.8
39.7
38.8
46.2
46.3
43.3
72.0
91.0
82.5
:
1. The banking offices covered by these data include U.S. offices and foreign branches
of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices net
covered include U.S. agencies and branches of foreign banks. Beginning March 1994, the
data include large foreign subsidiaries of U.S. banks. The data also include other types of
U.S. depository institutions as well as some types of brokers and dealers. To eliminate
duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S.
office or another foreign branch of the same banking institution.
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.
4.
5.
6.
7.
8.
Excludes Liberia. Beginning March 1994 includes Namibia.
As of December 1992, excludes other republics of the former Soviet Union.
As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia.
Includes Canal Zone.
Foreign branch claims only.
Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported Data
3.22
A61
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States1
Millions of dollars, end of period
1994
1993
Type of liability, and area or country
1990
1991
1992
June
Sept.
Dec.
Mar.
June
Sept.p
1 Total
46,043
44,708
45,331'
46,502'
48,513'
49,645'
51,728'
55,265
56,712
2 Payable in dollars
3 Payable in foreign currencies
40,786
5,257
39,029
5,679
37,276
8,055r
36,988r
9,514r
39,270*
9,243r
38,361'
11,284'
38,074'
13,654'
42,463
12,802
41,880
14,832
By type
4 Financial liabilities
Payable in dollars
5
6
Payable in foreign currencies
21,066
16,979
4,087
22,518
18,104
4,414
23,661r
16,780
6,881
25,100
16,935
8,165
26,731
18,705
8,026
28,254
18,175
10,079
30,111
18,481
11,630
33,226
22,424
10,802
35,483
22,533
12,950
7 Commercial liabilities
8
Trade payables
Advance receipts and other liabilities . . .
9
24,977
10,683
14,294
22,190
9,252
12,938
21,670
9,566
12,104
21,402r
9,358r
12,044
21,782r
9,215r
12,567
21,391'
8,787'
12,604'
21,617'
8,944'
12,673
22,039
9,855
12,184
21,229
9,504
11,725
10
11
Payable in dollars
Payable in foreign currencies
23,807
1,170
20,925
1,265
20,496
1,174
20,053r
l,349r
20,565r
1,217'
20,186'
1,205'
19,593'
2,024'
20,039
2,000
19,347
1,882
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
10,978
394
975
621
1,081
545
6,357
12,003
216
2,106
682
1,056
408
6,528
13,207
414
1,623
889
606
569
8,430
14,199
268
2,219
863
585
491
9,118
16,445
278
2,077
855
573
378
11,694
18,185
175
2,326
975
534
634
12,925
20,293
525
2,589
1,214
564
1,200
13,595
23,564
503
1,590
939
533
631
18,151
23,455
650
2,241
1,467
648
633
16,501
19
Canada
229
292
544
493
663
859
508
698
618
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
4,153
371
0
0
3,160
5
4
4,784
537
114
6
3,524
7
4
4,053
379
114
19
2,850
12
6
4,199
476
124
18
2,901
11
5
3,719
1,301
114
18
1,600
15
5
3,359
1,148
0
18
1,533
17
5
3,553
1,157
120
18
1,613
14
5
3,282
1,052
115
18
1,454
13
5
3,159
1,112
15
7
1,364
15
5
27
28
29
Asia2
Japan
Middle Eastern oil-exporting countries'
5,295
4,065
5
5,381
4,116
13
5,818r
4,750r
19
6,039
4,857
19
5,754
4,725
23
5,689
4,620
23
5,601
4,589
24
5,643
4,709
24
8,099
6,897
31
30
Africa
2
0
6
4
6
0
130
123
132
124
133
123
133
124
9
0
133
123
409
52
33
40
18
29
23
30
19
10,310
275
1,218
1,270
844
775
2,792
8,701
248
1,039
1,052
710
575
2,297
7,398
298
700
729
535
350
2,505
6,804r
269
774r
603
576r
441
2,186
7,048r
257
642r
571
600'
536
2,319
6,830'
239'
654'
684
688'
375
2,051
6,545r
252'
553r
577
628
387
2,155f
6,903
254
711
669
642
472
2,309
6,830
287
741
551
648
390
2,349
1,261
1,014
1,002
939r
31
32
33
34
35
36
37
38
39
40
Oil-exporting countries4
All other5
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
845'
881'
1,037'
1,062
1,061
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,672
12
538
145
30
475
130
1,355
3
310
219
107
307
94
1,533
3
307
209
33
457
142
l,824r
6
356
226
16
658r
172
1,754'
4
340
214
35'
576'
173
1,663'
21
348
216
26
483'
126
1,907'
8
493
211
19
556'
150
2,004
2
416
217
23
705
194
1,784
6
198
148
32
670
192
48
49
50
Asia2
Japan
Middle Eastern oil-exporting countries'
9,483
3,651
2,016
9,334
3,721
1,498
10,594
3,612
1,889
10,518r
3,390
1,815
10,915'
3,726
1,968
10,961'
4,31 (f
1,526'
10,904'
4,612'
1,533
10,898
4,385
1,813
10,427
4,231
1,675
51
52
Africa
Oil-exporting countries
844
422
715
327
568
309
665
378
641
320
464'
171
490
199
523
247
482
271
53
Other5
1,406
1,071
575
652
579
592
734
649
645
1. For a description of the changes in the international statistics tables, see Federal
Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Revisions include a reclassification of transactions, which also affects the totals for
Asia and the grand totals.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.
A62
International Statistics • March 1995
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States1
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
1994r
1993
Type of claim, and area or country
1990
1991
1992r
June
1 Total
35,348
45,262
Sept.
Dec.r
45,073
45,680r
46,002r
r
Mar.
June
Sept.p
48,853
48,849
50,664
51,334
32,760
2,589
42,564
2,698
42,281
2,792
42,245
3,435r
42,314r
3,688r
45,523
3,330
45,312
3,537
47,028
3,636
47,859
3,475
By type
4 Financial claims
5 Deposits
6
Payable in dollars
7
Payable in foreign currencies
8 Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
19,874
13,577
12,552
1,025
6,297
5,280
1,017
27,882
20,080
19,080
1,000
7,802
6,910
892
26,509
17,695
16,872
823
8,814
7,890
924
25,632r
14,298r
13,329r
969
ll,334 r
10,185r
1,149
26,902'
14,512r
13,503r
1,009
12,390r
ll,282 r
1,108
28,537
16,815
16,041
774
11,722
10,641
1,081
28,607
16,943
16,117
826
11,664
10,575
1,089
29,706
17,449
16,598
851
12,257
11,163
1,094
30,126
18,650
17,795
855
11,476
10,555
921
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
15,475
13,657
1,817
17,380
14,468
2,912
18,564
16,007
2,557
20,048'
17,565r
2,483
W.lOO'
16,122r
2,978
20,316
17,372
2,944
20,242
17,404
2,838
20,958
18,187
2,771
21,208
18,486
2,722
14
15
14,927
548
16,574
806
17,519
1,045
18,731r
l,317r
17,529r
l,571r
18,841
1,475
18,620
1,622
19,267
1,691
19,509
1,699
9,645
76
371
367
265
357
7,971
13,441
13
269
283
334
581
11,534
9,331
8
764
326
515
490
6,252
9,745r
74
781
383
500r
494
6,579
8,376r
70
708
362
485
512
5,230
8,136
131
785
452
502
515
4,608
7,545
122
753
419
503
520
4,136
8,093
83
859
407
480
495
4,696
8,966
114
825
331
512
747
5,373
2,934
2,642
1,833
2,034r
2,103r
r
2 Payable in dollars
3 Payable in foreign currencies
16
17
18
19
20
21
22
23
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Switzerland
United Kingdom
Canada
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
Asia
Japan
Middle Eastern oil-exporting countries2
34
35
Africa
Oil-exporting countries3
36
37
38
39
40
41
42
43
All other
4
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
2,206
2,573
3,547
3,374
6,201
1,090
3
68
4,635
177
25
10,717
827
8
351
9,056
212
40
13,893
778
40
686
11,747
445
29
10,095
827r
258
590
7,484r
665
24
12,965r
980*
197
590
10,000*
882
25
15,834
968
125
599
12,807
865
161
15,363
1,157
34
567
12,463
782
26
15,393
1,187
65
370
12,940
507
33
15,061
1,198
52
341
12,655
433
32
860
523
8
640
350
5
864
668
3
3,016
2,485
10
2,754r
2,213'
5
1,785
1,047
3
2,646
1,782
5
2,209
1,351
2
2,169
677
19
37
0
57
1
83
9
125
1
88
1
99
1
76
0
74
1
87
1
195
385
505
617
616
477
404
390
469
7,044
212
1,240
807
555
301
1,775
8,193
194
1,585
955
645
295
2,086
8,451
189
1,537
933
552
362
2,094
9,083r
173
1,511
1,046
565
442
2,561r
8,201r
163
1,438
935
410
376
2,287r
8,897
184
1,941
999
417
424
2,268
8,534
173
1,817
923
351
404
2,219
8,726
179
1,761
920
288
675
2,338
8,591
172
1,758
860
323
530
2,371
44
Canada
1,074
1,121
1,286
1,359
1,360
1,355
1,440
1,451
1,483
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,375
14
246
326
40
661
192
2,655
13
264
427
41
842
203
3,043
28
255
357
40
924
345
3,456
17
239
788
43
913
317
3,071
20
225
407
39
866
286
3,210
11
173
462
70
946
295
3,505
12
210
422
58
986
291
3,809
17
285
494
66
1,000
303
3,844
33
236
465
48
1,040
381
52
53
54
Asia
Japan
Middle Eastern oil-exporting countries2
4,127
1,460
460
4,591
1,899
620
4,866
1,903
693
5,220
1,885
673
5,538
2,519
456
5,836
2,154
709
5,772
2,339
656
6,041
2,327
601
6,341
2,427
604
55
56
Africa
Oil-exporting countries
488
67
430
95
554
78
516
99
493
107
513
84
512
101
483
90
447
68
57
Other4
367
390
364
414
437
505
479
448
502
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
3.24
A63
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1994
1994
Transaction, and area or country
1992
1993
Jan.Nov.
June
May
July
Aug.
Sept.
Oct.
Nov.p
29,312
26,400
28,849
30,431
27,794
29,841
28,719
27,640
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
221,367
226,503
319,728
298,145
3 Net purchases, or sales (—)
-5,136
21,583
4,566
1,586
—l,976r
-842
2,912
—1,582
-2,047
1,079
4 Foreign countries
-5,169
21,311
4,558
1,569
—l,967r
-846
2,914
-1,596
-2,079
1,056
-4,927
-1,350
-80
-262
168
-3,301
1,407
2,203
-88
-3,943
-3,598
10
169
10,665
-103
1,647
-600
2,986
4,560
-3,213
5,724
-328
8,198
3,825
63
202
8,031
-99
2,521
1,640
18
1,893
-1,266
-1,036
-991
-874
1,472
55
639
1,219
210
398
176
30
174
156
-207
49
476
335
-1
-123
-378
-241
119
89
74
-322
-529
-839
-111
-219'
171
6
103
-291
-68
56
357
82
-830
-313
-476
-94
280
555
-7
55
1,424
-22
73
266
136
866
-366
989
-281
1,031
1,132
0
117
-1,198
-63
-104
-134
-104
-641
57
-625
-431
589
761
10
2
-1,394
-198
-158
316
-655
-557
-416
-516
-75
335
251
12
-25
205
-25
-57
264
-557
560
-116
673
1
290
289
-4
7
33
272
8
17
4
-2
14
32
23
214,922
175,842
283,946'
217,932r
273,025
216,783
24,955
20,868
31,875'
21,123
25,166
18,898
22,963
15,686
19,131
17,540'
20,204
16,304
22,362
15,946
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 East1
Other Asia
Japan
Africa
Other countries
18 Nonmonetary international and
regional organizations
321,032
322,466
28,273'
30,249
26,699
25,113
-9
24,332
25,174
BONDS2
19 Foreign purchases
20 Foreign sales
21 Net purchases, or sales (—)
39,080
66,014r
56,242
4,087
10,752r
6,268
7,277
l,591 r
3,900
6,416
22 Foreign countries
37,964
65,476r
55,623
4,025
10,624'
5,883
7,344
l,574 r
3,901
6,408
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 East1
Other Asia
Japan
Africa
Other countries
17,435
1,203
2,480
540
-579
12,421
237
9,300
3,166
7,545
-450
354
-73
22,586r
2,346
885
-290
-627
19,686r
1,668
15,697
3,257
20,846
11,569
1,149
273
34,788
239
196
3,058
901
31,006
2,556
4,387
926
12,247
5,682
48
671
528
-3
-244
358
136
894
286
762
17
2,287
1,575
10
135
6,031
47
52
868
144
5,624
422
1,553
339
2,263r
1,396
9
7
4,531
21
52
29
-192
4,409
625
-527
375
766
712
-23
136
5,152
-18
34
610
-9
4,497
519
-81
157
1,558
763
18
21
2,406
-16
-355
-64
292
1,997
194
-1,852'
-76
857
340
2
43
3,546
105
449
125
4
1,475
460
-981
56
745
375
20
55
3,696
-106
200
412
351
3,672
201
1,290
-86
1,301
419
8
-2
36 Nonmonetary international and
regional organizations
1,116
538
619
62
128
385
-67
17
-1
8
Foreign securities
37 Stocks, net purchases, or sales (—)
38 Foreign purchases
39 Foreign sales3
40 Bonds, net purchases, or sales (—)
41 Foreign purchases
42 Foreign sales
-32,259
150,051
182,310
-15,605
513,589
529,194
-63,287 r
245,561'
308,848r
-70,136 r
828,922'
899,058'
-45,036
358,437
403,473
-20,033
839,813
859,846
-4,028
30,946
34,974
-152'
64,158
64,310'
-6,715
31,098
37,813
427
71,762
71,335
-3,093
29,291
32,384
-2,282'
59,351
61,633'
-4,568
30,534
35,102
861
67,288
66,427
679
37,367
36,688
-1,150
78,604
79,754
-4,350
29,875
34,225
-4,156
70,415
74,571
-2,550
28,246
30,796
-1,899
66,487
68,386
43 Net purchases, or sales ( - ) , of stocks and bonds
—47,864 —133,423r
-65,069
-4,180 r
-6,288
-5,375 r
r
r
-3,707
-471
—8,506
-4,449
44 Foreign countries
—51,274 —133,584
-64,834
—4,467
-6,281
—S,557r
-3,890
56
-8,356
-4,402
45
46
47
48
49
50
-31,350
-6,893
-4,340
-7,923
-13
-755
-90,005'
-14,997
-9,229
-15,300'
-185
-3,868
-8,865
-9,080
-21,631
-20,868
-529
-3,861
-1,296'
436
-2,421
-528
-4
-654
4,268
-769
-4,997
-4,309
-45
-429
-2,490'
-2,041
-1,437
339
29
43
-174
-600
-2,287
-321
48
-556
-2,931
865
4,819
-1,913
-22
-762
-4,548
-815
-1,573
-1,249
-73
-98
-1,049
-991
-1,995
719
-269
-817
3,410
161
-235
287
-7
182
183
-527
-150
-47
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.
A64
3.25
International Statistics • March 1995
Foreign Transactions1
MARKETABLE U.S. TREASURY BONDS AND NOTES
Millions of dollars; net purchases, or sales (—) during period
1994
Area or country
1992
1994
1993
Jan.Nov.
May
June
July
Aug.
Sept.
Oct.
Nov.p
1 Total estimated
39,288
23,451r
66,147
19,778
—5,353
1,710
15,160
ll,085 r
10,590
13,151
2 Foreign countries
37,935
23,225'
65,842
19,727
-4,901
2,043
14,744
11,163'
9,495
13,139
3
4
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
19,625
1,985
2,076
-2,959
-804
488
24,184
-5,345
562
-2,403
1,218
-9,975
-515
1,421
-1,501
6,167
782
10,309
30,194
623
5,944
1,256
733
-261
16,461
5,438
3,805
8,772
147
2,279
21
150
-211
4,955
1,431
98
-2,702
-170
143
560
257
158
-5,562
1,912
-11
4,891
-78
714
120
100
-416
4,820
-369
2,937
8,274
529
1,795
-15
-158
-259
5,361
1,021
1,888
3,922
-15
-243
-68
105
441
3,522
180
1,515
-1,430
32
254
954
-37
-718
-1,822
-93
-420
7,780
19
924
-2
211
-1,512
7,728
412
-1,282
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
-3,222
539
-1,956
-1,805
23,517
9,817
1,103
-3,650
-4,572
390
-5,806
844
20,581'
17,070
1,156
-1,846
-10,826
-361
-20,125
9,660
42,605
27,517
182
-118
-2,652
-130
-2,708
186
13,286
8,185
-29
252
-7,080
-9
-6,744
-327
5,128
5,099
16
-252
-7,273
17
-7,663
373
2,522
-812
5
-1,039
-2,310
-132
3,172
-5,350
5,987
3,681
80
825
-666
19
1,487
-2,172
6,761'
3,210
200
-569
6,683
7
-446
7,122
4,386
2,190
135
141
713
43
-2,086
2,756
4,942
4,551
-11
997
1,353
1,018
533
226
-279
654
305
351
78
51
70
-111
-452
-395
54
-333
-425
23
416
317
-4
-78
-65
-1
1,095
1,074
6
12
48
4
37,935
6,876
31,059
23,225'
1,322'
21,903
65,842
40,817
25,025
19,727
11,253
8,474
-4,901
2,679
-7,580
2,043
4,897
-2,854
14,744
9,216
5,528
11,163'
4,688
6,475'
9,495
2,801
6,694
13,139
2,645
10,494
4,317
11
-8,836
-5
426
1
-342
0
-495
0
12
0
621
1
3
0
445
0
623
0
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Japan
Africa
Other
20 Nonmonetary international and regional organizations
21 International
22 Latin American regional
MEMO
23 Foreign countries
24 Official institutions
Other foreign2
25
Oil-exporting countries
26 Middle East 2
27
1. Official and private transactions in marketable US. 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
3.26
A65
DISCOUNT RATES O F FOREIGN CENTRAL BANKS1
Percent per year, averages of daily figures
Rate on Jan. 31, 1995
Country
Rate on Jan. 31, 1995
Country
Month
effective
Month
effective
4.5
4.5
8.23
5.0
5.0
Austria..
Belgium.
Canada..
Denmark
France2 .
May 1994
May 1994
Jan. 1995
May 1994
July 1994
4.5
7.5
1.75
4.5
Germany...
Italy
Japan
Netherlands
1. Rates shown are mainly those at which the central bank either discounts or makes
advances against eligible commercial paper or government securities for commercial
banks or brokers. For countries with more than one rate applicable to such discounts or
advances, the rate shown is the one at which it is understood that the central bank
transacts the largest proportion of its credit operations.
3.27
Rate on Jan. 31, 1995
Country
May 1994
Aug. 1994
Sept. 1993
May 1994
Month effective
Norway
Switzerland
United Kingdom
4.75
3.5
12.0
Feb. 1994
Apr. 1994
Sept. 1992
2. Since February 1981, the rate has been that at which the Bank of France discounts
Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES1
Percent per year, averages of daily figures
1994
Type or country
8 Italy
1992
3.70
9.56
6.76
9.42
7.67
9.25
10.14
13.91
9.31
4.39
1993
3.18
5.88
5.14
7.17
4.79
6.73
8.30
10.09
8.10
2.96
4.63
5.45
5.57
5.25
4.03
5.09
5.72
8.45
5.65
2.24
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.
1995
1994
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
4.74
5.15
6.28
4.86
4.17
4.84
5.51
8.39
5.53
2.14
4.80
5.47
5.71
4.89
4.21
4.88
5.46
8.88
5.47
2.28
5.01
5.65
5.61
4.95
4.00
4.98
5.50
8.68
5.34
2.31
5.52
5.83
5.56
5.12
4.02
5.12
5.52
8.80
5.15
2.33
5.78
5.98
5.77
5.10
3.86
5.15
5.49
8.72
5.09
2.33
6.27
6.30
6.75
5.29
4.07
5.35
5.82
8.98
5.42
2.34
6.23
6.50
7.86
5.04
3.95
5.09
5.76
9.10
5.29
2.31
A66
3.28
International Statistics • March 1995
FOREIGN EXCHANGE RATES1
Currency units per dollar except as noted
1994
Country/currency unit
1
2
3
4
5
6
7
8
9
10
Australia/dollar2
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound2
Italy/lira
Japan/yen
Malaysia/ringgir.
Netherlands/guilder
New Zealand/dollar2
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/pound2
1992
1993
1995
1994
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81
67.993
11.639
34.581
1.2902
5.7795
6.4863
5.7251
5.6669
1.6545
229.64
73.161
11.409
33.424
1.3664
8.6295
6.3561
5.2340
5.5459
1.6216
242.50
74.010
11.010
32.248
1.3783
8.6072
6.1845
5.1493
5.3602
1.5646
237.11
74.200
10.904
31.871
1.3540
8.5581
6.1038
4.9689
5.2975
1.5491
235.98
73.787
10.695
31.284
1.3503
8.5492
5.9479
4.6866
5.2025
1.5195
233.06
75.492
10.838
31.694
1.3647
8.5370
6.0268
4.7388
5.2867
1.5396
237.38
77.389
11.063
32.329
1.3893
8.3833
6.1614
4.8590
5.4132
1.5716
242.96
76.469
10.769
31.542
1.4132
8.4608
6.0311
4.7505
5.2912
1.5302
238.21
7.7402
28.156
170.42
1,232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07
7.7357
31.291
146.47
1,573.41
111.08
2.5738
1.8585
54.127
7.0979
161.08
7.7290
31.394
149.69
1,611.49
102.18
2.6237
1.8190
59.358
7.0553
165.93
7.7272
31.373
152.22
1,582.15
99.94
2.5633
1.7570
60.119
6.8644
159.80
7.7275
31.372
154.61
1,565.79
98.77
2.5575
1.7372
60.297
6.7961
157.91
7.7276
31.373
158.64
1,548.29
98.35
2.5589
1.7028
60.898
6.6166
155.26
7.7306
31.394
156.39
1,583.81
98.04
2.5604
1.7261
62.093
6.7297
157.27
7.7379
31.389
153.36
1,633.71
100.18
2.5626
1.7601
63.726
6.8561
161.21
7.7439
31.374
155.67
1,611.53
99.72
2.5556
1.7159
64.018
6.6968
157.86
1.6294
2.8524
784.66
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63
1.6158
3.2729
805.75
127.48
48.211
7.7956
1.4781
26.416
25.333
150.16
1.5275
3.5534
806.93
133.88r
49.170
7.7161
1.3667
26.465r
25.161
153.19
1.5045
3.5968
806.83
129.90
49.241
7.7420
1.3184
26.419
25.021
154.22
1.4885
3.5570
803.69
128.60*
49.260
7.5227
1.2892
26.210
24.968
156.61
1.4761
3.5420
801.98
126.34
49.112
7.2631
1.2648
26.132
25.001
160.64
1.4682
3.5256
799.46
128.34
49.163
7.3637
1.2956
26.188
24.992
158.92
1.4657
3.5703
794.81
132.31
49.531
7.5161
1.3289
26.381*
25.109
155.87
1.4532
3.5404
793.08
132.62
49.870
7.4774
1.2863
26.300
25.133
157.46
86.61
93.18
91.32
89.26
88.08
86.66
87.71
89.64
88.29
MEMO
31 United States/dollar3
1. Averages of certified noon buying rates in New York for cable transfers. Data in this
table also appear in the Board's G.5 (405) monthly statistical release. For ordering
address, see inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the currencies of
ten industrial countries. The weight for each of the ten countries is 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).
A67
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List
Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases
SPECIAL
Issue
December 1994
Page
A76
TABLES—Quarterly Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Issue
Page
Assets and liabilities of commercial banks
March 31, 1993
June 30, 1993
September 30, 1993
December 31, 1993
August
November
February
May
1993
1993
1994
1994
A70
A70
A70
A68
Terms of lending at commercial banks
February 1994
May 1994
August 1994
November 1994
May
August
November
February
1994
1994
1994
1995
A74
A68
A68
A68
Assets and liabilities of U.S. branches and agencies of foreign banks
December 31, 1993
March 31, 1994
June 30, 1994
September 30, 1994
May
August
November
February
1994
1994
1994
1995
A78
All
A72
A72
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
All
A68
Index to Statistical Tables
References are to pages A3-A66 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, 18-22
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 23
Automobiles
Consumer installment credit, 39
Production, 47,48
BANKERS acceptances, 10, 22, 26
Bankers balances, 18-22. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 35
Rates, 26
Branch banks, 23
Business activity, nonfinancial, 45
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 11
Central banks, discount rates, 65
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 21
Weekly reporting banks, 21-23
Commercial banks
Assets and liabilities, 18-22
Commercial and industrial loans, 18-23
Consumer loans held, by type and terms, 39
Deposit interest rates of insured, 16
Loans sold outright, 21
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 4
Commercial paper, 24, 26, 36
Condition statements (See Assets and liabilities)
Construction, 45, 49
Consumer installment credit, 39
Consumer prices, 45,46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 39
Currency in circulation, 5, 14
Customer credit, stock market, 27
DEBITS to deposit accounts, 17
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-23
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 23
Turnover, 17
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 18-22, 24
Federal Reserve Banks, 5, 11
Interest rates, 16
Turnover, 17
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 26
FARM mortgage loans, 38
Federal agency obligations, 5, 10, 11, 12, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 7, 19, 21, 22, 23, 26, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11, 12, 30
Federal Reserve credit, 5, 6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39
Paper, 24, 26
Financial institutions, loans to, 21, 22, 23
Float, 5
Flow of funds, 40, 42, 43,44
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, 66
Foreign trade, 54
Foreigners
Claims on, 55, 58, 59, 60, 62
Liabilities to, 22, 54, 55, 56, 61, 63, 64
A69
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 45, 51,52
Industrial production, 45, 47
Installment loans, 39
Insurance companies, 30, 38
Interest rates
Bonds, 26
Consumer installment credit, 39
Deposits, 16
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 66
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-65
International organizations, 55, 56, 58, 61, 62
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18-23
Commercial banks, 4, 18-23
Federal Reserve Banks, 11, 12
Financial institutions, 38
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-23
Commercial banks, 4, 18-23
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 27
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 26
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 45, 50
Stock market, 27
Prime rate, 25
Producer prices, 45, 50
Production, 45, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 21, 22, 38
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7, 21-23
Reserve requirements, 9
Reserves
Commercial banks, 18
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
US. reserve assets, 54
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40, 45
SAVING
Flow of funds, 40, 42, 43, 44
National income accounts, 51
Savings and loan associations, 38, 39, 40
Savings banks, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 63
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 21, 22
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 21, 22
Rates on securities, 26
Stock market, selected statistics, 27
Stocks (See also Securities)
New issues, 34
Prices, 27
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 4. (See also Credit unions and Savings and
loan associations)
Time and savings deposits, 4, 14, 16, 18-23
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18-23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 18-23, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 5, 11, 12, 30
Foreign and international holdings and
transactions, 11, 30, 64
Open market transactions, 10
Outstanding, by type and holder, 28, 30
Rates, 25
U.S. international transactions, 53-66
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 22-24
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)
A70
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN,
ALAN S. BLINDER,
OFFICE OF BOARD
Chairman
Vice 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, Deputy Congressional Liaison
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
PORTIA W . THOMPSON, Equal Employment Opportunity
Programs Adviser
LEGAL
EDWARD W. KELLEY, JR.
JOHN P. LAWARE
DIVISION OF INTERNATIONAL
FINANCE
EDWIN M . TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
D A L E W . HENDERSON, Associate Director
DAVID H . HOWARD, Senior Adviser
DONALD B . ADAMS, Assistant Director
THOMAS A . CONNORS, Assistant Director
PETER HOOPER III, Assistant Director
KAREN H . JOHNSON, Assistant Director
CATHERINE L . M A N N , Assistant Director
RALPH W . SMITH, JR., Assistant Director
DIVISION
OFFICE OF THE SECRETARY
DIVISION OF RESEARCH AND STATISTICS
MICHAEL J. PRELL, Director
EDWARD C . ETTIN, Deputy Director
DAVID J. STOCKTON, Deputy Director
MARTHA BETHEA, Associate Director
WILLIAM R . JONES, Associate Director
MYRON L . KWAST, Associate Director
PATRICK M . PARKINSON, Associate Director
THOMAS D . SIMPSON, Associate Director
WILLIAM W. WILES,
LAWRENCE SLIFMAN, Associate
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
ROBERT DEV. FRIERSON, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
Secretary
JENNIFER J. JOHNSON, Deputy
Secretary
BARBARA R. LOWREY, Associate
Secretary
DAY W . RADEBAUGH, JR.,
Assistant Secretary1
DIVISION OF BANKING
SUPERVISION AND REGULATION
Director
Deputy Director
D O N E . KLINE, Associate Director
WILLIAM A . RYBACK, Associate Director
FREDERICK M . STRUBLE, Associate Director
HERBERT A . BIERN, Deputy Associate Director
ROGER T. COLE, Deputy Associate Director
JAMES I. GARNER, Deputy Associate Director
HOWARD A . AMER, Assistant Director
GERALD A . EDWARDS, JR., Assistant Director
JAMES D . GOETZINGER, Assistant Director
STEPHEN M . HOFFMAN, JR., Assistant Director
LAURA M . HOMER, Assistant Director
JAMES V. HOUPT, Assistant Director
JACK P. JENNINGS, Assistant Director
MICHAEL G . MARTINSON, Assistant Director
RHOGER H PUGH, Assistant Director
SIDNEY M . SUSSAN, Assistant Director
MOLLY S . WASSOM, Assistant Director
RICHARD SPILLENKOTHEN,
STEPHEN C . SCHEMERING,
WILLIAM SCHNEIDER, Project
Director,
National Information Center
1. On loan from the Division of Information Resources Management
Director
Deputy Associate Director
PETER A . TINSLEY, Deputy Associate Director
FLINT BRAYTON, Assistant Director
DAVID S . JONES, Assistant Director
STEPHEN A . RHOADES, Assistant Director
CHARLES S . STRUCKMEYER, Assistant Director
ALICE PATRICIA WHITE, Assistant Director
JOYCE K . ZICKLER, Assistant Director
JOHN J. MINGO, Senior Adviser
MARTHA S . SCANLON,
GLENN B. CANNER,
Adviser
DIVISION OF MONETARY
AFFAIRS
Director
DAVID E . LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D . PORTER, Deputy Associate Director
VINCENT R . REINHART, Assistant Director
NORMAND R.V. BERNARD, Special Assistant to the Board
DONALD L . KOHN,
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L. GARWOOD,
Director
Associate Director
DOLORES S . SMITH, Associate Director
MAUREEN P. ENGLISH, Assistant Director
IRENE SHAWN M C N U L T Y , Assistant Director
GLENN E . LONEY,
A71
JANET L. YELLEN
LAWRENCE B . LINDSEY
SUSAN M . PHILLIPS
OFFICE OF
STAFF DIRECTOR FOR
MANAGEMENT
Staff Director
EEO Programs Director
S . DAVID FROST,
SHEILA CLARK,
DIVISION OF HUMAN
MANAGEMENT
RESOURCES
Director
Associate Director
ANTHONY V. DIGIOIA, Assistant Director
JOSEPH H . HAYES, JR., Assistant Director
FRED HOROWITZ, Assistant Director
DAVID L . S H A N N O N ,
JOHN R . WEIS,
OFFICE OF THE
CONTROLLER
Controller
Assistant Controller (Programs and
DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
CLYDE H . FARNSWORTH, JR., Director
DAVID L . ROBINSON, Deputy Director (Finance and
Control)
LOUISE L . ROSEMAN, Associate Director
CHARLES W . BENNETT, Assistant Director
JACK DENNIS, JR., Assistant Director
EARL G . HAMILTON, Assistant Director
JEFFREY C . MARQUARDT, Assistant Director
JOHN H. PARRISH, Assistant
FLORENCE M . YOUNG,
Director
Assistant Director
OFFICE OF THE INSPECTOR
GENERAL
GEORGE E . LIVINGSTON,
BRENT L. BOWEN, Inspector
STEPHEN J. CLARK,
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General
Budgets)
DARRELL R . PAULEY,
Assistant Controller (Finance)
DIVISION OF SUPPORT SERVICES
ROBERT E . FRAZIER, Director
GEORGE M . LOPEZ, Assistant Director
DAVID L . WILLIAMS, Assistant Director
DIVISION OF INFORMATION
MANAGEMENT
STEPHEN R . MALPHRUS,
Director
MARIANNE M. EMERSON, Assistant
Po
RESOURCES
Director
Assistant Director
RAYMOND H . MASSEY, Assistant Director
EDWARD T. MULRENIN, Assistant Director
ELIZABETH B . RIGGS, Assistant Director
RICHARD C . STEVENS, Assistant Director
KYUNG KIM,
General
72
Federal Reserve Bulletin • March 1995
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
ALAN GREENSPAN,
Chairman
WILLIAM J. MCDONOUGH,
Vice Chairman
ALAN S. BLINDER
LAWRENCE B . LINDSEY
THOMAS M . HOENIG
THOMAS C . MELZER
SUSAN M . PHILLIPS
EDWARD W . KELLEY, JR.
CATHY E . MINEHAN
JANET L. YELLEN
MICHAEL H . MOSKOW
JOHN P. LAWARE
ALTERNATE
EDWARD G . BOEHNE
ROBERT D . MCTEER
JERRY L. JORDAN
JAMES H . OLTMAN
MEMBERS
GARY H . STERN
STAFF
DONALD L. KOHN, Secretary
NORMAND R . V . BERNARD,
and
THOMAS E. DAVIS, Associate
Economist
WILLIAM G. DEWALD, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
FREDERIC S. MISHKIN, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
DAVID J. STOCKTON, Associate
Economist
CARL E. VANDER WILT, 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
LYNN E. BROWNE, Associate
Economist
PETER R . FISHER,
FEDERAL ADVISORY
Manager, System Open Market Account
COUNCIL
ANTHONY P. TERRACCIANO,
MARSHALL N . CARTER,
N.
Seventh District
III, Eighth District
RICHARD M . KOVACEVICH, Ninth District
CHARLES E. NELSON, Tenth District
CHARLES R . HRDLICKA, Eleventh District
EDWARD A . CARSON, Twelfth District
First District
Second District
ANTHONY P. TERRACCIANO, Third District
FRANK V. CAHOUET, Fourth District
RICHARD G . TILGHMAN, Fifth District
CHARLES E. RICE, Sixth District
MARSHALL
ROGER L. FITZSIMONDS,
CARTER,
ANDREW
WALTER V. SHIPLEY,
President
Vice President
CRAIG,
Secretary Emeritus
Co-Secretary
KORSVIK, Co-Secretary
HERBERT V. PROCHNOW,
JAMES ANNABLE,
WILLIAM J.
B.
A73
CONSUMER ADVISORY
COUNCIL
JAMES L. WEST,
KATHARINE
W.
Tijeras, New Mexico, Chairman
Washington, D . C . , Vice Chairman
MCKEE,
St. Paul, Minnesota
R. BUTLER, Riverwoods, Illinois
ROBERT A. COOK, Baltimore, Maryland
ALVIN J. COWANS, Orlando, Florida
MICHAEL FERRY, St. Louis, Missouri
EMANUEL FREEMAN,
Dallas, Texas
TERRY JORDE, Cando, North Dakota
EUGENE I. LEHRMANN, Madison, Wisconsin
RONALD A . PRILL, Minneapolis, Minnesota
LISA RICE-COLEMAN, Toledo, Ohio
JOHN R . RINES, Detroit, Michigan
JULIA M. SEWARD, Richmond, Virginia
NORMA
ANNE B. SHLAY, Philadelphia, Pennsylvania
D . DOUGLAS BLANKE,
THOMAS L. HOUSTON,
THOMAS
ELIZABETH G. FLORES, Laredo, Texas
Philadelphia, Pennsylvania
L. FREIBERG, New Orleans, Louisiana
DAVID C. FYNN, Cleveland, Ohio
LORI GAY, LOS Angeles, California
ROBERT G . GREER, Houston, Texas
KENNETH R. HARNEY, Chevy Chase, Maryland
REGINALD
LORRAINE VANETTEN,
A.
HOMER,
LILY K. YAO, Honolulu, Hawaii
O. ZDENEK, Greenwich, Connecticut
Boston, Massachusetts
THRIFT INSTITUTIONS ADVISORY
Troy, Michigan
GRACE W. WEINSTEIN, Englewood, N e w Jersey
GAIL K. HILLEBRAND, San Francisco, California
RONALD
J. SMITH, Kansas City, Missouri
JOHN E. TAYLOR, W a s h i n g t o n , D . C .
ROBERT
COUNCIL
Cleveland, Ohio, President
Miami, Florida, Vice President
CHARLES JOHN KOCH,
STEPHEN
D.
E. LEE BEARD, Hazleton, Pennsylvania
JOHN E. BRUBAKER, San Mateo, California
MALCOLM E. COLLIER, Lakewood, Colorado
GEORGE L. ENGELKE, JR., Lake Success, New
BEVERLY D . S. HARRIS, Livingston, Montana
York
TAYLOR,
DAVID F. HOLLAND, Burlington, Massachusetts
JOSEPH C. SCULLY, Chicago, Illinois
JOHN M. TIPPETS, DFW Airport, Texas
LARRY T. WILSON, Raleigh, North Carolina
WILLIAM W . ZUPPE, Spokane, Washington
A74
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-127, 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 or may be ordered
via Mastercard or Visa. Payment from foreign residents should
be drawn on a U.S. bank.
THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS.
1994. 157 pp.
ANNUAL REPORT.
ANNUAL REPORT: BUDGET REVIEW, 1994-95.
FEDERAL RESERVE BULLETIN. Monthly. $25.00
per year or
$2.50 each in the United States, its possessions, Canada,
and Mexico. Elsewhere, $35.00 per year or $3.00 each.
ANNUAL STATISTICAL DIGEST: period covered, release date,
number of pages, and price.
239 pp.
$ 6.50
1981
October 1982
266 pp.
1982
December 1983
$ 7.50
264 pp.
October 1984
$11.50
1983
254 pp.
1984
October 1985
$12.50
October 1986
231 pp.
$15.00
1985
288 pp.
November 1987
$15.00
1986
272 pp.
$15.00
1987
October 1988
256 pp.
November 1989
$25.00
1988
712 pp.
$25.00
March 1991
1980-89
November 1991
185 pp.
$25.00
1990
215 pp.
$25.00
November 1992
1991
1992
December 1993
215 pp.
$25.00
December 1994
281 pp.
$25.00
1993
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.
(Truth in Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp.
Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25.
A N N U A L PERCENTAGE RATE TABLES
GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 6 7 2 pp.
each.
$8.50
Loose-leaf; updated
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. Four vols. (Contains all
four Handbooks plus substantial additional material.)
$200.00 per year.
Rates for subscribers outside the United States are as follows
and include additional air mail costs:
Federal Reserve Regulatory Service, $250.00 per year.
Each Handbook, $90.00 per year.
FEDERAL RESERVE REGULATORY SERVICE.
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.
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
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
How to File a Consumer Complaint
Making Deposits: When Will Your Money Be Available?
Making Sense of Savings
SHOP: The Card You Pick Can Save You Money
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
A75
STAFF STUDIES: Only Summaries Printed in the
BULLETIN
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 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM
MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n
A. Rhoades. February 1992. 11 pp.
1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR-
KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.
1 6 4 . THE 1 9 8 9 - 9 2 CREDIT CRUNCH FOR REAL ESTATE, b y
Staff Studies 1-157 are out of print.
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
1 6 5 . THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES,
PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
by Gregory E. Elliehausen and John D. Wolken. September 1 9 9 3 . 18 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, by Nellie Liang
1 6 6 . THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET,
and Donald Savage. February 1990. 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y
Gregory E. Elliehausen and John D. Wolken. September
1 9 9 0 . 3 5 pp.
1 6 1 . A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,
1 9 8 0 - 9 0 , by Margaret Hastings Pickering. May 1 9 9 1 .
21pp.
by Mark Carey, Stephen Prowse, John Rea, and Gregory
Udell. January 1994. I l l pp.
1 6 7 . A SUMMARY OF MERGER PERFORMANCE STUDIES IN
BANKING, 1 9 8 0 - 9 3 , AND AN ASSESSMENT OF THE "OPERATING PERFORMANCE" AND "EVENT STUDY" METHOD-
OLOGIES, by Stephen A. Rhoades. July 1994. 37 pp.
A76
Maps of the Federal Reserve System
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 terri
tories
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.
A77
1-A
2-B
3-C
4-D
Jffe
Pittsburgh
5-E
Baltimore MD
Ml
y
wv
•CSiarifSte
Buffalo
/ \
CT
A*
NJ
|
-
NY
RI
BOSTON
NEW YORK
PHILADELPHIA
RICHMOND
CLEVELAND
8-H
7-G
UM«
Rock
CHICAGO
ATLANTA
ST. LOUIS
9-1
M
MINNEAPOLIS
12-L
10-J
KANSAS CITY
11-K
EL P,
San Antonio
DALLAS
SAN FRANCISCO
A78
Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Jerome H. Grossman
William C. Brainard
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
Maurice R. Greenberg
David A. Hamburg
Joseph J. Castiglia
William J. McDonough
James H. Oltman
Buffalo
14240
PHILADELPHIA
19105
James M. Mead
Donald J. Kennedy
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
45201
15230
A. William Reynolds
G. Watts Humphrey, Jr.
John N. Taylor, Jr.
Robert P. Bozzone
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Jimmie R. Monhollon
Baltimore
Charlotte
21203
28230
Henry J. Faison
Claudine B. Malone
Michael R. Watson
James O. Roberson
Leo Benatar
Hugh M. Brown
Patricia B. Compton
Lana Jane Lewis-Brent
Michael T. Wilson
James E. Dalton, Jr.
Jo Ann Slaydon
Robert P. Forrestal
Jack Guynn
Robert M. Healey
Richard G. Cline
John D. Forsyth
Michael H. Moskow
William C. Conrad
Robert H. Quenon
John F. McDonnell
Janet M. Jones
Daniel L. Ash
Woods E. Eastland
Thomas C. Melzer
James R. Bowen
Gerald A. Rauenhorst
Jean D. Kinsey
Matthew J. Quinn
Gary H. Stern
Colleen K. Strand
Herman Cain
A. Drue Jennings
Sandra K. Woods
Ernest L. Holloway
Sheila Griffin
Thomas M. Hoenig
Richard K. Rasdall
Cece Smith
Roger R. Hemminghaus
W. Thomas Beard, III
Isaac H. Kempner, III
Carol L. Thompson
Robert D. McTeer, Jr.
Tony J. Salvaggio
Judith M. Runstad
James A. Vohs
Anita E. Landecker
Ross R. Runkel
Gerald R. Sherratt
George F. Russell, Jr.
Robert T. Parry
Patrick K. Barron
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
SAN FRANCISCO ....
Los Angeles
Portland
Salt Lake City
Seattle
59601
64198
80217
73125
68102
75201
79999
77252
78295
94120
90051
97208
84125
98124
Vice President
in charge of branch
Carl W. Turnipseed1
Charles A. Cerino1
Harold J. Swart1
Ronald B. Duncan1
Walter A. Varvel1
Donald E. Nelson1
Fred R. 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. Scott1
David J. France
Harold L. Shewmaker
Sammie C. Clay
Robert Smith, III1
James L. Stull1
John F. Moore1
A. Kenneth Ridd
Andrea P. Wolcott
Gordon Werkema1
•Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, 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.
A Consumer's
Guide to
Mortgage
Lock-Ins
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 127,
Board of Governors of the Federal Reserve System,
Washington, DC 20551. Multiple copies for classroom use are also available free of charge.
A ^^ttUVSHUQF*®
Guide to
Mortgage
Settlement
Costs
Publications of Interest
FEDERAL RESERVE REGULATORY SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a four-volume loose-leaf service
containing all Board regulations as well as related
statutes, interpretations, policy statements, rulings,
and staff opinions. For those with a more specialized
interest in the Board's regulations, parts of this service are published separately as handbooks pertaining
to monetary policy, securities credit, consumer affairs,
and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains
citation indexes and a subject index.
The Monetary Policy and Reserve Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations 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
GUIDE TO THE FLOW OF FUNDS
ACCOUNTS
A recent Federal Reserve publication, Guide to the
Flow of Funds Accounts, explains in detail how the
U.S. financial flow accounts are prepared. The
accounts, which are compiled by the Division of
Research and Statistics, are published in the Board's
quarterly Z.l statistical release, "Flow of Funds
Accounts, Flows and Outstandings." The Guide
updates and replaces Introduction to Flow of Funds,
published in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds
accounts and their relationship to the national income
and product accounts prepared by the U.S. Department of Commerce. Also discussed are the individual
data series that make up the accounts and such proce-
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, BB, and DD,
and associated materials.
The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulations CC, J, and EE, related statutes and commentaries, and policy statements on risk reduction in the
payment system.
For domestic subscribers, the annual rate is $200
for the Federal Reserve Regulatory Service and $75
for each Handbook. For subscribers outside the
United States, the price including additional air mail
costs is $250 for the Service and $90 for each Handbook. All subscription requests must be accompanied
by a check or money order payable to the Board of
Governors of the Federal Reserve System. Orders
should be addressed to Publications Services, mail
stop 127, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory
tables corresponding to the tables of financial flows
data that appeared in the September 1992 Z.l release.
These tables give, for each data series, the source of
the data or the methods of calculation, along with
annual data for 1991 that were published in the
September 1992 release.
Guide to the Flow of Funds Accounts is available
for $8.50 per copy from Publications Services, Board
of Governors of the Federal Reserve System, Washington, DC 20551. Orders must include a check or
money order, in U.S. dollars, made payable to the
Board of Governors of the Federal Reserve System.
Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve
System makes some of its statistical releases available to the public through the U.S. Department of
Commerce's economic bulletin board. Computer
access to the releases can be obtained by sub-
scription. For further information regarding a
subscription to the economic bulletin board,
please call (202) 482-1986. The releases transmitted
to the economic bulletin board, on a regular basis,
are the following:
Reference
Number
Statistical release
Frequency of release
H.3
Aggregate Reserves
Weekly/Thursday
H.4.1
Factors Affecting Reserve Balances
Weekly/Thursday
H.6
Money Stock
Weekly/Thursday
H.8
Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions
Weekly/Monday
H.10
Foreign Exchange Rates
Weekly/Monday
H.15
Selected Interest Rates
Weekly/Monday
G.5
Foreign Exchange Rates
Monthly/end of month
G.17
Industrial Production and Capacity Utilization
Monthly/midmonth
G.19
Consumer Installment Credit
Monthly/fifth business day
Z.7
Flow of Funds
Quarterly
@FedFRASER